UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-21507

Wells Fargo Utilities and High Income Fund

(Exact name of registrant as specified in charter)

525 Market St., San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market St., 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: August 31

Date of reporting period: February 28, 2017

ITEM 1. REPORT TO STOCKHOLDERS

2

Semi-Annual Report

February 28, 2017

Wells Fargo

Utilities and High Income Fund (ERH)

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Contents

Letter to shareholders	2
Performance highlights	4
Summary portfolio of investments*	7
Financial statements
Statement of assets and liabilities	15
Statement of operations	16
Statement of changes in net assets	17
Statement of cash flows	18
Financial highlights	19
Notes to financial statements	20
Other information	26
Automatic dividend reinvestment plan	29
List of abbreviations	30

* A complete schedule of portfolio holdings as of the report date may be obtained, free of charge, by accessing the following website: https://www.wellsfargofunds.com/assets/edocs/regulatory/holdings/utilities-and-high-income-semi.pdf or by calling Wells Fargo Funds at
1-800-222-8222. This complete schedule, filed on Form N-CSRS, is also available on the SEC’s website at sec.gov.

The views expressed and any forward-looking statements are as of February 28, 2017, unless otherwise noted, and are those of the Fund managers and/or Wells Fargo Funds Management, LLC. Discussions of individual securities, or the markets generally, or any Wells Fargo Fund are not intended as individual recommendations. Future events or results may vary significantly from those expressed in any forward-looking statements. The views expressed are subject to change at any time in response to changing circumstances in the market. Wells Fargo Funds Management, LLC and the Fund disclaim any obligation to publicly update or revise any views expressed or forward-looking statements.

NOT FDIC INSURED  ◾  NO BANK GUARANTEE  ◾   MAY LOSE VALUE

2 Wells Fargo Utilities and High Income Fund Letter to shareholders (unaudited)

Andrew Owen

President

Wells Fargo Funds

U.S. and international stocks returned 10.01% and 5.15% for the six-month period; within fixed income, the Bloomberg Barclays U.S. Aggregate Bond Index³ returned -2.19%.

Dear Shareholder:

As the new president of Wells Fargo Funds now that Karla Rabusch is retiring from that position after nearly 14 years, I am pleased to offer you this semi-annual report for the Wells Fargo Utilities and High Income Fund for the six-month period that ended February 28, 2017. During this period, global stocks delivered favorable results overall. U.S. and international stocks returned 10.01% and 5.15% for the six-month period, respectively, as measured by the S&P 500 Index¹ and the MSCI ACWI ex USA Index (Net)²; within fixed income, the Bloomberg Barclays U.S. Aggregate Bond Index³ returned -2.19%.

In September 2016, interest-rate uncertainty weighed somewhat on U.S. markets; bonds’ interest rates remained low.

Ever since the Great Recession, markets worldwide have been supported to varying degrees by accommodative policies from leading central banks, including the Federal Reserve (Fed), European Central Bank, Bank of England, and Bank of Japan. As a result, investors have watched closely for any signs that global central banks might tighten their measures. In the U.S., early-September comments by several Fed officials appeared to suggest a September interest-rate increase, which sent stock and bond prices downward. However, stocks surged following the Fed’s September 20 meeting on news that the Fed had decided to delay a rate increase to later in 2016. In bond markets, interest rates remained at low levels as a result of easy monetary policies, subdued global growth, and modest inflation expectations. Yields did rise, however, after bottoming in July, because market participants felt that yields had overshot the real risks of the U.K.’s Brexit vote and as economic activity strengthened. At the front end of the yield curve, anticipation of new money market fund rules resulted in significantly higher yields on many short-term securities.

During the fourth quarter of 2016, prospects for faster growth and higher interest rates in the U.S. largely influenced the markets.

Early in the fourth quarter of 2016, U.S. stocks tended to trade lower amid concerns such as a likely interest-rate increase and uncertainty over the approaching general election. However, following Donald Trump’s election as president in early November, U.S. stocks began to rally. Investors appeared optimistic that the new administration would usher in a series of pro-growth policies, and supportive economic news helped the rally carry through the quarter. The buoyant environment sent interest rates higher as well. At its mid-December meeting, Fed officials raised their short-term target interest rate for the first time in a year, by a quarter percentage point, to between 0.50% and 0.75%. The fourth quarter also saw the implementation of the Securities and Exchange Commission’s new rules for money market funds, which included floating net asset values (NAVs) for institutional prime and municipal money market funds as well as liquidity fees and redemption gates. In the year leading up to money fund

¹  The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

²  The Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) ex USA Index (Net) is a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed markets, excluding the United States and Canada. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. You cannot invest directly in an index.

³  The Bloomberg Barclays U.S. Aggregate Bond Index (formerly known as Barclays U.S. Aggregate Bond Index) is a broad-based benchmark that measures the investment-grade, U.S. dollar–denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. You cannot invest directly in an index.

Letter to shareholders (unaudited) Wells Fargo Utilities and High Income Fund 3

reform implementation, nearly $1 trillion in assets moved from these types of money market funds into government money market funds, which continued to transact at a stable $1 NAV. Outside of the U.S., the prospects for faster U.S. growth appeared to trigger some acceleration in Europe. The improvement may be partly attributable to expectations for further strengthening of the U.S. dollar, which in turn could improve demand for European goods in the U.S. due to weakening of the euro relative to the dollar.

Investor optimism continued into February 2017.

January and February brought continued strength in global stock markets. Markets were lifted by factors such as strong trade data from Japan, robust earnings reports by businesses, and investors’ hopes that the U.S. government will approve pro-growth policies, such as a large fiscal stimulus package. Within fixed income, short-term interest rates rose modestly in anticipation of Fed interest-rate hikes. Meanwhile, 10-year Treasury yields ranged between 2.30% and 2.55%, appearing to plateau after the fourth quarter’s sell-off. Spreads of both investment-grade and high-yield bonds compressed slightly, and both taxable and municipal bond mutual fund flows were positive.

Don’t let short-term uncertainty derail long-term investment goals. Periods of investment uncertainty can present challenges, but experience has taught us that maintaining long-term investment goals can be an effective way to plan for the future. Although diversification cannot guarantee an investment profit or prevent losses, we believe it can be an effective way to manage investment risk and potentially smooth out overall portfolio performance. We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Thank you for choosing to invest with Wells Fargo Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs.

Sincerely,

Andrew Owen

President

Wells Fargo Funds

We encourage investors to know their investments and to understand that appropriate levels of risk-taking may unlock opportunities.

Notice to shareholders

On November 23, 2016, the Fund announced an extension of its open-market share repurchase program (the “Buyback Program”). Under the extended Buyback Program, the Fund may repurchase up to 10% of its outstanding shares during the period beginning December 17, 2016, ending December 31, 2017. The Fund’s Board of Trustees has delegated to Wells Fargo Funds Management, LLC, the Fund’s adviser, discretion to administer the Buyback Program including the determination of the amount and timing of repurchases in accordance with the best interests of the Fund and subject to applicable legal limitations.

For further information about your Fund, contact your investment professional, visit our website at wellsfargofunds.com, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

4 Wells Fargo Utilities and High Income Fund Performance highlights (unaudited)

Investment objective

The Fund seeks a high level of current income and moderate capital growth, with an emphasis on providing tax-advantaged dividend income.

Adviser

Wells Fargo Funds Management, LLC

Subadvisers

Crow Point Partners, LLC

Wells Capital Management Incorporated

Portfolio managers

Niklas Nordenfelt, CFA^®

Timothy P. O’Brien, CFA^®

Phillip Susser

Average annual total return (%) as of February 28, 2017¹

	6 months			1 year		5 year		10 year
Based on market value		(0.32	)		9.10		8.73		1.85
Based on net asset value (NAV) per share		2.72			11.95		9.09		3.25

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on fund distributions or the sales of fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted, which assumes the reinvestment of dividends and capital gains. Performance figures of the Fund do not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares. If taxes and such brokerage commissions had been reflected, performance would have been lower. To obtain performance information current to the most recent month-end, please call 1-800-222-8222.

The Fund’s expense ratio for the six months ended Feburary 28, 2017, was 1.21% which includes 0.26% of interest expense.

Comparison of NAV vs. market value²

High-yield, lower-rated bonds may contain more risk due to the increased possibility of default. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability, and foreign currency fluctuations. Risks of international investing are magnified in emerging or developing markets. Funds that concentrate their investments in a single industry or sector may face increased risk of price fluctuation due to adverse developments within that industry or sector. Small- and mid-cap securities may be subject to special risks associated with narrower product lines and limited financial resources compared with their large-cap counterparts. The use of leverage results in certain risks, including, among others, the likelihood of greater volatility of net asset value and the market price of common shares. Derivatives involve additional risks, including interest-rate risk, credit risk, the risk of improper valuation, and the risk of noncorrelation to the relevant instruments they are designed to hedge or closely track. There are numerous risks associated with transactions in options on securities. Illiquid securities may be subject to wide fluctuations in market value and may be difficult to sell. This closed-end fund is no longer available as an initial public offering and is only offered through broker/dealers on the secondary market. A closed-end fund is not required to buy its shares back from investors upon request.

¹ Total returns based on market value are calculated assuming a purchase of common stock on the first day and sale on the last day of the period reported. Total returns based on NAV are calculated based on the NAV at the beginning of the period and end of the period. Dividends and distributions, if any, are assumed for the purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan.

² This chart does not reflect any brokerage commissions charged on the purchase and sale of the Fund’s common stock. Dividends and distributions paid by the Fund are included in the Fund’s average annual total returns but have the effect of reducing the Fund’s NAV.

Performance highlights (unaudited) Wells Fargo Utilities and High Income Fund 5

MANAGERS’ DISCUSSION

Overview

The Fund’s return based on market value was -0.32% for the six-month period that ended February 28, 2017. During the same period, the Fund’s return based on net asset value (NAV) was 2.72%. Based on its NAV return, the Fund underperformed relative to the ERH Blended Index³, which returned 6.73%.

During the reporting period, U.S. stock markets were strong, especially following the presidential election in November 2016, while international stock markets generally posted positive, less robust returns. The U.S. dollar remained strong as well. Although bond interest rates rose during the reporting period, the broad U.S. stock market—including utility stocks—shrugged off the interest-rate headwind to generate very good returns. Within the Fund’s stock portfolio, the allocation to utility preferred stocks rose during the reporting period, the allocation to international stocks increased slightly, and the cash position fell.

The high-yield bond market weathered rising Treasury yields during the reporting period while simultaneously staging a strong rally following the November 2016 presidential election. With rising Treasury yields and higher prices for high-yield bonds, spreads contracted meaningfully. Optimism over potentially growth-friendly policies coming from tax reform and infrastructure spending boosted risk assets, including high-yield bonds.

Detractors from performance

Within the Fund’s stock portfolio, detractors included Georgia Power preferred; Chunghwa Telecom Company, Limited; Enagas S.A.; and Terna SpA Chunghwa reported disappointing earnings and lowered its guidance. Enagas has invested heavily in acquisitions that have yet to bear fruit.

The Fund’s high-yield bond portfolio was hindered by underweights to the metals/mining and energy exploration and production industries. Negative security selection within metals/mining detracted as well.

Ten largest holdings (%) as of February 28, 20174
Eversource Energy	4.53
Enel SpA	4.51
Edison International	4.10
American Electric Power Company Incorporated	4.02
NextEra Energy Incorporated	3.93
Georgia Power Company	3.88
Enagas SA	3.69
Chunghwa Telecom Company Limited ADR	3.38
American Water Works Company Incorporated	3.34
Endesa SA	3.29

Contributors to performance

Within the Fund’s stock portfolio, contributors included utilities Eversource Energy; PNM Resources, Incorporated; and IDACORP, Incorporated. U.S. utility stocks generally benefited during the reporting period as income-oriented investors continued to have limited options—utility shares were one of the few.

The Fund’s high-yield bond portfolio benefited from positive security selection within the wireless and utilities sectors. An overweight to oil-field services contributed on a relative basis, as did an underweight to rate-sensitive BB-rated bonds.

³  Source: Wells Fargo Funds Management, LLC. The ERH Blended Index is weighted 70% S&P 500 Utilities Index and 30% BofA Merrill Lynch U.S. High Yield Index (formerly known as BofA Merrill Lynch High Yield Master II Index). The S&P 500 Utilities Index is a market-value-weighted index that measures the performance of all stocks within the utilities sector of the S&P 500 Index. The BofA Merrill Lynch U.S. High Yield Index is a market-capitalization weighted index of domestic and Yankee high-yield bonds. The index tracks the performance of high-yield securities traded in the U.S. bond market. You cannot invest directly in an index.

⁴ The ten largest holdings, excluding cash and cash equivalents, are calculated based on the value of the investments divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

6 Wells Fargo Utilities and High Income Fund Performance highlights (unaudited)

Credit quality as of February 28, 2017⁵

Country allocation as of February 28, 2017⁶

Management outlook

With regard to the Fund’s allocation to stocks, we believe the economy is improving in the U.S. and, to a lesser extent, in Europe. U.S. short- and long-term interest rates have continued to rise. The U.S. stock market remains buoyed by the anticipation of tax reform, deregulation, fiscal stimulus, and accelerating economic growth; thus far, investors appear undeterred by the somewhat rocky start for the new Trump administration. In the wake of the Brexit surprise in June 2016 and Donald Trump’s unexpected victory in November 2016, elections in three European countries—the Netherlands (March), France (April and May), and Germany (September)—are drawing renewed attention as potential catalysts. The mood of voters, both in the U.S. and abroad, in our view appears generally sour. We are inclined to be somewhat more cautious going forward.

With respect to the Fund’s high-yield bond portfolio, the U.S. Federal Reserve’s guidance in December 2016 of potentially three interest-rate hikes in 2017 appeared to be one more than the market was expecting. Our expectation was similar; in our view, more than two hikes

likely would require a jump in inflation combined with a strong stock market. We expect spreads to tighten further before widening to more normal levels in the coming years, and we find the most value in single-B, credit-sensitive bonds and select higher-quality bank loans. One of the most persistent forces benefiting U.S. high yield has been foreign demand for U.S. dollar–denominated debt with yield. Recently, dollar-funding costs for foreign investors have begun to decline. In the long run, we expect the relative performance of high-yield bonds may be primarily driven by corporate fundamentals and defaults. In the near term, our default outlook remains benign and supportive of high yield. Over a full cycle, we believe our continued focus on a bottom-up process—an approach that attempts to minimize downside risk while capturing the return potential of high-yield issuers—may insulate the Fund’s high-yield portfolio from periodic bouts of systemic fears and rebalancing.

⁵  The credit quality distribution of portfolio holdings reflected in the chart is based on ratings from Standard & Poor’s, Moody’s Investors Service, and/ or Fitch Ratings Ltd. Credit quality ratings apply to the underlying holdings of the Fund and not to the Fund itself. The percentages of the Fund’s portfolio with the ratings depicted in the chart are calculated based on the total market value of fixed income securities held by the Fund. If a security was rated by all three rating agencies, the middle rating was utilized. If rated by two of three rating agencies, the lower rating was utilized, and if rated by one of the rating agencies, that rating was utilized. Standard & Poor’s rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Ratings from A to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories. Standard & Poor’s rates the creditworthiness of short-term notes from SP-1 (highest) to SP-3 (lowest). Moody’s rates the creditworthiness of bonds, ranging from Aaa (highest) to C (lowest). Ratings Aa to B may be modified by the addition of a number 1 (highest) to 3 (lowest) to show relative standing within the ratings categories. Moody’s rates the creditworthiness of short-term U.S. tax-exempt municipal securities from MIG 1/VMIG 1 (highest) to SG (lowest). Fitch rates the creditworthiness of bonds, ranging from AAA (highest) to D (lowest). Credit quality distribution is subject to change and may have changed since the date specified.

⁶ Amounts are calculated based on the total long-term investments of the Fund. These percentages are subject to change and may have changed since the date specified.

Summary portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 7

The Summary portfolio of investments shows the 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the total net assets as of the report date. The remaining securities held are grouped as “Other securities” in each category.

Security name	Shares		Value		Percent of net assets
Common Stocks: 58.95%
Energy: 6.36%
Oil, Gas & Consumable Fuels: 6.36%
Enagas SA		175,000	$	4,300,235		3.68	%
Enbridge Incorporated		73,800		3,088,530		2.65
Other securities				36,153		0.03
				7,424,918		6.36
Telecommunication Services: 7.31%
Diversified Telecommunication Services: 5.14%
Chunghwa Telecom Company Limited ADR		120,000		3,944,400		3.38
Verizon Communications Incorporated		41,291		2,049,272		1.76
Other securities				2,572		0.00
				5,996,244		5.14
Wireless Telecommunication Services: 2.17%
Shenandoah Telecommunications Company		90,000		2,529,000		2.17
Utilities: 45.28%
Electric Utilities: 36.22%
American Electric Power Company Incorporated		70,000		4,687,900		4.02
Edison International		60,000		4,784,400		4.10
Endesa SA		180,000		3,831,954		3.29
Enel SpA		1,225,000		5,258,541		4.51
Eversource Energy		90,000		5,279,400		4.53
Exelon Corporation		16,000		587,360		0.50
Great Plains Energy Incorporated		100,000		2,906,000		2.49
IDACORP Incorporated		25,000		2,073,250		1.78
NextEra Energy Incorporated		35,000		4,585,000		3.93
PNM Resources Incorporated		75,000		2,722,500		2.33
Red Electrica Corporacion SA		40,000		722,299		0.62
Spark Energy Incorporated Class A		36,700		990,900		0.85
Terna SpA		650,000		3,010,601		2.58
Other securities				800,669		0.69
				42,240,774		36.22
Gas Utilities: 0.03%
Other securities				29,768		0.03
Multi-Utilities: 5.69%
CenterPoint Energy Incorporated		50,000		1,366,000		1.17
Dominion Resources Incorporated		300		23,292		0.02
Hera SpA		300,000		743,698		0.64
Public Service Enterprise Group Incorporated		50,000		2,299,000		1.97

The accompanying notes are an integral part of these financial statements.

8 Wells Fargo Utilities and High Income Fund Summary portfolio of investments—February 28, 2017 (unaudited)

Security name						Shares		Value		Percent of net assets
Multi-Utilities (continued)
Sempra Energy							19,900	$	2,194,771		1.88	%
Other securities									13,555		0.01
									6,640,316		5.69
Water Utilities: 3.34%
American Water Works Company Incorporated							50,000		3,900,000		3.34
Total Common Stocks (Cost $49,954,755)									68,761,020		58.95
	Interest rate			Maturity date		Principal
Corporate Bonds and Notes: 29.72%
Consumer Discretionary: 6.04%
Auto Components: 0.52%
Other securities									603,198		0.52
Distributors: 0.09%
Other securities									100,157		0.09
Diversified Consumer Services: 0.42%
Service Corporation International		7.50	%		4-1-2027	$	351,000		415,935		0.36
Other securities									73,800		0.06
									489,735		0.42
Hotels, Restaurants & Leisure: 1.14%
CCM Merger Incorporated 144A		9.13			5-1-2019		425,000		438,281		0.37
Greektown Holdings LLC 144A		8.88			3-15-2019		675,000		707,906		0.61
Other securities									190,383		0.16
									1,336,570		1.14
Leisure Products: 0.05%
Other securities									64,513		0.05
Media: 2.82%
Other securities									3,284,749		2.82
Specialty Retail: 0.94%
Other securities									1,099,988		0.94
Textiles, Apparel & Luxury Goods: 0.06%
Other securities									71,063		0.06
Consumer Staples: 0.69%
Beverages: 0.10%
Other securities									113,275		0.10
Food Products: 0.57%
Other securities									671,598		0.57

The accompanying notes are an integral part of these financial statements.

Summary portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 9

Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets
Household Products: 0.02%
Other securities								$	21,350		0.02	%
Energy: 7.44%
Energy Equipment & Services: 2.38%
NGPL PipeCo LLC 144A		7.77	%		12-15-2037	$	725,000		821,063		0.70
PHI Incorporated		5.25			3-15-2019		455,000		442,488		0.38
Other securities									1,516,508		1.30
									2,780,059		2.38
Oil, Gas & Consumable Fuels: 5.06%
Tallgrass Energy Partners LP 144A		5.50			9-15-2024		500,000		505,000		0.43
Other securities									5,394,688		4.63
									5,899,688		5.06
Financials: 2.33%
Banks: 0.30%
Other securities									347,286		0.30
Consumer Finance: 1.32%
Other securities									1,540,278		1.32
Diversified Financial Services: 0.27%
Other securities									314,156		0.27
Insurance: 0.44%
Other securities									520,001		0.44
Health Care: 2.84%
Health Care Equipment & Supplies: 0.51%
Other securities									599,700		0.51
Health Care Providers & Services: 1.63%
Other securities									1,897,287		1.63
Health Care Technology: 0.61%
Other securities									705,201		0.61
Pharmaceuticals: 0.09%
Other securities									104,538		0.09
Industrials: 1.03%
Airlines: 0.10%
Other securities									115,056		0.10
Commercial Services & Supplies: 0.75%
Other securities									870,876		0.75
Professional Services: 0.01%
Other securities									19,156		0.01

The accompanying notes are an integral part of these financial statements.

10 Wells Fargo Utilities and High Income Fund Summary portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets
Trading Companies & Distributors: 0.17%
Other securities								$	194,513		0.17	%
Information Technology: 2.84%
Communications Equipment: 0.09%
Other securities									107,000		0.09
Electronic Equipment, Instruments & Components: 0.69%
Jabil Circuit Incorporated		8.25	%		3-15-2018	$	620,000		659,643		0.57
Other securities									146,046		0.12
									805,689		0.69
Internet Software & Services: 0.25%
Other securities									290,184		0.25
IT Services: 0.24%
Other securities									281,661		0.24
Semiconductors & Semiconductor Equipment: 0.32%
Other securities									369,914		0.32
Software: 0.20%
Other securities									229,098		0.20
Technology Hardware, Storage & Peripherals: 1.05%
Diamond 1 Finance Corporation 144A		7.13			6-15-2024		425,000		469,576		0.40
NCR Corporation		6.38			12-15-2023		475,000		507,656		0.44
Other securities									253,746		0.21
									1,230,978		1.05
Materials: 0.82%
Chemicals: 0.04%
Other securities									48,564		0.04
Containers & Packaging: 0.78%
Other securities									908,890		0.78
Real Estate: 2.30%
Equity REITs: 1.99%
Other securities									2,324,533		1.99
Real Estate Management & Development: 0.31%
Other securities									357,438		0.31
Telecommunication Services: 2.06%
Diversified Telecommunication Services: 0.84%
Other securities									978,616		0.84

The accompanying notes are an integral part of these financial statements.

Summary portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 11

Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets
Wireless Telecommunication Services: 1.22%
Sprint Capital Corporation		6.88	%		11-15-2028	$	425,000	$	454,750		0.39	%
T-Mobile USA Incorporated		6.73			4-28-2022		375,000		390,000		0.33
Other securities									578,194		0.50
									1,422,944		1.22
Utilities: 1.33%
Gas Utilities: 0.07%
Other securities									75,375		0.07
Independent Power & Renewable Electricity Producers: 1.26%
NSG Holdings LLC 144A		7.75			12-15-2025		386,264		418,614		0.36
TerraForm Power Operating LLC 144A		6.38			2-1-2023		425,000		439,875		0.38
Other securities									611,987		0.52
									1,470,476		1.26
Total Corporate Bonds and Notes (Cost $33,092,212)									34,665,351		29.72
Loans: 0.99%
Consumer Discretionary: 0.32%
Hotels, Restaurants & Leisure: 0.32%
Other securities									366,401		0.32
Energy: 0.08%
Energy Equipment & Services: 0.03%
Other securities									41,808		0.03
Oil, Gas & Consumable Fuels: 0.05%
Other securities									54,000		0.05
Financials: 0.04%
Capital Markets: 0.04%
Other securities									49,500		0.04
Health Care: 0.02%
Health Care Providers & Services: 0.02%
Other securities									25,375		0.02
Industrials: 0.11%
Commercial Services & Supplies: 0.11%
Other securities									128,933		0.11
Information Technology: 0.37%
Internet Software & Services: 0.35%
Other securities									406,323		0.35
Technology Hardware, Storage & Peripherals: 0.02%
Other securities									28,300		0.02

The accompanying notes are an integral part of these financial statements.

12 Wells Fargo Utilities and High Income Fund Summary portfolio of investments—February 28, 2017 (unaudited)

Security name						Value		Percent of net assets
Utilities: 0.05%
Electric Utilities: 0.05%
Other securities						$	50,289		0.05	%
Total Loans (Cost $1,127,324)							1,150,929		0.99
	Dividend yield			Shares
Preferred Stocks: 17.98%
Utilities: 17.98%
Electric Utilities: 12.41%
Alabama Power Company		6.45	%		68,347		1,774,890		1.52
Alabama Power Company		6.50			103,283		2,727,322		2.34
Entergy Louisiana LLC		4.88			30,000		681,900		0.58
Georgia Power Company		6.50			44,043		4,524,097		3.88
Gulf Power Company		6.45			30,000		3,052,242		2.62
NextEra Energy Capital		5.25			18,826		448,624		0.38
The Connecticut Light & Power Company		5.28			12,000		630,750		0.54
The Connecticut Light & Power Company		6.56			12,000		641,626		0.55
							14,481,451		12.41
Multi-Utilities: 5.57%
Dominion Resources Incorporated		5.25			74,195		1,746,550		1.50
DTE Energy Company		6.00			40,000		1,028,800		0.88
Just Energy Group Incorporated ±		1.26			150,000		3,718,500		3.19
							6,493,850		5.57
Total Preferred Stocks (Cost $21,039,800)							20,975,301		17.98
Rights: 0.02%
Utilities: 0.02%
Electric Utilities: 0.02%
Other securities					23,978		23,978		0.02
Total Rights (Cost $26,376)							23,978		0.02
Warrants: 0.00%
Utilities: 0.00%
Gas Utilities: 0.00%
Other securities					16,000		50		0.00
Total Warrants (Cost $30,480)							50		0.00
Yankee Corporate Bonds and Notes: 3.23%
Energy: 0.77%
Energy Equipment & Services: 0.12%
Other securities							140,400		0.12

The accompanying notes are an integral part of these financial statements.

Summary portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 13

Security name	Interest rate			Maturity date		Principal		Value			Percent of net assets
Oil, Gas & Consumable Fuels: 0.65%
Teekay Corporation		8.50	%		1-15-2020	$	535,000	$	535,000			0.46	%
Other securities									228,242			0.19
									763,242			0.65
Financials: 0.11%
Banks: 0.11%
Other securities									131,691			0.11
Health Care: 0.77%
Pharmaceuticals: 0.77%
Valeant Pharmaceuticals International Incorporated 144A		6.13			4-15-2025		550,000		441,375			0.38
Other securities									452,480			0.39
									893,855			0.77
Industrials: 0.59%
Building Products: 0.01%
Other securities									16,125			0.01
Commercial Services & Supplies: 0.56%
Other securities									647,429			0.56
Machinery: 0.02%
Other securities									20,300			0.02
Materials: 0.12%
Containers & Packaging: 0.05%
Other securities									54,500			0.05
Metals & Mining: 0.07%
Other securities									80,501			0.07
Telecommunication Services: 0.87%
Diversified Telecommunication Services: 0.87%
Intelsat Jackson Holdings SA		5.50			8-1-2023		545,000		451,669			0.39
Other securities									560,484			0.48
									1,012,153			0.87
Total Yankee Corporate Bonds and Notes (Cost $4,169,904)									3,760,196			3.23
	Yield					Shares
Short-Term Investments: 7.36%
Investment Companies: 7.36%
Wells Fargo Government Money Market Fund Select Class (l)(u)##		0.48					8,583,240		8,583,240			7.36
Total Short-Term Investments (Cost $8,583,240)									8,583,240			7.36
Total investments in securities (Cost $118,024,091) *									137,920,065			118.25
Other assets and liabilities, net									(21,282,111	)		(18.25	)
Total net assets								$	116,637,954			100.00	%

The accompanying notes are an integral part of these financial statements.

14 Wells Fargo Utilities and High Income Fund Summary portfolio of investments—February 28, 2017 (unaudited)

144A The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

± Variable rate investment. The rate shown is the rate in effect at period end.

(l) The security represents an affiliate of the Fund as defined in the Investment Company Act of 1940.

(u) The rate represents the 7-day annualized yield at period end.

## All or a portion of this security is segregated for unfunded term loans.

* Cost for federal income tax purposes is $118,287,863 and unrealized gains (losses) consists of:

Gross unrealized gains	$	24,791,980
Gross unrealized losses		(5,159,778	)
Net unrealized gains	$	19,632,202

The accompanying notes are an integral part of these financial statements.

Statement of assets and liabilities—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 15

Assets
Investments
In unaffiliated securities, at value (cost $109,440,851)	$	129,336,825
In affiliated securities, at value (cost $8,583,240)		8,583,240
Total investments, at value (cost $118,024,091)		137,920,065
Foreign currency, at value (cost $464,924)		457,061
Receivable for investments sold		71,551
Receivable for dividends and interest		1,045,318
Prepaid expenses and other assets		7,007
Total assets		139,501,002
Liabilities
Dividends payable		693,312
Payable for investments purchased		76,730
Secured borrowing payable		22,000,000
Advisory fee payable		62,843
Administration fee payable		5,237
Accrued expenses and other liabilities		24,926
Total liabilities		22,863,048
Total net assets	$	116,637,954
NET ASSETS CONSIST OF
Paid-in capital	$	151,604,675
Overdistributed net investment income		(307,173	)
Accumulated net realized losses on investments		(54,543,087	)
Net unrealized gains on investments		19,883,539
Total net assets	$	116,637,954
NET ASSET VALUE PER SHARE
Based on $116,637,954 divided by 9,244,157 shares issued and outstanding (unlimited number of shares authorized)	$	12.62

The accompanying notes are an integral part of these financial statements.

16 Wells Fargo Utilities and High Income Fund Statement of operations—six months ended February 28, 2017 (unaudited)

Investment income
Dividends (net of foreign withholding taxes of $85,247)	$	3,546,885
Interest		1,394,152
Income from affiliated securities		13,269
Total investment income		4,954,306
Expenses
Advisory fee		406,374
Administration fee		33,864
Custody and accounting fees		12,711
Professional fees		61,500
Shareholder report expenses		715
Trustees’ fees and expenses		23,456
Transfer agent fees		2,699
Interest expense		145,808
Other fees and expenses		2,194
Total expenses		689,321
Net investment income		4,264,985
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) on:
Unaffiliated securities		(2,829,231	)
Written options		50,778
Net realized losses on investments		(2,778,453	)
Net change in unrealized gains (losses) on:
Unaffiliated securities		1,521,056
Written options		(44,822	)
Net change in unrealized gains (losses) on investments		1,476,234
Net realized and unrealized gains (losses) on investments		(1,302,219	)
Net increase in net assets resulting from operations	$	2,962,766

The accompanying notes are an integral part of these financial statements.

Statement of changes in net assets Wells Fargo Utilities and High Income Fund 17

	Six months ended February 28, 2017 (unaudited)			Year ended August 31, 2016
Operations
Net investment income	$	4,264,985		$	7,903,851
Net realized losses on investments		(2,778,453	)		(588,730	)
Net change in unrealized gains (losses) on investments		1,476,234			3,838,787
Net increase in net assets resulting from operations		2,962,766			11,153,908
Distributions to shareholders from
Net investment income		(4,159,365	)		(8,311,826	)
Capital share transactions
Net asset value of shares issued under the Automatic Dividend Reinvestment Plan		34,311			109,977
Total increase (decrease) in net assets		(1,162,288	)		2,952,059
Net assets
Beginning of period		117,800,242			114,848,183
End of period	$	116,637,954		$	117,800,242
Overdistributed net investment income	$	(307,173	)	$	(190,837	)

The accompanying notes are an integral part of these financial statements.

18 Wells Fargo Utilities and High Income Fund Statement of cash flows—six months ended February 28, 2017 (unaudited)

Cash flows from operating activities:
Net increase in net assets resulting from operations	$	2,962,766
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
Purchase of securities		(34,822,862	)
Proceeds from sale of securities		31,734,662
Amortization		(98,355	)
Proceeds from sales of short-term securities, net		3,389,568
Decrease in receivable for investments sold		148,701
Decrease in receivable for dividends and interest		210,818
Increase in prepaid expenses and other assets		(227	)
Decrease in payable for investments purchased		(149,676	)
Decrease in due to custodian bank		(33,300	)
Decrease in advisory fee payable		(9,431	)
Decrease in administration fee payable		(786	)
Decrease in accrued expenses and other liabilities		(81,571	)
Litigation payments received		512
Net realized losses on investments		2,778,453
Net change in unrealized gains (losses) on investments		(1,476,234	)
Net cash provided by operating activities		4,553,038
Cash flows from financing activities:
Cash distributions paid		(4,124,572	)
Net cash used in financing activities		(4,124,572	)
Net increase in cash		428,466
Cash (including foreign currency):
Beginning of period	$	28,595
End of period	$	457,061
Supplemental cash disclosure
Cash paid for interest	$	142,629
Supplemental non-cash financing disclosure
Reinvestment of dividends	$	34,311

The accompanying notes are an integral part of these financial statements.

Financial highlights Wells Fargo Utilities and High Income Fund 19

(For a share outstanding throughout each period)

	Six months ended February 28, 2017 (unaudited)			Year ended August 31
				2016			2015			2014			2013			2012
Net asset value, beginning of period		$12.75			$12.44			$13.83			$12.24			$11.74			$11.75
Net investment income		0.46			0.86			0.91			0.97	1		0.87	1		0.87	1
Net realized and unrealized gains (losses) on investments		(0.14	)		0.35			(1.40	)		1.52			0.53			0.02
Total from investment operations		0.32			1.21			(0.49	)		2.49			1.40			0.89
Distributions to shareholders from
Net investment income		(0.45	)		(0.90	)		(0.90	)		(0.90	)		(0.90	)		(0.90	)
Net asset value, end of period		$12.62			$12.75			$12.44			$13.83			$12.24			$11.74
Market value, end of period		$12.42			$12.93			$10.89			$12.87			$12.04			$11.92
Total return based on market value2		(0.32	)%		27.83	%		(9.11	)%		14.89	%		8.93	%		17.03	%
Ratios to average net assets (annualized)
Net expenses3		1.21	%		1.19	%		1.19	%		1.11	%		1.25	%		1.20	%
Net investment income		7.51	%		6.83	%		6.88	%		7.38	%		7.11	%		7.48	%
Supplemental data
Portfolio turnover rate		22	%		85	%		61	%		29	%		65	%		48	%
Net assets, end of period (000s omitted)		$116,638			$117,800			$114,848			$127,678			$113,001			$108,327
Borrowings outstanding, end of period (000s omitted)		$22,000			$22,000			$22,000			$22,000			$22,000			$22,000
Asset coverage per $1,000 of borrowing, end of period		$6,302			$6,355			$6,220			$6,804			$6,136			$5,866

¹  Calculated based upon average shares outstanding

²  Total return is calculated assuming a purchase of common stock on the first day and a sale on the last day of the period reported. Dividends and distributions, if any, are assumed for purposes of these calculations to be reinvested at prices obtained under the Fund’s Automatic Dividend Reinvestment Plan. Total return does not reflect brokerage commissions that a shareholder would pay on the purchase and sale of shares.

³  Ratios include interest expense relating to interest associated with borrowings and/or leverage transactions as follows:

Six months ended February 28, 2017 (unaudited)	0.26	%
Year ended August 31, 2016	0.21	%
Year ended August 31, 2015	0.16	%
Year ended August 31, 2014	0.19	%
Year ended August 31, 2013	0.21	%
Year ended August 31, 2012	0.25	%

The accompanying notes are an integral part of these financial statements.

20 Wells Fargo Utilities and High Income Fund Notes to financial statements (unaudited)

1. ORGANIZATION

The Wells Fargo Utilities and High Income Fund (the “Fund”) was organized as a statutory trust under the laws of the state of Delaware on February 4, 2004. Originally classified as non-diversified, the Fund now is classified as a diversified closed-end management investment company and is registered under the Investment Company Act of 1940, as amended. As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

2. SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Fund, are in conformity with U.S. generally accepted accounting principles which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Securities valuation

All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.

Equity securities and options that are listed on a foreign or domestic exchange or market are valued at the official closing price or, if none, the last sales price. If no sale occurs on the principal exchange or market that day, the prior day’s price will be deemed “stale” and a fair value price will be determined in accordance with the Fund’s Valuation Procedures.

Non-listed options are valued at the evaluated price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

The values of securities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Management Valuation Team of Wells Fargo Funds Management, LLC (“Funds Management”).

Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of such securities, then fair value pricing procedures approved by the Board of Trustees of the Fund are applied. These procedures take into account multiple factors including movements in U.S. securities markets after foreign exchanges close. Foreign securities that are fair valued under these procedures are categorized as Level 2 and the application of these procedures may result in transfers between Level 1 and Level 2. Depending on market activity, such fair valuations may be frequent. Such fair value pricing may result in net asset values that are higher or lower than net asset values based on the last reported sales price or latest quoted bid price. On February 28, 2017, such fair value pricing was not used in pricing foreign securities.

Debt securities are valued at the evaluated bid price provided by an independent pricing service or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.

Investments in registered open-end investment companies are 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 in good faith 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 or appropriate, including determining the fair value of portfolio securities, unless the determination has been delegated to the Management Valuation Team. The Board of Trustees retains the authority to make or ratify any valuation decisions or approve any changes to the Valuation Procedures as it deems appropriate. On a quarterly basis, the Board of Trustees receives reports on any valuation actions taken by the Valuation Committee or the Management Valuation Team which may include items for ratification.

Valuations of fair valued securities are compared to the next actual sales price when available, or other appropriate market values, to assess the continued appropriateness of the fair valuation methodologies 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 inputs considered in the valuation process until there is a readily available price provided on an exchange

Notes to financial statements (unaudited) Wells Fargo Utilities and High Income Fund 21

or by an independent pricing service. Valuations received from an independent pricing service or independent broker-dealer 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 subadviser. 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. The values of other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at rates provided by an independent foreign currency pricing source at a time each business day specified by the Management Valuation Team. Purchases and sales of securities, and income and expenses are converted at the rate of exchange on the respective dates of such transactions. 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 from 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 included in net realized and unrealized gains or losses from investments.

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.

Loans

The Fund may invest in direct debt instruments which are interests in amounts owed to lenders by corporate or other borrowers. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. Investments in loans may be in the form of participations in loans or assignments of all or a portion of loans from third parties. When the Fund purchases participations, it generally has no rights to enforce compliance with terms of the loan agreement with the borrower. As a result, the Fund assumes the credit risk of both the borrower and the lender that is selling the participation. When the Fund purchases assignments from lenders, it acquires direct rights against the borrower on the loan and may enforce compliance by the borrower with the terms of the loan agreement. Loans may include fully funded term loans or unfunded loan commitments, which are contractual obligations for future funding.

Options

The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. The Fund may write covered call options or secured put options on individual securities and/or indexes. When the Fund writes an option, an amount equal to the premium received is recorded as a liability and is subsequently adjusted to the current market value of the written option. Premiums received from written options that expire unexercised are recognized as realized gains on the expiration date. For exercised options, the difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in calculating the realized gain or loss on the sale. If a put option is exercised, the premium reduces the cost of the security purchased. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security and/or index underlying the written option.

The Fund may also purchase call or put options. Premiums paid are included in the Statement of Assets and Liabilities as investments, the values of which are subsequently adjusted based on the current market values of the options. Premiums paid for purchased options that expire are recognized as realized losses on the expiration date. Premiums paid for purchased options that are exercised or closed are added to the amount paid or offset against the proceeds received for the underlying security to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid.

Options traded on an exchange are regulated and terms of the options are standardized. Purchased options traded over-the-counter expose the Fund to counterparty risk in the event the counterparty does not perform. This risk can be mitigated by having a master netting arrangement between the Fund and the counterparty and by having the counterparty post collateral to cover the Fund’s exposure to the counterparty.

22 Wells Fargo Utilities and High Income Fund Notes to financial statements (unaudited)

Security transactions and income recognition

Securities transactions are recorded on a trade date basis. Realized gains or losses are recorded on the basis of identified cost.

Dividend income is recognized on the ex-dividend date, except for certain dividends from foreign securities, which are recorded as soon as the custodian verifies the ex-dividend date. Dividend income from foreign securities is recorded net of foreign taxes withheld where recovery of such taxes is not assured.

Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily based on the effective interest method. To the extent debt obligations are placed on non-accrual status, any related interest income may be reduced by writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. If the issuer subsequently resumes interest payments or when the collectability of interest is reasonably assured, the debt obligation is removed from non-accrual status.

Distributions to shareholders

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with federal income tax regulations, which may differ in amount or character from net investment income and realized gains recognized for purposes of U.S. generally accepted accounting principles.

Federal and other taxes

The Fund intends to continue to qualify as a regulated investment company by distributing substantially all of its investment company taxable income and any net realized capital gains (after reduction for capital loss carryforwards) sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes was required.

The Fund’s income and federal excise tax returns and all financial records supporting those returns for the prior three fiscal years are subject to examination by the federal and Delaware revenue authorities. Management has analyzed the Fund’s tax positions taken on federal, state, and foreign tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Capital loss carryforwards that do not expire are required to be utilized prior to capital loss carryforwards that expire. As of August 31, 2016, capital loss carryforwards available to offset future net realized capital gains were as follows through the indicated expiration dates:

		No expiration
2017	2018	Short-term
$19,833,087	$27,435,579	$4,258,819

3. 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 investments in securities are not necessarily an indication of the risk associated with investing in those securities.

Notes to financial statements (unaudited) Wells Fargo Utilities and High Income Fund 23

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of February 28, 2017:

	Quoted prices (Level 1)		Other significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Investments in:
Common stocks
Energy	$	7,424,918	$	0	$	0	$	7,424,918
Telecommunication services		8,525,244		0		0		8,525,244
Utilities		52,810,858		0		0		52,810,858
Corporate bonds and notes		0		34,665,351		0		34,665,351
Loans		0		689,436		461,493		1,150,929
Preferred stocks
Utilities		12,148,471		8,826,830		0		20,975,301
Rights
Utilities		0		23,978		0		23,978
Warrants
Utilities		0		50		0		50
Yankee corporate bonds and notes		0		3,759,824		372		3,760,196
Short-term investments
Investment companies		8,583,240		0		0		8,583,240
Total assets	$	89,492,731	$	47,965,469	$	461,865	$	137,920,065

The Fund recognizes transfers between levels within the fair value hierarchy at the end of the reporting period. At February 28, 2017, the Fund had no material transfers between Level 1 and Level 2. The Fund did not have any transfers into/out of Level 3.

4. TRANSACTIONS WITH AFFILIATES AND OTHER EXPENSES

Advisory fee

Funds Management, an indirect wholly owned subsidiary of Wells Fargo & Company (“Wells Fargo”) is the adviser to the Fund and is entitled to receive a fee at an annual rate of 0.60% of the Fund’s average daily total assets. Total assets consist of net assets of the Fund plus borrowings or other leverage for investment purposes to the extent excluded in calculating net assets.

Funds Management has retained the services of certain investment subadvisers to provide daily portfolio management to the Fund. The fees for subadvisory services are borne by Funds Management. Wells Capital Management Incorporated (an affiliate of Funds Management and an indirect wholly owned subsidiary of Wells Fargo) and Crow Point Partners, LLC are each investment subadvisers to the Fund and are each entitled to receive a fee from Funds Management at an annual rate of 0.20% of the Fund’s average daily total assets.

Administration fee

Funds Management also serves as the administrator to the Fund, providing the Fund with a wide range of administrative services necessary to the operation of the Fund. Funds Management is entitled to receive an annual administration fee from the Fund equal to 0.05% of the Fund’s average daily total assets.

During the six months ended February 28, 2017, State Street Bank and Trust Company, the Fund’s custodian, reimbursed the Fund $9,391 for certain out-of-pocket expenses that were billed to the Fund in error from 1998-2015. This amount is included in dividend income on the Statement of Operations. In addition, Funds Management was also reimbursed $4,015 for waivers/reimbursements it made to the Fund during the period the Fund was erroneously billed.

5. CAPITAL SHARE TRANSACTIONS

The Fund has authorized an unlimited number of shares with no par value. For the six months ended February 28, 2017 and the year ended August 31, 2016, the Fund issued 2,775 and 8,550 shares, respectively. During the six months ended February 28, 2017, the Fund did not repurchase any of it shares under the open-market share repurchase program.

24 Wells Fargo Utilities and High Income Fund Notes to financial statements (unaudited)

6. BORROWINGS

The Fund has borrowed $22 million through a revolving credit facility administered by a major financial institution (the “Facility”). The Facility has a commitment amount of $25 million with no specific contract expiration date but the Facility can be terminated upon 180 days’ notice. The Fund is charged interest at London Interbank Offered Rate (LIBOR) plus 0.70% and a commitment fee of 0.30% of the average daily unutilized amount of the commitment which is waived if the amount drawn on the Facility is over 75% of the committed amount.

At February 28, 2017, the Fund had borrowings outstanding in the amount of $22,021,169 (including accrued interest payable). During the six months ended February 28, 2017, an effective interest rate of 1.34% was incurred on the borrowings and the Fund incurred interest expense in the amount of $145,808, representing 0.26% of the Fund’s average daily net assets.

7. INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended February 28, 2017 were $32,775,176 and $28,914,455, respectively.

The Fund may purchase or sell investment securities to other Wells Fargo funds under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which generally do not incur broker commissions, are effected at current market prices. Interfund trades are included within the respective purchases and sales amounts shown.

As of February 28, 2017, the Fund had unfunded term loan commitments of $25,170.

8. DERIVATIVE TRANSACTIONS

During the six months ended February 28, 2017, the Fund entered into written options for economic hedging purposes.

During the six months ended February 28, 2017, the Fund had written call/put option activities as follows:

	Number of contracts			Premiums received
Options outstanding at August 31, 2016		749		$	52,977
Options expired		(385	)		(17,501	)
Options closed		(364	)		(35,476	)
Options outstanding at February 28, 2017		0		$	0

As of February 28, 2017, the Fund did not have any open written options. The Fund had an average of 116 written option contracts during the six months ended February 28, 2017.

The fair value, realized gains or losses and change in unrealized gains or losses, if any, on derivative instruments are reflected in the appropriate financial statements.

9. CONCENTRATION RISK

The Fund invests a substantial portion of its assets in utilities companies and, therefore, would be more affected by changes in that industry than would be a fund whose investments are not heavily weighted in the industry.

10. INDEMNIFICATION

Under the Trust’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Trust may enter into contracts with service providers that contain a variety of indemnification clauses. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

11. NEW ACCOUNTING PRONOUNCEMENTS

In August 2016, FASB issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force), which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Management is currently assessing the potential impact on the financial statements that may result from adopting this ASU. This ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those financial years, with early adoption permitted.

Notes to financial statements (unaudited) Wells Fargo Utilities and High Income Fund 25

In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (a Consensus of the Emerging Issues Task Force), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts general described as restricted cash or restricted cash equivalents. Amounts described as restricted cash and restricted cash equivalents should be included with the cash and cash equivalents in reconciling the beginning and end of period total amounts shown on the statement of cash flows. Management is currently assessing the potential impact on the financial statements that may result from adopting this ASU. This ASU is effective for interim and annual reporting periods beginning after December 15, 2017.

In December 2016, FASB issued ASU No. 2016-19, Technical Corrections and Improvements. ASU 2016-19 includes an amendment to FASB ASC Topic 820, Fair Value Measurement which clarifies the difference between a valuation approach and a valuation technique. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. The disclosure requirements are effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016. Management is currently evaluating the potential impact of this new guidance to the financial statements.

12. REGULATORY CHANGES

In October 2016, the Securities and Exchange Commission (“SEC”) adopted new rules and forms and amended existing rules and forms (together, “final rules”) intended to modernize and enhance the reporting and disclosure of information by registered investment companies and to enhance liquidity risk management by open-end mutual funds and exchange-traded funds. The final rules will enhance the quality of information available to investors and will allow the SEC to more effectively collect and use data reported by funds. In part, the final rules amend Regulation S-X and require standardized, enhanced disclosure about derivatives in the Fund’s financial statements, as well as other amendments. The compliance date for the amendments to Regulation S-X is August 1, 2017 while the compliance date for the new form types is June 1, 2018 and the compliance date for the liquidity risk management program requirements is December 1, 2018. Management is currently assessing the potential impact of these enhancements and their impact on the financial statement disclosures and reporting requirements.

13. SUBSEQUENT DISTRIBUTIONS

The Fund declared the following distributions to common shareholders:

Declaration date	Record date	Payable date	Per share amount
March 1, 2017	March 15, 2017	April 3, 2017	$0.075
March 31, 2017	April 18, 2017	May 1, 2017	0.075
April 28, 2017	May 18, 2017	June 1, 2017	0.075

These distributions are not reflected in the accompanying financial statements. The final determination of the source of all distributions is subject to change and made after the Fund’s tax year-end.

26 Wells Fargo Utilities and High Income Fund Other information (unaudited)

PROXY VOTING INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, upon request, by calling 1-800-222-8222, visiting our website at wellsfargofunds.com, or visiting the SEC website at sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website at wellsfargofunds.com or by visiting the SEC website at sec.gov.

SPECIAL MEETING OF SHAREHOLDERS

On December 5, 2016, an Annual Meeting of Shareholders for the Fund was held to consider the following proposal. The results of the proposal are indicated below.

Proposal 1 – Election of Trustees:

Net assets voted “For”	Peter G. Gordon	$	100,521,179
Net assets voted “Against”		$	4,459,245
Net assets voted “For”	Timothy J. Penny	$	100,655,166
Net assets voted “Against”		$	4,325,258
Net assets voted “For”	Michael S. Scofield	$	100,651,454
Net assets voted “Against”		$	4,328,970

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available monthly on the Fund’s website (wellsfargofunds.com), on a one-month delayed basis. The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available by visiting the SEC website at sec.gov. In addition, the Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and at regional offices in New York City, at 233 Broadway, and in Chicago, at 175 West Jackson Boulevard, Suite 900. Information about the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Other information (unaudited) Wells Fargo Utilities and High Income Fund 27

BOARD OF TRUSTEES AND OFFICERS

The following table provides basic information about the Board of Trustees and Officers of the Fund. Each of the Trustees and Officers listed below acts in identical capacities for each fund in the Wells Fargo family of funds, which consists of 138 mutual funds comprising the Wells Fargo Funds Trust, Wells Fargo Variable Trust, Wells Fargo Master Trust, and four closed-end funds, including the Fund (collectively the “Fund Complex”). The mailing address of each Trustee and Officer is 525 Market Street, 12th Floor, San Francisco, CA 94105. The Board of Trustees is classified into three classes of which one is elected annually. Each Trustee serves a three-year term concurrent with the class from which the Trustee is elected. Each Officer serves an indefinite term.

Independent Trustees

Name and year of birth	Position held and length of service	Principal occupations during past five years or longer	Current other public company or investment company directorships
Class I - Non-Interested Trustees to serve until 2020 Annual Meeting of Shareholders
Isaiah Harris, Jr. (Born 1952)	Trustee, since 2010	Retired. Chairman of the Board of CIGNA Corporation since 2009, and Director since 2005. From 2003 to 2011, Director of Deluxe Corporation. Prior thereto, President and CEO of BellSouth Advertising and Publishing Corp. from 2005 to 2007, President and CEO of BellSouth Enterprises from 2004 to 2005 and President of BellSouth Consumer Services from 2000 to 2003. Emeritus member of the Iowa State University Foundation Board of Governors. Emeritus Member of the Advisory Board of Iowa State University School of Business. Advisory Board Member, Palm Harbor Academy (charter school). Advisory Board Member, Child Evangelism Fellowship (non-profit). Mr. Harris is a certified public accountant (inactive status).	CIGNA Corporation; Asset Allocation Trust
David F. Larcker (Born 1950)	Trustee, since 2010	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Director of the Corporate Governance Research Initiative and Senior Faculty of The Rock Center for Corporate Governance since 2006. From 2005 to 2008, Professor of Accounting at the Graduate School of Business, Stanford University. Prior thereto, Ernst & Young Professor of Accounting at The Wharton School, University of Pennsylvania from 1985 to 2005.	Asset Allocation Trust
Olivia S. Mitchell (Born 1953)	Trustee, since 2010	International Foundation of Employee Benefit Plans Professor, Wharton School of the University of Pennsylvania since 1993. Director of Wharton’s Pension Research Council and Boettner Center on Pensions & Retirement Research, and Research Associate at the National Bureau of Economic Research. Previously, Cornell University Professor from 1978 to 1993.	Asset Allocation Trust
Class II - Non-Interested Trustees to serve until 2018 Annual Meeting of Shareholders
William R. Ebsworth (Born 1957)	Trustee, since 2015	Retired. From 1984 to 2013, equities analyst, portfolio manager, research director and chief financial officer at Fidelity Management and Research Company in Boston, Tokyo, and Hong Kong and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. where he lead a team of investment professionals managing client assets. Prior thereto, Board member of Hong Kong Securities Clearing Co., Hong Kong Options Clearing Corp., the Thailand International Fund, Ltd., Fidelity Investments Life Insurance Company, and Empire Fidelity Investments Life Insurance Company. Board member of the Fonté Foundation (non-profit organization) and the Vincent Memorial Hospital Endowment (non-profit organization), where he serves on the Investment Committee and as a Chair of the Audit Committee. Mr. Ebsworth is a CFA® charterholder and an Adjunct Lecturer, Finance, at Babson College.	Asset Allocation Trust
Jane A. Freeman (Born 1953)	Trustee, since 2015	Retired. From 2012 to 2014 and 1999 to 2008, Chief Financial Officer of Scientific Learning Corporation. From 2008 to 2012, Ms. Freeman provided consulting services related to strategic business projects. Prior to 1999, Portfolio Manager at Rockefeller & Co. and Scudder, Stevens & Clark. Board member of the Harding Loevner Funds from 1996 to 2014, serving as both Lead Independent Director and chair of the Audit Committee. Board member of the Russell Exchange Traded Funds Trust from 2011 to 2012 and the chair of the Audit Committee. Ms. Freeman is a Board Member of Ruth Bancroft Garden (non-profit organization) and an inactive chartered financial analyst.	Asset Allocation Trust

28 Wells Fargo Utilities and High Income Fund Other information (unaudited)

Name and year of birth	Position held and length of service	Principal occupations during past five years or longer	Current other public company or investment company directorships
Judith M. Johnson (Born 1949)	Trustee, since 2010; Audit Committee Chairman, since 2010	Retired. Prior thereto, Chief Executive Officer and Chief Investment Officer of Minneapolis Employees Retirement Fund from 1996 to 2008. Ms. Johnson is an attorney, certified public accountant and a certified managerial accountant.	Asset Allocation Trust
Class III - Non-Interested Trustees to serve until 2019 Annual Meeting of Shareholders
Peter G. Gordon* (Born 1942)	Trustee, since 2010; Chairman, since 2010	Co-Founder, Retired Chairman, President and CEO of Crystal Geyser Water Company. Trustee Emeritus, Colby College.	Asset Allocation Trust
Timothy J. Penny (Born 1951)	Trustee, since 2010	President and Chief Executive Officer of Southern Minnesota Initiative Foundation, a non-profit organization, since 2007 and Senior Fellow at the Humphrey Institute Policy Forum at the University of Minnesota since 1995. Member of the Board of Trustees of NorthStar Education Finance, Inc., a non-profit organization, since 2007.	Asset Allocation Trust
Michael S. Scofield (Born 1943)	Trustee, since 2004	Served on the Investment Company Institute’s Board of Governors and Executive Committee from 2008-2011 as well the Governing Council of the Independent Directors Council from 2006-2011 and the Independent Directors Council Executive Committee from 2008-2011. Chairman of the IDC from 2008-2010. Institutional Investor (Fund Directions) Trustee of Year in 2007. Trustee of the Evergreen Funds complex (and its predecessors) from 1984 to 2010. Chairman of the Evergreen Funds from 2000-2010. Former Trustee of the Mentor Funds. Retired Attorney, Law Offices of Michael S. Scofield.	Asset Allocation Trust

* Peter Gordon is expected to retire on December 31, 2017.

Officers

Name and year of birth	Position held and length of service	Principal occupations during past five years or longer
Andrew Owen (Born 1960)	President, since 2017	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo & Company and Head of Affiliated Managers, Wells Fargo Asset Management, since 2014. Executive Vice President responsible for marketing, investments and product development for Wells Fargo Funds Management, LLC, from 2009 to 2014.
Nancy Wiser1 (Born 1967)	Treasurer, since 2012	Executive Vice President of Wells Fargo Funds Management, LLC since 2011. Chief Operating Officer and Chief Compliance Officer at LightBox Capital Management LLC, from 2008 to 2011.
C. David Messman (Born 1960)	Secretary, since 2010; Chief Legal Officer, since 2010	Senior Vice President and Secretary of Wells Fargo Funds Management, LLC since 2001. Assistant General Counsel of Wells Fargo Bank, N.A. since 2013 and Vice President and Managing Counsel of Wells Fargo Bank, N.A. from 1996 to 2013.
Michael Whitaker (Born 1967)	Chief Compliance Officer, since 2016	Executive Vice President of Wells Fargo Funds Management, LLC since 2016. Chief Compliance Officer of Fidelity’s Fixed Income Funds and Asset Allocation Funds from 2008 to 2016, Compliance Officer of FMR Co., Inc. from 2014 to 2016, Fidelity Investments Money Management, Inc. from 2014 to 2016, Fidelity Investments from 2007 to 2016.
David Berardi (Born 1975)	Assistant Treasurer, since 2009	Vice President of Wells Fargo Funds Management, LLC since 2009. Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010. Manager of Fund Reporting and Control for Evergreen Investment Management Company, LLC from 2004 to 2010.
Jeremy DePalma1 (Born 1974)	Assistant Treasurer, since 2005	Senior Vice President of Wells Fargo Funds Management, LLC since 2009. Senior Vice President of Evergreen Investment Management Company, LLC from 2008 to 2010 and head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

¹ Nancy Wiser acts as Treasurer of 69 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 69 funds and Assistant Treasurer of 69 funds in the Fund Complex.

Automatic dividend reinvestment plan Wells Fargo Utilities and High Income Fund 29

AUTOMATIC DIVIDEND REINVESTMENT PLAN

All common shareholders are eligible to participate in the Automatic Dividend Reinvestment Plan (“the Plan”). Pursuant to the Plan, unless a common shareholder is ineligible or elects otherwise, all cash dividends and capital gains distributions are automatically reinvested by Computershare Trust Company, N.A., as agent for shareholders in administering the Plan (“Plan Agent”), in additional common shares of the Fund. Whenever the Fund declares an ordinary income dividend or a capital gain dividend (collectively referred to as “dividends”) payable either in shares or in cash, nonparticipants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The shares are acquired by the Plan Agent for the participant’s account, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized common shares from the Fund (“newly issued common shares”) or (ii) by purchase of outstanding common shares on the open-market (open-market purchases) on the NYSE Amex or elsewhere. If, on the payment date for any dividend or distribution, the net asset value per share of the common shares is equal to or less than the market price per common share plus estimated brokerage commissions (“market premium”), the Plan Agent will invest the amount of such dividend or distribution in newly issued shares on behalf of the participant. The number of newly issued common shares to be credited to the participant’s account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued, provided that the maximum discount from the then current market price per share on the date of issuance may not exceed 5%. If on the dividend payment date the net asset value per share is greater than the market value (“market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participant in open-market purchases. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 30170, College Station, Texas 77842-3170 or by calling 1-800-730-6001.

30 Wells Fargo Utilities and High Income Fund List of abbreviations

The following is a list of common abbreviations for terms and entities that may have appeared in this report.

ACA —  ACA Financial Guaranty Corporation

ADR —  American depositary receipt

ADS —  American depositary shares

AGC —  Assured Guaranty Corporation

AGM —  Assured Guaranty Municipal

Ambac —  Ambac Financial Group Incorporated

AMT —  Alternative minimum tax

AUD —  Australian dollar

BAN —  Bond anticipation notes

BHAC —  Berkshire Hathaway Assurance Corporation

BRL —  Brazilian 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 —  Colombian peso

CLP —  Chilean peso

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

FDIC —  Federal Deposit Insurance Corporation

FFCB —  Federal Farm Credit Banks

FGIC —  Financial Guaranty Insurance Corporation

FHA —  Federal Housing Administration

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 depositary 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

HUD —  Department of Housing and Urban Development

HUF —  Hungarian forint

IDA —  Industrial Development Authority

IDAG —  Industrial Development Agency

IDR —  Indonesian rupiah

IEP —  Irish pound

JPY —  Japanese yen

KRW —  Republic of Korea won

LIBOR —  London Interbank Offered Rate

LIFER —  Long Inverse Floating Exempt Receipts

LIQ —  Liquidity agreement

LLC —  Limited liability company

LLLP —  Limited liability limited partnership

LLP —  Limited liability partnership

LOC —  Letter of credit

LP —  Limited partnership

MBIA —  Municipal Bond Insurance Association

MFHR —  Multifamily housing revenue

MSTR —  Municipal securities trust receipts

MTN —  Medium-term note

MUD —  Municipal Utility District

MXN —  Mexican peso

MYR —  Malaysian ringgit

National —  National Public Finance Guarantee Corporation

NGN —  Nigerian naira

NOK —  Norwegian krone

NZD —  New Zealand dollar

PCFA —  Pollution Control Financing Authority

PCL —  Public Company Limited

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

Radian —  Radian Asset Assurance

RAN —  Revenue anticipation notes

RDA —  Redevelopment Authority

RDFA —  Redevelopment Finance Authority

REIT —  Real estate investment trust

ROC —  Reset option certificates

RON —  Romanian lei

RUB —  Russian ruble

SAVRS —  Select auction variable rate securities

SBA —  Small Business Authority

SDR —  Swedish depositary receipt

SEK —  Swedish krona

SFHR —  Single-family housing revenue

SFMR —  Single-family mortgage revenue

SGD —  Singapore dollar

SPA —  Standby purchase agreement

SPDR —  Standard & Poor’s Depositary Receipts

SPEAR —  Short Puttable Exempt Adjustable Receipts

STRIPS —  Separate trading of registered interest and

      principal securities

TAN —  Tax anticipation notes

TBA —  To be announced

THB —  Thai baht

TIPS —  Treasury inflation-protected securities

TRAN —  Tax revenue anticipation notes

TRY —  Turkish lira

TTFA —  Transportation Trust Fund Authority

TVA —  Tennessee Valley Authority

ZAR —  South African rand

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Transfer Agent, Registrar, Shareholder Servicing

Agent & Dividend Disbursing Agent

Computershare Trust Company, N.A.

P.O. Box 30170

College Station, TX 77842-3170

1-800-730-6001

Website: wellsfargofunds.com

Wells Fargo Funds Management, LLC, is a subsidiary of Wells Fargo & Company and is an affiliate of Wells Fargo & Company’s broker/dealer subsidiaries. Certain material contained in this report may be considered marketing material and has been reviewed by Wells Fargo Funds Distributor, LLC, Member FINRA, an affiliate of Wells Fargo & Company. Neither Wells Fargo Funds Management nor Wells Fargo Funds Distributor has Fund customer accounts/assets, and neither provides investment advice/recommendations or acts as an investment advice fiduciary to any investor.

NOT FDIC INSURED  ◾  NO BANK GUARANTEE  ◾   MAY LOSE VALUE

© 2017 Wells Fargo Funds Management, LLC. All rights reserved.

302021 04-17 SUHIF/SAR152 2-17

ITEM 2. CODE OF ETHICS

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6. INVESTMENTS

Wells Fargo Utilities and High Income Fund included a Summary Portfolio of Investments under Item 1. A Portfolio of Investments for Wells Fargo Utilities and High Income Fund is filed under this Item.

3

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 1

Security name	Shares		Value
Common Stocks: 58.95%
Energy: 6.36%
Oil, Gas & Consumable Fuels: 6.36%
Enagas SA		175,000	$	4,300,235
Enbridge Incorporated		73,800		3,088,530
Swift Energy Company †(i)		1,236		36,153
				7,424,918
Telecommunication Services: 7.31%
Diversified Telecommunication Services: 5.14%
CenturyLink Incorporated		106		2,572
Chunghwa Telecom Company Limited ADR		120,000		3,944,400
Verizon Communications Incorporated		41,291		2,049,272
				5,996,244
Wireless Telecommunication Services: 2.17%
Shenandoah Telecommunications Company		90,000		2,529,000
Utilities: 45.28%
Electric Utilities: 36.22%
Alliant Energy Corporation		8,000		315,840
American Electric Power Company Incorporated		70,000		4,687,900
Chesapeake Utilities Corporation		300		20,685
Edison International		60,000		4,784,400
Endesa SA		180,000		3,831,954
Enel SpA		1,225,000		5,258,541
Entergy Corporation		1,000		76,660
Eversource Energy		90,000		5,279,400
Exelon Corporation		16,000		587,360
Great Plains Energy Incorporated		100,000		2,906,000
IDACORP Incorporated		25,000		2,073,250
NextEra Energy Incorporated		35,000		4,585,000
PNM Resources Incorporated		75,000		2,722,500
Red Electrica Corporacion SA		40,000		722,299
Spark Energy Incorporated Class A		36,700		990,900
Terna SpA		650,000		3,010,601
Vistra Energy Corporation		23,978		387,484
				42,240,774
Gas Utilities: 0.03%
New Jersey Resources Corporation		400		15,760
South Jersey Industries Incorporated		400		14,008
				29,768
Multi-Utilities: 5.69%
CenterPoint Energy Incorporated		50,000		1,366,000
Dominion Resources Incorporated		300		23,292
Hera SpA		300,000		743,698

2 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name						Shares		Value
Multi-Utilities (continued)
MDU Resources Group Incorporated							500	$	13,555
Public Service Enterprise Group Incorporated							50,000		2,299,000
Sempra Energy							19,900		2,194,771
									6,640,316
Water Utilities: 3.34%
American Water Works Company Incorporated							50,000		3,900,000
Total Common Stocks (Cost $49,954,755)									68,761,020
	Interest rate			Maturity date		Principal
Corporate Bonds and Notes: 29.72%
Consumer Discretionary: 6.04%
Auto Components: 0.52%
Allison Transmission Incorporated 144A		5.00	%		10-1-2024	$	350,000		356,125
Cooper Tire & Rubber Company (i)		7.63			3-15-2027		202,000		220,948
Goodyear Tire & Rubber Company		7.00			5-15-2022		25,000		26,125
									603,198
Distributors: 0.09%
LKQ Corporation		4.75			5-15-2023		100,000		100,157
Diversified Consumer Services: 0.42%
Service Corporation International		7.50			4-1-2027		351,000		415,935
Service Corporation International		7.63			10-1-2018		25,000		27,000
Service Corporation International		8.00			11-15-2021		40,000		46,800
									489,735
Hotels, Restaurants & Leisure: 1.14%
Brinker International Incorporated 144A		5.00			10-1-2024		75,000		73,688
CCM Merger Incorporated 144A		9.13			5-1-2019		425,000		438,281
Greektown Holdings LLC 144A		8.88			3-15-2019		675,000		707,906
Hilton Worldwide Finance LLC		5.63			10-15-2021		15,000		15,445
Speedway Motorsports Incorporated		5.13			2-1-2023		100,000		101,250
									1,336,570
Leisure Products: 0.05%
Vista Outdoor Incorporated		5.88			10-1-2023		65,000		64,513
Media: 2.82%
Altice US Finance I Corporation 144A		5.38			7-15-2023		200,000		208,500
Altice US Finance I Corporation 144A		5.50			5-15-2026		100,000		103,375
AMC Entertainment Holdings Incorporated 144A		5.88			11-15-2026		75,000		76,712
Cablevision Systems Corporation		8.63			9-15-2017		145,000		149,531
CBS Radio Incorporated 144A		7.25			11-1-2024		5,000		5,338
CCO Holdings LLC		5.13			2-15-2023		50,000		52,063
CCO Holdings LLC 144A		5.13			5-1-2023		135,000		140,063
CCO Holdings LLC		5.25			9-30-2022		90,000		93,600

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 3

Security name	Interest rate			Maturity date		Principal		Value
Media (continued)
CCO Holdings LLC 144A		5.38	%		5-1-2025	$	335,000	$	350,913
CCO Holdings LLC 144A		5.50			5-1-2026		5,000		5,306
CCO Holdings LLC 144A		5.75			2-15-2026		275,000		294,250
CCO Holdings LLC 144A		5.88			4-1-2024		125,000		134,063
Cequel Communications Holdings I LLC 144A		7.75			7-15-2025		100,000		111,125
CSC Holdings LLC		7.88			2-15-2018		75,000		78,563
CSC Holdings LLC		8.63			2-15-2019		125,000		138,204
EMI Music Publishing 144A		7.63			6-15-2024		50,000		54,875
Gray Television Incorporated 144A		5.13			10-15-2024		100,000		98,750
Gray Television Incorporated 144A		5.88			7-15-2026		325,000		329,573
Lamar Media Corporation		5.88			2-1-2022		75,000		77,363
Live Nation Entertainment Incorporated 144A		4.88			11-1-2024		100,000		100,000
National CineMedia LLC		5.75			8-15-2026		100,000		102,000
National CineMedia LLC		6.00			4-15-2022		225,000		232,594
Nexstar Broadcasting Group Incorporated 144A		5.63			8-1-2024		75,000		76,688
Nexstar Broadcasting Group Incorporated 144A		6.13			2-15-2022		150,000		156,938
Outfront Media Capital Corporation		5.25			2-15-2022		15,000		15,581
Outfront Media Capital Corporation		5.63			2-15-2024		29,000		30,450
Outfront Media Capital Corporation		5.88			3-15-2025		65,000		68,331
									3,284,749
Specialty Retail: 0.94%
Asbury Automotive Group Incorporated		6.00			12-15-2024		300,000		312,000
Group 1 Automotive Incorporated		5.00			6-1-2022		100,000		103,000
Penske Auto Group Incorporated		5.38			12-1-2024		300,000		304,500
Penske Auto Group Incorporated		5.75			10-1-2022		99,000		102,713
Sonic Automotive Incorporated		5.00			5-15-2023		70,000		68,775
Sonic Automotive Incorporated		7.00			7-15-2022		200,000		209,000
									1,099,988
Textiles, Apparel & Luxury Goods: 0.06%
Wolverine World Wide Company 144A		5.00			9-1-2026		75,000		71,063
Consumer Staples: 0.69%
Beverages: 0.10%
Cott Beverages Incorporated		5.38			7-1-2022		50,000		51,250
Cott Beverages Incorporated		6.75			1-1-2020		60,000		62,025
									113,275
Food Products: 0.57%
B&G Foods Incorporated		4.63			6-1-2021		30,000		30,375
Darling Ingredients Incorporated		5.38			1-15-2022		15,000		15,581
Pilgrim’s Pride Corporation 144A		5.75			3-15-2025		85,000		87,338
Pinnacle Foods Incorporated 144A		5.63			5-1-2024		25,000		25,438
Post Holdings Incorporated 144A		5.00			8-15-2026		75,000		72,234
Post Holdings Incorporated 144A		5.50			3-1-2025		50,000		51,000
Post Holdings Incorporated 144A		5.75			3-1-2027		50,000		50,594
Post Holdings Incorporated 144A		8.00			7-15-2025		100,000		112,750
Prestige Brands Incorporated 144A		6.38			3-1-2024		10,000		10,600

4 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value
Food Products (continued)
Simmons Foods Incorporated 144A		7.88	%		10-1-2021	$	175,000	$	184,188
US Foods Incorporated 144A		5.88			6-15-2024		30,000		31,500
									671,598
Household Products: 0.02%
Central Garden & Pet Company		6.13			11-15-2023		20,000		21,350
Energy: 7.44%
Energy Equipment & Services: 2.38%
Bristow Group Incorporated		6.25			10-15-2022		325,000		281,938
Era Group Incorporated		7.75			12-15-2022		215,000		210,163
Hilcorp Energy Company 144A		5.00			12-1-2024		150,000		143,625
Hilcorp Energy Company 144A		5.75			10-1-2025		150,000		148,875
Hornbeck Offshore Services Incorporated		1.50			9-1-2019		350,000		245,219
Hornbeck Offshore Services Incorporated		5.00			3-1-2021		150,000		97,125
Hornbeck Offshore Services Incorporated		5.88			4-1-2020		235,000		156,275
NGPL PipeCo LLC 144A		7.12			12-15-2017		190,000		196,888
NGPL PipeCo LLC 144A		7.77			12-15-2037		725,000		821,063
NGPL PipeCo LLC 144A		9.63			6-1-2019		35,000		36,400
PHI Incorporated		5.25			3-15-2019		455,000		442,488
									2,780,059
Oil, Gas & Consumable Fuels: 5.06%
Archrock Partners LP		6.00			10-1-2022		50,000		49,875
Continental Resources Incorporated		3.80			6-1-2024		50,000		46,313
Crestwood Midstream Partners LP		6.25			4-1-2023		150,000		155,625
Denbury Resources Incorporated		4.63			7-15-2023		325,000		253,500
Denbury Resources Incorporated		6.38			8-15-2021		160,000		142,800
Enable Midstream Partner LP		2.40			5-15-2019		275,000		272,831
Enable Midstream Partner LP		3.90			5-15-2024		150,000		146,852
Enable Midstream Partner LP		5.00			5-15-2044		25,000		23,255
Enable Oklahoma Intrastate Transmission LLC 144A		6.25			3-15-2020		50,000		52,777
EnLink Midstream LLC		4.15			6-1-2025		225,000		224,832
EnLink Midstream LLC		4.40			4-1-2024		250,000		254,274
Exterran Partners LP		6.00			4-1-2021		275,000		275,000
Gulfport Energy Corporation 144A		6.00			10-15-2024		75,000		74,625
Gulfport Energy Corporation 144A		6.38			5-15-2025		75,000		75,375
Gulfport Energy Corporation		6.63			5-1-2023		200,000		203,500
Kinder Morgan Incorporated		6.50			9-15-2020		45,000		50,598
Kinder Morgan Incorporated (i)		7.42			2-15-2037		90,000		101,212
Matador Resources Company 144A		6.88			4-15-2023		25,000		26,375
Murphy Oil Corporation		4.70			12-1-2022		175,000		171,938
Murphy Oil Corporation		6.88			8-15-2024		50,000		53,525
Nabors Industries Incorporated 144A		5.50			1-15-2023		25,000		25,797
Overseas Shipholding Group Incorporated		8.13			3-30-2018		175,000		180,688
PDC Energy Incorporated 144A		6.13			9-15-2024		50,000		51,625
Rockies Express Pipeline LLC 144A		5.63			4-15-2020		325,000		342,875
Rockies Express Pipeline LLC 144A		6.88			4-15-2040		300,000		319,500
Rockies Express Pipeline LLC 144A		7.50			7-15-2038		130,000		143,650

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 5

Security name	Interest rate			Maturity date		Principal		Value
Oil, Gas & Consumable Fuels (continued)
Rose Rock Midstream LP		5.63	%		7-15-2022	$	100,000	$	98,250
Rose Rock Midstream LP		5.63			11-15-2023		75,000		73,125
Sabine Oil & Gas Corporation (i)(s)		7.25			6-15-2019		50,000		50
Sabine Oil & Gas Corporation (i)(s)		7.50			9-15-2020		260,000		260
Sabine Pass Liquefaction LLC		5.63			2-1-2021		125,000		135,935
Sabine Pass Liquefaction LLC		5.63			4-15-2023		165,000		181,462
Sabine Pass Liquefaction LLC		5.63			3-1-2025		50,000		54,875
Sabine Pass Liquefaction LLC		5.75			5-15-2024		75,000		83,036
Sabine Pass Liquefaction LLC 144A		5.88			6-30-2026		100,000		111,988
Sabine Pass Liquefaction LLC		6.25			3-15-2022		200,000		225,616
SemGroup Corporation		7.50			6-15-2021		350,000		365,750
Southwestern Energy Company		4.10			3-15-2022		75,000		66,656
Southwestern Energy Company		6.70			1-23-2025		125,000		120,000
Summit Midstream Holdings LLC		5.75			4-15-2025		25,000		25,375
Tallgrass Energy Partners LP 144A		5.50			9-15-2024		500,000		505,000
Tesoro Logistics LP		5.25			1-15-2025		50,000		52,688
Tesoro Logistics LP		6.13			10-15-2021		25,000		26,094
Tesoro Logistics LP		6.38			5-1-2024		25,000		27,177
Western Gas Partners LP		5.38			6-1-2021		25,000		27,134
									5,899,688
Financials: 2.33%
Banks: 0.30%
CIT Group Incorporated 144A		5.50			2-15-2019		100,000		105,313
CIT Group Incorporated 144A		6.63			4-1-2018		231,000		241,973
									347,286
Consumer Finance: 1.32%
Ally Financial Incorporated		8.00			12-31-2018		75,000		82,359
Ally Financial Incorporated		8.00			3-15-2020		203,000		232,159
Navient Corporation		8.00			3-25-2020		175,000		189,852
Navient Corporation		8.45			6-15-2018		125,000		133,594
OneMain Financial Group LLC 144A		7.25			12-15-2021		300,000		313,500
Springleaf Finance Corporation		6.00			6-1-2020		100,000		101,750
Springleaf Finance Corporation		6.50			9-15-2017		50,000		50,938
Springleaf Finance Corporation		6.90			12-15-2017		243,000		250,594
Springleaf Finance Corporation		7.75			10-1-2021		25,000		26,719
Springleaf Finance Corporation		8.25			10-1-2023		150,000		158,813
									1,540,278
Diversified Financial Services: 0.27%
Infinity Acquisition LLC 144A(i)		7.25			8-1-2022		125,000		110,156
NewStar Financial Incorporated		7.25			5-1-2020		200,000		204,000
									314,156
Insurance: 0.44%
Hub Holdings LLC (PIK at 8.88%) 144A¥		8.13			7-15-2019		175,000		176,313
Hub International Limited 144A		7.88			10-1-2021		325,000		343,688
									520,001

6 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value
Health Care: 2.84%
Health Care Equipment & Supplies: 0.51%
Hill-Rom Holdings Incorporated 144A		5.75	%		9-1-2023	$	25,000	$	26,125
Hill-Rom Holdings Incorporated 144A		5.00			2-15-2025		50,000		50,250
Hologic Incorporated 144A		5.25			7-15-2022		90,000		93,825
Kinetics Concepts Incorporated 144A		7.88			2-15-2021		200,000		215,500
Surgery Center Holdings Company 144A		8.88			4-15-2021		200,000		214,000
									599,700
Health Care Providers & Services: 1.63%
Acadia Healthcare Company Incorporated		6.50			3-1-2024		20,000		21,250
DaVita HealthCare Partners Incorporated		5.00			5-1-2025		35,000		35,217
DaVita HealthCare Partners Incorporated		5.75			8-15-2022		170,000		177,225
HCA Incorporated		5.88			3-15-2022		25,000		27,594
HCA Incorporated		6.50			2-15-2020		325,000		356,623
HealthSouth Corporation		5.75			9-15-2025		75,000		75,938
Mednax Incorporated 144A		5.25			12-1-2023		50,000		51,688
MPH Acquisition Holdings LLC 144A		7.13			6-1-2024		125,000		134,688
MPT Operating Partnership LP		5.25			8-1-2026		100,000		101,000
MPT Operating Partnership LP		6.38			2-15-2022		125,000		129,219
MPT Operating Partnership LP		6.38			3-1-2024		10,000		10,675
Select Medical Corporation		6.38			6-1-2021		315,000		316,969
TeamHealth Incorporated 144A		6.38			2-1-2025		25,000		24,813
Tenet Healthcare Corporation		6.00			10-1-2020		50,000		53,000
Tenet Healthcare Corporation 144A		7.50			1-1-2022		35,000		37,888
Vizient Incorporated 144A		10.38			3-1-2024		300,000		343,500
									1,897,287
Health Care Technology: 0.61%
Change Healthcare Holdings Incorporated 144A		5.75			3-1-2025		175,000		180,688
Change Healthcare Holdings Incorporated 144A		6.00			2-15-2021		150,000		159,750
Change Healthcare Holdings Incorporated		11.00			12-31-2019		355,000		364,763
									705,201
Pharmaceuticals: 0.09%
Endo Finance LLC 144A		5.38			1-15-2023		50,000		44,250
Endo Finance LLC 144A		5.75			1-15-2022		65,000		60,288
									104,538
Industrials: 1.03%
Airlines: 0.10%
Aviation Capital Group Corporation 144A		6.75			4-6-2021		100,000		115,056
Commercial Services & Supplies: 0.75%
Acco Brands Corporation 144A		5.25			12-15-2024		25,000		25,313
Advanced Disposal Services Incorporated 144A		5.63			11-15-2024		200,000		204,500
Aramark Services Incorporated		5.13			1-15-2024		60,000		62,856
Covanta Holding Corporation		5.88			3-1-2024		185,000		187,775
Covanta Holding Corporation		6.38			10-1-2022		195,000		201,094
Covanta Holding Corporation		7.25			12-1-2020		110,000		113,025
The ServiceMaster Company LLC 144A		5.13			11-15-2024		75,000		76,313
									870,876

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 7

Security name	Interest rate			Maturity date		Principal		Value
Professional Services: 0.01%
Ascent Capital Group Incorporated		4.00	%		7-15-2020	$	25,000	$	19,156
Trading Companies & Distributors: 0.17%
Ashtead Capital Incorporated 144A		6.50			7-15-2022		150,000		156,886
International Lease Finance Corporation 144A		7.13			9-1-2018		35,000		37,627
									194,513
Information Technology: 2.84%
Communications Equipment: 0.09%
CommScope Technologies Finance LLC 144A		6.00			6-15-2025		100,000		107,000
Electronic Equipment, Instruments & Components: 0.69%
Jabil Circuit Incorporated		8.25			3-15-2018		620,000		659,643
Zebra Technologies Corporation		7.25			10-15-2022		135,000		146,046
									805,689
Internet Software & Services: 0.25%
Infor Software Parent LLC		6.50			5-15-2022		50,000		52,000
Infor Software Parent LLC (PIK at 7.88%) 144A¥		7.13			5-1-2021		75,000		77,063
Zayo Group LLC 144A		5.75			1-15-2027		25,000		26,433
Zayo Group LLC		6.38			5-15-2025		125,000		134,688
									290,184
IT Services: 0.24%
First Data Corporation 144A		5.00			1-15-2024		75,000		76,592
First Data Corporation 144A		5.38			8-15-2023		25,000		26,000
First Data Corporation 144A		5.75			1-15-2024		95,000		98,444
First Data Corporation 144A		7.00			12-1-2023		75,000		80,625
									281,661
Semiconductors & Semiconductor Equipment: 0.32%
Micron Technology Incorporated 144A		5.25			8-1-2023		25,000		25,219
Micron Technology Incorporated 144A		5.25			1-15-2024		75,000		75,938
Micron Technology Incorporated		5.50			2-1-2025		110,000		113,575
Micron Technology Incorporated 144A		5.63			1-15-2026		85,000		87,338
Micron Technology Incorporated		5.88			2-15-2022		65,000		67,844
									369,914
Software: 0.20%
Boxer Parent Company Incorporated (PIK at 9.75%) 144A¥		9.00			10-15-2019		150,000		150,563
SS&C Technologies Incorporated		5.88			7-15-2023		50,000		52,875
Symantec Corporation 144A		5.00			4-15-2025		25,000		25,660
									229,098
Technology Hardware, Storage & Peripherals: 1.05%
Diamond 1 Finance Corporation 144A		5.88			6-15-2021		225,000		238,033
Diamond 1 Finance Corporation 144A		7.13			6-15-2024		425,000		469,576
NCR Corporation		5.88			12-15-2021		15,000		15,713
NCR Corporation		6.38			12-15-2023		475,000		507,656
									1,230,978

8 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value
Materials: 0.82%
Chemicals: 0.04%
Celanese U.S. Holdings LLC		5.88	%		6-15-2021	$	20,000	$	22,189
Valvoline Incorporated 144A		5.50			7-15-2024		25,000		26,375
									48,564
Containers & Packaging: 0.78%
Ball Corporation		5.25			7-1-2025		15,000		15,919
Berry Plastics Corporation		5.13			7-15-2023		50,000		51,500
Berry Plastics Corporation		6.00			10-15-2022		65,000		68,819
Crown Cork & Seal Company Incorporated		7.38			12-15-2026		155,000		177,863
Crown Cork & Seal Company Incorporated (i)		7.50			12-15-2096		50,000		50,813
Owens-Brockway Glass Container Incorporated 144A		5.88			8-15-2023		50,000		53,688
Owens-Illinois Incorporated 144A		5.38			1-15-2025		50,000		51,563
Owens-Illinois Incorporated 144A		6.38			8-15-2025		250,000		271,406
Owens-Illinois Incorporated		7.80			5-15-2018		60,000		63,600
Sealed Air Corporation 144A		5.13			12-1-2024		75,000		78,375
Silgan Holdings Incorporated		5.00			4-1-2020		25,000		25,344
									908,890
Real Estate: 2.30%
Equity REITs: 1.99%
CoreCivic Incorporated		5.00			10-15-2022		100,000		102,000
Crown Castle International Corporation		4.88			4-15-2022		35,000		37,819
Crown Castle International Corporation		5.25			1-15-2023		70,000		76,621
DuPont Fabros Technology Incorporated LP		5.63			6-15-2023		225,000		234,281
DuPont Fabros Technology Incorporated LP		5.88			9-15-2021		340,000		354,450
Equinix Incorporated		5.75			1-1-2025		50,000		53,000
Equinix Incorporated		5.88			1-15-2026		100,000		106,812
ESH Hospitality Incorporated 144A		5.25			5-1-2025		275,000		277,406
Iron Mountain Incorporated 144A		4.38			6-1-2021		125,000		128,438
Iron Mountain Incorporated 144A		5.38			6-1-2026		100,000		99,500
Iron Mountain Incorporated 144A		6.00			10-1-2020		20,000		21,006
Iron Mountain Incorporated		6.00			8-15-2023		267,000		282,593
Sabra Health Care Incorporated		5.38			6-1-2023		75,000		75,000
Sabra Health Care Incorporated		5.50			2-1-2021		130,000		134,875
The Geo Group Incorporated		5.13			4-1-2023		45,000		45,113
The Geo Group Incorporated		5.88			1-15-2022		135,000		140,569
The Geo Group Incorporated		5.88			10-15-2024		100,000		103,000
The Geo Group Incorporated		6.00			4-15-2026		50,000		52,050
									2,324,533
Real Estate Management & Development: 0.31%
Onex Corporation 144A		7.75			1-15-2021		350,000		357,438
Telecommunication Services: 2.06%
Diversified Telecommunication Services: 0.84%
Citizens Communications Company		7.88			1-15-2027		25,000		20,750
Frontier Communications Corporation		8.13			10-1-2018		60,000		64,200
GCI Incorporated		6.75			6-1-2021		125,000		128,438
GCI Incorporated		6.88			4-15-2025		75,000		77,813

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 9

Security name	Interest rate			Maturity date		Principal		Value
Diversified Telecommunication Services (continued)
Level 3 Financing Incorporated		5.13	%		5-1-2023	$	75,000	$	76,500
Level 3 Financing Incorporated 144A		5.25			3-15-2026		50,000		50,625
Level 3 Financing Incorporated		5.38			8-15-2022		125,000		129,594
Level 3 Financing Incorporated		5.38			1-15-2024		50,000		51,375
Level 3 Financing Incorporated		5.38			5-1-2025		75,000		77,438
Level 3 Financing Incorporated		5.63			2-1-2023		65,000		67,113
Level 3 Financing Incorporated		6.13			1-15-2021		80,000		82,900
SBA Communications Corporation		4.88			7-15-2022		100,000		102,125
SBA Communications Corporation 144A		4.88			9-1-2024		50,000		49,745
									978,616
Wireless Telecommunication Services: 1.22%
Sprint Capital Corporation		6.88			11-15-2028		425,000		454,750
Sprint Capital Corporation		8.75			3-15-2032		75,000		90,000
Sprint Communications Incorporated 144A		9.00			11-15-2018		25,000		27,375
T-Mobile USA Incorporated		6.00			3-1-2023		25,000		26,438
T-Mobile USA Incorporated		6.13			1-15-2022		25,000		26,487
T-Mobile USA Incorporated		6.25			4-1-2021		30,000		31,050
T-Mobile USA Incorporated		6.38			3-1-2025		145,000		155,872
T-Mobile USA Incorporated		6.46			4-28-2019		10,000		10,076
T-Mobile USA Incorporated		6.50			1-15-2024		5,000		5,373
T-Mobile USA Incorporated		6.54			4-28-2020		10,000		10,275
T-Mobile USA Incorporated		6.63			4-1-2023		35,000		37,170
T-Mobile USA Incorporated		6.63			4-28-2021		75,000		78,015
T-Mobile USA Incorporated		6.73			4-28-2022		375,000		390,000
T-Mobile USA Incorporated		6.84			4-28-2023		75,000		80,063
									1,422,944
Utilities: 1.33%
Gas Utilities: 0.07%
Amerigas Partners LP		5.75			5-20-2027		75,000		75,375
Independent Power & Renewable Electricity Producers: 1.26%
Calpine Corporation 144A		5.88			1-15-2024		20,000		21,100
Calpine Corporation 144A		6.00			1-15-2022		40,000		41,950
Calpine Corporation 144A		7.88			1-15-2023		31,000		32,249
NSG Holdings LLC 144A		7.75			12-15-2025		386,264		418,614
Pattern Energy Group Incorporated 144A		5.88			2-1-2024		350,000		359,188
TerraForm Power Operating LLC 144A		6.38			2-1-2023		425,000		439,875
TerraForm Power Operating LLC 144A		6.63			6-15-2025		150,000		157,500
									1,470,476
Total Corporate Bonds and Notes (Cost $33,092,212)									34,665,351
Loans: 0.99%
Consumer Discretionary: 0.32%
Hotels, Restaurants & Leisure: 0.32%
CCM Merger Incorporated ±<		4.03			8-8-2021		60,696		61,151
Montreign Operating Company ±		9.31			12-7-2022		300,000		305,250
									366,401

10 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value
Energy: 0.08%
Energy Equipment & Services: 0.03%
Hummel Station LLC ±		7.00	%		10-27-2022	$	42,991	$	41,808
Oil, Gas & Consumable Fuels: 0.05%
Chesapeake Energy Corporation ±		8.55			8-23-2021		50,000		54,000
Financials: 0.04%
Capital Markets: 0.04%
American Beacon Advisors Incorporated ±		9.79			3-3-2023		50,000		49,500
Health Care: 0.02%
Health Care Providers & Services: 0.02%
Press Ganey Holdings Incorporated ±		8.25			10-21-2024		25,000		25,375
Industrials: 0.11%
Commercial Services & Supplies: 0.11%
Advantage Sales & Marketing LLC ±		7.50			7-25-2022		91,664		89,373
WASH Multifamily Laundry Systems LLC ±		4.25			5-14-2022		25,146		25,240
WASH Multifamily Laundry Systems LLC ±		4.25			5-14-2022		4,404		4,420
WASH Multifamily Laundry Systems LLC ±		8.00			5-12-2023		1,490		1,476
WASH Multifamily Laundry Systems LLC ±(i)		8.00			5-14-2023		8,510		8,424
									128,933
Information Technology: 0.37%
Internet Software & Services: 0.35%
Ancestry.com Incorporated ±		4.25			10-19-2023		225,000		227,531
Ancestry.com Incorporated ±		9.25			10-19-2024		175,000		178,792
									406,323
Technology Hardware, Storage & Peripherals: 0.02%
Peak 10 Incorporated ±(i)		8.28			6-17-2022		30,000		28,300
Utilities: 0.05%
Electric Utilities: 0.05%
Texas Competitive Electric Holdings Company LLC ±		4.02			12-14-2023		50,000		50,289
Total Loans (Cost $1,127,324)									1,150,929
	Dividend yield					Shares
Preferred Stocks: 17.98%
Utilities: 17.98%
Electric Utilities: 12.41%
Alabama Power Company		6.45					68,347		1,774,890
Alabama Power Company		6.50					103,283		2,727,322
Entergy Louisiana LLC		4.88					30,000		681,900
Georgia Power Company		6.50					44,043		4,524,097
Gulf Power Company		6.45					30,000		3,052,242

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 11

Security name	Dividend yield					Shares		Value
Electric Utilities (continued)
NextEra Energy Capital		5.25	%				18,826	$	448,624
The Connecticut Light & Power Company		5.28					12,000		630,750
The Connecticut Light & Power Company		6.56					12,000		641,626
									14,481,451
Multi-Utilities: 5.57%
Dominion Resources Incorporated		5.25					74,195		1,746,550
DTE Energy Company		6.00					40,000		1,028,800
Just Energy Group Incorporated ±		1.26					150,000		3,718,500
									6,493,850
Total Preferred Stocks (Cost $21,039,800)									20,975,301
				Expiration date
Rights: 0.02%
Utilities: 0.02%
Electric Utilities: 0.02%
Texas Competitive Electric Holdings Company LLC Rights †(i)					10-10-2024		23,978		23,978
Total Rights (Cost $26,376)									23,978
Warrants: 0.00%
Utilities: 0.00%
Gas Utilities: 0.00%
Kinder Morgan Incorporated †					5-25-2017		16,000		50
Total Warrants (Cost $30,480)									50
	Interest rate			Maturity date		Principal
Yankee Corporate Bonds and Notes: 3.23%
Energy: 0.77%
Energy Equipment & Services: 0.12%
Ensco plc		5.75			10-1-2044	$	180,000		140,400
Oil, Gas & Consumable Fuels: 0.65%
Baytex Energy Corporation 144A		5.13			6-1-2021		175,000		159,250
Baytex Energy Corporation 144A		5.63			6-1-2024		75,000		68,620
Griffin Coal Mining Company Limited 144A(a)(i)(s)		9.50			12-1-2016		93,118		372
Teekay Corporation		8.50			1-15-2020		535,000		535,000
									763,242
Financials: 0.11%
Banks: 0.11%
Nielsen Holding and Finance BV 144A		5.00			2-1-2025		100,000		100,500
Nielsen Holding and Finance BV 144A		5.50			10-1-2021		30,000		31,191
									131,691

12 Wells Fargo Utilities and High Income Fund Portfolio of investments—February 28, 2017 (unaudited)

Security name	Interest rate			Maturity date		Principal		Value
Health Care: 0.77%
Pharmaceuticals: 0.77%
Mallinckrodt plc 144A		5.50	%		4-15-2025	$	50,000	$	46,500
Mallinckrodt plc 144A		5.63			10-15-2023		20,000		19,200
Valeant Pharmaceuticals International Incorporated 144A		5.63			12-1-2021		50,000		42,125
Valeant Pharmaceuticals International Incorporated 144A		5.88			5-15-2023		180,000		144,788
Valeant Pharmaceuticals International Incorporated 144A		6.13			4-15-2025		550,000		441,375
Valeant Pharmaceuticals International Incorporated 144A		6.38			10-15-2020		100,000		91,000
Valeant Pharmaceuticals International Incorporated 144A		6.75			8-15-2021		25,000		22,563
Valeant Pharmaceuticals International Incorporated 144A		7.50			7-15-2021		94,000		86,304
									893,855
Industrials: 0.59%
Building Products: 0.01%
Allegion plc		5.88			9-15-2023		15,000		16,125
Commercial Services & Supplies: 0.56%
GFL Environmental Incorporated 144A		7.88			4-1-2020		250,000		258,750
GFL Environmental Incorporated 144A		9.88			2-1-2021		50,000		54,375
Ritchie Brothers Auctioneers Incorporated 144A		5.38			1-15-2025		325,000		334,304
									647,429
Machinery: 0.02%
Sensata Technologies BV 144A		5.00			10-1-2025		20,000		20,300
Materials: 0.12%
Containers & Packaging: 0.05%
Ardagh Packaging Finance plc 144A		7.25			5-15-2024		50,000		54,500
Metals & Mining: 0.07%
Hudbay Minerals Incorporated 144A		7.25			1-15-2023		25,000		26,688
Hudbay Minerals Incorporated 144A		7.63			1-15-2025		25,000		27,313
Novelis Corporation 144A		6.25			8-15-2024		25,000		26,500
									80,501
Telecommunication Services: 0.87%
Diversified Telecommunication Services: 0.87%
Intelsat Jackson Holdings SA		5.50			8-1-2023		545,000		451,669
Intelsat Jackson Holdings SA		7.25			4-1-2019		200,000		191,500
Intelsat Luxembourg SA		7.75			6-1-2021		125,000		70,234
Intelsat Luxembourg SA		8.13			6-1-2023		500,000		272,500
Virgin Media Finance plc 144A		6.38			4-15-2023		25,000		26,250
									1,012,153
Total Yankee Corporate Bonds and Notes (Cost $4,169,904)									3,760,196

Portfolio of investments—February 28, 2017 (unaudited) Wells Fargo Utilities and High Income Fund 13

Security name	Yield			Shares		Value
Short-Term Investments: 7.36%
Investment Companies: 7.36%
Wells Fargo Government Money Market Fund Select Class (l)(u)##		0.48	%		8,583,240	$	8,583,240
Total Short-Term Investments (Cost $8,583,240)							8,583,240

Total investments in securities (Cost $118,024,091) *	118.25	%		137,920,065
Other assets and liabilities, net	(18.25	)		(21,282,111	)
Total net assets	100.00	%	$	116,637,954

† Non-income-earning security

(i) Illiquid security

144A The security may be resold in transactions exempt from registration, normally to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933.

(s) The security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on the 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.

± Variable rate investment. The rate shown is the rate in effect at period end.

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

(a) The security is fair valued in accordance with procedures approved by the Board of Trustees.

(l) The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940.

(u) The rate represents the 7-day annualized yield at period end.

## All or a portion of this security is segregated for unfunded loans.

* Cost for federal income tax purposes is $118,287,863 and unrealized gains (losses) consists of:

Gross unrealized gains	$	24,791,980
Gross unrealized losses		(5,159,778	)
Net unrealized gains	$	19,632,202

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

PROXY VOTING POLICIES AND PROCEDURES

REVISED AS OF AUGUST 13, 2014

1.    Scope of Policies and Procedures. These Policies and Procedures (“Procedures”) are used to determine how to vote proxies relating to portfolio securities held by the series of Wells Fargo Funds Trust, Wells Fargo Master Trust, Wells Fargo Variable Trust, Asset Allocation Trust, Wells Fargo Advantage Global Dividend Opportunity Fund, Wells Fargo Advantage Income Opportunities Fund, Wells Fargo Advantage Multi-Sector Income Fund, and Wells Fargo Advantage Utilities & High Income Fund (the “Trusts”) except for those series that exclusively hold non-voting securities (hereafter, all such series, and all such Trusts not having separate series, holding voting securities are referred to as the “Funds”).

2.    Voting Philosophy. The Funds and Wells Fargo Funds Management, LLC (“Funds Management”) have adopted these Procedures to ensure that proxies are voted in the best interests of Fund shareholders, without regard to any relationship that any affiliated person of the Fund (or an affiliated person of such affiliated person) may have with the issuer. Funds Management exercises its voting responsibility, as a fiduciary, with the goal of maximizing value to shareholders consistent with governing laws and the investment policies of each Fund. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership, the Funds support sound corporate governance practices within companies in which they invest.

3.    Responsibilities

(a)    Board of Trustees. The Board of Trustees of each Trust (the “Board”) has delegated the responsibility for voting proxies relating to the Funds’ portfolio securities to Funds Management. The Board retains the authority to make or ratify any voting decisions or approve any changes to these Procedures as the Board deems appropriate. Funds Management will provide reports to the Board regarding voting matters when and as reasonably requested by the Board. The Board shall review these Procedures as often as it deems appropriate to consider whether any revisions are warranted. On an annual basis, the Board shall receive and review areport from Funds Management on the proxy voting process.

4

(b)    Funds Management Proxy Committee

(i) Responsibilities. The Funds Management Proxy Voting Committee (the “Proxy Committee”) shall be responsible for overseeing the proxy voting process to ensure its implementation in conformance with these Procedures. The Proxy Committee shall monitor Institutional Shareholder Services (“ISS”), the proxy voting agent for Funds Management, to determine that ISS is accurately applying the Procedures as set forth herein. The Proxy Committee shall review the continuing appropriateness of the Procedures set forth herein, recommend revisions to the Board as necessary and provide an annual update to the Board on the proxy voting process.

(ii) Voting Guidelines. Appendix A hereto sets forth guidelines regarding how proxies will be voted on the issues specified. ISS will vote proxies for or against as directed by the guidelines. Where the guidelines specify a “case by case” determination for a particular issue, ISS will forward the proxy to the Proxy Committee for a vote determination by the Proxy Committee. Finally, with respect to issues for which a vote for or against is specified by the Procedures, the Proxy Committee shall have the authority to direct ISS to forward the proxy to the Proxy Committee for a discretionary vote by the Proxy Committee if the Proxy Committee determines that a case-by-case review of such matter is warranted. The Proxy Committee may also consult Fund sub-advisers on certain proxy voting issues on a case-by-case basis as the Proxy Committee deems appropriate or to the extent that a sub-adviser of a Fund makes a recommendation regarding a proxy voting issue. As a general matter, however, proxies are voted consistently on the same matter when securities of an issuer are held by multiple Funds.

(iii) Proxy Committee. In all cases, the Proxy Committee will exercise its voting discretion in accordance with the voting philosophy of the Funds. In cases where a proxy is forwarded by ISS to the Proxy Committee, the Proxy Committee may be assisted in its voting decision through receipt of:

(i)    independent research and voting recommendations provided by ISS or other independent sources; (ii) input from the investment sub-adviser responsible for purchasing the security; and (iii) information provided by company management and shareholder groups.

Voting decisions made by the Proxy Committee will be reported to ISS to ensure that the vote is registered in a timely manner and included in Form N-PX reporting.

5

(iv) Securities on Loan. As a general matter, securities on loan will not be recalled to facilitate proxy voting (in which case the borrower of the security shall be entitled to vote the proxy). However, if the Proxy Committee is aware of an item in time to recall the security and has determined in good faith that the importance of the matter to be voted upon outweighs the loss in lending revenue that would result from recalling the security (i.e., if there is a controversial upcoming merger or acquisition, or some other significant matter), the security will be recalled for voting.

6

(v) Practical Limitations to Proxy Voting. While Funds Management uses its best efforts to vote proxies, in certain circumstances it may be impractical or impossible for Funds Management to vote proxies (e.g., limited value or unjustifiable costs). For example, in accordance with local law or business practices, many foreign companies prevent the sales of shares that have been voted for a certain period beginning prior to the shareholder meeting and ending on the day following the meeting (“share blocking”). Due to these restrictions, Funds Management must balance the benefits to its clients of voting proxies against the potentially serious portfolio management consequences of a reduced flexibility to sell the underlying shares at the most advantageous time. As a result, Funds Management will generally not vote those proxies in the absence of an unusual, significant vote or compelling economic importance. Additionally, Funds Management may not be able to vote proxies for certain foreign securities if Funds Management does not receive the proxy statement in time to vote the proxies due to custodial processing delays.

(vi) Conflicts of Interest. Funds Management may have a conflict of interest regarding a proxy to be voted upon if, for example, Funds Management or its affiliates have other relationships with the issuer of the proxy. In most instances, conflicts of interest are avoided through a strict and objective application of the voting guidelines attached hereto. However, when the Proxy Committee is aware of a material conflict of interest regarding a matter that would otherwise require a vote by the Proxy Committee, the Proxy Committee shall address the material conflict by using any of the following methods: (1) instructing ISS to vote in accordance with the recommendation ISS makes to its clients; (2) disclosing the conflict to the Board and obtaining their consent before voting; (3) submitting the matter to the Board to exercise its authority to vote on such matter; (4) engaging an independent fiduciary who will direct the Proxy Committee on voting instructions for the proxy; (5) consulting with outside legal counsel for guidance on resolution of the conflict of interest; (6) erecting information barriers around the person or persons making voting decisions; (7) voting in proportion to other shareholders (“mirror voting”); or (8) voting in other ways that are consistent with each Fund’s obligation to vote in the best interests of its shareholders. Additionally, the Proxy Committee will not permit its votes to be influenced by any conflict of interest that exists for any other affiliated person of the Fund (such as a sub-adviser or principal underwriter) or any affiliated persons of such affiliated persons and the Proxy Committee will vote all such matters without regard to the conflict.

7

Funds Management may also have a conflict of interest regarding a proxy to be voted on if a member of the Board has an affiliation, directly or indirectly, with a public or private company (an “Identified Company”). Identified Companies include a Board member’s employer, as well as any company of which the Board member is a director or officer or a 5% or more shareholder. The Proxy Committee shall address such a conflict by instructing ISS to vote in accordance with the recommendation ISS makes to its clients.

(vii) Meetings. The Proxy Committee shall convene as needed and when discretionary voting determinations need to be considered, and shall have the authority to act by vote of a majority of the Proxy Committee members available at that time. The Proxy Committee shall also meet at least semi- annually to review the Procedures and the performance of ISS in exercising its proxy voting responsibilities.

(viii) Membership. The voting members of the Proxy Committee shall be Tom Biwer, Travis Keshemberg, Erik Sens, Aldo Ceccarelli and Melissa Duller. Changes to the membership of the Proxy Committee will be made only with Board approval. Upon departure from Funds Management, a member’s position on the Proxy Committee will automatically terminate.

4.    Disclosure of Policies and Procedures. Each Fund shall disclose in its statement of additional information a description of the policies and procedures it uses to determine how to vote proxies relating to securities held in its portfolio. In addition, each Fund shall disclose in its semi- and annual reports that a description of its proxy voting policies and procedures is available without charge, upon request, by calling 1-800-222-8222, on the Fund’s web site at www.wellsfargo.com/advantagefunds and on the Securities and Exchange Commission’s website at http://www.sec.gov.

5.    Disclosure of Proxy Voting Record. Each Trust shall file with the Commission an annual report on Form N-PX not later than August 31 of each year (beginning August 31, 2004), containing the Trust’s proxy voting record for the most recent twelve-month period ended June 30.

Each Fund shall disclose in its statement of additional information and semi- and annual reports that information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Funds’ web site at www.wellsfargo.com/advantagefunds or by accessing the Commission’s web site at www.sec.gov.

8

Each Fund shall disclose the following information on Form N-PX for each matter relating to a portfolio security considered at any shareholder meeting held during the period covered by the report and with respect to which the Fund was entitled to vote:

• The name of the issuer of the portfolio security;

• The exchange ticker symbol of the portfolio security;

• The Council of Uniform Securities Identification Procedures (“CUSIP”) number for the portfolio security (unless the CUSIP is not available through reasonably practicable means, in which case it will be omitted);

• The shareholder meeting date;

• A brief identification of the matter voted on;

• Whether the matter was proposed by the issuer or by a security holder;

• Whether the Fund cast its vote on the matter;

• How the Fund cast its vote (e.g. for or against a proposal, or abstain; for or withhold regarding election of directors); and

• Whether the Fund cast its vote for or against management.

Form N-PX shall be made available to Fund shareholders through the SEC web site.

9

APPENDIX A

TO

PROXY VOTING POLICIES AND PROCEDURES

Funds Management will vote proxies relating to portfolio securities held by the Trusts in accordance with the following proxy voting guidelines. To the extent the specific guidelines below do not address a proxy voting proposal, Funds Management will vote pursuant to ISS’ current U.S. and International proxy voting guidelines. Proxies related to issues not addressed by the specific guidelines below or by ISS’ current U.S. and International proxy voting guidelines will be forwarded to the Proxy Committee for a vote determination by the Proxy Committee.

10

Uncontested Election of Directors or Trustees
THE FUNDS will generally vote for all uncontested director or trustee nominees. The Nominating Committee is in the best position to select nominees who are available and capable of working well together to oversee management of the company. THE FUNDS will not require a performance test for directors.	FOR
THE FUNDS will generally vote for reasonably crafted shareholder proposals calling for directors to be elected with an affirmative majority of votes cast and/or the elimination of the plurality standard for electing directors, unless the company has adopted formal corporate governance principles that present a meaningful alternative to the majority voting standard.	FOR
THE FUNDS will withhold votes for a director if the nominee fails to attend at least 75% of the board and committee meetings without a valid excuse.	WITHHOLD
THE FUNDS will vote against routine election of directors if any of the following apply: company fails to disclose adequate information in a timely manner, serious issues with the finances, questionable transactions, conflicts of interest, record of abuses against minority shareholder interests, bundling of director elections, and/or egregious governance practices.	AGAINST
THE FUNDS will withhold votes from the entire board (except for new nominees) where the director(s) receive more than 50% withhold votes out of those cast and the issue that was the underlying cause of the high level of withhold votes has not been addressed.	WITHHOLD
THE FUNDS will withhold votes from members of the Audit Committee and/or the full board if poor accounting practices, which rise to a level of serious concern, such as: fraud; misapplication of GAAP; and material weaknesses identified in Section 404 disclosures, are identified.	WITHHOLD

11

THE FUNDS will withhold votes from members of the Audit Committee if the company receives an adverse opinion on the company’s financial statements from its auditor.		WITHHOLD
THE FUNDS will withhold votes from members of the Audit Committee if there is persuasive evidence that the audit committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm.		WITHHOLD
THE FUNDS will withhold votes from all directors (except for new nominees) if the company has adopted or renewed a poison pill without shareholder approval since the company’s last annual meeting, does not put the pill to a vote at the current annual meeting, and does not have a requirement or does not commit to put the pill to shareholder vote within 12 months. In addition, THE FUNDS will withhold votes on all directors at any company that responds to the majority of the shareholders voting by putting the poison pill to a shareholder vote with a recommendation other than to eliminate the pill.		WITHHOLD
THE FUNDS will withhold votes from compensation committee members if they fail to submit one-time transferable stock options (TSO’s) to shareholders for approval.		WITHHOLD
Limitation on Number of Boards a Director May Sit On
THE FUNDS will withhold votes from directors who sit on more than six boards.		WITHHOLD
THE FUNDS will withhold votes from CEO directors who sit on more than two outside boards besides their own.		WITHHOLD
Ratification of Auditors
THE FUNDS will vote against auditors and withhold votes from audit committee members if non-audit fees are greater than audit fees, audit- related fees, and permitted tax fees, combined. THE FUNDS will follow the disclosure categories being proposed by the SEC in applying the above formula.		AGAINST/ WITHHOLD
With the above exception, THE FUNDS will generally vote for proposals to ratify auditors unless:		FOR
•	an auditor has a financial interest in or association with the company, and is therefore not independent, or	AGAINST
•	there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position.	AGAINST

12

THE FUNDS will vote against proposals that require auditors to attend annual meetings as auditors are regularly reviewed by the board audit committee, and such attendance is unnecessary.	AGAINST
THE FUNDS will vote for shareholder proposals requesting a shareholder vote for audit firm ratification.	FOR AGAINST
THE FUNDS will vote against shareholder proposals asking for audit firm rotation. This practice is viewed as too disruptive and too costly to implement for the benefit achieved.
Company Name Change/Purpose
THE FUNDS will vote for proposals to change the company name as management and the board is best suited to determine if such change in company name is necessary.	FOR
However, where the name change is requested in connection with a reorganization of the company, the vote will be based on the merits of the reorganization.	CASE-BY-CASE
In addition, THE FUNDS will generally vote for proposals to amend the purpose of the company. Management is in the best position to know whether the description of what the company does is accurate, or whether it needs to be updated by deleting, adding or revising language.	FOR
Employee Stock Purchase Plans/401(k) Employee Benefit Plans
THE FUNDS will vote for proposals to adopt, amend or increase authorized shares for employee stock purchase plans and 401(k) plans for employees as properly structured plans enable employees to purchase common stock at a slight discount and thus own a beneficial interest in the company, provided that the total cost of the company’s plan is not above the allowable cap for the company.	FOR
Similarly, THE FUNDS will generally vote for proposals to adopt or amend thrift and savings plans, retirement plans, pension plans and profit plans.	FOR
Anti-Hedging/Pledging/Speculative Investments Policy
THE FUNDS will consider proposals prohibiting named executive officers from engaging in derivative or speculative transactions involving company stock, including hedging, holding stock in a margin account, or pledging stock as collateral for a loan on a case-by-case basis. The company’s existing policies regarding responsible use of company stock will be considered.	CASE-BY-CASE

13

Approve Other Business
THE FUNDS will generally vote for proposals to approve other business. This transfer of authority allows the corporation to take certain ministerial steps that may arise at the annual or special meeting.	FOR
However, THE FUNDS retains the discretion to vote against such proposals if adequate information is not provided in the proxy statement, or the measures are significant and no further approval from shareholders is sought.	AGAINST
Independent Board of Directors/Board Committees
THE FUNDS will vote for proposals requiring that two-thirds of the board be independent directors. An independent board faces fewer conflicts and is best prepared to protect stockholders’ interests.	FOR
THE FUNDS will withhold votes from insiders and affiliated outsiders on boards that are not at least majority independent.	WITHHOLD
THE FUNDS will withhold votes from compensation committee members where there is a pay-for-performance disconnect (for Russell 3000 companies).	WITHHOLD
THE FUNDS will vote for proposals requesting that the board audit, compensation and/or nominating committees be composed of independent directors, only. Committees should be composed entirely of independent directors in order to avoid conflicts of interest.	FOR
THE FUNDS will withhold votes from any insiders or affiliated outsiders on audit, compensation or nominating committees. THE FUNDS will withhold votes from any insiders or affiliated outsiders on the board if any of these key committees has not been established.	WITHHOLD
THE FUNDS will vote against proposals from shareholders requesting an independent compensation consultant.	AGAINST
Director Fees
THE FUNDS, will vote for proposals to set director fees.	FOR

14

Minimum Stock Requirements by Directors THE FUNDS will vote against proposals requiring directors to own a minimum number of shares of company stock in order to qualify as a director, or to remain on the board. Minimum stock ownership requirements can impose an across-the-board requirement that could prevent qualified individuals from serving as directors.	AGAINST
Indemnification and Liability Provisions for Directors and Officers THE FUNDS will vote for proposals to allow indemnification of directors and officers, when the actions taken were on behalf of the company and no criminal violations occurred. THE FUNDS will also vote in favor of proposals to purchase liability insurance covering liability in connection with those actions. Not allowing companies to indemnify directors and officers to the degree possible under the law would limit the ability of the company to attract qualified individuals.	FOR
Alternatively, THE FUNDS will vote against indemnity proposals that are overly broad. For example, THE FUNDS will oppose proposals to indemnify directors for acts going beyond mere carelessness, such as gross negligence, acts taken in bad faith, acts not otherwise allowed by state law or more serious violations of fiduciary obligations.	AGAINST
Nominee Statement in the Proxy THE FUNDS will vote against proposals that require board nominees to have a statement of candidacy in the proxy, since the proxy statement already provides adequate information pertaining to the election of directors.	AGAINST
Director Tenure/Retirement Age THE FUNDS will vote against proposals to limit the tenure of directors as such limitations based on an arbitrary number could prevent qualified individuals from serving as directors. However, THE FUNDS is in favor of inserting cautionary language when the average director tenure on the board exceeds 15 years for the entire board.	AGAINST
The Funds will vote for proposals to establish a mandatory retirement age for directors provided that such retirement age is not less than 65.	FOR
Board Powers/Procedures/Qualifications THE FUNDS will consider on a case-by-case basis proposals to amend the corporation’s By-laws so that the Board of Directors shall have the power,	CASE-BY-CASE

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without the assent or vote of the shareholders, to make, alter, amend, or rescind the By-laws, fix the amount to be reserved as working capital, and fix the number of directors and what number shall constitute a quorum of the Board. In determining these issues, THE FUNDS will rely on the proxy voting Guidelines.
Adjourn Meeting to Solicit Additional Votes THE FUNDS will examine proposals to adjourn the meeting to solicit additional votes on a case-by-case basis. As additional solicitation may be costly and could result in coercive pressure on shareholders, THE FUNDS will consider the nature of the proposal and its vote recommendations for the scheduled meeting. THE FUNDS will vote for this item when:	CASE-BY-CASE
THE FUNDS is supportive of the underlying merger proposal; the company provides a sufficient, compelling reason to support the adjournment proposal; and the authority is limited to adjournment proposals requesting the authority to adjourn solely to solicit proxies to approve a transaction THE FUNDS supports.	FOR
Reimbursement of Solicitation Expenses THE FUNDS will consider contested elections on a case-by-case basis, considering the following factors: long-term financial performance of the target company relative to its industry; management’s track record; background of the proxy contest; qualifications of director or trustee nominees (both slates); evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met; and stock ownership positions.	CASE-BY-CASE
Board Structure: Staggered vs. Annual Elections THE FUNDS will consider the issue of classified boards on a case-by-case basis. In some cases, the division of the board into classes, elected for staggered terms, can entrench the incumbent management and make them less responsive to shareholder concerns. On the other hand, in some cases, staggered elections may provide for the continuity of experienced directors on the Board.	CASE-BY-CASE
Removal of Directors THE FUNDS will consider on a case-by-case basis proposals to eliminate shareholders’ rights to remove directors with or without cause or only with approval of two-thirds or more of the shares entitled to vote.	CASE-BY-CASE

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However, a requirement that a 75% or greater vote be obtained for removal of directors is abusive and will warrant a vote against the proposal.	AGAINST
Board Vacancies THE FUNDS will vote against proposals that allow the board to fill vacancies without shareholder approval as these authorizations run contrary to basic shareholders’ rights.	AGAINST
Alternatively, THE FUNDS will vote for proposals that permit shareholders to elect directors to fill board vacancies.	FOR
Cumulative Voting THE FUNDS will vote on proposals to permit or eliminate cumulative voting on a case-by-case basis based upon the existence of a counter balancing governance structure and company performance, in accordance with its proxy voting guideline philosophy.	CASE-BY-CASE
THE FUNDS will vote for against cumulative voting if the board is elected annually.	AGAINST
Board Size THE FUNDS will vote for proposals that seek to fix the size of the board, as the ability for management to increase or decrease the size of the board in the face of a proxy contest may be used as a takeover defense. However, if the company has cumulative voting, downsizing the board may decrease a minority shareholder’s chances of electing a director. By increasing the size of the board, management can make it more difficult for dissidents to gain control of the board. Fixing the size of the board also prevents a reduction in the board size as a means to oust independent directors or those who cause friction within an otherwise homogenous board.	FOR
Shareholder Rights Plan (Poison Pills) THE FUNDS will generally vote for proposals that request a company to submit its poison pill for shareholder ratification.	FOR CASE-BY-
Alternatively, THE FUNDS will analyze proposals to redeem a company’s poison pill, or requesting the ratification of a poison pill on a case-by-case basis.	CASE

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Poison pills are one of the most potent anti-takeover measures and are generally adopted by boards without shareholder approval. These plans harm shareholder value and entrench management by deterring stock acquisition offers that are not favored by the board.
Fair Price Provisions THE FUNDS will consider fair price provisions on a case-by-case basis, evaluating factors such as the vote required to approve the proposed mechanism, the vote required to approve the proposed acquisition, the vote required to repeal the fair price provision, and the mechanism for determining the fair price.	CASE-BY-CASE
THE FUNDS will vote against fair price provisions with shareholder vote requirements of 75% or more of disinterested shares.	AGAINST
Greenmail THE FUNDS will generally vote in favor of proposals limiting the corporation’s authority to purchase shares of common stock (or other outstanding securities) from a holder of a stated interest (5% or more) at a premium unless the same offer is made to all shareholders. These are known as “anti-greenmail” provisions. Greenmail discriminates against rank-and- file shareholders and may have an adverse effect on corporate image.	FOR
If the proposal is bundled with other charter or bylaw amendments, THE FUNDS will analyze such proposals on a case-by-case basis. In addition, THE FUNDS will analyze restructurings that involve the payment of pale greenmail on a case-by-case basis.	CASE-BY-CASE
Voting Rights THE FUNDS will vote for proposals that seek to maintain or convert to a one-share, one-vote capital structure as such a principle ensures that management is accountable to all the company’s owners.	FOR
Alternatively, THE FUNDS will vote against any proposals to cap the number of votes a shareholder is entitled to. Any measure that places a ceiling on voting may entrench management and lessen its interest in maximizing shareholder value.	AGAINST
Dual Class/Multiple-Voting Stock THE FUNDS will vote against proposals that authorize, amend or increase dual class or multiple-voting stock which may be used in exchanges or recapitalizations. Dual class or multiple-voting stock carry unequal voting rights, which differ from those of the broadly traded class of common stock.	AGAINST

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Alternatively, THE FUNDS will vote for the elimination of dual class or multiple-voting stock, which carry different rights than the common stock.	FOR
Confidential Voting THE FUNDS will vote for proposals to adopt confidential voting.	FOR
Vote Tabulations THE FUNDS will vote against proposals asking corporations to refrain from counting abstentions and broker non-votes in their vote tabulations and to eliminate the company’s discretion to vote unmarked proxy ballots. Vote counting procedures are determined by a number of different standards, including state law, the federal proxy rules, internal corporate policies, and mandates of the various stock exchanges.	AGAINST
Equal Access to the Proxy THE FUNDS will evaluate Shareholder proposals requiring companies to give shareholders access to the proxy ballot for the purpose of nominating board members, on a case-by-case basis taking into account the ownership threshold proposed in the resolution and the proponent’s rationale for the proposal at the targeted company in terms of board and director conduct.	CASE-BY-CASE
Disclosure of Information THE FUNDS will vote against shareholder proposals requesting fuller disclosure of company policies, plans, or business practices. Such proposals rarely enhance shareholder return and in many cases would require disclosure of confidential business information.	AGAINST

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Annual Meetings THE FUNDS will vote for proposals to amend procedures or change date or location of the annual meeting. Decisions as to procedures, dates or locations of meetings are best placed with management.	FOR
Alternatively, THE FUNDS will vote against proposals from shareholders calling for a change in the location or date of annual meetings as no date or location proposed will be acceptable to all shareholders.	AGAINST
THE FUNDS will generally vote in favor of proposals to reduce the quorum necessary for shareholders’ meetings, subject to a minimum of a simple majority of the company’s outstanding voting shares.	FOR

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Shareholder Advisory Committees/Independent Inspectors THE FUNDS will vote against proposals seeking to establish shareholder advisory committees or independent inspectors. The existence of such bodies dilutes the responsibility of the board for managing the affairs of the corporation.	AGAINST
Technical Amendments to the Charter of Bylaws THE FUNDS will generally vote in favor of charter and bylaw amendments proposed solely to conform to modern business practices, for simplification, or to comply with what management’s counsel interprets as applicable law.	FOR
However, amendments that have a material effect on shareholder’s rights will be considered on a case-by-case basis.	CASE-BY-CASE
Bundled Proposals THE FUNDS will vote for bundled or “conditional” proxy proposals on a case-by-case basis, as THE FUNDS will examine the benefits and costs of the packaged items, and determine if the effect of the conditioned items are in the best interests of shareholders.	CASE-BY-CASE
Dividends THE FUNDS will vote for proposals to allocate income and set dividends. THE FUNDS will also vote for proposals that authorize a dividend reinvestment program as it allows investors to receive additional stock in lieu of a cash dividend.	FOR FOR
However, if a proposal for a special bonus dividend is made that specifically rewards a certain class of shareholders over another, THE FUNDS will vote against the proposal.	AGAINST
THE FUNDS will also vote against proposals from shareholders requesting management to redistribute profits or restructure investments. Management is best placed to determine how to allocate corporate earnings or set dividends.	AGAINST

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Reduce the Par Value of the Common Stock
THE FUNDS will vote for proposals to reduce the par value of common stock.		FOR
Preferred Stock Authorization
THE FUNDS will generally vote for proposals to create preferred stock in cases where the company expressly states that the stock will not be used as a takeover defense or carry superior voting rights, or where the stock may be used to consummate beneficial acquisitions, combinations or financings.		FOR
Alternatively, THE FUNDS will vote against proposals to authorize or issue preferred stock if the board has asked for the unlimited right to set the terms and conditions for the stock and may issue it for anti-takeover purposes without shareholder approval (blank check preferred stock).		AGAINST
In addition, THE FUNDS will vote against proposals to issue preferred stock if the shares to be used have voting rights greater than those available to other shareholders.		AGAINST
THE FUNDS will vote for proposals to require shareholder approval of blank check preferred stock issues for other than general corporate purposes (white squire placements).		FOR
Preemptive Rights
THE FUNDS will generally vote for proposals to eliminate preemptive rights. Preemptive rights are unnecessary to protect shareholder interests due to the size of most modern companies, the number of investors and the liquidity of trading.		FOR
Share Repurchase Plans
THE FUNDS will vote for share repurchase plans, unless:		FOR AGAINST
•	there is clear evidence of past abuse of the authority; or	AGAINST
•	the plan contains no safeguards against selective buy-backs.
Corporate stock repurchases are a legitimate use of corporate funds and can add to long-term shareholder returns.
Executive and Director Compensation Plans
THE FUNDS will analyze on a case-by-case basis proposals on executive or director compensation plans, with the view that viable compensation programs reward the creation of stockholder wealth by having high payout sensitivity to increases in shareholder value. Such proposals may seek shareholder approval to adopt a new plan, or to increase shares reserved for an existing plan.		CASE-BY-CASE

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THE FUNDS will review the potential cost and dilutive effect of the plan. After determining how much the plan will cost, ISS evaluates whether the cost is reasonable by comparing the cost to an allowable cap. The allowable cap is industry-specific, market cap-base, and pegged to the average amount paid by companies performing in the top quartile of their peer groups. If the proposed cost is below the allowable cap, THE FUNDS will vote for the plan. ISS will also apply a pay for performance overlay in assessing equity- based compensation plans for Russell 3000 companies.		FOR
If the proposed cost is above the allowable cap, THE FUNDS will vote against the plan.		AGAINST
Among the plan features that may result in a vote against the plan are:
•	plan administrators are given the authority to reprice or replace underwater options; repricing guidelines will conform to changes in the NYSE and NASDAQ listing rules.	AGAINST
THE FUNDS will vote against equity plans that have high average three- year burn rate. (The burn rate is calculated as the total number of stock awards and stock options granted any given year divided by the number of common shares outstanding.) THE FUNDS will define a high average three-year burn rate as the following: The company’s most recent three-year burn rate exceeds one standard deviation of its four-digit GICS peer group segmented by Russell 3000 index and non-Russell 3000 index; and the company’s most recent three-year burn rate exceeds 2% of common shares outstanding. For companies that grant both full value awards and stock options to their employees, THE FUNDS shall apply a premium on full value awards for the past three fiscal years.		AGAINST
Even if the equity plan fails the above burn rate, THE FUNDS will vote for the plan if the company commits in a public filing to a three-year average burn rate equal to its GICS group burn rate mean plus one standard deviation. If the company fails to fulfill its burn rate commitment, THE FUNDS will consider withholding from the members of the compensation committee.		FOR
THE FUNDS will calculate a higher award value for awards that have Dividend Equivalent Rights (DER’s) associated with them.		CASE-BY-CASE
THE FUNDS will generally vote for shareholder proposals requiring performance-based stock options unless the proposal is overly restrictive or the company demonstrates that it is using a substantial portion of performance-based awards for its top executives.		FOR

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THE FUNDS will vote for shareholder proposals asking the company to expense stock options, as a result of the FASB final rule on expensing stock options.	FOR
THE FUNDS will generally vote for shareholder proposals to exclude pension fund income in the calculation of earnings used in determining executive bonuses/compensation.	FOR
THE FUNDS will generally vote for TSO awards within a new equity plan if the total cost of the equity plan is less than the company’s allowable cap.	FOR AGAINST
THE FUNDS will generally vote against shareholder proposals to ban future stock option grants to executives. This may be supportable in extreme cases where a company is a serial repricer, has a huge overhang, or has highly dilutive, broad-based (non-approved) plans and is not acting to correct the situation.
THE FUNDS will evaluate shareholder proposals asking companies to adopt holding periods for their executives on a case-by-case basis taking into consideration the company’s current holding period or officer share ownership requirements, as well as actual officer stock ownership in the company.	CASE-BY-CASE
For certain OBRA-related proposals, THE FUNDS will vote for plan provisions that (a) place a cap on annual grants or amend administrative features, and (b) add performance criteria to existing compensation plans to comply with the provisions of Section 162(m) of the Internal Revenue Code.	FOR
In addition, director compensation plans may also include stock plans that provide directors with the option of taking all or a portion of their cash compensation in the form of stock. THE FUNDS will consider these plans based on their voting power dilution.	CASE-BY-CASE
THE FUNDS will generally vote for retirement plans for directors.	FOR CASE-BY-CASE
THE FUNDS will evaluate compensation proposals (Tax Havens) requesting share option schemes or amending an existing share option scheme on a case-by-case basis.
Stock options align management interests with those of shareholders by motivating executives to maintain stock price appreciation. Stock options, however, may harm shareholders by diluting each owner’s interest. In addition, exercising options can shift the balance of voting power by increasing executive ownership.

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Bonus Plans THE FUNDS will vote for proposals to adopt annual or long-term cash or cash-and-stock bonus plans on a case-by-case basis. These plans enable companies qualify for a tax deduction under the provisions of Section 162(m) of the IRC. Payouts under these plans may either be in cash or stock and are usually tied to the attainment of certain financial or other performance goals. THE FUNDS will consider whether the plan is comparable to plans adopted by companies of similar size in the company’s industry and whether it is justified by the company’s performance.		CASE-BY-CASE
Deferred Compensation Plans THE FUNDS will generally vote for proposals to adopt or amend deferred compensation plans as they allow the compensation committee to tailor the plan to the needs of the executives or board of directors, unless		FOR
•	the proposal is embedded in an executive or director compensation plan that is contrary to guidelines	AGAINST
Disclosure on Executive or Director Compensation Cap or Restrict Executive or Director Compensation THE FUNDS will generally vote for shareholder proposals requiring companies to report on their executive retirement benefits (deferred compensation, split-dollar life insurance, SERPs, and pension benefits.		FOR
THE FUNDS will generally vote for shareholder proposals requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote, unless the company’s executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans.		FOR
THE FUNDS will generally vote against proposals seek to limit executive and director pay.		AGAINST
Tax-Gross-Up Payments THE FUNDS will examine on a case-by-case basis proposals calling for companies to adopt a policy of not providing tax gross-up payments to executives.		CASE-BY-CASE

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Relocation Benefits The FUNDS will not consider relocation benefits as a problematic pay practice in connection with management say-on-pay proposals.
Exchange Offers/Re-Pricing The FUNDS will not vote against option exchange programs made available to executives and directors that are otherwise found acceptable.
Golden and Tin Parachutes THE FUNDS will vote for proposals that seek shareholder ratification of golden or tin parachutes as shareholders should have the opportunity to approve or disapprove of these severance agreements.		FOR
Alternatively, THE FUNDS will examine on a case-by-case basis proposals that seek to ratify or cancel golden or tin parachutes. Effective parachutes may encourage management to consider takeover bids more fully and may also enhance employee morale and productivity. Among the arrangements that will be considered on their merits are:
•	arrangements guaranteeing key employees continuation of base salary for more than three years or lump sum payment of more than three times base salary plus retirement benefits;	CASE-BY-CASE
•	guarantees of benefits if a key employee voluntarily terminates;
•	guarantees of benefits to employees lower than very senior management; and	AGAINST
•	indemnification of liability for excise taxes.
By contrast, THE FUNDS will vote against proposals that would guarantee benefits in a management-led buyout.
Stakeholder Laws THE FUNDS will vote against resolutions that would allow the Board to consider stakeholder interests (local communities, employees, suppliers, creditors, etc.) when faced with a takeover offer.		AGAINST
Similarly, THE FUNDS will vote for proposals to opt out of stakeholder laws, which permit directors, when taking action, to weight the interests of constituencies other than shareholders in the process of corporate decision- making. Such laws allow directors to consider nearly any factor they deem relevant in discharging their duties.		FOR

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Mergers/Acquisitions and Corporate Restructurings
THE FUNDS will consider proposals on mergers and acquisitions on a case-by-case basis. THE FUNDS will determine if the transaction is in the best economic interests of the shareholders. THE FUNDS will take into account the following factors:		CASE-BY-CASE
•	anticipated financial and operating benefits;
•	offer price (cost versus premium);
•	prospects for the combined companies;
•	how the deal was negotiated;	CASE-BY-CASE
•	changes in corporate governance and their impact on shareholder rights.
In addition, THE FUNDS will also consider whether current shareholders would control a minority of the combined company’s outstanding voting power, and whether a reputable financial advisor was retained in order to ensure the protection of shareholders’ interests.		CASE-BY-CASE
On all other business transactions, i.e. corporate restructuring, spin-offs, asset sales, liquidations, and restructurings, THE FUNDS will analyze such proposals on a case-by-case basis and utilize the majority of the above factors in determining what is in the best interests of shareholders. Specifically, for liquidations, the cost versus premium factor may not be applicable, but THE FUNDS may also review the compensation plan for executives managing the liquidation.
Appraisal Rights
THE FUNDS will vote for proposals to restore, or provide shareholders with rights of appraisal. Rights of appraisal provide shareholders who are not satisfied with the terms of certain corporate transactions (such as mergers) the right to demand a judicial review in order to determine the fair value of their shares.		FOR
Mutual Fund Proxies
THE FUNDS will vote mutual fund proxies on a case-by-case basis.		CASE-BY-CASE
Proposals may include, and are not limited to, the following issues:
•	eliminating the need for annual meetings of mutual fund shareholders;
•	entering into or extending investment advisory agreements and management contracts;
•	permitting securities lending and participation in repurchase agreements;

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APPENDIX B TO

PROXY VOTING POLICIES AND PROCEDURES

Members of Funds Management Proxy Voting Committee

Thomas C. Biwer, CFA

Mr. Biwer has over 38 years of investment industry experience. He has served as an investment analyst, portfolio strategist, and corporate pension officer. He received B.S. and M.B.A. degrees from the University of Illinois and has earned the right to use the CFA designation.

Erik J. Sens, CFA

Mr. Sens has over 22 years of investment industry experience. He has served as an investment analyst and portfolio manager. He received undergraduate degrees in Finance and Philosophy from the University of San Francisco and has earned the right to use the CFA designation.

Travis L. Keshemberg, CFA

Mr. Keshemberg has over 17 years of investment industry experience. He has served as an overlay portfolio manager and investment consultant. He holds a Master’s Degree from the University of Wisconsin – Milwaukee and Bachelor’s degree from Marquette University. He has earned the right to use the CFA, CIPM and CIMA designations.

Aldo Ceccarelli, CFA

Mr. Ceccarelli has over 14 years of investment industry experience. He has served as Fixed Income Analyst with responsibilities including portfolio manager selection and performance. He earned his bachelor’s degree in business administration with an emphasis in economics from Santa Clara University. He has earned the right to use the CFA designation and is a member of the CFA Institute and the CFA society of San Francisco.

Melissa Duller, CIMA, CFA

Ms. Duller has over 16 years of experience in the investment industry. She has served as an investment analyst, provides oversight for domestic equity strategies and assists with investment communications for core equity mutual funds, sector specific mutual funds, and closed-end funds. She has also provided research and communications for growth equity and international equity strategies as well as short-term and tax advantaged fixed income products. In addition, she has served as a regional investment manager for high net worth individuals, personal trusts, and charitable foundations.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees that have been implemented since the registrant’s last provided disclosure in response to the requirements of this Item.

ITEM 11. CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Utilities and High Income Fund (the “Fund”) 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 Fund 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 Fund’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS

(a)(1) Not applicable.

(a)(2) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(a)(3) Not applicable.

(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is filed and attached hereto as Exhibit 99.906CERT.

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 Utilities and High Income Fund
By:	/s/ Andrew Owen
	Andrew Owen
	President
Date:	April 26, 2017

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 date indicated.

Wells Fargo Utilities and High Income Fund
By:	/s/ Andrew Owen
	Andrew Owen
	President
Date:	April 26, 2017
By:	/s/ Nancy Wiser
	Nancy Wiser
	Treasurer
Date:	April 26, 2017