Edgar Filing: WELLS FARGO ADVANTAGE UTILITIES & HIGH INCOME FUND

Form N-CSRS

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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 Advantage 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, 2015

ITEM 1.

REPORT TO STOCKHOLDERS

LOGO

Wells Fargo Advantage

Utilities and High Income Fund

LOGO

Semi-Annual Report

February 28, 2015

This closed-end fund is no longer offered 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.

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Contents


Letter to shareholders			2

Performance highlights			4

Summary portfolio of investments*			7

Financial statements
Statement of assets and liabilities			14
Statement of operations			15
Statement of changes in net assets			16
Financial highlights			18

Notes to financial statements			19

Other information			24

Automatic dividend reinvestment plan			27

List of abbreviations			28

A complete schedule of portfolio holdings as of the report date may be obtained, free of charge, by accessing the following website: http://a584.g.akamai.net/f/584/1326/1d/www.wellsfargoadvantagefunds.com/pdf/semi/holdings/utilitiesandhighincome.pdf or by calling Wells Fargo Advantage 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, 2015, 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 Advantage 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 Advantage Utilities and High Income Fund		Letter to shareholders (unaudited)

LOGO

Karla M. Rabusch

President

Wells Fargo Advantage Funds

During the period, an improving U.S. economy, a stronger U.S. dollar, declining oil and gas prices, and central bank actions globally were among the most significant influences on the equity and bond markets.

Dear Valued Shareholder:

We are pleased to offer you this semi-annual report for the Wells Fargo Advantage Utilities and High Income Fund for the six-month period that ended February 28, 2015. During the period, an improving U.S. economy, a stronger U.S. dollar, declining oil and gas prices, and central bank actions globally were among the most significant influences on the equity and bond markets.

The U.S. Federal Reserve (Fed) continued to hold short-term interest rates near zero, which supported equity investing, although falling energy commodity prices caused volatility. Utilities sector stocks benefited while energy sector stocks suffered. Many domestic longer-term fixed-income market segments recorded positive returns, which was counter to investor expectations that bonds would suffer when the Fed ended its quantitative easing-related bond-buying program in October 2014. U.S. high-yield bond returns were essentially flat. Energy-related high-yield bonds declined due to falling oil and natural gas prices.

Strengthening U.S. economic recovery benefited investors.

The U.S. economy strengthened with positive gross domestic product measures in each of the last two quarters of 2014. Consumer sentiment improved and corporate earnings generally were favorable. In 2015, initial weekly jobless claims fell to 267,000 for the week ended January 24. The unemployment rate declined from 5.7% in January to 5.5% in February. The S&P 500 Index¹ returned 6.12%. Nine of ten business sectors in the index had positive returns. The lone exception was the S&P 500 Energy Index², which fell 18.21% when oil and natural gas prices declined in the second half of 2014 before stabilizing in early 2015. The S&P 500 Utilities Index³ returned 6.44%. Utilities stocks followed a negative September 2014 return with four months of positive performances before declining 6.40% in February 2015 when improving economic data caused the 10-year U.S. Treasury bond yield to spike. Some stocks may look less attractive during times of rising fixed-income yields because investors may consider stocks, particularly utilities stocks, as a source of dividend income when bond investment returns are low.

Returns in fixed-income markets, while not as strong as stocks, were positive in many sectors. Domestic bond yields were higher than international bonds, driving continued investor demand for U.S. issues. The Barclays U.S. Aggregate Bond Index⁴ returned 2.25%. Returns in the high-yield sector of the fixed-income market were essentially flat, falling 0.08% as measured by the Barclays U.S. Corporate High Yield Bond Index⁵.

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 S&P 500 Energy Index is a market-value-weighted index that measures the performance of all stocks within the energy sector of the S&P 500 Index. You cannot invest directly in an index.

³	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. You cannot invest directly in an index.

⁴

The 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, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS. You cannot invest directly in an index.

⁵

The Barclays U.S. Corporate High Yield Bond Index is an unmanaged, U.S. dollar–denominated, nonconvertible, non-investment-grade debt index. The index consists of domestic and corporate bonds rated Ba and below with a minimum outstanding amount of $150 million. You cannot invest directly in an index.


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

Europe and Asia focus on economic stimulus.

As the U.S. economic recovery gained strength, economies in other global regions tended to struggle. In response, central banks in Europe, Japan, and China took steps to spark business activity and economic growth. The European Central Bank reduced interest rates in June and September 2014 and announced a quantitative easing bond-buying program early in 2015. While Japan’s economy rebounded from recession in the final quarter of 2014, the Bank of Japan maintained accommodative monetary policies because growth was weaker than expected. The People’s Bank of China reduced interest rates in November 2014 and February 2015 in an effort to spark increased economic activity, however government officials revised their projections for future economic growth lower. U.S. investors in international equity markets saw positive returns in local currency terms turn negative after translation into U.S. dollars because the U.S. dollar strengthened substantially. During the period, the return for the MSCI All Country World Index ex-USA Index (Net)⁶ was -3.78%. On the international fixed-income front, the return for the Barclays Global Aggregate ex-U.S. Dollar Bond Index⁷ was -9.54% during the period, as investors shunned foreign debt markets in favor of the U.S., helping to sustain higher domestic bond prices.

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 Advantage Funds. We appreciate your confidence in us and remain committed to helping you meet your financial needs. For current information about your fund investments, contact your investment professional, visit our website at wellsfargoadvantagefunds.com, or call us directly at 1-800-222-8222. We are available 24 hours a day, 7 days a week.

Sincerely,

LOGO

Karla M. Rabusch

President

Wells Fargo Advantage Funds

⁶

The MSCI All Country World Index ex-USA Index (Net) includes large-, mid-, small-, and micro-cap segments for all developed markets countries in the index together with large-, mid-, and small-cap segments for the emerging markets countries. You cannot invest directly in an index. 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.

⁷	The Barclays Global Aggregate ex-U.S. Dollar Bond Index tracks an international basket of government, corporate, agency, and mortgage-related bonds. You cannot invest directly in an index.


4		Wells Fargo Advantage 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

Phillip Susser

Niklas Nordenfelt, CFA

Timothy P. O’Brien, CFA

Average annual total return¹ (%) as of February 28, 2015


	6 months		1 year		5 year		10 year
Based on market value		8.35		16.66		4.74		7.91
Based on net asset value (NAV) per share		1.13		8.99		11.81		6.79

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 February 28, 2015, was 1.09% which includes 0.16% of interest expense.


Comparison of NAV vs. market value²

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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 midcap 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 to 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.

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 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 have the effect of reducing the Fund’s NAV.


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

MANAGERS’ DISCUSSION

The Fund’s return was 8.35% based on market value and 1.13% based on net asset value during the six-month period that ended February 28, 2015.

Overview

For the period, high-yield bond prices declined, driven primarily by the energy sector as oil prices fell nearly 50%. The high-yield market reached its lowest level in December 2014 and moved higher through January and February. Corporate leverage levels have moved higher over the past several years, though they are not at record highs. Typically, leverage is highest during recessions when earnings before interest, taxes, depreciation, and amortization typically decline. That is not the situation today. Economic and business measures have improved. In addition, accommodative U.S. Federal Reserve (Fed) policies allow companies to take advantage of historically low interest rates to extend maturities while keeping interest costs low. Low interest costs reduce the cash-flow impact of higher debt levels as evidenced by today’s historically high interest coverage levels, which measure the ability of companies to meet interest obligations on outstanding debt.

The Fund’s equity allocation was positioned somewhat more defensively during the period compared with the period that ended August 31, 2014. Interest rates generally declined during 2014 and into 2015, with the 10-year U.S. Treasury yield falling below 2.00% early in 2015 before moving higher in February 2015. Within the equity portfolio, the Fund’s cash allocation increased.


Ten largest holdings³(%) as of February 28, 2015
Entergy Louisiana LLC			5.14
American Electric Power Company Incorporated			4.61
ITC Holdings Corporation			4.19
NextEra Energy Incorporated			4.14
Deutsche Post AG			4.09
Suez Environnement Company SA			3.93
The Williams Companies Incorporated			3.93
Edison International			3.86
Eversource Energy			3.73
Great Plains Energy Incorporated			3.73

Credit quality⁴as of February 28, 2015

Contributors to performance

Relative to the broader high-yield market, the Fund’s fixed-income portfolio allocation to the exploration and production and metals and mining industries had a beneficial effect on performance, though it was offset to some extent by its oil-field services industry positions. Select European equity investments contributed to performance despite the strengthening U.S. dollar, with gains in Deutsche Post AG and Veolia Environnement SA. Domestic utility investments NextEra Energy Incorporated; American Electric Power Company Incorporated; Edison International; Entergy Louisiana, LLC; and Public Service Enterprise Group Incorporated contributed to performance.

Detractors from performance

The Fund’s allocation to BB-rated bonds detracted from performance, while a lower risk profile contributed. Stocks of companies directly exposed to energy prices detracted from performance, including The Williams Companies Incorporated; Spectra Energy Corporation; and EQT Corporation.


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

Country allocation⁵as of February 28, 2015

Management outlook

Our base case is for high-yield bonds to perform in a relatively stable manner, potentially outperforming government and investment-grade corporate bonds, which may be more affected by rising interest rates. In this scenario, the economy improves while U.S. Treasury yields rise. We believe lower energy prices are generally positive for the economy and high-yield bonds, with the exception of energy exploration and development companies and others associated with them. We do not expect a substantial increase in 2015 defaults for energy

exploration and development companies if energy prices remain at today’s level because many have hedged 2015 production partially and have access to secured debt markets. If energy prices remain low for several years, an uptick may be expected in energy-company defaults in the coming years. High levels of developed markets governmental debt, a potential real estate and municipal debt bubble in China, and persistent trade and current account concerns among certain countries could renew fears of systemic risks and related falls in risk markets. Long-term high-yield bond performance is likely to be driven primarily by corporate fundamentals and defaults. Over a full cycle, we believe the best way to protect the Fund against the potentially negative effects periodic bouts of systemic fear can have will be a continued focus on a bottom-up approach that seeks to minimize downside risk while capturing the return potential of high-yield issuers.

A strengthening economy and potential interest-rate increases also influence the outlook from an equity perspective. While stronger economic growth will be positive for utilities suffering from weak sales, it could push interest rates higher, which could be a near-term headwind for utility stocks. During the period, interest rates in the U.S. remained higher compared with Europe and Japan and the U.S. dollar strengthened sharply. The dollar could move higher if and when the Fed raises U.S. interest rates. Longer-term fundamentals for regulated network operators remain robust, while the outlook for utilities with significant commodity-price exposure remains challenging.

³	The ten largest holdings are calculated based on the value of the securities divided by total net assets of the Fund. Holdings are subject to change and may have changed since the date specified.

⁴

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 and credit quality ratings are subject to change and may have changed since the date specified.

⁵	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, 2015 (unaudited)		Wells Fargo Advantage 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: 63.26%

Energy: 9.58%

Oil, Gas & Consumable Fuels: 9.58%
Cenovus Energy Incorporated		75,000	$	1,296,750		1.04	%
Energen Corporation		15,000		969,600		0.77
EQT Corporation		15,000		1,197,150		0.96
Spectra Energy Corporation		75,000		2,661,750		2.13
The Williams Companies Incorporated		100,000		4,904,000		3.93
Veresen Incorporated		75,000		933,525		0.75

				11,962,775		9.58


Industrials: 4.14%

Air Freight & Logistics: 4.09%
Deutsche Post AG		150,000		5,107,904		4.09


Construction & Engineering: 0.05%
Other securities				56,340		0.05


Telecommunication Services: 3.52%

Diversified Telecommunication Services: 2.19%
BCE Incorporated		16,000		700,960		0.56
Verizon Communications Incorporated		41,291		2,041,840		1.63

				2,742,800		2.19


Wireless Telecommunication Services: 1.33%
Shenandoah Telecommunications Company		45,000		1,309,050		1.05
Other securities				347,771		0.28

				1,656,821		1.33


Utilities: 46.02%

Electric Utilities: 31.70%
American Electric Power Company Incorporated		100,000		5,758,000		4.61
Duke Energy Corporation		30,514		2,396,875		1.92
Edison International		75,000		4,818,750		3.86
Endesa SA		80,000		1,617,699		1.30
Enel SpA		200,000		921,650		0.74
Eversource Energy		90,000		4,657,500		3.73
Exelon Corporation		16,000		542,720		0.44
Great Plains Energy Incorporated		175,000		4,656,750		3.73
IDACORP Incorporated		25,000		1,565,500		1.25
ITC Holdings Corporation		135,000		5,228,550		4.19
NextEra Energy Incorporated		50,000		5,173,000		4.14
PNM Resources Incorporated		75,000		2,141,250		1.72

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


8		Wells Fargo Advantage Utilities and High Income Fund		Summary portfolio of investments—February 28, 2015 (unaudited)


Security name						Shares		Value		Percent of net assets

Electric Utilities (continued)
Other securities								$	96,384		0.07	%

									39,574,628		31.70


Gas Utilities: 0.83%
Snam SpA							200,000		1,012,069		0.81
Other securities									23,852		0.02

									1,035,921		0.83


Multi-Utilities: 11.32%
CenterPoint Energy Incorporated							50,000		1,039,500		0.83
Public Service Enterprise Group Incorporated							50,000		2,103,000		1.68
Sempra Energy							19,900		2,153,180		1.72
Suez Environnement Company SA							275,000		4,906,895		3.93
TECO Energy Incorporated							50,000		981,500		0.79
Veolia Environnement SA							137,000		2,667,592		2.14
Other securities									287,177		0.23

									14,138,844		11.32


Water Utilities: 2.17%
American Water Works Company Incorporated							50,000		2,704,000		2.17


Total Common Stocks (Cost $53,882,275)									78,980,033		63.26


	Interest rate			Maturity date		Principal
Corporate Bonds and Notes: 28.97%

Consumer Discretionary: 4.92%

Auto Components: 0.47%
Other securities									583,900		0.47


Distributors: 0.06%
Other securities									73,875		0.06


Diversified Consumer Services: 0.49%
Other securities									616,178		0.49


Hotels, Restaurants & Leisure: 1.38%
CCM Merger Incorporated 144A		9.13	%		5-1-2019	$	465,000		505,688		0.41
Greektown Holdings LLC 144A		8.88			3-15-2019		565,000		603,138		0.48
Other securities									618,797		0.49

									1,727,623		1.38


Household Durables: 0.15%
Other securities									186,938		0.15


Media: 2.04%
Gray Television Incorporated		7.50			10-1-2020		500,000		520,000		0.42
Other securities									2,026,009		1.62

									2,546,009		2.04

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


Summary portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			9


Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets

Specialty Retail: 0.33%
Other securities								$	408,181		0.33	%


Consumer Staples: 0.23%

Beverages: 0.05%
Other securities									60,000		0.05


Food Products: 0.18%
Other securities									220,150		0.18


Energy: 5.94%

Energy Equipment & Services: 2.44%
NGPL PipeCo LLC 144A		7.77	%		12-15-2037	$	715,000		768,625		0.62
Other securities									2,272,901		1.82

									3,041,526		2.44


Oil, Gas & Consumable Fuels: 3.50%
Other securities									4,373,363		3.50


Financials: 4.68%

Banks: 0.14%
Other securities									177,801		0.14


Capital Markets: 0.47%
Other securities									590,888		0.47


Consumer Finance: 1.61%
Other securities									2,008,198		1.61


Diversified Financial Services: 0.42%
Other securities									523,038		0.42


Insurance: 0.18%
Other securities									223,875		0.18


Real Estate Management & Development: 0.37%
Other securities									459,375		0.37


REITs: 1.49%
Other securities									1,863,142		1.49


Health Care: 2.84%

Health Care Equipment & Supplies: 0.38%
Other securities									474,113		0.38


Health Care Providers & Services: 1.68%
Capella Healthcare Incorporated		9.25			7-1-2017		430,000		447,200		0.36
Select Medical Corporation		6.38			6-1-2021		455,000		457,275		0.37
Other securities									1,192,407		0.95

									2,096,882		1.68

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


10		Wells Fargo Advantage Utilities and High Income Fund		Summary portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets

Health Care Technology: 0.31%
Other securities								$	389,613		0.31	%


Pharmaceuticals: 0.47%
Other securities									579,260		0.47


Industrials: 1.69%

Airlines: 0.14%
Other securities									171,415		0.14


Commercial Services & Supplies: 0.65%
Other securities									816,726		0.65


Construction & Engineering: 0.18%
Other securities									228,213		0.18


Trading Companies & Distributors: 0.72%
Other securities									895,132		0.72


Information Technology: 2.32%

Electronic Equipment, Instruments & Components: 0.69%
Jabil Circuit Incorporated		8.25	%		3-15-2018	$	620,000		716,100		0.57
Other securities									145,800		0.12

									861,900		0.69


Internet Software & Services: 0.11%
Other securities									141,400		0.11


IT Services: 0.98%
First Data Corporation		11.75			8-15-2021		375,000		436,875		0.35
Other securities									790,440		0.63

									1,227,315		0.98


Semiconductors & Semiconductor Equipment: 0.10%
Other securities									121,469		0.10


Software: 0.10%
Other securities									126,813		0.10


Technology Hardware, Storage & Peripherals: 0.34%
Other securities									420,548		0.34


Materials: 0.52%

Chemicals: 0.02%
Other securities									21,750		0.02


Containers & Packaging: 0.35%
Other securities									437,482		0.35


Paper & Forest Products: 0.15%
Other securities									192,292		0.15

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


Summary portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			11


Security name	Interest rate			Maturity date		Principal		Value		Percent of net assets

Telecommunication Services: 3.75%

Diversified Telecommunication Services: 1.80%
GCI Incorporated		8.63	%		11-15-2019	$	428,000	$	447,795		0.36	%
Syniverse Holdings Incorporated		9.13			1-15-2019		525,000		546,000		0.44
Other securities									1,259,273		1.00

									2,253,068		1.80


Wireless Telecommunication Services: 1.95%
Sprint Capital Corporation		6.88			11-15-2028		1,100,000		1,034,000		0.83
Other securities									1,399,415		1.12

									2,433,415		1.95


Utilities: 2.08%

Electric Utilities: 1.41%
ComEd Financing III		6.35			3-15-2033		1,340,000		1,370,603		1.10
Other securities									394,243		0.31

									1,764,846		1.41


Gas Utilities: 0.22%
Other securities									267,063		0.22


Independent Power & Renewable Electricity Producers: 0.45%
Other securities									560,472		0.45


Total Corporate Bonds and Notes (Cost $34,653,059)									36,165,247		28.97


Loans: 2.40%
Texas Competitive Electric Holdings Company LLC ±(s)		4.66			10-10-2015		1,471,940		931,002		0.75
Other securities									2,066,683		1.65

Total Loans (Cost $3,589,380)									2,997,685		2.40


	Dividend yield					Shares
Preferred Stocks: 10.89%

Financials: 0.07%

Banks: 0.07%
Other securities									89,986		0.07


Utilities: 10.82%

Electric Utilities: 10.82%
Alabama Power Company		6.45					20,576		568,412		0.46
Entergy Arkansas Incorporated		4.75					65,000		1,537,250		1.23
Entergy Arkansas Incorporated		4.90					80,000		1,972,000		1.58
Entergy Louisiana LLC		4.70					270,483		6,421,266		5.14
Indianapolis Power & Light Company		5.65					20,000		1,940,626		1.55
NextEra Energy Capital Holding Incorporated Series I		5.13					44,000		1,067,000		0.86

									13,506,554		10.82


Total Preferred Stocks (Cost $12,476,809)									13,596,540		10.89

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


12		Wells Fargo Advantage Utilities and High Income Fund		Summary portfolio of investments—February 28, 2015 (unaudited)


Security name								Value		Percent of net assets

Warrants: 0.05%

Utilities: 0.05%

Gas Utilities: 0.05%
Other securities								$	61,760		0.05	%


Total Warrants (Cost $30,480)									61,760		0.05

Yankee Corporate Bonds and Notes: 2.31%

Consumer Discretionary: 0.00%

Media: 0.00%
Other securities									3,083		0.00


Energy: 0.37%

Oil, Gas & Consumable Fuels: 0.37%
Other securities									466,077		0.37


Financials: 0.02%

Banks: 0.02%
Other securities									31,200		0.02


Health Care: 0.32%

Pharmaceuticals: 0.32%
Other securities									403,781		0.32


Industrials: 0.04%

Aerospace & Defense: 0.04%
Other securities									45,000		0.04


Materials: 0.52%

Containers & Packaging: 0.18%
Other securities									229,253		0.18


Metals & Mining: 0.26%
Other securities									321,500		0.26


Paper & Forest Products: 0.08%
Other securities									93,000		0.08


	Interest rate			Maturity date		Principal

Telecommunication Services: 1.04%

Diversified Telecommunication Services: 1.00%
Intelsat Jackson Holdings SA		5.50	%		8-1-2023	$	575,000		543,375		0.43
Other securities									701,731		0.57

									1,245,106		1.00

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


Summary portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			13


Security name						Value			Percent of net assets

Wireless Telecommunication Services: 0.04%
Other securities						$	51,188			0.04	%


Total Yankee Corporate Bonds and Notes (Cost $2,924,078)							2,889,188			2.31


	Yield			Shares
Short-Term Investments: 10.12%

Investment Companies: 10.12%
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class ##(l)(u)		0.10	%		12,636,577		12,636,577			10.12


Total Short-Term Investments (Cost $12,636,577)							12,636,577			10.12


Total investments in securities (Cost $120,192,658) *							147,327,030			118.00	%
Other assets and liabilities, net							(22,474,532	)		(18.00	)

Total net assets						$	124,852,498			100.00	%

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.

(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.

(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 loans.

*	Cost for federal income tax purposes is $120,714,424 and unrealized gains (losses) consists of:


Gross unrealized gains	$	30,683,305
Gross unrealized losses		(4,070,699	)

Net unrealized gains	$	26,612,606

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


14		Wells Fargo Advantage Utilities and High Income Fund		Statement of assets and liabilities—February 28, 2015 (unaudited)




Assets
Investments
In unaffiliated securities, at value (cost $107,556,081)	$	134,690,453
In affiliated securities, at value (cost $12,636,577)		12,636,577

Total investments, at value (cost $120,192,658)		147,327,030
Foreign currency, at value (cost $126,651)		116,424
Receivable for investments sold		583,022
Receivable for dividends and interest		1,298,233
Prepaid expenses and other assets		2,628

Total assets		149,327,337


Liabilities
Dividends payable		692,078
Payable for investments purchased		1,599,294
Secured borrowing payable		22,004,402
Advisory fee payable		70,373
Administration fee payable		5,864
Accrued expenses and other liabilities		102,828

Total liabilities		24,474,839

Total net assets	$	124,852,498


NET ASSETS CONSIST OF
Paid-in capital	$	151,438,236
Overdistributed net investment income		(670,697	)
Accumulated net realized losses on investments		(53,036,407	)
Net unrealized gains on investments		27,121,366

Total net assets	$	124,852,498


NET ASSET VALUE PER SHARE
Based on $124,852,498 divided by 9,231,183 shares issued and outstanding (unlimited number of shares authorized)		$13.53

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


Statement of operations—six months ended February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			15




Investment income
Dividends (net of foreign withholding taxes of $215,324)	$	2,760,154
Interest		1,461,948
Income from affiliated securities		3,845

Total investment income		4,225,947


Expenses
Advisory fee		437,194
Administration fee		36,433
Custody and accounting fees		12,544
Professional fees		36,734
Shareholder report expenses		24,439
Trustees’ fees and expenses		7,489
Transfer agent fees		16,978
Interest expense		99,187
Secured borrowing fees		2,221
Other fees and expenses		4,853

Total expenses		678,072

Net investment income		3,547,875


REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized losses on investments		(1,486,582	)
Net change in unrealized gains (losses) on investments		(732,804	)

Net realized and unrealized gains (losses) on investments		(2,219,386	)

Net increase in net assets resulting from operations	$	1,328,489

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


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


	Six months ended February 28, 2015 (unaudited)			Year ended August 31, 2014

Operations
Net investment income	$	3,547,875		$	8,968,521
Net realized gains (losses) on investments		(1,486,582	)		1,474,455
Net change in unrealized gains (losses) on investments		(732,804	)		12,542,009

Net increase in net assets resulting from operations		1,328,489			22,984,985


Distributions to shareholders from
Net investment income		(4,154,032	)		(8,308,065	)

Total increase (decrease) in net assets		(2,825,543	)		14,676,920


Net assets
Beginning of period		127,678,041			113,001,121

End of period	$	124,852,498		$	127,678,041


Undistributed (overdistributed) net investment income	$	(670,697	)	$	105,977

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


Statement of cash flows—six months ended February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			17




Cash flows from operating activities:
Net increase in net assets resulting from operations	$	1,328,489

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Purchase of securities		(26,816,743	)
Proceeds from sale of securities		32,098,107
Amortization		7,202
Proceeds from short-term securities, net		(7,343,665	)
Increase in dividends and interest receivable		(58,191	)
Increase in receivable for investments sold		(573,022	)
Decrease in prepaid expenses and other assets		579
Increase in payable for securities purchased		1,433,938
Decrease in advisory fee payable		(6,863	)
Decrease in administration fee payable		(572	)
Decrease in accrued expenses and other liabilities		(47,179	)
Change in unrealized gains (losses) on investments		732,804
Net realized losses on investments		1,486,582

Net cash provided by operating activities		2,241,466


Cash flows from financing activities:
Cash distributions paid		(4,154,032	)
Decrease in secured borrowing		6,694

Net cash used in financing activities		(4,147,338	)

Net increase in cash		(1,905,872	)


Cash (including foreign currency):
Beginning of period	$	2,022,296

End of period	$	116,424


Supplemental cash disclosure:
Cash paid for interest	$	105,881

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


18		Wells Fargo Advantage Utilities and High Income Fund		Financial highlights

(For a share outstanding throughout each period)


	Six months ended February 28, 2015 (unaudited)			Year ended August 31
	Six months ended February 28, 2015 (unaudited)			2014			2013			2012			2011			2010
Net asset value, beginning of period		$13.83			$12.24			$11.74			$11.75			$11.23			$11.38
Net investment income		0.38			0.97	¹		0.87	¹		0.87	¹		0.99	¹		0.59	¹
Net realized and unrealized gains (losses) on investments		(0.23	)		1.52			0.53			0.02			0.43			0.41

Total from investment operations		0.15			2.49			1.40			0.89			1.42			1.00
Distributions to shareholders from
Net investment income		(0.45	)		(0.90	)		(0.90	)		(0.90	)		(0.90	)		(0.53	)¹
Tax basis return of capital		0.00			0.00			0.00			0.00			0.00			(0.62	)¹

Total distributions to shareholders		(0.45	)		(0.90	)		(0.90	)		(0.90	)		(0.90	)		(1.15	)
Net asset value, end of period		$13.53			$13.83			$12.24			$11.74			$11.75			$11.23
Market value, end of period		$13.48			$12.87			$12.04			$11.92			$11.03			$11.23
Total return based on market value²		8.35	%		14.89	%		8.93	%		17.03	%		5.99	%		(1.24	)%
Ratios to average net assets (annualized)
Gross expenses		1.09	%		1.11	%		1.25	%		1.20	%		1.24	%		2.52	%
Net expenses		1.09	%		1.11	%		1.25	%		1.20	%		1.24	%		1.52	%
Net investment income		5.73	%		7.38	%		7.11	%		7.48	%		8.14	%		5.19	%
Supplemental data
Portfolio turnover rate		18	%		29	%		65	%		48	%		64	%		59	%
Net assets, end of period (000s omitted)		$124,852			$127,678			$113,001			$108,327			$108,146			$103,245

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		$6,675			$6,804			$6,136			$5,866			$5,916			$5,693

¹	Calculated based upon average shares outstanding

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, 2015 (unaudited)	0.16	%
Year ended August 31, 2014	0.19	%
Year ended August 31, 2013	0.21	%
Year ended August 31, 2012	0.25	%
Year ended August 31, 2011	0.25	%
Year ended August 31, 2010	0.19	%

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


Notes to financial statements (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			19

1. ORGANIZATION

Wells Fargo Advantage 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 Fund 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).

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 primary 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.

Equity securities that are not listed on a foreign or domestic exchange or market, but have a public trading market, are valued at the quoted bid price from an independent broker-dealer that the Management Valuation Team of Wells Fargo Funds Management, LLC (“Funds Management”) has determined is an acceptable source.

Non-listed OTC 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.

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, 2015, 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


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

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 interest rate and 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. The premium is included in the Statement of Assets and Liabilities as an investment, the value of which is subsequently adjusted based on the current market value of the option. 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.


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

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 2014, 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
$20,548,693	$27,435,579	$3,278,428

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, use of amortized cost, 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.


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

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of February 28, 2015:


	Quoted prices (Level 1)		Other significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets
Investments in:

Common stocks
Energy	$	11,962,775	$	0	$	0	$	11,962,775
Industrials		5,164,244		0		0		5,164,244
Telecommunication services		4,399,621		0		0		4,399,621
Utilities		57,453,393		0		0		57,453,393

Corporate bonds and notes		0		36,165,247		0		36,165,247

Loans		0		2,036,304		961,381		2,997,685

Preferred stocks
Financials		89,986		0		0		89,986
Utilities		10,997,516		2,509,038		0		13,506,554

Warrants
Utilities		0		61,760		0		61,760

Yankee corporate bonds and notes		0		2,889,188		0		2,889,188

Short-term investments
Investment companies		12,636,577		0		0		12,636,577
Total assets	$	102,704,112	$	43,661,537	$	961,381	$	147,327,030

The Fund recognizes transfers between levels within the fair value hierarchy at the end of the reporting period. At February 28, 2015, the Fund did not have any transfers into/out of Level 1, Level 2, or 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.

5. CAPITAL SHARE TRANSACTIONS

The Fund has authorized an unlimited number of shares with no par value. For the six months ended February 28, 2015 and the year ended August 31, 2014, the Fund did not issue any shares.

6. BORROWINGS

The Fund has borrowed approximately $22 million through a secured debt financing agreement administered by a major financial institution (the “Facility”). The Facility has a commitment amount of $25 million which expires on March 6, 2015, at which point it may be renegotiated and potentially renewed for another one-year term. At February 28, 2015, the Fund had secured borrowings outstanding in the amount of $22,004,402 (including accrued interest and usage and commitment fees payable).


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

The Fund’s borrowings under the Facility are generally charged interest at a rate determined by the type of loan elected by the Fund. During the six months ended February 28, 2015, an effective interest rate of 0.91% was incurred on the borrowings. Interest expense of $99,187, representing 0.16% of the Fund’s average daily net assets, was incurred during the six months ended February 28, 2015.

The Fund has pledged all of its assets to secure the borrowings and pays a commitment fee at an annual rate equal to 0.15% of average daily unutilized amounts of the $25 million commitment amount.

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, 2015 were $24,319,104 and $29,250,079, respectively.

As of February 28, 2015, the Fund had unfunded term loan commitments of $123,554.

8. 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 sector.

9. INDEMNIFICATION

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

10. SUBSEQUENT DISTRIBUTIONS

The Fund declared the following distributions to shareholders:


Declaration date	Record date	Payable date	Per share amount
February 19, 2015	March 16, 2015	April 1, 2015	$0.075
March 27, 2015	April 15, 2015	May 1, 2015	0.075
April 24, 2015	May 13, 2015	June 1, 2015	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.


24		Wells Fargo Advantage 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 wellsfargoadvantagefunds.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 wellsfargoadvantagefunds.com or by visiting the SEC website at sec.gov.

ANNUAL MEETING OF SHAREHOLDERS

On December 8, 2014, 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”	Isaiah Harris, Jr.	$	106,899,296
Net assets voted “Against”		$	5,148,707
Net assets voted “For”	David F. Larcker	$	107,279,695
Net assets voted “Against”		$	4,768,308
Net assets voted “For”	Olivia S. Mitchell	$	106,834,503
Net assets voted “Against”		$	5,213,500

PORTFOLIO HOLDINGS INFORMATION

The complete portfolio holdings for the Fund are publicly available monthly on the Fund’s website (wellsfargoadvantagefunds.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 Advantage Utilities and High Income Fund			25

BOARD OF TRUSTEES AND OFFICERS

The following table provides basic information about the Board of Trustees (the “Trustees”) and Officers of the Fund. Each of the Trustees and Officers¹ listed below acts in identical capacities for each fund in the Wells Fargo Advantage family of funds, which consists of 134 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	Other directorships during past five years
William R. Ebsworth (Born 1957)	Trustee, since 2015**	Retired. From 1984 to 2013, equities analyst, portfolio manager, research director at Fidelity Management and Research Company and retired in 2013 as Chief Investment Officer of Fidelity Strategic Advisers, Inc. in Boston, Tokyo, and Hong Kong where he led 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. Mr. Ebsworth is an Adjunct Lecturer, Finance, at Babson College and a Chartered Financial Analyst.	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 thereto, 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 Chartered Financial Analyst (inactive), Chair of Taproot Foundation (non-profit organization) and a Board Member of Ruth Bancroft Garden (non-profit organization).	Asset Allocation Trust
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
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 Delux 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. Mr. Harris is a certified public accountant.	CIGNA Corporation; Asset Allocation Trust
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
David F. Larcker (Born 1950)	Trustee, since 2010	James Irvin Miller Professor of Accounting at the Graduate School of Business, Stanford University, Morgan Stanley Director of the Center for Leadership Development and Research 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


26		Wells Fargo Advantage 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	Other directorships during past five years
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
Donald C. Willeke (Born 1940)	Trustee, since 2010	Principal of the law firm of Willeke & Daniels. General Counsel of the Minneapolis Employees Retirement Fund from 1984 until its consolidation into the Minnesota Public Employees Retirement Association on June 30, 2010. Director and Vice Chair of The Tree Trust (non-profit corporation). Director of the American Chestnut Foundation (non-profit corporation).	Asset Allocation Trust

Length of service dates reflect the Trustee’s commencement of service with the Trust’s predecessor entities, where applicable.

William R. Ebsworth and Jane A. Freeman each became a Trustee effective January 1, 2015.

Officers


Name and year of birth	Position held and length of service	Principal occupations during past five years or longer
Karla M. Rabusch (Born 1959)	President, since 2010	Executive Vice President of Wells Fargo Bank, N.A. and President of Wells Fargo Funds Management, LLC since 2003.
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. Owned and operated a consulting business providing services to various hedge funds including acting as Chief Operating Officer and Chief Compliance Officer for a hedge fund from 2007 to 2008. Chief Operating Officer and Chief Compliance Officer of GMN Capital LLC from 2006 to 2007.
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.
Debra Ann Early (Born 1964)	Chief Compliance Officer, since 2010	Senior Vice President of Wells Fargo Funds Management, LLC since 2007 and Chief Compliance Officer from 2007 to 2014. Chief Compliance Officer of Parnassus Investments from 2005 to 2007. Chief Financial Officer of Parnassus Investments from 2004 to 2007 and Senior Audit Manager of PricewaterhouseCoopers LLP from 1998 to 2004.
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. Assistant Vice President of Evergreen Investment Services, Inc. from 2004 to 2008. 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. Vice President, Evergreen Investment Services, Inc. from 2004 to 2007. Head of the Fund Reporting and Control Team within Fund Administration from 2005 to 2010.

¹	Nancy Wiser acts as Treasurer of 73 funds in the Fund Complex. Jeremy DePalma acts as Treasurer of 60 funds and Assistant Treasurer of 73 funds in the Fund Complex.


Automatic dividend reinvestment plan		Wells Fargo Advantage Utilities and High Income Fund			27

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.


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

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	— Columbian 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

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

LOGO

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: wellsfargoadvantagefunds.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/SIPC, an affiliate of Wells Fargo & Company.

NOT FDIC INSURED ¡ NO BANK GUARANTEE ¡ MAY LOSE VALUE

232061 04-15

SUHIF/SAR152 02-15

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


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			1


Security name	Shares		Value

Common Stocks: 63.26%

Energy: 9.58%

Oil, Gas & Consumable Fuels: 9.58%
Cenovus Energy Incorporated		75,000	$	1,296,750
Energen Corporation		15,000		969,600
EQT Corporation		15,000		1,197,150
Spectra Energy Corporation		75,000		2,661,750
The Williams Companies Incorporated		100,000		4,904,000
Veresen Incorporated		75,000		933,525

				11,962,775


Industrials: 4.14%

Air Freight & Logistics: 4.09%
Deutsche Post AG		150,000		5,107,904


Construction & Engineering: 0.05%
Ameresco Incorporated Class A †		9,000		56,340


Telecommunication Services: 3.52%

Diversified Telecommunication Services: 2.19%
BCE Incorporated		16,000		700,960
Verizon Communications Incorporated		41,291		2,041,840

				2,742,800


Wireless Telecommunication Services: 1.33%
Cellcom Israel Limited †		58,900		347,771
Shenandoah Telecommunications Company		45,000		1,309,050

				1,656,821


Utilities: 46.02%

Electric Utilities: 31.70%
American Electric Power Company Incorporated		100,000		5,758,000
Chesapeake Utilities Corporation		300		14,160
Duke Energy Corporation		30,514		2,396,875
Edison International		75,000		4,818,750
Endesa SA		80,000		1,617,699
Enel SpA		200,000		921,650
Entergy Corporation		1,000		79,510
Eversource Energy		90,000		4,657,500
Exelon Corporation		16,000		542,720
Great Plains Energy Incorporated		175,000		4,656,750
IDACORP Incorporated		25,000		1,565,500
ITC Holdings Corporation		135,000		5,228,550
NextEra Energy Incorporated		50,000		5,173,000
Pepco Holdings Incorporated		100		2,714
PNM Resources Incorporated		75,000		2,141,250

				39,574,628


2		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name						Shares		Value

Gas Utilities: 0.83%
New Jersey Resources Corporation							200	$	12,516
Snam SpA							200,000		1,012,069
South Jersey Industries Incorporated							200		11,336

									1,035,921


Multi-Utilities: 11.32%
Alliant Energy Corporation							4,000		254,400
CenterPoint Energy Incorporated							50,000		1,039,500
Dominion Resources Incorporated							300		21,627
MDU Resources Group Incorporated							500		11,150
Public Service Enterprise Group Incorporated							50,000		2,103,000
Sempra Energy							19,900		2,153,180
Suez Environnement Company SA							275,000		4,906,895
TECO Energy Incorporated							50,000		981,500
Veolia Environnement SA							137,000		2,667,592

									14,138,844


Water Utilities: 2.17%
American Water Works Company Incorporated							50,000		2,704,000


Total Common Stocks (Cost $53,882,275)									78,980,033


	Interest rate			Maturity date		Principal

Corporate Bonds and Notes: 28.97%

Consumer Discretionary: 4.92%

Auto Components: 0.47%
Allison Transmission Incorporated 144A		7.13	%		5-15-2019	$	340,000		354,875
Cooper Tire & Rubber Company (i)		7.63			3-15-2027		190,000		201,400
Goodyear Tire & Rubber Company		7.00			5-15-2022		25,000		27,625

									583,900


Distributors: 0.06%
LKQ Corporation		4.75			5-15-2023		75,000		73,875


Diversified Consumer Services: 0.49%
Service Corporation International		6.75			4-1-2016		100,000		104,250
Service Corporation International		7.00			6-15-2017		25,000		27,250
Service Corporation International		7.50			4-1-2027		351,000		408,915
Service Corporation International		7.63			10-1-2018		25,000		28,563
Service Corporation International		8.00			11-15-2021		40,000		47,200

									616,178


Hotels, Restaurants & Leisure: 1.38%
CCM Merger Incorporated 144A		9.13			5-1-2019		465,000		505,688
Greektown Holdings LLC 144A		8.88			3-15-2019		565,000		603,138
Hilton Worldwide Finance LLC		5.63			10-15-2021		15,000		15,919
Pinnacle Entertainment Incorporated		7.50			4-15-2021		355,000		375,856


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			3


Security name	Interest rate			Maturity date		Principal		Value

Hotels, Restaurants & Leisure (continued)
Speedway Motorsports Incorporated 144A		5.13	%		2-1-2023	$	100,000	$	102,750
Speedway Motorsports Incorporated		6.75			2-1-2019		120,000		124,272

									1,727,623


Household Durables: 0.15%
American Greetings Corporation		7.38			12-1-2021		150,000		160,125
Tempur Sealy International Incorporated		6.88			12-15-2020		25,000		26,813

									186,938


Media: 2.04%
Cablevision Systems Corporation		8.63			9-15-2017		145,000		164,031
CCO Holdings LLC		7.38			6-1-2020		125,000		134,063
CCO Holdings LLC		5.13			2-15-2023		40,000		40,300
CCOH Safari LLC		5.50			12-1-2022		35,000		36,181
CCOH Safari LLC		5.75			12-1-2024		335,000		346,725
Cequel Communications Holdings I LLC 144A		5.13			12-15-2021		15,000		14,981
Cequel Communications Holdings I LLC 144A		5.13			12-15-2021		85,000		84,894
Cinemark USA Incorporated		7.38			6-15-2021		75,000		80,438
CSC Holdings LLC		7.63			7-15-2018		45,000		50,850
CSC Holdings LLC		7.88			2-15-2018		75,000		84,656
CSC Holdings LLC		8.63			2-15-2019		125,000		145,781
DISH DBS Corporation		5.88			11-15-2024		15,000		14,925
DISH DBS Corporation		7.88			9-1-2019		115,000		129,519
EchoStar DBS Corporation		7.13			2-1-2016		50,000		52,188
Gray Television Incorporated		7.50			10-1-2020		500,000		520,000
Lamar Media Corporation		5.88			2-1-2022		75,000		79,688
LIN Television Corporation		6.38			1-15-2021		25,000		25,813
Live Nation Entertainment Incorporated 144A		7.00			9-1-2020		35,000		37,538
National CineMedia LLC		6.00			4-15-2022		155,000		158,875
National CineMedia LLC		7.88			7-15-2021		100,000		106,250
Nexstar Broadcasting Group Incorporated		6.88			11-15-2020		145,000		153,700
Outfront Media Capital Corporation		5.25			2-15-2022		15,000		15,713
Outfront Media Capital Corporation		5.88			3-15-2025		65,000		68,900

									2,546,009


Specialty Retail: 0.33%
ABC Supply Company Incorporated 144A		5.63			4-15-2021		40,000		40,800
Century Intermediate Holding Company (PIK at 10.50%) 144A¥		9.75			2-15-2019		15,000		15,956
Chinos Intermediate Holdings A Incorporated 144A		7.75			5-1-2019		25,000		22,250
Penske Auto Group Incorporated		5.38			12-1-2024		85,000		87,975
Penske Auto Group Incorporated		5.75			10-1-2022		80,000		83,800
Sonic Automotive Incorporated		5.00			5-15-2023		70,000		70,000
Sonic Automotive Incorporated		7.00			7-15-2022		80,000		87,400

									408,181


Consumer Staples: 0.23%

Beverages: 0.05%
Cott Beverages Incorporated 144A		6.75			1-1-2020		60,000		60,000


4		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Food Products: 0.18%
B&G Foods Incorporated		4.63	%		6-1-2021	$	30,000	$	30,000
Darling Ingredients Incorporated		5.38			1-15-2022		15,000		15,150
Simmons Foods Incorporated 144A		7.88			10-1-2021		175,000		175,000

									220,150


Energy: 5.94%

Energy Equipment & Services: 2.44%
Bristow Group Incorporated		6.25			10-15-2022		265,000		259,700
Cleaver Brooks Incorporated 144A(i)		8.75			12-15-2019		40,000		40,900
Compressco Partners LP 144A		7.25			8-15-2022		95,000		82,650
Era Group Incorporated		7.75			12-15-2022		334,000		317,300
Forum Energy Technologies Incorporated		6.25			10-1-2021		15,000		14,100
Gulfmark Offshore Incorporated		6.38			3-15-2022		470,000		386,575
Hilcorp Energy Company 144A		5.00			12-1-2024		50,000		47,125
Hornbeck Offshore Services Incorporated		5.00			3-1-2021		230,000		195,500
Hornbeck Offshore Services Incorporated		5.88			4-1-2020		235,000		215,025
NGPL PipeCo LLC 144A		7.12			12-15-2017		300,000		298,500
NGPL PipeCo LLC 144A		7.77			12-15-2037		715,000		768,625
NGPL PipeCo LLC 144A		9.63			6-1-2019		35,000		35,088
PHI Incorporated		5.25			3-15-2019		405,000		368,550
Pride International Incorporated		8.50			6-15-2019		10,000		11,888

									3,041,526


Oil, Gas & Consumable Fuels: 3.50%
Arch Coal Incorporated		7.00			6-15-2019		100,000		30,000
CVR Refining LLC		6.50			11-1-2022		68,000		68,340
Denbury Resources Incorporated		4.63			7-15-2023		45,000		40,331
Denbury Resources Incorporated		5.50			5-1-2022		5,000		4,675
Denbury Resources Incorporated		6.38			8-15-2021		25,000		24,000
El Paso LLC		6.50			9-15-2020		45,000		51,910
El Paso LLC		7.00			6-15-2017		50,000		55,340
El Paso LLC (i)		7.42			2-15-2037		90,000		108,988
El Paso LLC		7.80			8-1-2031		100,000		123,776
Energy XXI Gulf Coast Incorporated 144A		6.88			3-15-2024		170,000		85,000
Energy XXI Gulf Coast Incorporated		7.75			6-15-2019		50,000		26,500
Exterran Partners LP		6.00			4-1-2021		225,000		208,688
Northern Tier Energy LLC		7.13			11-15-2020		215,000		221,988
Overseas Shipholding Group Incorporated		7.50			2-15-2021		150,000		141,750
Overseas Shipholding Group Incorporated		8.13			3-30-2018		175,000		175,000
Pioneer Natural Resources Company		7.50			1-15-2020		145,000		172,488
Rockies Express Pipeline LLC 144A		5.63			4-15-2020		260,000		272,350
Rockies Express Pipeline LLC 144A		6.88			4-15-2040		330,000		364,650
Rockies Express Pipeline LLC 144A		7.50			7-15-2038		205,000		236,775
Sabine Pass Liquefaction LLC		5.63			2-1-2021		75,000		76,781
Sabine Pass Liquefaction LLC		5.63			4-15-2023		90,000		92,025
Sabine Pass Liquefaction LLC		5.75			5-15-2024		50,000		51,125
Sabine Pass Liquefaction LLC		6.25			3-15-2022		200,000		210,500
Sabine Pass LNG LP		6.50			11-1-2020		395,000		407,838
Sabine Pass LNG LP		7.50			11-30-2016		370,000		391,275


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			5


Security name	Interest rate			Maturity date		Principal		Value

Oil, Gas & Consumable Fuels (continued)
SemGroup Corporation		7.50	%		6-15-2021	$	220,000	$	231,000
Suburban Propane Partners LP		5.50			6-1-2024		20,000		20,400
Suburban Propane Partners LP		7.38			8-1-2021		26,000		28,145
Swift Energy Company		7.13			6-1-2017		397,000		228,275
Swift Energy Company		8.88			1-15-2020		75,000		37,500
Ultra Petroleum Corporation 144A		5.75			12-15-2018		35,000		33,950
Ultra Petroleum Corporation 144A		6.13			10-1-2024		160,000		152,000

									4,373,363


Financials: 4.68%

Banks: 0.14%
CIT Group Incorporated 144A		5.50			2-15-2019		100,000		106,870
CIT Group Incorporated 144A		6.63			4-1-2018		65,000		70,931

									177,801


Capital Markets: 0.47%
Jefferies Finance LLC 144A		6.88			4-15-2022		300,000		289,500
Jefferies Finance LLC 144A		7.38			4-1-2020		80,000		79,200
Jefferies Finance LLC 144A		7.50			4-15-2021		225,000		222,188

									590,888


Consumer Finance: 1.61%
Ally Financial Incorporated		8.00			3-15-2020		53,000		63,468
Ford Motor Credit Company LLC		8.00			12-15-2016		25,000		27,798
General Motors Financial Company Incorporated		6.75			6-1-2018		95,000		107,469
Homer City Generation (PIK at 9.23%) LLC ¥		8.73			10-1-2026		146,599		149,531
Navient Corporation		8.00			3-25-2020		355,000		413,131
SLM Corporation		6.13			3-25-2024		140,000		140,700
SLM Corporation		7.25			1-25-2022		70,000		77,350
SLM Corporation		8.45			6-15-2018		125,000		142,813
Springleaf Finance Corporation		5.40			12-1-2015		140,000		142,975
Springleaf Finance Corporation		5.75			9-15-2016		50,000		52,000
Springleaf Finance Corporation		6.00			6-1-2020		175,000		179,813
Springleaf Finance Corporation		6.50			9-15-2017		50,000		53,000
Springleaf Finance Corporation		6.90			12-15-2017		243,000		262,440
Springleaf Finance Corporation		7.75			10-1-2021		37,000		41,810
Springleaf Finance Corporation		8.25			10-1-2023		135,000		153,900

									2,008,198


Diversified Financial Services: 0.42%
Denali Borrower LLC 144A		5.63			10-15-2020		330,000		351,450
Infinity Acquisition LLC 144A		7.25			8-1-2022		185,000		171,588

									523,038


Insurance: 0.18%
Hub Holdings LLC (PIK at 8.88%) 144A¥		8.13			7-15-2019		225,000		223,875


6		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Real Estate Management & Development: 0.37%
Hockey Merger Sub 2 Incorporated 144A		7.88	%		10-1-2021	$	150,000	$	154,125
Onex Corporation 144A		7.75			1-15-2021		300,000		305,250

									459,375


REITs: 1.49%
Crown Castle International Corporation		4.88			4-15-2022		35,000		36,663
Crown Castle International Corporation		5.25			1-15-2023		75,000		79,125
DuPont Fabros Technology Incorporated LP		5.88			9-15-2021		340,000		355,300
Iron Mountain Incorporated		5.75			8-15-2024		400,000		405,000
Iron Mountain Incorporated		6.00			8-15-2023		205,000		215,250
Iron Mountain Incorporated		7.75			10-1-2019		30,000		32,063
Iron Mountain Incorporated		8.38			8-15-2021		64,000		66,752
Omega Healthcare Investors Incorporated		6.75			10-15-2022		125,000		131,875
Sabra Health Care Incorporated		5.38			6-1-2023		50,000		52,938
Sabra Health Care Incorporated		5.50			2-1-2021		105,000		112,088
The Geo Group Incorporated		5.13			4-1-2023		100,000		102,000
The Geo Group Incorporated		5.88			1-15-2022		205,000		216,275
The Geo Group Incorporated		5.88			10-15-2024		35,000		36,663
The Geo Group Incorporated		6.63			2-15-2021		20,000		21,150

									1,863,142


Health Care: 2.84%

Health Care Equipment & Supplies: 0.38%
Crimson Merger Sub Incorporated 144A		6.63			5-15-2022		370,000		343,175
Hologic Incorporated		6.25			8-1-2020		125,000		130,938

									474,113


Health Care Providers & Services: 1.68%
Acadia Healthcare Company Incorporated 144A		5.63			2-15-2023		15,000		15,488
Aviv Healthcare Properties LP		6.00			10-15-2021		40,000		42,800
Aviv Healthcare Properties LP		7.75			2-15-2019		150,000		156,300
Capella Healthcare Incorporated		9.25			7-1-2017		430,000		447,200
Centene Corporation		5.75			6-1-2017		75,000		79,688
Community Health Systems Incorporated		6.88			2-1-2022		160,000		170,400
DaVita HealthCare Partners Incorporated		5.75			8-15-2022		55,000		59,331
HCA Incorporated		5.88			3-15-2022		25,000		28,100
HCA Incorporated		6.50			2-15-2020		175,000		199,063
HealthSouth Corporation		5.75			11-1-2024		25,000		26,125
HealthSouth Corporation		7.75			9-15-2022		82,000		87,330
HealthSouth Corporation		8.13			2-15-2020		60,000		62,550
MPT Operating Partnership LP		6.38			2-15-2022		70,000		75,950
MPT Operating Partnership LP		6.88			5-1-2021		125,000		134,844
Select Medical Corporation		6.38			6-1-2021		455,000		457,275
Tenet Healthcare Corporation		6.00			10-1-2020		50,000		54,438

									2,096,882


Health Care Technology: 0.31%
Emdeon Incorporated		11.00			12-31-2019		355,000		389,613


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			7


Security name	Interest rate			Maturity date		Principal		Value

Pharmaceuticals: 0.47%
Endo Finance LLC 144A		5.75	%		1-15-2022	$	65,000	$	68,494
Endo Finance LLC 144A		6.00			2-1-2025		50,000		52,938
Endo Finance LLC 144A		7.25			1-15-2022		180,000		193,275
Par Pharmaceutical Company		7.38			10-15-2020		64,000		67,840
Pinnacle Incorporated 144A		9.50			10-1-2023		21,000		23,625
Salix Pharmaceuticals Incorporated 144A		6.50			1-15-2021		150,000		168,000
Valeant Pharmaceuticals International Incorporated 144A		5.63			12-1-2021		5,000		5,088

									579,260


Industrials: 1.69%

Airlines: 0.14%
Aviation Capital Group Corporation 144A		6.75			4-6-2021		100,000		113,870
Aviation Capital Group Corporation 144A		7.13			10-15-2020		50,000		57,545

									171,415


Commercial Services & Supplies: 0.65%
ADT Corporation		4.13			6-15-2023		85,000		80,963
ADT Corporation		6.25			10-15-2021		300,000		324,750
Covanta Holding Corporation		5.88			3-1-2024		80,000		83,200
Covanta Holding Corporation		6.38			10-1-2022		195,000		210,113
Covanta Holding Corporation		7.25			12-1-2020		110,000		117,700

									816,726


Construction & Engineering: 0.18%
AECOM 144A		5.75			10-15-2022		15,000		15,713
AECOM 144A		5.88			10-15-2024		200,000		212,500

									228,213


Trading Companies & Distributors: 0.72%
Ashtead Capital Incorporated 144A		6.50			7-15-2022		350,000		380,625
H&E Equipment Services Incorporated		7.00			9-1-2022		355,000		364,763
International Lease Finance Corporation 144A		7.13			9-1-2018		35,000		39,813
International Lease Finance Corporation		8.63			9-15-2015		75,000		77,531
Light Tower Rentals Incorporated 144A		8.13			8-1-2019		45,000		32,400

									895,132


Information Technology: 2.32%

Electronic Equipment, Instruments & Components: 0.69%
Jabil Circuit Incorporated		8.25			3-15-2018		620,000		716,100
Zebra Technologies Corporation 144A		7.25			10-15-2022		135,000		145,800

									861,900


Internet Software & Services: 0.11%
Sophia Holding Finance LP (PIK at 10.38%) 144A¥		9.63			12-1-2018		140,000		141,400


IT Services: 0.98%
Audatex North America Incorporated 144A		6.00			6-15-2021		155,000		164,688
Audatex North America Incorporated 144A		6.13			11-1-2023		60,000		63,600


8		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

IT Services (continued)
First Data Corporation 144A		6.75	%		11-1-2020	$	52,000	$	55,770
First Data Corporation 144A		7.38			6-15-2019		110,000		115,533
First Data Corporation 144A		8.88			8-15-2020		25,000		26,813
First Data Corporation		11.75			8-15-2021		375,000		436,875
SunGard Data Systems Incorporated		6.63			11-1-2019		35,000		36,400
SunGard Data Systems Incorporated		7.38			11-15-2018		253,000		263,436
SunGard Data Systems Incorporated		7.63			11-15-2020		60,000		64,200

									1,227,315


Semiconductors & Semiconductor Equipment: 0.10%
Micron Technology Incorporated		5.88			2-15-2022		115,000		121,469


Software: 0.10%
Activision Blizzard Incorporated 144A		5.63			9-15-2021		45,000		48,150
Activision Blizzard Incorporated 144A		6.13			9-15-2023		10,000		11,063
Boxer Parent Company Incorporated (PIK at 9.75%) 144A¥		9.00			10-15-2019		80,000		67,600

									126,813


Technology Hardware, Storage & Peripherals: 0.34%
NCR Corporation		5.88			12-15-2021		15,000		15,525
NCR Corporation		6.38			12-15-2023		383,000		405,023

									420,548


Materials: 0.52%

Chemicals: 0.02%
Celanese US Holdings LLC		5.88			6-15-2021		20,000		21,750


Containers & Packaging: 0.35%
Crown Americas LLC		6.25			2-1-2021		20,000		21,200
Crown Cork & Seal Company Incorporated		7.38			12-15-2026		5,000		5,688
Crown Cork & Seal Company Incorporated (i)		7.50			12-15-2096		50,000		48,000
Owens-Illinois Incorporated		7.80			5-15-2018		60,000		67,500
Sealed Air Corporation 144A		8.38			9-15-2021		215,000		243,219
Silgan Holdings Incorporated		5.00			4-1-2020		50,000		51,875

									437,482


Paper & Forest Products: 0.15%
Georgia-Pacific LLC		8.88			5-15-2031		125,000		192,292


Telecommunication Services: 3.75%

Diversified Telecommunication Services: 1.80%
Citizens Communications Company		7.88			1-15-2027		200,000		205,500
Frontier Communications Corporation		8.13			10-1-2018		60,000		68,250
GCI Incorporated		6.75			6-1-2021		170,000		172,444
GCI Incorporated		8.63			11-15-2019		428,000		447,795
Level 3 Financing Incorporated		8.13			7-1-2019		74,000		78,255
Level 3 Financing Incorporated		5.38			8-15-2022		110,000		113,816
Level 3 Financing Incorporated 144A		5.63			2-1-2023		65,000		67,275


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			9


Security name	Interest rate			Maturity date		Principal		Value

Diversified Telecommunication Services (continued)
Level 3 Financing Incorporated		6.13	%		1-15-2021	$	80,000	$	84,500
Level 3 Financing Incorporated		7.00			6-1-2020		15,000		16,128
Qwest Corporation		7.25			9-15-2025		125,000		144,692
Qwest Corporation		7.63			8-3-2021		20,000		21,550
Syniverse Holdings Incorporated		9.13			1-15-2019		525,000		546,000
Windstream Corporation		7.88			11-1-2017		265,000		286,863

									2,253,068


Wireless Telecommunication Services: 1.95%
MetroPCS Wireless Incorporated		6.63			11-15-2020		240,000		253,200
SBA Communications Corporation 144A		4.88			7-15-2022		85,000		85,000
SBA Communications Corporation		5.63			10-1-2019		10,000		10,525
SBA Communications Corporation		5.75			7-15-2020		100,000		105,250
Sprint Capital Corporation		6.88			11-15-2028		1,100,000		1,034,000
Sprint Capital Corporation		8.75			3-15-2032		105,000		110,906
Sprint Communications Incorporated 144A		9.00			11-15-2018		25,000		29,063
Sprint Communications Incorporated		11.50			11-15-2021		25,000		30,875
Sprint Corporation		7.13			6-15-2024		70,000		69,650
Sprint Corporation		7.25			9-15-2021		10,000		10,250
Sprint Corporation		7.88			9-15-2023		10,000		10,325
T-Mobile USA Incorporated		6.13			1-15-2022		5,000		5,263
T-Mobile USA Incorporated		6.38			3-1-2025		135,000		141,075
T-Mobile USA Incorporated		6.46			4-28-2019		10,000		10,388
T-Mobile USA Incorporated		6.50			1-15-2024		5,000		5,250
T-Mobile USA Incorporated		6.54			4-28-2020		10,000		10,600
T-Mobile USA Incorporated		6.63			4-1-2023		35,000		37,188
T-Mobile USA Incorporated		6.63			4-28-2021		65,000		69,144
T-Mobile USA Incorporated		6.73			4-28-2022		305,000		325,588
T-Mobile USA Incorporated		6.84			4-28-2023		75,000		79,875

									2,433,415


Utilities: 2.08%

Electric Utilities: 1.41%
ComEd Financing III		6.35			3-15-2033		1,340,000		1,370,603
IPALCO Enterprises Incorporated 144A		7.25			4-1-2016		145,000		152,613
Otter Tail Corporation (i)		9.00			12-15-2016		215,000		241,630

									1,764,846


Gas Utilities: 0.22%
AmeriGas Finance LLC		6.75			5-20-2020		175,000		186,813
AmeriGas Finance LLC		7.00			5-20-2022		75,000		80,250

									267,063


Independent Power & Renewable Electricity Producers: 0.45%
Calpine Corporation 144A		5.88			1-15-2024		20,000		21,700
Calpine Corporation 144A		6.00			1-15-2022		40,000		43,620
Calpine Corporation 144A		7.88			1-15-2023		48,000		53,940
NSG Holdings LLC 144A		7.75			12-15-2025		335,904		361,937


10		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Independent Power & Renewable Electricity Producers (continued)
Reliant Energy Incorporated (i)		9.24	%		7-2-2017	$	49,955	$	52,828
Reliant Energy Incorporated (i)		9.68			7-2-2026		10,000		10,850
TerraForm Power Operating LLC 144A		5.88			2-1-2023		15,000		15,597

									560,472


Total Corporate Bonds and Notes (Cost $34,653,059)									36,165,247


Loans: 2.40%
Accellent Incorporated ±<%%		7.50			3-11-2022		57,692		54,663
Alliance Laundry Systems LLC ±		9.50			12-10-2019		159,122		159,321
Applied Systems Incorporated ±		7.50			1-24-2022		25,000		24,775
Asurion LLC ±		8.50			3-3-2021		25,000		25,156
CCM Merger Incorporated ±		4.50			8-8-2021		43,969		44,024
Centaur Acquisition LLC ±		8.75			2-20-2020		135,000		135,844
Focus Brands Incorporated ±(i)		10.25			8-21-2018		176,935		177,819
HGIM Corporation ±<%%		5.50			6-18-2020		229,148		160,158
Interactive Data Corporation ±		4.75			5-2-2021		139,300		139,648
Learfield Communications Incorporated ±		8.75			10-9-2021		212,434		212,169
LM U.S. Corp Acquisition Incorporated ±(i)		8.25			1-25-2021		10,000		9,950
Neff Rental LLC ±		7.25			6-9-2021		49,983		48,983
nTelos Incorporated ±		5.75			11-9-2019		155,000		130,200
Peak 10 Incorporated ±		8.25			6-17-2022		30,000		28,675
Sedgwick Claims Management Services Incorporated ±		6.75			2-28-2022		55,000		53,763
Spin Holdco Incorporated ±		4.25			11-14-2019		118,602		117,676
Tallgrass Operations LLC ±		5.44			11-13-2018		84,844		84,137
Texas Competitive Electric Holdings Company LLC ±(s)		4.66			10-10-2015		1,471,940		931,002
TGI Friday’s Incorporated ±		9.25			7-15-2021		45,000		45,000
TWCC Holdings Corporation ±		7.00			6-26-2020		275,000		255,406
Vertafore Incorporated ±		9.75			10-29-2017		35,000		35,140
W3 Company ±(i)		9.25			9-13-2020		19,950		18,803
WASH Multifamily Laundry Systems LLC ±		4.50			2-21-2019		108,075		105,373

Total Loans (Cost $3,589,380)									2,997,685


	Dividend yield					Shares
Preferred Stocks: 10.89%

Financials: 0.07%

Banks: 0.07%
GMAC Capital Trust I ±		7.80					3,457		89,986


Utilities: 10.82%

Electric Utilities: 10.82%
Alabama Power Company		6.45					20,576		568,412
Entergy Arkansas Incorporated		4.75					65,000		1,537,250
Entergy Arkansas Incorporated		4.90					80,000		1,972,000
Entergy Louisiana LLC		4.70					270,483		6,421,266
Indianapolis Power & Light Company		5.65					20,000		1,940,626
NextEra Energy Capital Holding Incorporated Series I		5.13					44,000		1,067,000

									13,506,554


Total Preferred Stocks (Cost $12,476,809)									13,596,540


Portfolio of investments—February 28, 2015 (unaudited)		Wells Fargo Advantage Utilities and High Income Fund			11


Security name				Expiration date		Shares		Value
Warrants: 0.05%

Utilities: 0.05%

Gas Utilities: 0.05%
Kinder Morgan Incorporated †					5-25-2017		16,000	$	61,760


Total Warrants (Cost $30,480)									61,760


	Interest rate			Maturity date		Principal
Yankee Corporate Bonds and Notes: 2.31%

Consumer Discretionary: 0.00%

Media: 0.00%
Videotron Limited		9.13	%		4-15-2018	$	3,000		3,083


Energy: 0.37%

Oil, Gas & Consumable Fuels: 0.37%
Griffin Coal Mining Company Limited 144A(s)(i)		9.50			12-1-2016		93,118		61,977
Teekay Corporation		8.50			1-15-2020		360,000		404,100

									466,077


Financials: 0.02%

Banks: 0.02%
Nielsen Holding and Finance BV 144A		5.50			10-1-2021		30,000		31,200


Health Care: 0.32%

Pharmaceuticals: 0.32%
Valeant Pharmaceuticals International Incorporated 144A		5.50			3-1-2023		25,000		25,156
Valeant Pharmaceuticals International Incorporated 144A		6.75			8-15-2018		50,000		53,125
Valeant Pharmaceuticals International Incorporated 144A		7.50			7-15-2021		300,000		325,500

									403,781


Industrials: 0.04%

Aerospace & Defense: 0.04%
Bombardier Incorporated 144A%%		5.50			9-15-2018		15,000		15,000
Bombardier Incorporated 144A%%		7.50			3-15-2025		30,000		30,000

									45,000


Materials: 0.52%

Containers & Packaging: 0.18%
Ardagh Finance Holdings SA (PIK at 8.63%) 144A¥		8.63			6-15-2019		3,945		4,028
Ardagh Packaging Finance plc 144A		9.13			10-15-2020		210,000		225,225

									229,253


Metals & Mining: 0.26%
Novelis Incorporated		8.38			12-15-2017		100,000		104,500
Novelis Incorporated		8.75			12-15-2020		200,000		217,000

									321,500


12		Wells Fargo Advantage Utilities and High Income Fund		Portfolio of investments—February 28, 2015 (unaudited)


Security name	Interest rate			Maturity date		Principal		Value

Paper & Forest Products: 0.08%
Sappi Limited 144A		7.50	%		6-15-2032	$	100,000	$	93,000


Telecommunication Services: 1.04%

Diversified Telecommunication Services: 0.98%
Intelsat Jackson Holdings SA		5.50			8-1-2023		575,000		543,375
Intelsat Jackson Holdings SA		7.25			10-15-2020		175,000		182,000
Intelsat Jackson Holdings SA		7.50			4-1-2021		150,000		157,125
Intelsat Luxembourg SA		7.75			6-1-2021		125,000		115,781
Intelsat Luxembourg SA		8.13			6-1-2023		225,000		209,250
Virgin Media Finance plc 144A		5.38			4-15-2021		10,000		10,575
Virgin Media Finance plc 144A		6.38			4-15-2023		25,000		27,000

									1,245,106


Wireless Telecommunication Services: 0.06%
Telesat Canada Incorporated 144A		6.00			5-15-2017		50,000		51,188


Total Yankee Corporate Bonds and Notes (Cost $2,924,078)									2,889,188


	Yield					Shares
Short-Term Investments: 10.12%

Investment Companies: 10.12%
Wells Fargo Advantage Cash Investment Money Market Fund, Select Class (l)(u)##		0.10					12,636,577	$	12,636,577


Total Short-Term Investments (Cost $12,636,577)									12,636,577


Total investments in securities (Cost $120,192,658) *	118.00	%		147,327,030
Other assets and liabilities, net	(18.00	)		(22,474,532	)

Total net assets	100.00	%	$	124,852,498

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

%%	The security is issued on a when-issued basis.

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

†	Non-income-earning 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.

(i)	Illiquid security

(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.

(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 when-issued securities and unfunded loans.

*	Cost for federal income tax purposes is $120,714,424 and unrealized gains (losses) consists of:


Gross unrealized gains	$	30,683,305
Gross unrealized losses		(4,070,699	)

Net unrealized gains	$	26,612,606

ITEM 7.

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

Not applicable.

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMEENT 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 Advantage Utilities and High Income Fund (the “Trust”) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.

(b) There were no significant changes in the Trust’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the 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 Advantage Utilities and High Income Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date:		April 24, 2015

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 Advantage Utilities and High Income Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date:		April 24, 2015

By:		/s/ Nancy Wiser

		Nancy Wiser
		Treasurer

Date:		April 24, 2015