As of March 31, 2020 | Fact sheet | wfam.com

Utilities and High Income FundClosed-End Fund

FUND FACTSTicker ERHNAV Ticker XERHXCUSIP 94987E109Fund inception date 4-28-04Shares outstanding 9,266,662.97Average daily volume 42,820

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

INVESTMENT STRATEGYThe fund allocates its assets between two separate investment strategies, or sleeves. Under normal market conditions, the fund will allocate approximately 70% of its total assets to a sleeve that places a focus on common, preferred and convertible preferred stocks of utility companies, and approximately 30% of its total assets to a sleeve of U.S. dollar denominated non-investment-grade (high yield) debt.

ASSET ALLOCATIONEquity 69.02Fixed income 27.91Cash & equivalents 3.07

FUND MANAGERSName Years of investment experience

Kent Newcomb, CFA 35Jack Spudich, CFA 34Niklas Nordenfelt, CFA 29Philip Susser 25

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

EXPENSES (%)Gross expense ratio 1.63

As of 08-31-19. Expense ratios include 0.59% of interest expense. Excluding interest expense, gross ratio would be 1.04%.

Performance (%)Annualized

3 monthYear to

date 1 year 3 year 5 year 10 year Since incep.Fund at Market -20.60 -20.60 -10.91 1.85 3.50 6.54 6.57Fund at NAV -14.26 -14.26 -8.02 2.12 3.40 7.09 6.93

Figures quoted represent past performance, which is no guarantee of future results, and do not reflect taxes that a shareholder may pay on an investment in a fund. Investment return, principal value, and yields of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted and assumes the reinvestment of dividends and capital gains. Performance shown is net of all applicable fund fees and expenses. Performance figures of the fund do not reflect fees an investor may be charged pursuant to the terms of any brokerage account agreements with their broker or financial intermediary. Current month-end performance is available by calling 1-800-222-8222.

NAV vs. market price chart

Net asset value (NAV) and market price dataCurrent share price ($) 10.87Current share NAV ($) 10.94Premium/discount at NAV (%) -0.64

Fund capitalizationNet assets ($ in millions) 101.4Bank borrowings ($ in millions) 22.0Total assets ($ in millions) 123.4Leverage as a percentage of total assets (%) 17.8Effective rate on borrowing (%) 2.29Borrowing cost impact on expense ratio (%) 0.50

Fund characteristicsNumber of holdings 324Portfolio turnover (%) 160.3Duration (years) 3.77Weighted average maturity (years) 5.12Weighted average coupon (%) 5.39

Yields (%)At market At NAV

Distribution rate* 8.71 8.6530-day SEC yield 1 4.04

*Distribution rate is calculated by annualizing the last distribution and then dividing by the period ending NAV or market price. Special distributions, including special capital gains distributions, are not included in the calculation. Distributions may be sourced from any or all of the following: income, capital gains and return of capital.

Dividend informationDeclaration date Payment amount($)

03-27-2020 0.0809602-20-2020 0.0804001-31-2020 0.0798812-27-2019 0.0794911-22-2019 0.0792210-25-2019 0.07875

Dividends shown are from the last six months and are paid monthly. Historical dividend sources since the Fund's inception have included net investment income, realized gains, and return of capital. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes. A fund’s current distribution rate and historical dividends are not

2 indicative of future performance.

NAV Market Value$20

15

10

5

03-17 6-17 9-17 12-17 3-18 6-18 9-18 12-18 3-19 6-19 9-19 12-19 3-20

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Credit rating allocation (%)BBB/Baa 3.62BB/Ba 49.31B/B 35.32CCC/Caa and below 10.15Not rated 1.06Other 0.53

Calculated as a percentage of market value of bonds. Credit rating allocation is subject to change and may have changed since the date specified. Percent totals may not add to 100% due to rounding. The ratings indicated are from Standard & Poor’s, Fitch Ratings Ltd., and/or Moody’s Investors Service. If a security was rated by all three rating agencies, the middle rating was used. If rated by two of three rating agencies, the lower rating was used, and if rated by one of the agencies, that rating was used.

Sector allocation (%)Top equity allocations

Utilities 68.87Cash & equivalents 3.07Energy 0.13

Top fixed income allocations

Consumer discretionary 5.06Communication services 5.01Energy 4.02Industrials 3.31Consumer staples 2.95Information technology 2.80Utilities 1.78Financials 1.68Real estate 0.48

Calculated as a percentage of market value of investments. Sector allocation is subject to change and may have changed since the date specified. These amounts may differ from the final sector categorization determined by the portfolio management team. Percent totals may not add to 100% due to rounding.

Maturity distribution (%)0 - 1 year 3.381 - 3 years 16.103 - 5 years 27.755 - 10 years 47.8810 - 20 years 2.2820+ years 2.06Other 0.53

Calculated as a percentage of market value of bonds. Maturity distribution is subject to change and may have changed since the date specified. Percent totals may not add to 100% due to rounding.

Top geographic allocations (%)United States 85.87Canada 2.67Netherlands 2.66Luxembourg 1.38New Zealand 0.33United Kingdom 0.28Ireland 0.27

Geographic allocation is subject to change and may have changed since the date specified. Percent totals may not add to 100% due to rounding.

Top holdings (%)NextEra Energy, Inc. 11.78American Electric Power Company, Inc. 4.57Duke Energy Corporation 4.19Xcel Energy Inc. 4.16Southern Company 4.11Dominion Energy Inc 3.95WEC Energy Group Inc 3.72Exelon Corporation 3.66Eversource Energy 3.47American Water Works Company, Inc. 3.16

Portfolio holdings are subject to change and may have changed since the date specified. The holdings listed should not be considered recommendations to purchase or sell a particular security.

1. The 30-day SEC yield is calculated with a standardized formula mandated by the SEC. The formula is based on maximum offering price per share and includes the effect of any fee waivers. Without waivers, yields would be reduced. A fund's actual distribution rate will differ from the SEC yield and any income distributions from the fund may be higher or lower than the SEC yield.

2. If a distribution is from a source other than net investment income, the Fund provides a notice to shareholders with an estimate of its distribution source at that time. The final determination of the source of all dividend distributions in the current year will be made after year-end. The actual amounts and sources of the amounts for tax reporting purposes will depend upon a fund's investment experience during the remainder of the fiscal year and may be subject to change based on tax regulations. Each fund will send shareholders a Form 1099-DIV for the calendar year that will tell shareholders how to report these distributions for federal income tax purposes.

As of March 31, 2020 | Fact sheet |

Utilities and High Income FundClosed-End Fund

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StrategyIn the first quarter of 2020, markets reflected the high level of uncertainty around the novel coronavirus. As of quarter-end, the economic facts needed to form expectations were just beginning to accumulate. On a basic level, it is not yet clear what near-term success at slowing the spread of the coronavirus will look like. Increased volatility across asset classes is based on real uncertainty around economic fundamentals such as the basic health of individuals, employment, and the earnings power of businesses, in our opinion.

Fortunately, there is less uncertainty around the policy response. To help consumers and business access credit, the U.S. Federal Reserve (Fed) and other central banks took broad-based action to lower the cost of loans and increase the availability capital. To more directly address the expected demand shortfall, a nearly $2 trillion stimulus package was signed into law in the U.S. The law calls for direct cash grants to consumers and contains incentives designed to minimize unemployment. These efforts could reduce the chances that unemployment becomes entrenched and a broad-based credit crunch slows a recovery.

While the supply technical in high yield remained positive with issuance shutting down for most of March, the demand technical flipped as the volatility and risk-off sentiment led investors to flee high yield and accelerate outflows. Liquidity in the high-yield market was severely strained for much of March but improved toward the end of the month in large part due to the extraordinary response from the Fed.

The Utilities and High Income Fund’s return based on market value was -20.60% for the three-month period that ended March 31, 2020, underperforming the -13.28% return of the Utilities and High Income Blended Index. 3 During the same period, the fund’s return based on its net asset value was -14.26%, underperforming the index. The Utilities and High Income Blended Index also returned-3.09%, 6.74%, and 9.21% for the 1-, 5-, and 10-year periods, respectively.

Contributors to performanceAvoidance of select index constituents benefited results, as did investments in holdings such as NextEra Energy, Inc. (11.78%), and American Water Works Co., Inc. (3.16%). NextEra’s regulated utility business is primarily focused on Florida. It has a track record of effective cost management. That has allowed the company to deliver reliable power attractive rates. The company also generates power from renewable sources, mostly solar and wind, at attractive returns across a national footprint. We expect renewables to grow as a share of the company’s generation capacity. In our view, these businesses could provide investment opportunities that support high-single-digit earnings growth over the next few years. The company has grown the dividend at an annualized rate of about 10% over the past 10 years. American Water Works is often seen as being relatively defensive and has demonstrated consistent dividend growth. The company is not as exposed to the downturn in power usage stemming from lower industrial demand.

Within the fund’s high-yield sleeve, security selection helped drive positive performance, with credit-quality allocation providing a further small positive. The fund’s underweight to CCC-rated and below credits was a contributor as lower-rated paper underperformed. Positive security selection included names in the autos, midstream, oil-field services, and retailer subsectors. Contributing was selection in certain sectors that the fund’s holdings outperformed the index and particularly in certain energy subsectors where the fund avoided some of the worst-performing names.

Detractors from performanceWhile the equity sleeve’s performance generally benefited relative results overall, select holdings such as DTE Energy Co. (2.17%) detracted from returns. The firm’s exposure to midstream gas was a headwind in the recent environment, but the team believes DTE is a higher-quality utility company with long-term contracts and an attractive valuation. Other individual detractors included Public Service Enterprise Group Inc. (2.35%) and Exelon Corp. (3.66%).

Within the fund’s high-yield sleeve, sector allocation along with leverage were detractors from performance. Leverage in an environment where high yield significantly underperformed was a detractor from total returns. From a sector perspective, detractors came from underweights to communications and consumer non-cylicals, specifically within wireless, cable and satellite, food and beverage, and supermarkets as these sectors held in better amid the larger sell-off. A further negative was the fund’s overweights to the energy subsectors, and as oil prices crashed in the quarter from the steep decline in demand along with a supply glut, the entire energy sector underperformed and this allocation was a detractor. The fund’s allocation to floating-rate high-yield bank loans (approximately 2.8% at quarter-end) was another slight detractor from performance as bank loans underperformed broad-based fixed-rate high-yield paper as the Fed cut interest rates to 0%.

Management outlookA prevailing risk to equities is that efforts to contain the crisis fall short and come too late. Despite all appearances, we think there is reason for some optimism. It might turn out the actions taken now to support credit markets and demand could shorten the slowdown by narrowing the range of outcomes.

One way to respond to all of this uncertainty and stock market volatility is through intelligent asset allocation and stock selection. In our view, a good solution for the stock selection piece of the puzzle is to focus on companies that have the ability to deliver consistent dividend growth. We think that dividend growth is a sign of prudent capital allocation and potentially positive prospects. In our view, businesses that consistently increase their dividends tend to have management teams that make prudent strategic investments that generate attractive returns over time, and they are in businesses where it is possible to find these opportunities. Their commitment to returning cash to shareholders in effect rations capital and forces them to be disciplined. They also tend to avoid excess leverage that could put the dividend at risk. We think those are the very companies and management teams you want to invest in across economic cycles.

Pertaining to the high-yield portfolio sleeve, the team expects continued fiscal and monetary support by the U.S. Government as long as the economy remains largely shut down. In the current environment, the team believes there will be heightened volatility in the short term but that high yield offers an attractive opportunity for longer-term investors. The team sees dislocations in fallen angels as well as smaller and mid-size issuers as providing further opportunities. The team is actively monitoring and rigorously stress-testing credits, especially for those issuers directly affected by the coronavirus. In regard to energy, the demand for oil is and will continue to be affected by the pandemic and while the default rate is currently low, this will begin to increase as the year progresses, especially from energy issuers. The demand for floating-rate loans has significantly decreased given the Fed’s move toward 0% rates and the higher risk from increased leverage levels seen in recent years. As the pace of ratings downgrades accelerates, especially within the lower-quality parts of the loan market, the size of the CCC and below bucket will swell, creating a further headwind for collateralized loan obligations trying to maintain their test thresholds.

3. Source: Wells Fargo Funds Management LLC. Effective October 15, 2019, the Utilities and High Income Blended Index changed the high-yield component of the index from the ICE BofA U.S. High Yield Index to the ICE BofA U.S. High Yield Constrained Index in order to better match the fund’s investment strategy. The Utilities and High Income Blended Index is composed of 70% S&P 500 Utilities Sector Index and 30% ICE BofA U.S. High Yield Constrained Index. Prior to October 15, 2019, The Utilities and High Income Blended Index was composed of 70% S&P 500 Utilities Sector Index and 30% ICE BofA U.S. High Yield Index. Prior to July 9, 2010, the index was composed of 70% S&P Utilities Sector Index and 30% ICE BofA BB-B U.S. Cash Pay High Yield Index. You cannot invest directly in an index.

As of March 31, 2020 | Fact sheet |

Utilities and High Income FundClosed-End Fund

Returns reflect expense limits previously in effect, without which returns would have been lower.

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

The ratings indicated are from Standard & Poor’s, Moody’s Investors Service, and/or Fitch Ratings Ltd. Credit-quality ratings: Credit-quality ratings apply to underlying holdings of the fund and not the fund itself. Standard & Poor's rates the creditworthiness of bonds 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. Moody’s rates the creditworthiness of bonds 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. Fitch rates the creditworthiness of bonds from AAA (highest) to D (lowest).

This material is for general informational and educational purposes only and is NOT intended to provide investment advice or a recommendation of any kind—including a recommendation for any specific investment, strategy, or plan.

Wells Fargo Asset Management (WFAM) is the trade name for certain investment advisory/management firms owned by Wells Fargo & Company. These firms include but are not limited to Wells Capital Management Incorporated and Wells Fargo Funds Management, LLC. Certain products managed by WFAM entities are distributed by Wells Fargo Funds Distributor, LLC (a broker-dealer and Member FINRA).

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

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As of March 31, 2020 | Fact sheet |

Utilities and High Income FundClosed-End Fund

PAR-0420-07661 05-20