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: 811-09255
Allspring Variable Trust
(Exact name of registrant as specified in charter)
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Address of principal executive offices) (Zip code)
Matthew Prasse
Allspring Funds Management, LLC
1415 Vantage Park Drive, 3rd Floor, Charlotte, NC 28203
(Name and address of agent for service)
Registrant’s telephone number, including area code: 800-222-8222
Date of fiscal year end: December 31
Registrant is making a filing for 5 of its series: Allspring VT Discovery All Cap Growth Fund, Allspring VT Discovery SMID Cap Growth Fund, Allspring VT Index Asset Allocation Fund, Allspring VT Opportunity Fund and Allspring VT Small Cap Growth Fund
Date of reporting period: June 30, 2024
ITEM 1. REPORT TO STOCKHOLDERS
Semi-Annual Shareholder Report
VT Discovery All Cap Growth Fund
This semi-annual shareholder report contains important information about VT Discovery All Cap Growth Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 1 | $40 | 0.75% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $71,919,047 |
| # of portfolio holdings | 51 |
| Portfolio turnover rate | 27% |
| Total advisory fees paid | $187,923 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| Microsoft Corp. | 12.3 |
| Amazon.com, Inc. | 7.4 |
| NVIDIA Corp. | 5.6 |
| Meta Platforms, Inc. Class A | 4.9 |
| Visa, Inc. Class A | 3.2 |
| Alphabet, Inc. Class A | 3.1 |
| Apple, Inc. | 2.6 |
| Chipotle Mexican Grill, Inc. | 2.5 |
| Eli Lilly & Co. | 2.3 |
| ServiceNow, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 41.2 |
| Consumer discretionary | 16.6 |
| Health care | 10.6 |
| Financials | 9.8 |
| Industrials | 9.2 |
| Communication services | 9.0 |
| Materials | 2.6 |
| Consumer staples | 1.0 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
VT Discovery All Cap Growth Fund
This semi-annual shareholder report contains important information about VT Discovery All Cap Growth Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 2 | $53 | 1.00% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $71,919,047 |
| # of portfolio holdings | 51 |
| Portfolio turnover rate | 27% |
| Total advisory fees paid | $187,923 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| Microsoft Corp. | 12.3 |
| Amazon.com, Inc. | 7.4 |
| NVIDIA Corp. | 5.6 |
| Meta Platforms, Inc. Class A | 4.9 |
| Visa, Inc. Class A | 3.2 |
| Alphabet, Inc. Class A | 3.1 |
| Apple, Inc. | 2.6 |
| Chipotle Mexican Grill, Inc. | 2.5 |
| Eli Lilly & Co. | 2.3 |
| ServiceNow, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 41.2 |
| Consumer discretionary | 16.6 |
| Health care | 10.6 |
| Financials | 9.8 |
| Industrials | 9.2 |
| Communication services | 9.0 |
| Materials | 2.6 |
| Consumer staples | 1.0 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
VT Discovery SMID Cap Growth Fund
This semi-annual shareholder report contains important information about VT Discovery SMID Cap Growth Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 2 | $60 | 1.15% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $141,742,416 |
| # of portfolio holdings | 73 |
| Portfolio turnover rate | 32% |
| Total advisory fees paid | $513,654 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| Casella Waste Systems, Inc. Class A | 2.7 |
| Natera, Inc. | 2.5 |
| Axon Enterprise, Inc. | 2.2 |
| Onto Innovation, Inc. | 2.2 |
| Tetra Tech, Inc. | 2.2 |
| HealthEquity, Inc. | 2.0 |
| Morningstar, Inc. | 2.0 |
| TKO Group Holdings, Inc. | 2.0 |
| CCC Intelligent Solutions Holdings, Inc. | 1.9 |
| Saia, Inc. | 1.9 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Industrials | 27.4 |
| Information technology | 23.9 |
| Health care | 20.5 |
| Consumer discretionary | 13.0 |
| Financials | 6.1 |
| Communication services | 3.3 |
| Consumer staples | 2.8 |
| Materials | 1.5 |
| Real estate | 1.5 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
VT Index Asset Allocation Fund
This semi-annual shareholder report contains important information about VT Index Asset Allocation Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 2 | $52 | 1.00% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $69,771,204 |
| # of portfolio holdings | 645 |
| Portfolio turnover rate | 6% |
| Total advisory fees paid | $157,245 |
What did the Fund invest in?
(Based on long-term investments)
EFFECTIVE MATURITY (% OF LONG-TERM INVESTMENTS)
| 0-1 year | 4.3 |
| 1-3 years | 34.8 |
| 3-5 years | 24.1 |
| 5-10 years | 15.6 |
| 10-20 years | 21.2 |
TOP TEN HOLDINGS (% OF NET ASSETS)
| Microsoft Corp. | 4.3 |
| NVIDIA Corp. | 4.0 |
| Apple, Inc. | 4.0 |
| Amazon.com, Inc. | 2.3 |
| U.S. Treasury Bonds, 6.00%, 2/15/2026 | 1.7 |
| U.S. Treasury Bonds, 6.75%, 8/15/2026 | 1.6 |
| U.S. Treasury Notes, 1.38%, 10/31/2028 | 1.6 |
| Meta Platforms, Inc. Class A | 1.4 |
| Alphabet, Inc. Class A | 1.4 |
| Alphabet, Inc. Class C | 1.2 |
EQUITY SECTOR ALLOCATION (% OF EQUITY INVESTMENTS)
| Information technology | 32.4 |
| Financials | 12.4 |
| Health care | 11.7 |
| Consumer discretionary | 10.0 |
| Communication services | 9.3 |
| Industrials | 8.1 |
| Consumer staples | 5.8 |
| Energy | 3.6 |
| Utilities | 2.3 |
| Real estate | 2.2 |
| Materials | 2.2 |
VT Index Asset Allocation Fund
Semi-Annual Shareholder Report | June 30, 2024
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
This semi-annual shareholder report contains important information about VT Opportunity Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 1 | $38 | 0.75% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $180,868,871 |
| # of portfolio holdings | 55 |
| Portfolio turnover rate | 9% |
| Total advisory fees paid | $552,900 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| Amazon.com, Inc. | 5.6 |
| Apple, Inc. | 5.5 |
| Alphabet, Inc. Class C | 5.5 |
| Salesforce, Inc. | 3.9 |
| Mastercard, Inc. Class A | 3.5 |
| Meta Platforms, Inc. Class A | 3.3 |
| Texas Instruments, Inc. | 3.0 |
| HEICO Corp. Class A | 2.6 |
| Carlisle Cos., Inc. | 2.1 |
| Marvell Technology, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 24.1 |
| Industrials | 18.6 |
| Consumer discretionary | 10.5 |
| Financials | 10.4 |
| Health care | 9.3 |
| Communication services | 9.1 |
| Real estate | 8.8 |
| Materials | 4.6 |
| Consumer staples | 4.6 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
This semi-annual shareholder report contains important information about VT Opportunity Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 2 | $51 | 1.00% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $180,868,871 |
| # of portfolio holdings | 55 |
| Portfolio turnover rate | 9% |
| Total advisory fees paid | $552,900 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| Amazon.com, Inc. | 5.6 |
| Apple, Inc. | 5.5 |
| Alphabet, Inc. Class C | 5.5 |
| Salesforce, Inc. | 3.9 |
| Mastercard, Inc. Class A | 3.5 |
| Meta Platforms, Inc. Class A | 3.3 |
| Texas Instruments, Inc. | 3.0 |
| HEICO Corp. Class A | 2.6 |
| Carlisle Cos., Inc. | 2.1 |
| Marvell Technology, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 24.1 |
| Industrials | 18.6 |
| Consumer discretionary | 10.5 |
| Financials | 10.4 |
| Health care | 9.3 |
| Communication services | 9.1 |
| Real estate | 8.8 |
| Materials | 4.6 |
| Consumer staples | 4.6 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
This semi-annual shareholder report contains important information about VT Small Cap Growth Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 1 | $48 | 0.92% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $311,816,913 |
| # of portfolio holdings | 89 |
| Portfolio turnover rate | 34% |
| Total advisory fees paid | $1,211,155 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| TransMedics Group, Inc. | 3.7 |
| RadNet, Inc. | 3.1 |
| CyberArk Software Ltd. | 3.1 |
| e.l.f. Beauty, Inc. | 3.0 |
| Casella Waste Systems, Inc. Class A | 2.9 |
| SPS Commerce, Inc. | 2.5 |
| Glaukos Corp. | 2.4 |
| BellRing Brands, Inc. | 2.4 |
| Boot Barn Holdings, Inc. | 2.3 |
| Comfort Systems USA, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 26.2 |
| Health care | 24.3 |
| Industrials | 22.8 |
| Consumer discretionary | 12.5 |
| Consumer staples | 7.9 |
| Financials | 4.3 |
| Materials | 1.6 |
| Communication services | 0.4 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
Semi-Annual Shareholder Report
This semi-annual shareholder report contains important information about VT Small Cap Growth Fund for the period of January 1, 2024 to June 30, 2024. You can find additional information about the Fund at allspringglobal.com. You can also request this information by contacting us at 1-800-260-5969.
What were the Fund costs for the past 6 months?
The table explains the costs you would have paid within the reporting period based on a hypothetical $10,000 investment.
| CLASS NAME | COST OF A $10,000 INVESTMENT | COSTS PAID AS A % OF A $10,000 INVESTMENT |
|---|
| Class 2 | $61 | 1.17% |
The manager has contractually committed to waive fees and/or reimburse certain expenses to the extent necessary to cap the Fund's total annual fund operating expense ratio at a specific amount. Without this cap, the costs shown above may have been higher. Please see the prospectus for the amount and the expiration date of the cap. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
| Total net assets | $311,816,913 |
| # of portfolio holdings | 89 |
| Portfolio turnover rate | 34% |
| Total advisory fees paid | $1,211,155 |
What did the Fund invest in?
(Based on long-term investments)
TOP TEN HOLDINGS (% OF NET ASSETS)
| TransMedics Group, Inc. | 3.7 |
| RadNet, Inc. | 3.1 |
| CyberArk Software Ltd. | 3.1 |
| e.l.f. Beauty, Inc. | 3.0 |
| Casella Waste Systems, Inc. Class A | 2.9 |
| SPS Commerce, Inc. | 2.5 |
| Glaukos Corp. | 2.4 |
| BellRing Brands, Inc. | 2.4 |
| Boot Barn Holdings, Inc. | 2.3 |
| Comfort Systems USA, Inc. | 2.1 |
SECTOR ALLOCATION (% OF LONG-TERM INVESTMENTS)
| Information technology | 26.2 |
| Health care | 24.3 |
| Industrials | 22.8 |
| Consumer discretionary | 12.5 |
| Consumer staples | 7.9 |
| Financials | 4.3 |
| Materials | 1.6 |
| Communication services | 0.4 |
You can find additional information on the Fund's website at allspringglobal.com, including its:
- Prospectus - Financial Information - Fund holdings - Proxy voting information
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
(a) The registrant’s Schedule of Investments is included as part of the Financial Statements filed under Item 7(a) of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES
(a) The registrant’s Financial Statements are attached herewith.
(b) The registrant’s Financial Highlights are included as part of the Financial Statements filed under Item 7(a) of this Form.
Allspring VT
Discovery All Cap
Growth Fund
Long Form Financial Statements
Semi-Annual Report
Allspring VT Discovery All Cap Growth Fund | 1
Portfolio of investments—June 30, 2024 (unaudited)
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Communication services: 8.95% | | | | | | |
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Interactive media & services: 8.07% | | | | | | |
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Meta Platforms, Inc. Class A | | | | | | |
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Consumer discretionary: 16.60% | | | | | | |
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Hotels, restaurants & leisure: 5.03% | | | | | | |
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Chipotle Mexican Grill, Inc.† | | | | | | |
DraftKings, Inc. Class A† | | | | | | |
| | | | | | |
Household durables: 1.24% | | | | | | |
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Tradeweb Markets, Inc. Class A | | | | | | |
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Financial services: 4.65% | | | | | | |
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The accompanying notes are an integral part of these financial statements.
2 | Allspring VT Discovery All Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
Health care equipment & supplies: 3.34% | | | | | | |
| | | | | | |
Intuitive Surgical, Inc.† | | | | | | |
| | | | | | |
Health care providers & services: 1.63% | | | | | | |
| | | | | | |
Health care technology: 1.04% | | | | | | |
Veeva Systems, Inc. Class A† | | | | | | |
Life sciences tools & services: 2.29% | | | | | | |
| | | | | | |
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Aerospace & defense: 1.37% | | | | | | |
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Commercial services & supplies: 3.52% | | | | | | |
| | | | | | |
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Electrical equipment: 1.73% | | | | | | |
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Ground transportation: 2.59% | | | | | | |
Old Dominion Freight Line, Inc. | | | | | | |
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Information technology: 41.14% | | | | | | |
Communications equipment: 1.87% | | | | | | |
| | | | | | |
Electronic equipment, instruments & components: 0.96% | | | | | | |
Zebra Technologies Corp. Class A† | | | | | | |
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Semiconductors & semiconductor equipment: 13.10% | | | | | | |
Advanced Micro Devices, Inc.† | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 3
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Semiconductors & semiconductor equipment(continued) | | | | | | |
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Monolithic Power Systems, Inc. | | | | | | |
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Cadence Design Systems, Inc.† | | | | | | |
CCC Intelligent Solutions Holdings, Inc.† | | | | | | |
Crowdstrike Holdings, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
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Technology hardware, storage & peripherals: 2.64% | | | | | | |
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Construction materials: 1.05% | | | | | | |
| | | | | | |
Total common stocks (Cost $36,486,486) | | | | | | |
| | | | | |
Short-term investments: 0.26% | | | | | | |
Investment companies: 0.26% | | | | | | |
Allspring Government Money Market Fund Select Class♠∞ | | | | | | |
Total short-term investments (Cost $185,756) | | | | | | |
Total investments in securities (Cost $36,672,242) | | | | | | |
Other assets and liabilities, net | | | | | | |
| | | | | | |
| Non-income-earning security |
| The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| The rate represents the 7-day annualized yield at period end. |
The accompanying notes are an integral part of these financial statements.
4 | Allspring VT Discovery All Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| | | | | Net
change in
unrealized
gains
(losses) | | | Income
from
affiliated
securities |
| | | | | | | | |
Allspring Government Money Market Fund Select Class | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 5
Statement of assets and liabilities—June 30, 2024 (unaudited)
Financial statements
Statement of assets and liabilities
| |
Investments in unaffiliated securities, at value (cost $36,486,486) | |
Investments in affiliated securities, at value (cost $185,756) | |
| |
Receivable for Fund shares sold | |
Prepaid expenses and other assets | |
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Payable for Fund shares redeemed | |
Professional fees payable | |
| |
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Administration fees payable | |
Accrued expenses and other liabilities | |
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| |
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Total distributable earnings | |
| |
Computation of net asset value per share | |
| |
Shares outstanding–Class 11 | |
Net asset value per share–Class 1 | |
| |
Shares outstanding–Class 21 | |
Net asset value per share–Class 2 | |
1 The Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
6 | Allspring VT Discovery All Cap Growth Fund
Statement of operations—six months ended June 30, 2024 (unaudited)
Statement of operations
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Dividends (net of foreign withholdings taxes of $2,121) | |
Income from affiliated securities | |
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Custody and accounting fees | |
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Shareholder report expenses | |
Trustees’ fees and expenses | |
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Less: Fee waivers and/or expense reimbursements | |
| |
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| |
Realized and unrealized gains (losses) on investments | |
Net realized gains (losses) on | |
| |
Foreign currency and foreign currency translations | |
Net realized gains on investments | |
Net change in unrealized gains (losses) on investments | |
Net realized and unrealized gains (losses) on investments | |
Net increase in net assets resulting from operations | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 7
Statement of changes in net assets
Statement of changes in net assets
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Six months ended
June 30, 2024 (unaudited) | Year ended December 31, 2023 |
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Net realized gains on investments | | | | |
Net change in unrealized gains (losses) on investments | | | | |
Net increase in net assets resulting from operations | | | | |
Distributions to shareholders from | | | | |
Net investment income and net realized gains | | | | |
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Total distributions to shareholders | | | | |
Capital share transactions | | | | |
Proceeds from shares sold | | | | |
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Reinvestment of distributions | | | | |
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Payment for shares redeemed | | | | |
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Net decrease in net assets resulting from capital share transactions | | | | |
Total increase in net assets | | | | |
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The accompanying notes are an integral part of these financial statements.
8 | Allspring VT Discovery All Cap Growth Fund
Financial highlights
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
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Net asset value, beginning of period | | | | | | |
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Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery All Cap Growth Fund | 9
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
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Net asset value, beginning of period | | | | | | |
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Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Discovery All Cap Growth Fund
Notes to financial statements (unaudited)
Notes to financial statements
Allspring Variable Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring VT Discovery All Cap Growth Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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 (“GAAP”) 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 income and expenses during the reporting period. Actual results could differ from those estimates.
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds 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.
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 Valuation Committee at Allspring Funds Management, LLC (“Allspring Funds Management”).
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee 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. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
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 Valuation Committee. 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 of securities 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.
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. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Interest earned on cash balances held at the custodian is recorded as interest income.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. GAAP. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
Allspring VT Discovery All Cap Growth Fund | 11
Notes to financial statements (unaudited)
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, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2024, the aggregate cost of all investments for federal income tax purposes was $36,757,930 and the unrealized gains (losses) consisted of:
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
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 unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2024:
| | Other significant
observable inputs
(Level 2) | Significant
unobservable inputs
(Level 3) | |
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Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
At June 30, 2024, the Fund did not have any transfers into/out of Level 3.
12 | Allspring VT Discovery All Cap Growth Fund
Notes to financial statements (unaudited)
4.
TRANSACTIONS WITH AFFILIATES
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
For the six months ended June 30, 2024, the management fee was equivalent to an annual rate of 0.60% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.30% as the average daily net assets of the Fund increase.
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through April 30, 2025 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. As of June 30, 2024, the contractual caps are as follows:
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund transactions during the six months ended June 30, 2024.
Allspring VT Discovery All Cap Growth Fund | 13
Notes to financial statements (unaudited)
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended June 30, 2024 were $19,380,943 and $26,497,743, respectively.
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the six months ended June 30, 2024, there were no borrowings by the Fund under the agreement.
As of the end of the period, the Fund concentrated its portfolio of investments in the information technology sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. 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.
14 | Allspring VT Discovery All Cap Growth Fund
Other information (unaudited)
Other information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring VT Discovery All Cap Growth Fund | 15
Other information (unaudited)
Item 8. Changes in and disagreements with accountants
Item 9. Matters submitted to fund shareholders for a vote
Item 10. Remuneration paid to directors, officers and others
Refer to information in the Statement of operations.
16 | Allspring VT Discovery All Cap Growth Fund
Other information (unaudited)
Item 11. Statement regarding basis for the board’s approval of investment advisory contract
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Variable Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 28-30, 2024 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring VT Discovery All Cap Growth Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a meeting of the Board held in April 2024, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2024. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis.
The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent, and quality of services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business.* The Board also received information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., under a transition services agreement and an update on the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds
*
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring VT Discovery All Cap Growth Fund | 17
Other information (unaudited)
Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and fair valuation designee. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2023. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund was higher than or in range of the average investment performance of the Universe for all periods under review except the three-year period. The Board also noted that the investment performance of the Fund was lower than the investment performance of its benchmark index, the Russell 3000® Growth Index, for all periods under review.
The Board received information concerning, and discussed factors contributing to, the underperformance of the Fund relative to the Universe and benchmark for the periods identified above. The Board took note of the explanations for the relative underperformance during these periods, including with respect to investment decisions and market factors that affected the Fund’s investment performance. The Board also took note of the Fund’s outperformance relative to the Universe for the shorter time periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were lower than the median net operating expense ratios of the expense Groups for each share class.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment management and sub-advisory fee rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were lower the sum of these average rates for the Fund’s expense Groups for each share class.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal and regulatory obligations and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
18 | Allspring VT Discovery All Cap Growth Fund
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
Allspring VT Discovery All Cap Growth Fund | 19
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For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-260-5969 or visit the Fund’s website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
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.
© 2024 Allspring Global Investments Holdings, LLC. All rights reserved.
NCSRS0578 06-24
Allspring VT Index Asset Allocation Fund
Long Form Financial Statements
Semi-Annual Report
Allspring VT Index Asset Allocation Fund | 1
Portfolio of investments—June 30, 2024 (unaudited)
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Communication services: 5.58% | | | | | | |
Diversified telecommunication services: 0.40% | | | | | | |
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Verizon Communications, Inc. | | | | | | |
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Live Nation Entertainment, Inc.† | | | | | | |
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Take-Two Interactive Software, Inc.† | | | | | | |
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Warner Bros Discovery, Inc.† | | | | | | |
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Interactive media & services: 4.01% | | | | | | |
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Meta Platforms, Inc. Class A | | | | | | |
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Charter Communications, Inc. Class A† | | | | | | |
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| | | | | | |
| | | | | | |
Interpublic Group of Cos., Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Wireless telecommunication services: 0.12% | | | | | | |
| | | | | | |
Consumer discretionary: 5.95% | | | | | | |
Automobile components: 0.03% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
2 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Hotels, restaurants & leisure: 1.13% | | | | | | |
| | | | | | |
| | | | | | |
Caesars Entertainment, Inc.† | | | | | | |
| | | | | | |
Chipotle Mexican Grill, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Hilton Worldwide Holdings, Inc. | | | | | | |
| | | | | | |
Marriott International, Inc. Class A | | | | | | |
| | | | | | |
MGM Resorts International† | | | | | | |
Norwegian Cruise Line Holdings Ltd.† | | | | | | |
Royal Caribbean Cruises Ltd.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Household durables: 0.21% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 3
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Specialty retail(continued) | | | | | | |
| | | | | | |
| | | | | | |
O’Reilly Automotive, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Textiles, apparel & luxury goods: 0.22% | | | | | | |
| | | | | | |
lululemon athletica, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Brown-Forman Corp. Class B | | | | | | |
| | | | | | |
Constellation Brands, Inc. Class A | | | | | | |
| | | | | | |
Molson Coors Beverage Co. Class B | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Consumer staples distribution & retail: 1.12% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Walgreens Boots Alliance, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Archer-Daniels-Midland Co. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
4 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
| | | | | | |
Lamb Weston Holdings, Inc. | | | | | | |
| | | | | | |
Mondelez International, Inc. Class A | | | | | | |
Tyson Foods, Inc. Class A | | | | | | |
| | | | | | |
Household products: 0.73% | | | | | | |
Church & Dwight Co., Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Personal care products: 0.08% | | | | | | |
Estee Lauder Cos., Inc. Class A | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Philip Morris International, Inc. | | | | | | |
| | | | | | |
| | | | | | |
Energy equipment & services: 0.17% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Oil, gas & consumable fuels: 2.01% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Occidental Petroleum Corp. | | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 5
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Oil, gas & consumable fuels(continued) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Citizens Financial Group, Inc. | | | | | | |
| | | | | | |
Huntington Bancshares, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
PNC Financial Services Group, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Ameriprise Financial, Inc. | | | | | | |
Bank of New York Mellon Corp. | | | | | | |
| | | | | | |
| | | | | | |
Cboe Global Markets, Inc. | | | | | | |
| | | | | | |
| | | | | | |
FactSet Research Systems, Inc. | | | | | | |
| | | | | | |
Goldman Sachs Group, Inc. | | | | | | |
Intercontinental Exchange, Inc. | | | | | | |
| | | | | | |
| | | | | | |
MarketAxess Holdings, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Raymond James Financial, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
6 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
| | | | | | |
Capital One Financial Corp. | | | | | | |
Discover Financial Services | | | | | | |
| | | | | | |
| | | | | | |
Financial services: 2.29% | | | | | | |
Berkshire Hathaway, Inc. Class B† | | | | | | |
| | | | | | |
Fidelity National Information Services, Inc. | | | | | | |
| | | | | | |
| | | | | | |
Jack Henry & Associates, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
American International Group, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Cincinnati Financial Corp. | | | | | | |
| | | | | | |
| | | | | | |
Hartford Financial Services Group, Inc. | | | | | | |
| | | | | | |
Marsh & McLennan Cos., Inc. | | | | | | |
| | | | | | |
Principal Financial Group, Inc. | | | | | | |
| | | | | | |
Prudential Financial, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 7
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Regeneron Pharmaceuticals, Inc.† | | | | | | |
Vertex Pharmaceuticals, Inc.† | | | | | | |
| | | | | | |
Health care equipment & supplies: 1.41% | | | | | | |
| | | | | | |
| | | | | | |
Baxter International, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Edwards Lifesciences Corp.† | | | | | | |
GE HealthCare Technologies, Inc. | | | | | | |
| | | | | | |
IDEXX Laboratories, Inc.† | | | | | | |
| | | | | | |
Intuitive Surgical, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Zimmer Biomet Holdings, Inc. | | | | | | |
| | | | | | |
Health care providers & services: 1.46% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Universal Health Services, Inc. Class B | | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
8 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Life sciences tools & services: 0.73% | | | | | | |
Agilent Technologies, Inc. | | | | | | |
Bio-Rad Laboratories, Inc. Class A† | | | | | | |
| | | | | | |
Charles River Laboratories International, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
Mettler-Toledo International, Inc.† | | | | | | |
| | | | | | |
Thermo Fisher Scientific, Inc. | | | | | | |
| | | | | | |
West Pharmaceutical Services, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Aerospace & defense: 1.08% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Huntington Ingalls Industries, Inc. | | | | | | |
L3Harris Technologies, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Air freight & logistics: 0.25% | | | | | | |
CH Robinson Worldwide, Inc. | | | | | | |
Expeditors International of Washington, Inc. | | | | | | |
| | | | | | |
United Parcel Service, Inc. Class B | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 9
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Building products(continued) | | | | | | |
| | | | | | |
Builders FirstSource, Inc.† | | | | | | |
| | | | | | |
Johnson Controls International PLC | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Commercial services & supplies: 0.34% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Construction & engineering: 0.05% | | | | | | |
| | | | | | |
Electrical equipment: 0.43% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Rockwell Automation, Inc. | | | | | | |
| | | | | | |
Ground transportation: 0.58% | | | | | | |
| | | | | | |
J.B. Hunt Transport Services, Inc. | | | | | | |
| | | | | | |
Old Dominion Freight Line, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Industrial conglomerates: 0.26% | | | | | | |
| | | | | | |
Honeywell International, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Illinois Tool Works, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Stanley Black & Decker, Inc. | | | | | | |
Westinghouse Air Brake Technologies Corp. | | | | | | |
| | | | | | |
| | | | | | |
Passenger airlines: 0.09% | | | | | | |
American Airlines Group, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
United Airlines Holdings, Inc.† | | | | | | |
| | | | | | |
Professional services: 0.36% | | | | | | |
Automatic Data Processing, Inc. | | | | | | |
Broadridge Financial Solutions, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Trading companies & distributors: 0.16% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Information technology: 19.37% | | | | | | |
Communications equipment: 0.48% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 11
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Electronic equipment, instruments & components: 0.35% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Keysight Technologies, Inc.† | | | | | | |
| | | | | | |
Teledyne Technologies, Inc.† | | | | | | |
| | | | | | |
Zebra Technologies Corp. Class A† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Akamai Technologies, Inc.† | | | | | | |
Cognizant Technology Solutions Corp. Class A | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
International Business Machines Corp. | | | | | | |
| | | | | | |
| | | | | | |
Semiconductors & semiconductor equipment: 7.18% | | | | | | |
Advanced Micro Devices, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Microchip Technology, Inc. | | | | | | |
| | | | | | |
Monolithic Power Systems, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
12 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
Cadence Design Systems, Inc.† | | | | | | |
Crowdstrike Holdings, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Palo Alto Networks, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Tyler Technologies, Inc.† | | | | | | |
| | | | | | |
Technology hardware, storage & peripherals: 4.18% | | | | | | |
| | | | | | |
Hewlett Packard Enterprise Co. | | | | | | |
| | | | | | |
| | | | | | |
Seagate Technology Holdings PLC | | | | | | |
Super Micro Computer, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Air Products & Chemicals, Inc. | | | | | | |
| | | | | | |
| | | | | | |
CF Industries Holdings, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
International Flavors & Fragrances, Inc. | | | | | | |
| | | | | | |
LyondellBasell Industries NV Class A | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 13
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Construction materials: 0.09% | | | | | | |
Martin Marietta Materials, Inc. | | | | | | |
| | | | | | |
| | | | | | |
Containers & packaging: 0.12% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Packaging Corp. of America | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Alexandria Real Estate Equities, Inc. | | | | | | |
Healthpeak Properties, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Hotel & resort REITs: 0.02% | | | | | | |
Host Hotels & Resorts, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Real estate management & development: 0.08% | | | | | | |
CBRE Group, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
Residential REITs : 0.17% | | | | | | |
AvalonBay Communities, Inc. | | | | | | |
| | | | | | |
| | | | | | |
Essex Property Trust, Inc. | | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
14 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Residential REITs (continued) | | | | | | |
Mid-America Apartment Communities, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Federal Realty Investment Trust | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Simon Property Group, Inc. | | | | | | |
| | | | | | |
Specialized REITs : 0.56% | | | | | | |
| | | | | | |
| | | | | | |
Digital Realty Trust, Inc. | | | | | | |
| | | | | | |
Extra Space Storage, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Electric utilities: 0.89% | | | | | | |
| | | | | | |
American Electric Power Co., Inc. | | | | | | |
Constellation Energy Corp. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Pinnacle West Capital Corp. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 15
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Independent power and renewable electricity producers: 0.05% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Consolidated Edison, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Public Service Enterprise Group, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
American Water Works Co., Inc. | | | | | | |
Total common stocks (Cost $17,797,996) | | | | | | |
| | | | | |
U.S. Treasury securities: 34.03% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
16 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
U.S. Treasury securities(continued) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
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The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 17
Portfolio of investments—June 30, 2024 (unaudited)
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U.S. Treasury securities(continued) | | | | | | |
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The accompanying notes are an integral part of these financial statements.
18 | Allspring VT Index Asset Allocation Fund
Portfolio of investments—June 30, 2024 (unaudited)
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U.S. Treasury securities(continued) | | | | | | |
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Total U.S. Treasury securities (Cost $25,932,384) | | | | | | |
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Short-term investments: 4.26% | | | | | | |
Investment companies: 4.26% | | | | | | |
Allspring Government Money Market Fund Select Class♠∞ | | | | | | |
Total short-term investments (Cost $2,971,658) | | | | | | |
Total investments in securities (Cost $46,702,038) | | | | | | |
Other assets and liabilities, net | | | | | | |
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| Non-income-earning security |
| The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| The rate represents the 7-day annualized yield at period end. |
|
| Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| | | | | Net
change in
unrealized
gains
(losses) | | | Income
from
affiliated
securities |
| | | | | | | | |
Allspring Government Money Market Fund Select Class | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 19
Portfolio of investments—June 30, 2024 (unaudited)
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10-Year U.S. Treasury Notes | | | | | | |
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Ultra 10-Year U.S. Treasury Notes | | | | | | |
Ultra Long Term U.S. Treasury Bond | | | | | | |
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2-Year U.S. Treasury Notes | | | | | | |
5-Year U.S. Treasury Notes | | | | | | |
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The accompanying notes are an integral part of these financial statements.
20 | Allspring VT Index Asset Allocation Fund
Statement of assets and liabilities—June 30, 2024 (unaudited)
Financial statements
Statement of assets and liabilities
| |
Investments in unaffiliated securities, at value (cost $43,730,380) | |
Investments in affiliated securities, at value (cost $2,971,658) | |
Cash at broker segregated for futures contracts | |
Receivable for investments sold | |
Receivable for dividends and interest | |
Receivable for Fund shares sold | |
Prepaid expenses and other assets | |
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Payable for daily variation margin on open futures contracts | |
Payable for Fund shares redeemed | |
Professional fees payable | |
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Administration fee payable | |
Overdraft due to custodian bank | |
Accrued expenses and other liabilities | |
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Total distributable earnings | |
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Computation of net asset value per share | |
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Shares outstanding - Class 21 | |
Net asset value per share - Class 2 | |
1 The Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 21
Statement of operations—six months ended June 30, 2024 (unaudited)
Statement of operations
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Dividends (net of foreign withholdings taxes of $74) | |
Income from affiliated securities | |
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Administration fee - Class 2 | |
Distribution fee - Class 2 | |
Custody and accounting fees | |
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Shareholder report expenses | |
Trustees’ fees and expenses | |
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Less: Fee waivers and/or expense reimbursements | |
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Realized and unrealized gains (losses) on investments | |
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Net realized gains on investments | |
Net change in unrealized gains (losses) on | |
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Net change in unrealized gains (losses) on investments | |
Net realized and unrealized gains (losses) on investments | |
Net increase in net assets resulting from operations | |
The accompanying notes are an integral part of these financial statements.
22 | Allspring VT Index Asset Allocation Fund
Statement of changes in net assets
Statement of changes in net assets
|
Six months ended
June 30, 2024 (unaudited) | Year ended December 31, 2023 |
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Net realized gains on investments | | | | |
Net change in unrealized gains (losses) on investments | | | | |
Net increase in net assets resulting from operations | | | | |
Distributions to shareholders from | | | | |
Net investment income and net realized gains - Class 2 | | | | |
Capital share transactions | | | | |
Proceeds from shares sold - Class 2 | | | | |
Reinvestment of distributions - Class 2 | | | | |
Payment for shares redeemed - Class 2 | | | | |
Net decrease in net assets resulting from capital share transactions | | | | |
Total increase in net assets | | | | |
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The accompanying notes are an integral part of these financial statements.
Allspring VT Index Asset Allocation Fund | 23
Financial highlights
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
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Net asset value, beginning of period | | | | | | |
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Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Total distributions to shareholders | | | | | | |
Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
24 | Allspring VT Index Asset Allocation Fund
Notes to financial statements (unaudited)
Notes to financial statements
Allspring Variable Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring VT Index Asset Allocation Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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 (“GAAP”) 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 income and expenses during the reporting period. Actual results could differ from those estimates.
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities, exchange-traded funds and futures contracts 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.
Debt securities are valued at the evaluated bid price provided by an independent pricing service (e.g., taking into account various factors, including yields, maturities, or credit ratings) or, if a reliable price is not available, the quoted bid price from an independent broker-dealer.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee 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. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
Futures contracts are agreements between the Fund and a counterparty to buy or sell a specific amount of a commodity, financial instrument or currency at a specified price and on a specified date. The Fund may buy and sell futures contracts in order to gain exposure to, or protect against, changes in interest rates and security values and is subject to interest rate risk and equity price risk. The primary risks associated with the use of futures contracts are the imperfect correlation between changes in market values of securities held by the Fund and the prices of futures contracts, and the possibility of an illiquid market. Futures contracts are generally entered into on a regulated futures exchange and cleared through a clearinghouse associated with the exchange. With futures contracts, there is minimal counterparty risk to the Fund since futures contracts are exchange-traded and the exchange’s clearinghouse, as the counterparty to all exchange-traded futures, guarantees the futures contracts against default.
Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) with the broker in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are paid to or received from the broker each day equal to the daily changes in the contract value. Such payments are recorded as unrealized gains or losses and, if any, shown as variation margin receivable (payable) in the Statement of Assets and Liabilities. Should the Fund fail to make requested variation margin payments, the broker can gain access to the initial margin to satisfy the Fund’s payment obligations. When the contracts are closed, a realized gain or loss is recorded in the Statement of Operations.
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.
Interest income is accrued daily and bond discounts are accreted and premiums are amortized daily. 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 been determined to be doubtful based on consistently applied procedures and the fair value has decreased. 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.
Allspring VT Index Asset Allocation Fund | 25
Notes to financial statements (unaudited)
Interest earned on cash balances held at the custodian is recorded as interest income.
Income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Distributions received from REIT investments may be characterized as ordinary income, capital gains, or a return of capital to the Fund based on information provided by the REIT. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates may be used in reporting the character of income and distributions for financial statement purposes.
Distributions to shareholders
Distributions to shareholders are recorded on the ex-dividend date and paid from net investment income quarterly and any net realized gains are paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. GAAP. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
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, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2024, the aggregate cost of all investments for federal income tax purposes was $48,574,269 and the unrealized gains (losses) consisted of:
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 unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
26 | Allspring VT Index Asset Allocation 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 June 30, 2024:
| | Other significant
observable inputs
(Level 2) | Significant
unobservable inputs
(Level 3) | |
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Futures contracts are reported at their cumulative unrealized gains (losses) at measurement date as reported in the table following the Portfolio of Investments. For futures contracts, the current day’s variation margin is reported on the Statement of Assets and Liabilities. All other assets and liabilities are reported at their market value at measurement date.
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
At June 30, 2024, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
For the six months ended June 30, 2024, the management fee was equivalent to an annual rate of 0.60% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned
Allspring VT Index Asset Allocation Fund | 27
Notes to financial statements (unaudited)
subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.15% and declining to 0.10% as the average daily net assets of the Fund increase.
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of Class 2 shares.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed through April 30, 2025 to waive fees and/or reimburse management and administration fees to the extent necessary to cap the Fund’s expenses at 1.00% for Class 2 shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund transactions during the six months ended June 30, 2024.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six months ended June 30, 2024 were as follows:
6.
DERIVATIVE TRANSACTIONS
During the six months ended June 30, 2024, the Fund entered into futures contracts to manage market exposure to certain asset classes consistent with an active asset allocation strategy. The Fund had an average notional amount of $13,129,495 in long futures contracts and $360,244 in short futures contracts during the six months ended June 30, 2024.
The fair value of derivative instruments as of June 30, 2024 by primary risk type was as follows for the Fund:
| Amount represents the cumulative unrealized gains (losses) as reported in the table following the Portfolio of Investments. For futures contracts, only the current day’s variation margin as of June 30, 2024 is reported separately on the Statement of Assets and Liabilities. |
The effect of derivative instruments on the Statement of Operations for the six months ended June 30, 2024 was as follows:
| | | |
Net realized gains (losses) on derivatives |
| | | |
Net change in unrealized gains (losses) on derivatives |
| | | |
28 | Allspring VT Index Asset Allocation Fund
Notes to financial statements (unaudited)
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the six months ended June 30, 2024, there were no borrowings by the Fund under the agreement.
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. 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.
Allspring VT Index Asset Allocation Fund | 29
Other information (unaudited)
Other information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
30 | Allspring VT Index Asset Allocation Fund
Other information (unaudited)
Item 8. Changes in and disagreements with accountants
Item 9. Matters submitted to fund shareholders for a vote
Item 10. Remuneration paid to directors, officers and others
Refer to information in the Statement of operations.
Allspring VT Index Asset Allocation Fund | 31
Other information (unaudited)
Item 11. Statement regarding basis for the board’s approval of investment advisory contract
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Variable Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 28-30, 2024 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring VT Index Asset Allocation Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a meeting of the Board held in April 2024, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2024. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent, and quality of services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business.* The Board also received information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., under a transition services agreement and an update on the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds
*
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
32 | Allspring VT Index Asset Allocation Fund
Other information (unaudited)
Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, fair valuation designee, and derivatives risk management program manager. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2023. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund was higher than the average investment performance of the Universe for all periods under review. The Board also noted that the investment performance of the Fund was lower than the investment performance of its benchmark index, the Index Asset Allocation Blended Index, for all periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratio and its various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered this ratio in comparison to the median ratios of funds in an expense group that was determined by Broadridge to be similar to the Fund (the “Group”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Group and an explanation of how funds comprising expense group and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratio of the Fund was equal to the median net operating expense ratio of the expense Group. The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment management and sub-advisory fee rates
The Board reviewed and considered the contractual fee rate payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rate payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which includes, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rate”). The Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rate with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rate of the Fund was lower than the sum of the average rates for the Fund’s expense Group.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal and regulatory obligations and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Allspring VT Index Asset Allocation Fund | 33
Other information (unaudited)
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders. The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
34 | Allspring VT Index Asset Allocation Fund
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For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-222-8222 or visit the Fund’s website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
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.
© 2024 Allspring Global Investments Holdings, LLC. All rights reserved.
NCSRS0360 06-24
Allspring VT
Discovery SMID Cap
Growth Fund
Long Form Financial Statements
Semi-Annual Report
Allspring VT Discovery SMID Cap Growth Fund | 1
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
Communication services: 3.26% | | | | | | |
| | | | | | |
Liberty Media Corp.-Liberty Live Class C† | | | | | | |
TKO Group Holdings, Inc. Class A | | | | | | |
| | | | | | |
Consumer discretionary: 12.79% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Hotels, restaurants & leisure: 5.64% | | | | | | |
DraftKings, Inc. Class A† | | | | | | |
Dutch Bros, Inc. Class A† | | | | | | |
Hyatt Hotels Corp. Class A | | | | | | |
Sweetgreen, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
Household durables: 1.27% | | | | | | |
Taylor Morrison Home Corp.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Textiles, apparel & luxury goods: 1.02% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Personal care products: 1.58% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Tradeweb Markets, Inc. Class A | | | | | | |
| | | | | | |
Financial services: 1.70% | | | | | | |
Jack Henry & Associates, Inc. | | | | | | |
The accompanying notes are an integral part of these financial statements.
2 | Allspring VT Discovery SMID Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
| | | | | | |
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| | | | | | |
Halozyme Therapeutics, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Neurocrine Biosciences, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
Health care equipment & supplies: 5.00% | | | | | | |
| | | | | | |
iRhythm Technologies, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Health care providers & services: 4.11% | | | | | | |
| | | | | | |
Option Care Health, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
Life sciences tools & services: 3.76% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Aerospace & defense: 3.38% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Advanced Drainage Systems, Inc. | | | | | | |
Commercial services & supplies: 7.40% | | | | | | |
Casella Waste Systems, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Construction & engineering: 2.97% | | | | | | |
| | | | | | |
Sterling Infrastructure, Inc.† | | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 3
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Electrical equipment: 1.47% | | | | | | |
| | | | | | |
Ground transportation: 1.88% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Professional services: 1.47% | | | | | | |
| | | | | | |
Trading companies & distributors: 4.55% | | | | | | |
Applied Industrial Technologies, Inc. | | | | | | |
SiteOne Landscape Supply, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
Information technology: 23.44% | | | | | | |
Electronic equipment, instruments & components: 3.06% | | | | | | |
| | | | | | |
Teledyne Technologies, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Semiconductors & semiconductor equipment: 6.04% | | | | | | |
| | | | | | |
| | | | | | |
Monolithic Power Systems, Inc. | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
CCC Intelligent Solutions Holdings, Inc.† | | | | | | |
Clearwater Analytics Holdings, Inc. Class A† | | | | | | |
Descartes Systems Group, Inc.† | | | | | | |
| | | | | | |
Procore Technologies, Inc.† | | | | | | |
| | | | | | |
Sprout Social, Inc. Class A† | | | | | | |
Tyler Technologies, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
4 | Allspring VT Discovery SMID Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
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| | | | | | |
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Rexford Industrial Realty, Inc. | | | | | | |
Total common stocks (Cost $113,855,391) | | | | | | |
| | | | | |
Short-term investments: 0.98% | | | | | | |
Investment companies: 0.98% | | | | | | |
Allspring Government Money Market Fund Select Class♠∞ | | | | | | |
Total short-term investments (Cost $1,385,526) | | | | | | |
Total investments in securities (Cost $115,240,917) | | | | | | |
Other assets and liabilities, net | | | | | | |
| | | | | | |
| Non-income-earning security |
| The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| The rate represents the 7-day annualized yield at period end. |
|
| American depositary receipt |
| Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| | | | | Net
change in
unrealized
gains
(losses) | | | Income
from
affiliated
securities |
| | | | | | | | |
Allspring Government Money Market Fund Select Class | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 5
Statement of assets and liabilities—June 30, 2024 (unaudited)
Financial statements
Statement of assets and liabilities
| |
Investments in unaffiliated securities, at value (cost $113,855,391) | |
Investments in affiliated securities, at value (cost $1,385,526) | |
Receivable for investments sold | |
Receivable for Fund shares sold | |
| |
Prepaid expenses and other assets | |
| |
| |
Payable for investments purchased | |
| |
Payable for Fund shares redeemed | |
| |
Administration fee payable | |
Accrued expenses and other liabilities | |
| |
| |
| |
| |
Total distributable earnings | |
| |
Computation of net asset value per share | |
| |
Shares outstanding - Class 21 | |
Net asset value per share - Class 2 | |
1 The Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
6 | Allspring VT Discovery SMID Cap Growth Fund
Statement of operations—six months ended June 30, 2024 (unaudited)
Statement of operations
| |
Dividends (net of foreign withholdings taxes of $1,920) | |
Income from affiliated securities | |
| |
| |
| |
| |
Administration fee - Class 2 | |
Distribution fee - Class 2 | |
Custody and accounting fees | |
| |
Shareholder report expenses | |
Trustees’ fees and expenses | |
| |
| |
Less: Fee waivers and/or expense reimbursements | |
| |
| |
| |
Realized and unrealized gains (losses) on investments | |
Net realized gains on investments | |
Net change in unrealized gains (losses) on investments | |
Net realized and unrealized gains (losses) on investments | |
Net increase in net assets resulting from operations | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 7
Statement of changes in net assets
Statement of changes in net assets
|
Six months ended
June 30, 2024 (unaudited) | Year ended December 31, 2023 |
| | | | |
| | | | |
Net realized gains (losses) on investments | | | | |
Net change in unrealized gains (losses) on investments | | | | |
Net increase in net assets resulting from operations | | | | |
Capital share transactions | | | | |
Proceeds from shares sold - Class 2 | | | | |
Payment for shares redeemed - Class 2 | | | | |
Net decrease in net assets resulting from capital share transactions | | | | |
Total increase in net assets | | | | |
| | | | |
| | | | |
| | | | |
The accompanying notes are an integral part of these financial statements.
8 | Allspring VT Discovery SMID Cap Growth Fund
Financial highlights
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
| | | | | | |
Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
Ratios to average net assets (annualized) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Discovery SMID Cap Growth Fund | 9
Notes to financial statements (unaudited)
Notes to financial statements
Allspring Variable Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring VT Discovery SMID Cap Growth Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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 (“GAAP”) 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 income and expenses during the reporting period. Actual results could differ from those estimates.
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds 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.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee 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. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
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. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured.
Interest earned on cash balances held at the custodian is recorded as interest income.
Distributions received from REIT investments may be characterized as ordinary income, capital gains, or a return of capital to the Fund based on information provided by the REIT. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates may be used in reporting the character of income and distributions for financial statement purposes.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. GAAP. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
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, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
10 | Allspring VT Discovery SMID Cap Growth Fund
Notes to financial statements (unaudited)
As of June 30, 2024, the aggregate cost of all investments for federal income tax purposes was $116,421,269 and the unrealized gains (losses) consisted of:
As of December 31, 2023, the Fund had capital loss carryforwards which consisted of $6,874,659 in short-term capital losses and $8,977,436 in long-term capital losses.
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 unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2024:
| | Other significant
observable inputs
(Level 2) | Significant
unobservable inputs
(Level 3) | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
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| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
At June 30, 2024, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative
Allspring VT Discovery SMID Cap Growth Fund | 11
Notes to financial statements (unaudited)
services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
For the six months ended June 30, 2024, the management fee was equivalent to an annual rate of 0.75% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.35% as the average daily net assets of the Fund increase.
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of Class 2 shares.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed through April 30, 2025 to waive fees and/or reimburse management and administration fees to the extent necessary to cap the Fund’s expenses at 1.15% for Class 2 shares. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees.
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund transactions during the six months ended June 30, 2024.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended June 30, 2024 were $43,649,045 and $50,038,292, respectively.
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the six months ended June 30, 2024, there were no borrowings by the Fund under the agreement.
As of the end of the period, the Fund concentrated its portfolio of investments in industrials sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
12 | Allspring VT Discovery SMID Cap Growth Fund
Notes to financial statements (unaudited)
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. 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.
Allspring VT Discovery SMID Cap Growth Fund | 13
Other information (unaudited)
Other information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
14 | Allspring VT Discovery SMID Cap Growth Fund
Other information (unaudited)
Item 8. Changes in and disagreements with accountants
Item 9. Matters submitted to fund shareholders for a vote
Item 10. Remuneration paid to directors, officers and others
Refer to information in the Statement of operations.
Allspring VT Discovery SMID Cap Growth Fund | 15
Other information (unaudited)
Item 11. Statement regarding basis for the board’s approval of investment advisory contract
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Variable Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 28-30, 2024 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring VT Discovery SMID Cap Growth Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a meeting of the Board held in April 2024, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2024. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent, and quality of services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business.* The Board also received information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., under a transition services agreement and an update on the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board noted that the portfolio managers responsible for the day-to-day portfolio management of the Fund would be changing during the Summer of 2024, and the Board considered the revised portfolio management team that would be taking over portfolio management responsibilities. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
*
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
16 | Allspring VT Discovery SMID Cap Growth Fund
Other information (unaudited)
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and fair valuation designee. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2023. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund was lower than the average investment performance of the Universe for all periods under review. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Russell 2500™ Growth Index, for the one-year period under review, but lower for all other periods under review.
The Board received information concerning, and discussed factors contributing to, the underperformance of the Fund relative to the Universe and benchmark for the periods identified above. The Board took note of the explanations for the relative underperformance during these periods, including with respect to the investment decisions and market factors that affected the Fund’s investment performance.
The Board also received and considered information regarding the Fund’s net operating expense ratio and its various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered this ratio in comparison to the median ratios of funds in an expense group that was determined by Broadridge to be similar to the Fund (the “Group”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Group and an explanation of how funds comprising expense group and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratio of the Fund was in range of the median net operating expense ratio of the expense Group.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment management and sub-advisory fee rates
The Board reviewed and considered the contractual fee rate payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rate payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which includes, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rate”). The Board also reviewed and considered the contractual investment sub-advisory fee rate that is payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rate with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rate of the Fund was lower than the sum of the average rates for the Fund’s expense Group.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal and regulatory obligations and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Allspring VT Discovery SMID Cap Growth Fund | 17
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
18 | Allspring VT Discovery SMID Cap Growth Fund
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For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-260-5969 or visit the Fund’s website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
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.
© 2024 Allspring Global Investments Holdings, LLC. All rights reserved.
NCSRS3221 06-24
Allspring VT Opportunity Fund
Long Form Financial Statements
Semi-Annual Report
Allspring VT Opportunity Fund | 1
Portfolio of investments—June 30, 2024 (unaudited)
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Communication services: 8.78% | | | | | | |
Interactive media & services: 8.78% | | | | | | |
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Meta Platforms, Inc. Class A | | | | | | |
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Consumer discretionary: 10.16% | | | | | | |
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Hotels, restaurants & leisure: 1.06% | | | | | | |
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Consumer staples distribution & retail: 3.07% | | | | | | |
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Household products: 1.36% | | | | | | |
Church & Dwight Co., Inc. | | | | | | |
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Intercontinental Exchange, Inc. | | | | | | |
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Financial services: 3.52% | | | | | | |
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Marsh & McLennan Cos., Inc. | | | | | | |
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Health care equipment & supplies: 2.87% | | | | | | |
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Health care providers & services: 2.05% | | | | | | |
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The accompanying notes are an integral part of these financial statements.
2 | Allspring VT Opportunity Fund
Portfolio of investments—June 30, 2024 (unaudited)
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Life sciences tools & services: 4.12% | | | | | | |
Agilent Technologies, Inc. | | | | | | |
Bio-Rad Laboratories, Inc. Class A† | | | | | | |
Thermo Fisher Scientific, Inc. | | | | | | |
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Aerospace & defense: 4.11% | | | | | | |
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Commercial services & supplies: 1.69% | | | | | | |
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Electrical equipment: 2.62% | | | | | | |
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Professional services: 2.99% | | | | | | |
Dun & Bradstreet Holdings, Inc. | | | | | | |
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Trading companies & distributors: 1.71% | | | | | | |
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Information technology: 23.29% | | | | | | |
Electronic equipment, instruments & components: 3.60% | | | | | | |
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Teledyne Technologies, Inc.† | | | | | | |
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Semiconductors & semiconductor equipment: 5.06% | | | | | | |
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The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 3
Portfolio of investments—June 30, 2024 (unaudited)
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Palo Alto Networks, Inc.† | | | | | | |
QXO, Inc. (Acquired 6-17-2024, cost $0)♦†˃ | | | | | | |
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Technology hardware, storage & peripherals: 5.50% | | | | | | |
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Real estate management & development: 1.19% | | | | | | |
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Residential REITs : 2.99% | | | | | | |
Mid-America Apartment Communities, Inc. | | | | | | |
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Specialized REITs : 2.72% | | | | | | |
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Total common stocks (Cost $122,086,254) | | | | | | |
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Short-term investments: 3.29% | | | | | | |
Investment companies: 3.29% | | | | | | |
Allspring Government Money Market Fund Select Class♠∞ | | | | | | |
Total short-term investments (Cost $5,944,451) | | | | | | |
Total investments in securities (Cost $128,030,705) | | | | | | |
Other assets and liabilities, net | | | | | | |
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The accompanying notes are an integral part of these financial statements.
4 | Allspring VT Opportunity Fund
Portfolio of investments—June 30, 2024 (unaudited)
| Non-income-earning security |
| The security is fair valued in accordance with procedures approved by the Board of Trustees. |
| Restricted security as to resale, excluding Rule 144A securities. The Fund held restricted securities with an aggregate current value of $0 (original an aggregate cost of $0), representing 0.00% of its net assets as of period end. |
| The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| The rate represents the 7-day annualized yield at period end. |
|
| Real estate investment trust |
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| | | | | Net
change in
unrealized
gains
(losses) | | | Income
from
affiliated
securities |
| | | | | | | | |
Allspring Government Money Market Fund Select Class | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 5
Statement of assets and liabilities—June 30, 2024 (unaudited)
Financial statements
Statement of assets and liabilities
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Investments in unaffiliated securities, at value (cost $122,086,254) | |
Investments in affiliated securities, at value (cost $5,944,451) | |
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Receivable for Fund shares sold | |
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Payable for Fund shares redeemed | |
Professional fees payable | |
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Administration fees payable | |
Accrued expenses and other liabilities | |
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Total distributable earnings | |
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Computation of net asset value per share | |
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Shares outstanding–Class 11 | |
Net asset value per share–Class 1 | |
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Shares outstanding–Class 21 | |
Net asset value per share–Class 2 | |
1 The Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
6 | Allspring VT Opportunity Fund
Statement of operations—six months ended June 30, 2024 (unaudited)
Statement of operations
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Income from affiliated securities | |
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Custody and accounting fees | |
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Shareholder report expenses | |
Trustees’ fees and expenses | |
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Less: Fee waivers and/or expense reimbursements | |
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Realized and unrealized gains (losses) on investments | |
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Foreign currency and foreign currency translations | |
Net realized gains on investments | |
Net change in unrealized gains (losses) on | |
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Foreign currency and foreign currency translations | |
Net change in unrealized gains (losses) on investments | |
Net realized and unrealized gains (losses) on investments | |
Net increase in net assets resulting from operations | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 7
Statement of changes in net assets
Statement of changes in net assets
|
Six months ended
June 30, 2024 (unaudited) | Year ended December 31, 2023 |
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Net realized gains on investments | | | | |
Net change in unrealized gains (losses) on investments | | | | |
Net increase in net assets resulting from operations | | | | |
Distributions to shareholders from | | | | |
Net investment income and net realized gains | | | | |
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Total distributions to shareholders | | | | |
Capital share transactions | | | | |
Proceeds from shares sold | | | | |
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Reinvestment of distributions | | | | |
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Payment for shares redeemed | | | | |
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Net decrease in net assets resulting from capital share transactions | | | | |
Total increase (decrease) in net assets | | | | |
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The accompanying notes are an integral part of these financial statements.
8 | Allspring VT Opportunity Fund
Financial highlights
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Total distributions to shareholders | | | | | | |
Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net investment income (loss) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Opportunity Fund | 9
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
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Net asset value, beginning of period | | | | | | |
Net investment income (loss) | | | | | | |
Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Total distributions to shareholders | | | | | | |
Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net investment income (loss) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Opportunity Fund
Notes to financial statements (unaudited)
Notes to financial statements
Allspring Variable Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring VT Opportunity Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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 (“GAAP”) 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 income and expenses during the reporting period. Actual results could differ from those estimates.
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds 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.
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 Valuation Committee at Allspring Funds Management, LLC (“Allspring Funds Management”).
Many securities markets and exchanges outside the U.S. close prior to the close of the New York Stock Exchange and therefore may not fully reflect trading or events that occur after the close of the principal exchange in which the foreign securities are traded, but before the close of the New York Stock Exchange. If such trading or events are expected to materially affect the value of such securities, then fair value pricing procedures implemented by Allspring Funds Management 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 June 30, 2024, such fair value pricing was not used in pricing foreign securities.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee 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. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
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 Valuation Committee. 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 of securities 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.
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.
Allspring VT Opportunity Fund | 11
Notes to financial statements (unaudited)
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.
Interest earned on cash balances held at the custodian is recorded as interest income.
Distributions received from REIT investments may be characterized as ordinary income, capital gains, or a return of capital to the Fund based on information provided by the REIT. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, estimates may be used in reporting the character of income and distributions for financial statement purposes.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. GAAP. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
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 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, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
As of June 30, 2024, the aggregate cost of all investments for federal income tax purposes was $128,171,289 and the unrealized gains (losses) consisted of:
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
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 unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
12 | Allspring VT Opportunity 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 June 30, 2024:
| | Other significant
observable inputs
(Level 2) | Significant
unobservable inputs
(Level 3) | |
| | | | |
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| | | | |
| | | | |
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| | | | |
Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
At June 30, 2024, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
For the six months ended June 30, 2024, the management fee was equivalent to an annual rate of 0.70% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.45% and declining to 0.30% as the average daily net assets of the Fund increase.
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain
Allspring VT Opportunity Fund | 13
Notes to financial statements (unaudited)
classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through April 30, 2025 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. As of June 30, 2024, the contractual caps are as follows:
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund transactions during the six months ended June 30, 2024.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended June 30, 2024 were $15,289,361 and $26,273,671, respectively.
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the six months ended June 30, 2024, there were no borrowings by the Fund under the agreement.
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. 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.
14 | Allspring VT Opportunity Fund
Other information (unaudited)
Other information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
Allspring VT Opportunity Fund | 15
Other information (unaudited)
Item 8. Changes in and disagreements with accountants
Item 9. Matters submitted to fund shareholders for a vote
Item 10. Remuneration paid to directors, officers and others
Refer to information in the Statement of operations.
16 | Allspring VT Opportunity Fund
Other information (unaudited)
Item 11. Statement regarding basis for the board’s approval of investment advisory contract
Board consideration of investment management and sub-advisory agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Variable Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 28-30, 2024 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring VT Opportunity Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a meeting of the Board held in April 2024, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2024. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent, and quality of services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business.* The Board also received information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., under a transition services agreement and an update on the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds
*
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
Allspring VT Opportunity Fund | 17
Other information (unaudited)
Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and fair valuation designee. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2023. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund was higher than the average investment performance of the Universe for all periods under review. The Board also noted that the investment performance of the Fund was higher than the investment performance of its benchmark index, the Russell 3000® Index, for the one-year period under review, in range of the investment performance of its benchmark index for the five-year period under review, and lower than the investment performance of its benchmark index for the three and ten-year periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense Groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were in range of the median net operating expense ratios of the expense Groups for each share class.
The Board received information concerning, and discussed factors contributing to, the net operating expense ratios of the Fund relative to the expense Groups for each share class. The Board took note of the explanations for the net operating expense ratios of the Fund.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment management and sub-advisory fee rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were higher than the sum of these average rates for the Fund’s expense Groups for each share class.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal and regulatory obligations and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
18 | Allspring VT Opportunity Fund
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other benefits to Allspring Funds Management and the Sub-Advisers
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
Allspring VT Opportunity Fund | 19
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For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-260-5969 or visit the Fund’s website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
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.
© 2024 Allspring Global Investments Holdings, LLC. All rights reserved.
NCSRS3020 06-24
Allspring VT Small Cap Growth Fund
Long Form Financial Statements
Semi-Annual Report
Allspring VT Small Cap Growth Fund | 1
Portfolio of investments—June 30, 2024 (unaudited)
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Communication services: 0.39% | | | | | | |
Interactive media & services: 0.39% | | | | | | |
| | | | | | |
Consumer discretionary: 12.38% | | | | | | |
Automobile components: 1.16% | | | | | | |
Modine Manufacturing Co.† | | | | | | |
Diversified consumer services: 3.06% | | | | | | |
Bright Horizons Family Solutions, Inc.† | | | | | | |
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Hotels, restaurants & leisure: 3.61% | | | | | | |
Dutch Bros, Inc. Class A† | | | | | | |
First Watch Restaurant Group, Inc.† | | | | | | |
Sweetgreen, Inc. Class A† | | | | | | |
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Household durables: 0.49% | | | | | | |
Taylor Morrison Home Corp.† | | | | | | |
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American Eagle Outfitters, Inc. | | | | | | |
Boot Barn Holdings, Inc.† | | | | | | |
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Consumer staples distribution & retail : 0.51% | | | | | | |
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Personal care products: 5.35% | | | | | | |
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Kinsale Capital Group, Inc. | | | | | | |
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Skyward Specialty Insurance Group, Inc.† | | | | | | |
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The accompanying notes are an integral part of these financial statements.
2 | Allspring VT Small Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
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Apellis Pharmaceuticals, Inc.† | | | | | | |
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| | | | | | |
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Soleno Therapeutics, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
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Health care equipment & supplies: 9.62% | | | | | | |
| | | | | | |
Inspire Medical Systems, Inc.† | | | | | | |
iRhythm Technologies, Inc.† | | | | | | |
PROCEPT BioRobotics Corp.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Health care providers & services: 6.05% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
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Intra-Cellular Therapies, Inc.† | | | | | | |
Ligand Pharmaceuticals, Inc.† | | | | | | |
Structure Therapeutics, Inc. ADR† | | | | | | |
Tarsus Pharmaceuticals, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
Aerospace & defense: 1.06% | | | | | | |
| | | | | | |
| | | | | | |
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| | | | | | |
| | | | | | |
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Zurn Elkay Water Solutions Corp. | | | | | | |
| | | | | | |
Commercial services & supplies: 5.39% | | | | | | |
ACV Auctions, Inc. Class A† | | | | | | |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 3
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Commercial services & supplies(continued) | | | | | | |
Casella Waste Systems, Inc. Class A† | | | | | | |
CECO Environmental Corp.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Construction & engineering: 4.44% | | | | | | |
Comfort Systems USA, Inc. | | | | | | |
Construction Partners, Inc. Class A† | | | | | | |
Sterling Infrastructure, Inc.† | | | | | | |
| | | | | | |
Ground transportation: 0.32% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Marine transportation: 0.50% | | | | | | |
| | | | | | |
Professional services: 1.82% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Trading companies & distributors: 2.77% | | | | | | |
Applied Industrial Technologies, Inc. | | | | | | |
SiteOne Landscape Supply, Inc.† | | | | | | |
| | | | | | |
Information technology: 25.85% | | | | | | |
Electronic equipment, instruments & components: 3.55% | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Semiconductors & semiconductor equipment: 5.51% | | | | | | |
ACM Research, Inc. Class A† | | | | | | |
Allegro MicroSystems, Inc.† | | | | | | |
Credo Technology Group Holding Ltd.† | | | | | | |
The accompanying notes are an integral part of these financial statements.
4 | Allspring VT Small Cap Growth Fund
Portfolio of investments—June 30, 2024 (unaudited)
| | | | | |
Semiconductors & semiconductor equipment(continued) | | | | | | |
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Silicon Laboratories, Inc.† | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
CCC Intelligent Solutions Holdings, Inc.† | | | | | | |
Clearwater Analytics Holdings, Inc. Class A† | | | | | | |
| | | | | | |
Descartes Systems Group, Inc.† | | | | | | |
| | | | | | |
PowerSchool Holdings, Inc. Class A† | | | | | | |
| | | | | | |
Sprout Social, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
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Construction materials: 0.62% | | | | | | |
Summit Materials, Inc. Class A† | | | | | | |
| | | | | | |
| | | | | | |
Total common stocks (Cost $231,775,626) | | | | | | |
| | | | | |
Short-term investments: 2.11% | | | | | | |
Investment companies: 2.11% | | | | | | |
Allspring Government Money Market Fund Select Class♠∞ | | | | | | |
Total short-term investments (Cost $6,578,324) | | | | | | |
Total investments in securities (Cost $238,353,950) | | | | | | |
Other assets and liabilities, net | | | | | | |
| | | | | | |
| Non-income-earning security |
| The issuer of the security is an affiliated person of the Fund as defined in the Investment Company Act of 1940. |
| The rate represents the 7-day annualized yield at period end. |
|
| American depositary receipt |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 5
Portfolio of investments—June 30, 2024 (unaudited)
Investments in affiliates
An affiliated investment is an investment in which the Fund owns at least 5% of the outstanding voting shares of the issuer or as a result of other relationships, such as the Fund and the issuer having the same investment manager. Transactions with issuers that were affiliates of the Fund at the end of the period were as follows:
| | | | | Net
change in
unrealized
gains
(losses) | | | Income
from
affiliated
securities |
| | | | | | | | |
Allspring Government Money Market Fund Select Class | | | | | | | | |
The accompanying notes are an integral part of these financial statements.
6 | Allspring VT Small Cap Growth Fund
Statement of assets and liabilities—June 30, 2024 (unaudited)
Financial statements
Statement of assets and liabilities
| |
Investments in unaffiliated securities, at value (cost $231,775,626) | |
Investments in affiliated securities, at value (cost $6,578,324) | |
Receivable for Fund shares sold | |
| |
Prepaid expenses and other assets | |
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Payable for investments purchased | |
Payable for Fund shares redeemed | |
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Administration fees payable | |
Accrued expenses and other liabilities | |
| |
| |
| |
| |
Total distributable earnings | |
| |
Computation of net asset value per share | |
| |
Shares outstanding–Class 11 | |
Net asset value per share–Class 1 | |
| |
Shares outstanding–Class 21 | |
Net asset value per share–Class 2 | |
1 The Fund has an unlimited number of authorized shares.
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 7
Statement of operations—six months ended June 30, 2024 (unaudited)
Statement of operations
| |
Income from affiliated securities | |
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Custody and accounting fees | |
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Shareholder report expenses | |
Trustees’ fees and expenses | |
| |
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| |
Realized and unrealized gains (losses) on investments | |
Net realized gains on investments | |
Net change in unrealized gains (losses) on investments | |
Net realized and unrealized gains (losses) on investments | |
Net increase in net assets resulting from operations | |
The accompanying notes are an integral part of these financial statements.
8 | Allspring VT Small Cap Growth Fund
Statement of changes in net assets
Statement of changes in net assets
|
Six months ended
June 30, 2024 (unaudited) | Year ended December 31, 2023 |
| | | | |
| | | | |
Net realized gains (losses) on investments | | | | |
Net change in unrealized gains (losses) on investments | | | | |
Net increase in net assets resulting from operations | | | | |
Capital share transactions | | | | |
Proceeds from shares sold | | | | |
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Payment for shares redeemed | | | | |
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Net decrease in net assets resulting from capital share transactions | | | | |
Total increase in net assets | | | | |
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The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 9
Financial highlights
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
| | | | | | |
Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
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Net asset value, end of period | | | | | | |
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Ratios to average net assets (annualized) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
10 | Allspring VT Small Cap Growth Fund
(For a share outstanding throughout each period)
| Six months ended
June 30, 2024
(unaudited) | |
| | | | | |
Net asset value, beginning of period | | | | | | |
| | | | | | |
Net realized and unrealized gains (losses) on investments | | | | | | |
Total from investment operations | | | | | | |
Distributions to shareholders from | | | | | | |
| | | | | | |
Net asset value, end of period | | | | | | |
| | | | | | |
Ratios to average net assets (annualized) | | | | | | |
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Net assets, end of period (000s omitted) | | | | | | |
| Calculated based upon average shares outstanding |
| Returns include adjustments required by U.S. GAAP and may differ from net asset values and performance reported elsewhere. Returns for periods of less than one year are not annualized. Returns do not reflect fees and expenses charged pursuant to the terms of variable life insurance policies and variable annuity contracts. |
The accompanying notes are an integral part of these financial statements.
Allspring VT Small Cap Growth Fund | 11
Notes to financial statements (unaudited)
Notes to financial statements
Allspring Variable Trust (the “Trust”), a Delaware statutory trust organized on March 10, 1999, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As an investment company, the Trust follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. These financial statements report on the Allspring VT Small Cap Growth Fund (the “Fund”) which is a diversified series of the Trust. The Trust offers shares of the Fund to separate accounts of various life insurance companies as funding vehicles for certain variable annuity contracts and variable life insurance policies.
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 (“GAAP”) 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 income and expenses during the reporting period. Actual results could differ from those estimates.
All investments are valued each business day as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time), although the Fund may deviate from this calculation time under unusual or unexpected circumstances.
Equity securities and exchange-traded funds 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.
Investments in registered open-end investment companies (other than those listed on a foreign or domestic exchange or market) are valued at net asset value.
Investments which are not valued using the methods discussed above are valued at their fair value, as determined in good faith by Allspring Funds Management, LLC (“Allspring Funds Management”), which was named the valuation designee by the Board of Trustees. As the valuation designee, Allspring Funds Management is responsible for day-to-day valuation activities for the Allspring Funds. In connection with these responsibilities, Allspring Funds Management has established a Valuation Committee 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. On a quarterly basis, the Board of Trustees receives reports of valuation actions taken by the Valuation Committee. On at least an annual basis, the Board of Trustees receives an assessment of the adequacy and effectiveness of Allspring Funds Management’s process for determining the fair value of the portfolio of investments.
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.
Interest earned on cash balances held at the custodian is recorded as interest income.
Distributions to shareholders
Distributions to shareholders from net investment income and any net realized gains are recorded on the ex-dividend date and paid at least annually. Such distributions are determined in accordance with income tax regulations and may differ from U.S. GAAP. Dividend sources are estimated at the time of declaration. The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made prior to the Fund’s fiscal year end may be categorized as a tax return of capital at year end.
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, as applicable, for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.
12 | Allspring VT Small Cap Growth Fund
Notes to financial statements (unaudited)
As of June 30, 2024, the aggregate cost of all investments for federal income tax purposes was $238,878,956 and the unrealized gains (losses) consisted of:
As of December 31, 2023, the Fund had capital loss carryforwards which consisted of $28,434,363 in short-term capital losses.
The separate classes of shares offered by the Fund differ principally in distribution fees. Class specific expenses are charged directly to that share class. Investment income, common fund-level expenses, and realized and unrealized gains (losses) on investments are allocated daily to each class of shares based on the relative proportion of net assets of each class.
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 unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical securities
•Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
•Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodologies used for valuing investments in securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used in valuing the Fund’s assets and liabilities as of June 30, 2024:
| | Other significant
observable inputs
(Level 2) | Significant
unobservable inputs
(Level 3) | |
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Additional sector, industry or geographic detail, if any, is included in the Portfolio of Investments.
At June 30, 2024, the Fund did not have any transfers into/out of Level 3.
4.
TRANSACTIONS WITH AFFILIATES
Allspring Funds Management, a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., is the manager of the Fund and provides advisory and fund-level administrative services under an investment management agreement. Under the investment management agreement, Allspring Funds Management is responsible for, among other services, implementing the investment objectives and strategies of the Fund, supervising the subadviser and providing fund-level administrative
Allspring VT Small Cap Growth Fund | 13
Notes to financial statements (unaudited)
services in connection with the Fund’s operations. As compensation for its services under the investment management agreement, Allspring Funds Management is entitled to receive a management fee at the following annual rate based on the Fund’s average daily net assets:
For the six months ended June 30, 2024, the management fee was equivalent to an annual rate of 0.80% of the Fund’s average daily net assets.
Allspring Funds Management has retained the services of a subadviser to provide daily portfolio management to the Fund. The fee for subadvisory services is borne by Allspring Funds Management. Allspring Global Investments, LLC, an affiliate of Allspring Funds Management and a wholly owned subsidiary of Allspring Global Investments Holdings, LLC, is the subadviser to the Fund and is entitled to receive a fee from Allspring Funds Management at an annual rate starting at 0.55% and declining to 0.40% as the average daily net assets of the Fund increase.
Under a class-level administration agreement, Allspring Funds Management provides class-level administrative services to the Fund, which includes paying fees and expenses for services provided by the transfer agent, sub-transfer agents, omnibus account servicers and record-keepers. As compensation for its services under the class-level administration agreement, Allspring Funds Management receives an annual fee of 0.08% which is calculated based on the average daily net assets of each class.
Waivers and/or expense reimbursements
Allspring Funds Management has contractually committed to waive and/or reimburse management and administration fees to the extent necessary to maintain certain net operating expense ratios for the Fund. When each class of the Fund has exceeded its expense cap, Allspring Funds Management will waive fees and/or reimburse expenses from fund-level expenses on a proportionate basis and then from class specific expenses. When only certain classes exceed their expense caps, waivers and/or reimbursements are applied against class specific expenses before fund-level expenses. Allspring Funds Management has contractually committed through April 30, 2025 to waive fees and/or reimburse expenses to the extent necessary to cap the Fund’s expenses. Prior to or after the commitment expiration date, the cap may be increased or the commitment to maintain the cap may be terminated only with the approval of the Board of Trustees. As of June 30, 2024, the contractual caps are as follows:
The Trust has adopted a distribution plan for Class 2 shares pursuant to Rule 12b-1 under the 1940 Act. A distribution fee is charged to Class 2 shares and paid to Allspring Funds Distributor, LLC, the principal underwriter, an affiliate of Allspring Funds Management, at an annual rate up to 0.25% of the average daily net assets of Class 2 shares.
The Fund may purchase or sell portfolio investment securities to certain affiliates pursuant to Rule 17a-7 under the 1940 Act and under procedures adopted by the Board of Trustees. The procedures have been designed to ensure that these interfund transactions, which do not incur broker commissions, are effected at current market prices. Pursuant to these procedures, the Fund did not have any interfund transactions during the six months ended June 30, 2024.
5.
INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding U.S. government obligations (if any) and short-term securities, for the six months ended June 30, 2024 were $101,930,665 and $111,772,970, respectively.
The Trust, Allspring Master Trust and Allspring Funds Trust (excluding the money market funds) are parties to a $350,000,000 revolving credit agreement whereby the Fund is permitted to use bank borrowings for temporary or emergency purposes, such as to fund shareholder redemption
14 | Allspring VT Small Cap Growth Fund
Notes to financial statements (unaudited)
requests. Interest under the credit agreement is charged to the Fund based on a borrowing rate equal to the higher of the Federal Funds rate or the overnight bank funding rate in effect on that day plus a spread. In addition, an annual commitment fee based on the unused balance is allocated to each participating fund.
For the six months ended June 30, 2024, there were no borrowings by the Fund under the agreement.
As of the end of the period, the Fund concentrated its portfolio of investments in the information technology sector. A fund that invests a substantial portion of its assets in any sector may be more affected by changes in that sector than would be a fund whose investments are not heavily weighted in any sector.
Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification rights against certain liabilities that may arise out of performance of their duties to the Fund. The Fund has entered into a separate agreement with each Trustee that converts indemnification rights currently existing under the Fund’s organizational documents into contractual rights that cannot be changed in the future without the consent of the Trustee. 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.
Allspring VT Small Cap Growth Fund | 15
Other information (unaudited)
Other information
A description of the policies and procedures used to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-866-259-3305, visiting our website at allspringglobal.com, or visiting the SEC website at sec.gov. Information regarding how the proxies related to portfolio securities were voted during the most recent 12-month period ended June 30 is available on the website at allspringglobal.com or by visiting the SEC website at sec.gov.
Quarterly portfolio holdings information
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the SEC website at sec.gov.
16 | Allspring VT Small Cap Growth Fund
Other information (unaudited)
Item 8. Changes in and disagreements with accountants
Item 9. Matters submitted to fund shareholders for a vote
Item 10. Remuneration paid to directors, officers and others
Refer to information in the Statement of operations.
Allspring VT Small Cap Growth Fund | 17
Other information (unaudited)
Item 11. Statement regarding basis for the board’s approval of investment advisory contract
Board Consideration of Investment Management and Sub-Advisory Agreements:
Under the Investment Company Act of 1940 (the “1940 Act”), the Board of Trustees (the “Board”) of Allspring Variable Trust (the “Trust”) must determine annually whether to approve the continuation of the Trust’s investment management and sub-advisory agreements. In this regard, at a Board meeting held on May 28-30, 2024 (the “Meeting”), the Board, all the members of which have no direct or indirect interest in the investment management and sub-advisory agreements and are not “interested persons” of the Trust, as defined in the 1940 Act (the “Independent Trustees”), reviewed and approved for the Allspring VT Small Cap Growth Fund (the “Fund”): (i) an investment management agreement (the “Management Agreement”) with Allspring Funds Management, LLC (“Allspring Funds Management”); and (ii) an investment sub-advisory agreement (the “Sub-Advisory Agreement”) with Allspring Global Investments, LLC (the “Sub-Adviser”), an affiliate of Allspring Funds Management. The Management Agreement and the Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements.”
At the Meeting, the Board considered the factors and reached the conclusions described below relating to the selection of Allspring Funds Management and the Sub-Adviser and the approval of the Advisory Agreements. Prior to the Meeting, including at a meeting of the Board held in April 2024, and at the Meeting, the Trustees conferred extensively among themselves and with representatives of Allspring Funds Management about these matters. The Board has adopted a team-based approach, with each team consisting of a sub-set of Trustees, to assist the full Board in the discharge of its duties in reviewing investment performance and other matters throughout the year. The Independent Trustees were assisted in their evaluation of the Advisory Agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately.
In providing information to the Board, Allspring Funds Management and the Sub-Adviser were guided by a detailed set of requests for information submitted to them by independent legal counsel on behalf of the Independent Trustees at the start of the Board’s annual contract renewal process earlier in 2024. In considering and approving the Advisory Agreements, the Trustees considered the information they believed relevant, including but not limited to the information discussed below. The Board considered not only the specific information presented in connection with the Meeting, but also the knowledge gained over time through interactions with Allspring Funds Management and the Sub-Adviser about various topics. In this regard, the Board reviewed reports of Allspring Funds Management at each of its quarterly meetings, which included, among other things, portfolio reviews and investment performance reports. In addition, the Board and the teams mentioned above confer with portfolio managers at various times throughout the year. The Board did not identify any particular information or consideration that was all-important or controlling, and each individual Trustee may have attributed different weights to various factors.
After its deliberations, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term. The Board considered the approval of the Advisory Agreements for the Fund as part of its consideration of agreements for funds across the complex, but its approvals were made on a fund-by-fund basis. The following summarizes a number of important, but not necessarily all, factors considered by the Board in support of its approvals.
Nature, extent, and quality of services
The Board received and considered various information regarding the nature, extent, and quality of services provided to the Fund by Allspring Funds Management and the Sub-Adviser under the Advisory Agreements. This information included a description of the investment advisory services and Fund-level administrative services covered by the Management Agreement, as well as, among other things, a summary of the background and experience of senior management of Allspring Global Investments, of which Allspring Funds Management and the Sub-Adviser are a part, and a summary of investments made in the Allspring Global Investments business.* The Board also received information about the services that continue to be provided by Wells Fargo & Co. and/or its affiliates (“Wells Fargo”) since the sale of Wells Fargo Asset Management to Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P., under a transition services agreement and an update on the anticipated timeline for exiting the transition services agreement. In addition, the Board received and considered information about the full range of services provided to the Fund by Allspring Funds Management and its affiliates.
The Board considered the qualifications, background, tenure, and responsibilities of each of the portfolio managers primarily responsible for the day-to-day portfolio management of the Fund. The Board evaluated the ability of Allspring Funds Management and the Sub-Adviser to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel.
The Board further considered the compliance programs and compliance records of Allspring Funds Management and the Sub-Adviser. The Board received and considered information about Allspring Global Investments’ risk management functions, which included information about Allspring Funds
*
The trade name for the asset management firm that includes Allspring Funds Management and the Sub-Adviser is “Allspring Global Investments.”
18 | Allspring VT Small Cap Growth Fund
Other information (unaudited)
Management’s and the Sub-Adviser’s business continuity plans, their approaches to data privacy and cybersecurity, Allspring Funds Management’s role as administrator of the Fund’s liquidity risk management program, and fair valuation designee. The Board also received and considered information about Allspring Funds Management’s intermediary and vendor oversight program.
Fund investment performance and expenses
The Board considered the investment performance results for the Fund over various time periods ended December 31, 2023. The Board considered these results in comparison to the investment performance of funds in a universe that was determined by Broadridge Inc. (“Broadridge”) to be similar to the Fund (the “Universe”), and in comparison to the Fund’s benchmark index and to other comparative data. Broadridge is an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the mutual funds in the performance Universe. The Board noted that the investment performance of the Fund was higher than or in range of the average investment performance of its Universe for all periods under review. The Board also noted that the investment performance of the Fund was higher than or in range of its benchmark index, the Russell 2000® Growth Index, for all periods under review.
The Board also received and considered information regarding the Fund’s net operating expense ratios and their various components, including actual management fees, custodian and other non-management fees, and Rule 12b-1 and non-Rule 12b-1 shareholder service fees. The Board considered these ratios in comparison to the median ratios of funds in class-specific expense groups that were determined by Broadridge to be similar to the Fund (the “Groups”). The Board received a description of the methodology used by Broadridge to select the mutual funds in the expense Groups and an explanation of how funds comprising expense Groups and their expense ratios may vary from year-to-year. Based on the Broadridge reports, the Board noted that the net operating expense ratios of the Fund were in range of the median net operating expense ratios of the expense Groups for each share class.
The Board received information concerning, and discussed factors contributing to, the net operating expense ratios of the Fund relative to the expense Groups for each share class. The Board took note of the explanations for the net operating expense ratios of the Fund.
The Board took into account the Fund’s investment performance and expense information provided to it among the factors considered in deciding to re-approve the Advisory Agreements.
Investment management and sub-advisory fee rates
The Board reviewed and considered the contractual fee rates payable by the Fund to Allspring Funds Management under the Management Agreement, as well as the contractual fee rates payable by the Fund to Allspring Funds Management for class-level administrative services under a Class-Level Administration Agreement, which include, among other things, class-level transfer agency and sub-transfer agency costs (collectively, the “Management Rates”). The Board also reviewed and considered the contractual investment sub-advisory fee rates payable by Allspring Funds Management to the Sub-Adviser for investment sub-advisory services. It was noted that advisory fee waivers, if any, are at the fund level and not class level.
Among other information reviewed by the Board was a comparison of the Fund’s Management Rates with the average contractual investment management fee rates of funds in the expense Groups at a common asset level as well as transfer agency costs of the funds in the expense Groups. The Board noted that the Management Rates of the Fund were equal to or in range of the sum of these average rates for the Fund’s expense Groups for each share class.
The Board also received and considered information about the portion of the total management fee that was retained by Allspring Funds Management after payment of the fee to the Sub-Adviser for sub-advisory services. In assessing the reasonableness of this amount, the Board received and evaluated information about the nature and extent of responsibilities retained and risks assumed by Allspring Funds Management and not delegated to or assumed by the Sub-Adviser, and about Allspring Funds Management’s on-going oversight services. Given the affiliation between Allspring Funds Management and the Sub-Adviser, the Board ascribed limited relevance to the allocation of fees between them.
The Board also received and considered information about the nature and extent of services offered and fee rates charged by Allspring Funds Management and the Sub-Adviser to other types of clients with investment strategies similar to those of the Fund. In this regard, the Board received information about the significantly greater scope of services, and compliance, reporting and other legal and regulatory obligations and risks of managing proprietary mutual funds compared with those associated with managing assets of other types of clients, including third-party sub-advised fund clients and non-mutual fund clients such as institutional separate accounts.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board determined that the compensation payable to Allspring Funds Management under the Management Agreement and to the Sub-Adviser under the Sub-Advisory Agreement was reasonable.
Allspring VT Small Cap Growth Fund | 19
Other information (unaudited)
Profitability
The Board received and considered information concerning the profitability of Allspring Funds Management, as well as the profitability of Allspring Global Investments, from providing services to the fund complex as a whole. The Board noted that the Sub-Adviser’s profitability information with respect to providing services to the Fund and other funds in the complex was subsumed in the Allspring Global Investments profitability analysis.
Allspring Funds Management reported on the methodologies and estimates used in calculating profitability, including a description of the methodology used to allocate certain expenses. Among other things, the Board noted that the levels of profitability reported on a fund-by-fund basis varied widely, depending on factors such as the size, type, and age of fund.
Based on its review, the Board did not deem the profits reported by Allspring Funds Management or Allspring Global Investments from services provided to the Fund to be at a level that would prevent it from approving the continuation of the Advisory Agreements.
The Board received and considered information about the potential for Allspring Funds Management to experience economies of scale in the provision of management services to the Fund, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with Fund shareholders. The Board noted the existence of breakpoints in the Fund’s management fee structure, which operate generally to reduce the Fund’s expense ratios as the Fund grows in size, and the size of the Fund in relation to such breakpoints. The Board considered that in addition to management fee breakpoints, Allspring Funds Management shares potential economies of scale from its management business in a variety of ways, including through fee waiver and expense reimbursement arrangements, competitive management fee rates set at the outset without regard to breakpoints, and investments in the business intended to enhance services available to shareholders.
The Board concluded that Allspring Funds Management’s arrangements with respect to the Fund, including contractual breakpoints, constituted a reasonable approach to sharing potential economies of scale with the Fund and its shareholders.
Other benefits to Allspring Funds Management and the Sub-Adviser
The Board received and considered information regarding potential “fall-out” or ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, as a result of their relationships with the Fund. Ancillary benefits could include, among others, benefits directly attributable to other relationships with the Fund and benefits potentially derived from an increase in Allspring Funds Management’s and the Sub-Adviser’s business as a result of their relationships with the Fund. The Board noted that Allspring Funds Distributor, LLC, an affiliate of Allspring Funds Management, receives distribution-related fees in respect of shares sold or held through it. The Board also reviewed information about soft dollar credits earned and utilized by the Sub-Adviser.
Based on its consideration of the factors and information it deemed relevant, including those described here, the Board did not find that any ancillary benefits received by Allspring Funds Management and its affiliates, including the Sub-Adviser, were unreasonable.
At the Meeting, after considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board unanimously determined that the compensation payable to Allspring Funds Management and the Sub-Adviser under each of the Advisory Agreements was reasonable, and approved the continuation of the Advisory Agreements for a one-year term.
20 | Allspring VT Small Cap Growth Fund
For more information
More information about Allspring Funds is available free upon request. To obtain literature, please write, visit the Fund’s website, or call:
Allspring Funds
P.O. Box 219967
Kansas City, MO 64121-9967
Website: allspringglobal.com
Individual investors: 1-800-260-5969
Retail investment professionals: 1-888-877-9275
Institutional investment professionals: 1-866-765-0778
This report and the financial statements contained herein are submitted for the general information of the shareholders of the Fund. If this report is used for promotional purposes, distribution of the report must be accompanied or preceded by a current prospectus. Before investing, please consider the investment objectives, risks, charges, and expenses of the investment. For a current prospectus and, if available, a summary prospectus, containing this information, call 1-800-260-5969 or visit the Fund’s website at allspringglobal.com. Read the prospectus carefully before you invest or send money.
Allspring Global InvestmentsTM is the trade name for the asset management firms of Allspring Global Investments Holdings, LLC, a holding company indirectly owned by certain private funds of GTCR LLC and Reverence Capital Partners, L.P. These firms include but are not limited to Allspring Global Investments, LLC, and Allspring Funds Management, LLC. Certain products managed by Allspring entities are distributed by Allspring Funds Distributor, LLC (a broker-dealer and Member FINRA/SIPC).
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.
© 2024 Allspring Global Investments Holdings, LLC. All rights reserved.
NCSRS3003 06-24
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES
Changes in and Disagreements with Accountants for Open-End Management Investment Companies are included as part of the Financial Statements filed under Item 7(a) of this Form.
ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES
Proxy Disclosures for Open-End Management Investment Companies are included as part of the Financial Statements filed under Item 7(a) of this Form.
ITEM 10. REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES
Renumeration Paid to Directors, Officers, and Others of Open-End Investment Companies is included as part of the Financial Statements filed under Item 7(a) of this Form.
ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT
The registrant’s Statement Regarding Basis for Approval of Investment Advisory Contract is included as part of the Financial Statements filed under Item 7(a) of this Form.
ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 15. 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 16. CONTROLS AND PROCEDURES
(a) The President and Treasurer have concluded that Allspring Variable 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 registrant 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 registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the most recent fiscal half-year 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 17. DISCLOSURES OF SECURITIES LENDING ACTIVITES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Not applicable.
ITEM 19. EXHIBITS
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.
| | |
| Allspring Variable Trust |
| |
| By: | | /s/ Andrew Owen |
| | Andrew Owen |
| | President |
|
| Date: August 23, 2024 |
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.
| | |
| Allspring Variable Trust |
| |
| By: | | /s/ Andrew Owen |
| | Andrew Owen |
| | President |
|
| Date: August 23, 2024 |
| |
| By: | | /s/Jeremy DePalma |
| | Jeremy DePalma |
| | Treasurer |
|
| Date: August 23, 2024 |
