William Blair Growth N NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number 811-5344

William Blair Funds

(Exact name of registrant as specified in charter)

222 West Adams Street, Chicago, IL		60606
(Address of principal executive offices)		(Zip Code)

Michelle R. Seitz

William Blair Funds

222 West Adams Street, Chicago, IL 60606

(Name and address of agent for service)

Registrant’s telephone number, including area code: 312-236-1600

Date of fiscal year end: December 31,

Date of reporting period: June 30, 2013

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A Registrant is not required to respond to the collection of information contained in Form N-CSR unless the form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimates and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. (ss) 3507.

Item 1.

June 30, 2013 Semi Annual Reports transmitted to shareholders.






	June 30, 2013
William Blair Funds Semiannual Report

	Table of Contents

	Growth Fund
	An Overview from the Portfolio Managers	6
	Portfolio of Investments	8

	Large Cap Growth Fund
	An Overview from the Portfolio Managers	9
	Portfolio of Investments	11

	Mid Cap Growth Fund
	An Overview from the Portfolio Managers	12
	Portfolio of lnvestments	14

	Small-Mid Cap Growth Fund
	An Overview from the Portfolio Managers	15
	Portfolio of lnvestments	17

	Small Cap Growth Fund
	An Overview from the Portfolio Managers	18
	Portfolio of lnvestments	20

	Global Markets Overview	22

	Global Leaders Fund
	An Overview from the Portfolio Managers	23
	Portfolio of lnvestments	25

	Global Small Cap Growth Fund
	An Overview from the Portfolio Managers	27
	Portfolio of lnvestments	29

	International Growth Fund
	An Overview from the Portfolio Managers	32
	Portfolio of lnvestments	34

	Institutional International Growth Fund
	An Overview from the Portfolio Managers	39
	Portfolio of lnvestments	41

	International Equity Fund
	An Overview from the Portfolio Manager	46
	Portfolio of lnvestments	48

	Institutional International Equity Fund
	An Overview from the Portfolio Manager	50
	Portfolio of lnvestments	52

	International Leaders Fund
	An Overview from the Portfolio Managers	54
	Portfolio of lnvestments	56

	International Small Cap Growth Fund
	An Overview from the Portfolio Managers	58
	Portfolio of lnvestments	60

	Emerging Markets Growth Fund
	An Overview from the Portfolio Managers	63
	Portfolio of lnvestments	65

June 30, 2013

William Blair Funds

	Emerging Markets Leaders Fund
	An Overview from the Portfolio Managers	69
	Portfolio of lnvestments	71

	Emerging Markets Small Cap Growth Fund
	An Overview from the Portfolio Managers	73
	Portfolio of lnvestments	75

	Large Cap Value Fund
	An Overview from the Portfolio Manager	79
	Portfolio of lnvestments	81

	Mid Cap Value Fund
	An Overview from the Portfolio Managers	83
	Portfolio of lnvestments	85

	Small-Mid Cap Value Fund
	An Overview from the Portfolio Managers	86
	Portfolio of lnvestments	88

	Small Cap Value Fund
	An Overview from the Portfolio Managers	90
	Portfolio of lnvestments	93

	Bond Fund
	An Overview from the Portfolio Managers	95
	Portfolio of lnvestments	97

	Income Fund
	An Overview from the Portfolio Manager	101
	Portfolio of lnvestments	103

	Low Duration Fund
	An Overview from the Portfolio Managers	106
	Portfolio of lnvestments	108

	Ready Reserves Fund
	An Overview from the Portfolio Managers	112
	Portfolio of lnvestments	114

	Financial Statements	115

	Notes to Financial Statements	133

	Financial Highlights	153

	Board of Trustees and Officers	185

	Approval of Management Agreement	190

	Renewal of Management Agreement	191

	Fund Expenses	197

The views expressed in the commentary for each Fund reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The portfolio management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Statements involving predictions, assessments, analyses, or outlook for individual securities, industries, market sectors, and/or markets involve risks and uncertainties, and there is no guarantee they will come to pass.

This report is submitted for the general information of the shareholders of the William Blair Funds. It is not authorized for distribution to prospective investors unless accompanied or preceded by a prospectus of the William Blair Funds. Please carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling 1-800-742-7272. Read it carefully before you invest or send money.

Semi-Annual Report

June 30, 2013

PERFORMANCE AS OF JUNE 30, 2013—CLASS N SHARES (Unaudited)

										10 yr				Overall
	Year									(or since			Inception	Morningstar
	To Date		1 yr		3yr		5 yr			inception)			Date	Rating
Growth Fund
Class N		11.54		18.42		16.23		6.13			7.80		3/20/1946	««««
Morningstar Large Growth		11.05		17.23		16.51		5.57			7.02			Among 1,488
Russell 3000^®Growth Index		12.23		17.56		18.78		7.58			7.57			Large Growth Funds
S&P 500		13.82		20.60		18.45		7.01			7.30

Large Cap Growth Fund
Class N		9.34		15.43		16.42		5.28			5.44		12/27/1999	«««
Morningstar Large Growth		11.05		17.23		16.51		5.57			7.02			Among 1,488
Russell 1000^®Growth Index		11.80		17.07		18.68		7.47			7.40			Large Growth Funds

Mid Cap Growth Fund
Class N		12.49		16.56		17.31		8.59			7.20		2/1/2006	««««
Morningstar Mid-Cap Growth		13.11		19.79		17.01		6.07			—			Among 637
Russell MidCap^®Growth Index		14.70		22.88		19.53		7.61			6.20			Mid-Cap Growth Funds

Small-Mid Cap Growth Fund
Class N		19.07		27.23		19.05		10.82			8.93		12/29/2003	«««««
Morningstar Mid-Cap Growth		13.11		19.79		17.01		6.07			—			Among 637
Russell 2500^TMGrowth Index		15.82		24.03		20.22		8.94			8.35			Mid-Cap Growth Funds

Small Cap Growth Fund
Class N		23.65		33.79		15.15		9.65			9.45		12/27/1999	«««
Morningstar Small Growth		16.03		22.25		18.57		8.33			9.26			Among 632
Russell 2000^®Growth Index		17.44		23.67		19.97		8.89			9.62			Small Growth Funds

Global Leaders Fund
Class N		4.65		12.93		14.83		1.89			0.02		10/15/2007	«««
Morningstar World Stock		7.45		18.01		12.72		3.25			—			Among 759
MSCI All Country World IMI (net)		6.40		17.08		12.60		2.79			(0.35	)		World Stock Funds

Global Small Cap Growth Fund
Class N		—		—		—		—			3.00		4/10/2013	Not rated.
MSCI All Country World Small Cap Index (net)		—		—		—		—			0.75

International Growth Fund
Class N		1.96		17.13		10.56		(0.13	)		8.94		10/1/1992	«««
Morningstar Foreign Large Growth		1.83		14.49		9.88		0.39			8.16			Among 223
MSCI All Country World Ex-U.S. IMI (net)		0.18		13.91		8.13		(0.41	)		8.95			Foreign Large Growth Funds

International Equity Fund
Class N		2.90		15.72		8.80		(2.23	)		4.11		5/24/2004	««
Morningstar Foreign Large Growth		1.83		14.49		9.88		0.39			—			Among 223
MSCI World Ex-U.S. Index (net)		3.01		17.07		9.43		(0.84	)		5.99			Foreign Large Growth Funds

International Leaders Fund
Class N		2.50		—		—		—			10.86		8/16/2012	Not rated.
Morningstar Foreign Large Growth		1.83		—		—		—			—
MSCI All Country World Ex-U.S. IMI (net)		0.18		—		—		—			9.81

June 30, 2013

William Blair Funds

PERFORMANCE AS OF JUNE 30, 2013—CLASS N SHARES (Unaudited)—CONTINUED

												10 yr			Overall
	Year											(or since		Inception	Morningstar
	To Date			1 yr			3yr		5 yr			inception)		Date	Rating
International Small Cap Growth Fund
Class N		6.91			21.58			13.47		3.11			6.67	11/1/2005	«««
Morningstar Foreign Small/Mid Growth		7.09			22.11			14.56		3.32			—		Among 111
MSCI All Country World Ex-U.S. Small Cap Index (net)		1.83			15.94			9.16		2.65			5.85		Foreign Small/Mid Growth Funds

Emerging Markets Growth Fund
Class N		(6.27	)		5.66			6.46		(1.87	)		9.51	6/6/2005	«««
Morningstar Diversified Emerging Markets		(7.78	)		4.45			3.44		(1.35	)		—		Among 366 Diversified Emerging Markets Funds
MSCI Emerging Markets IMI (net)		(8.89	)		3.66			3.43		0.16			9.49

Emerging Markets Leaders Fund
Class N		(7.50	)		4.15			4.16		—			1.88	5/3/2010	«««
Morningstar Diversified Emerging Markets		(7.78	)		4.45			3.44		—			—		Among 366 Diversified Emerging Markets Funds
MSCI Emerging Markets Index (net)		(9.57	)		2.87			3.38		—			0.36

Emerging Markets Small Cap Growth Fund
Class N		6.54			25.14			—		—			21.67	10/24/2011	Not rated.
Morningstar Diversified Emerging Markets		(7.78	)		4.45			—		—			—
MSCI Emerging Markets Small Cap Index (net)		(3.58	)		9.86			—		—			6.04

Large Cap Value Fund
Class N		15.08			23.28			—		—			19.12	10/24/2011	Not rated.
Morningstar Large Value		14.94			23.02			—		—			—
Russell 1000^®Value Index		15.90			25.32			—		—			21.30

Mid Cap Value Fund
Class N		15.28			25.04			17.65		—			11.54	5/3/2010	«««
Morningstar Mid-Cap Value		15.98			26.71			17.61		—			—		Among 369
Russell Midcap^®Value Index		16.10			27.65			19.53		—			12.57		Mid-Cap Value Funds

Small-Mid Cap Value Fund
Class N		16.74			24.95			—		—			22.40	12/15/2011	Not rated.
Morningstar Mid-Cap Value		15.30			25.62			—		—			—
Russell 2500^TMValue Index		15.10			26.88			—		—			26.09

Small Cap Value Fund
Class N		17.58			25.41			17.09		9.84			9.36	12/23/1996	«««
Morningstar Small Value		15.30			25.62			16.70		9.31			9.95		Among 295
Russell 2000^®Value Index		14.39			24.76			17.33		8.59			9.30		Small Value Funds

Bond Fund
Class N		(3.37	)		0.73			4.84		6.31			5.80	5/1/2007	««««
Morningstar Intermediate-Term Bond		(2.31	)		0.91			4.28		5.60			—		Among 1,005
Barclays U.S. Aggregate Bond Index		(2.44	)		(0.69	)		3.51		5.19			5.18		Intermediate-Term Bond Funds

Semi-Annual Report

June 30, 2013

PERFORMANCE AS OF JUNE 30, 2013—CLASS N SHARES (Unaudited)—CONTINUED

											10 yr			Overall
	Year										(or since		Inception	Morningstar
	To Date			1 yr			3yr		5 yr		inception)		Date	Rating
Income Fund
Class N		(2.45	)		0.45			3.54		4.36		3.19	10/1/1990	«««
Morningstar Short-term Bond		(0.54	)		1.23			2.10		3.11		2.86		Among 360
Barclays U.S. Intermediate														Short-Term Bond Funds
Govt./Credit Bond Index		(1.45	)		0.28			3.14		4.57		4.03

Low Duration Fund
Class N		(1.27	)		(0.09	)		1.22		—		1.25	12/1/2009	«««
Morningstar Ultra Short Bond		(0.03	)		0.87			1.07		—		—		Among 88
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index		0.11			0.32			0.41		—		0.44		Ultrashort Bond Funds

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or a loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Investing in smaller companies involves special risks, including higher volatility and lower liquidity. International and emerging markets investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. As interest rates rise, bond prices will fall and bond funds may become more volatile. Class N shares are available to the general public without a sales load.

Morningstar Ratings^TMare as of 06/30/2013 and are subject to change every month. The ratings are based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each Category receive 5 stars, the next 22.5% receive 4 stars, the middle 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. The 3/5/10 year Morningstar ratings were as follows: Growth Fund «««/«««/«««« and Large Cap Growth Fund «««/«««/««, out of 1,488/1,308/863 large growth funds; Small Cap Growth Fund ««/«««/«««, out of 632/558/362 small growth funds; Mid Cap Growth Fund «««/««««/NA and Small-Mid Cap Growth Fund ««««/«««««/NA out of 637/563/NA mid cap growth funds; Global Leaders Fund ««««/««/NA out of 759/603/NA world stock funds; International Growth Fund «««/«««/««« and International Equity Fund «««/««/NA out of 223/183/106 foreign large growth funds; International Small Cap Growth Fund «««/«««/NA out of 111/88/NA foreign small/mid growth funds; Emerging Markets Growth Fund ««««/««/NA and Emerging Markets Leaders Fund «««/NA/NA, out of 366/269/NA diversified emerging markets funds; Mid Cap Value Fund «««/NA/NA, out of 369/NA/NA mid-cap value funds; Small Cap Value Fund «««/««««/««« out of 295/254/151 small value funds; Income Fund ««««/««««/««« out of 360/322/217 short-term bond funds; Bond Fund ««««/««««/NA out of 1,005/873/NA intermediate-term bond funds; Low Duration Fund «««/NA/NA out of 88/NA/NA ultrashort bond funds.

Please carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling 1-800-742-7272. Read it carefully before you invest or send money.

June 30, 2013

William Blair Funds

	GROWTH FUND

	The Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

David C. Fording John F. Jostrand	The William Blair Growth Fund (Class N shares) posted an 11.54% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 3000^®Growth Index (the “Index”), increased 12.23%. Market Review Solid economic and corporate performance provided an upward bias to the market in the first half of the year. Continued improvement in economic data, especially in housing and also employment data, pushed stocks to their 2013 highs through May. In June, the market witnessed its only, albeit minor, hiccup of the year as the Federal Reserve signaled an eventual slowdown in monetary easing (dubbed as the Federal Reserve’s “tapering”). The uncertainty sparked a rapid increase in long-term interest rates from historically low levels, pressuring the fixed income market. Stocks experienced a short-lived correction on worries less quantitative easing may become a drag on the economy and investor psychology. However, the period ended on a positive note, in part as investors realized the Federal Reserve would only taper to the extent the economy stayed on a sustainable path to recovery. Portfolio Results The Fund’s modest underperformance relative to the Index in the first half of the year is attributable to mixed stock selection and modest style headwinds. Investors’ gravitation to cheaper stocks (as defined by several valuation measures including price-to-earnings ratio), to which the Fund is underweight, served as a style headwind given the Fund’s higher growth orientation, and therefore, typical underweight to the cheapest segment of the market. This was true in March and even more so in April, periods in which the Fund underperformed. As far as stock selection, the Information Technology sector was a prime example of mixed results. The sector housed some of our biggest detractors from relative return such as Cognizant Technology Solutions, SolarWinds, and Real Page, but also some of our biggest winners such as Pandora Media and Google. Health Care stock selection was negative, with underperformances by Allergan and HMS Holdings. On the other hand, Green Mountain Coffee Roasters (Consumer Staples) and IntercontinentalExchange (Financials) stood out as positive contributors during the first half of the year. Outlook Looking forward, the importance of central bank policy over the past few years brings plans for future policy into the forefront. The “tapering” of quantitative easing by the Federal Reserve (i.e., the slowing of its bond buying program) and China’s ability to execute a soft landing for its decelerating economy will be closely watched by the marketplace for their impacts on economic growth, global capital flows, and investor psychology. In addition, a potential change in leadership at the Federal Reserve as well as fiscal debate in Washington D.C. regarding the debt ceiling could negatively impact investor psychology. However, we believe that U.S. corporate performance remains solid and that U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and growth as well. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the Fund from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the expected growth and consistency of their business.

Semi-Annual Report

June 30, 2013

Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		11.54	%		18.42	%		16.23	%		6.13	%		7.80	%
Class I		11.76			18.84			16.63			6.49			8.13
Russell 3000^® Growth Index		12.23			17.56			18.78			7.58			7.57
S&P 500		13.82			20.60			18.45			7.01			7.30

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 3000^®Growth Index consists of large, medium, and small capitalization companies with above average price-to-book ratios and forecasted growth rates. The index is weighted by market capitalization and large/medium/small companies make up approximately 80%/15%/5% of the index.

The S&P 500 Index indicates broad larger capitalization equity market performance.

This report identifies the Fund’s investments on June 30, 2013. These holdings are subject to change. Not all stocks in the Fund performed the same, nor is there any guarantee that these stocks will perform as well in the future. Market forecasts provided in this report may not necessarily come to pass.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Information Technology—33.6%
*	Akamai Technologies, Inc.		204,900		$	8,719
	Apple, Inc.		72,885			28,868
*	Citrix Systems, Inc.		116,400			7,022
*	Cognizant Technology Solutions Corporation		403,400			25,257
*	eBay, Inc.		363,600			18,805
	FactSet Research Systems, Inc.		61,400			6,259
	Genpact, Ltd.†		1,055,305			20,304
*	Google, Inc.		51,405			45,255
	Mastercard, Inc.		64,200			36,883
*	Pandora Media, Inc.		977,183			17,980
	QUALCOMM, Inc.		301,140			18,394
*	RealPage, Inc.		525,275			9,634
*	Red Hat, Inc.		189,006			9,038
*	SolarWinds, Inc.		385,700			14,969
						267,387

	Industrials—17.7%
*	B/E Aerospace, Inc.		137,200			8,655
	Equifax, Inc.		198,400			11,692
	Fastenal Co.		232,458			10,658
*	IHS, Inc.		79,922			8,342
*	Jacobs Engineering Group, Inc.		222,956			12,292
	Precision Castparts Corporation		118,000			26,669
*	Stericycle, Inc.		141,400			15,615
	TransDigm Group, Inc.		77,180			12,099
*	Trimas Corporation		268,022			9,992
	Union Pacific Corporation		159,800			24,654
						140,668

	Health Care—14.2%
	Allergan, Inc.		213,500			17,985
*	Gilead Sciences, Inc.		427,070			21,870
*	Haemonetics Corporation		357,597			14,787
*	HMS Holdings Corporation		432,362			10,074
*	IDEXX Laboratories, Inc.		220,618			19,807
*	NxStage Medical, Inc.		647,761			9,250
	Perrigo Co.		160,400			19,409
						113,182

	Consumer Discretionary—14.2%
*	Amazon.com, Inc.		74,000			20,549
*	Discovery Communications, Inc.		144,800			11,180
	Harley-Davidson, Inc.		265,499			14,555
*	K12, Inc.		164,013			4,309
	Lowe’s Cos., Inc.		247,800			10,135
*	Sally Beauty Holdings, Inc.		358,800			11,159
	Tractor Supply Co.		73,900			8,691
	VF Corporation		93,300			18,012
	Yum! Brands, Inc.		206,700			14,333
						112,923

	Issuer	Shares or Principal Amount		Value

	Common Stocks—(continued)

	Consumer Staples—7.5%
	Costco Wholesale Corporation		283,200		$	31,313
*	Green Mountain Coffee Roasters, Inc.		150,300			11,282
	Mead Johnson Nutrition Co.		219,200			17,367
						59,962

	Financials—4.9%
*	Encore Capital Group, Inc.		354,921			11,752
*	IntercontinentalExchange, Inc.		96,700			17,189
	LPL Financial Holdings, Inc.		266,400			10,059
						39,000

	Energy—3.9%
*	Cameron International Corporation		138,447			8,467
	Schlumberger, Ltd.†		309,500			22,179
						30,646

	Materials—3.0%
	Airgas, Inc.		121,800			11,627
	Ecolab, Inc.		144,720			12,329
						23,956

	Total Common Stocks—99.0% (cost $608,829)					787,724

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $5,550, collateralized by U.S. Treasury Note, 0.750%, due 10/31/2017 .		$5,550			5,550

	Total Repurchase Agreement—0.7% (cost $5,550)					5,550

	Total Investments—99.7% (cost $614,379)					793,274
	Cash and other assets, less liabilities—0.3%					2,293
	Net assets—100.0%				$	795,567

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	LARGE CAP GROWTH FUND

	The Large Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

James S. Golan David P. Ricci	The William Blair Large Cap Growth Fund (Class N shares) posted a 9.34% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 1000^®Growth Index (the “Index”), increased 11.80%. Market Review Solid economic and corporate performance provided an upward bias to the market in the first half of the year. Continued improvement in economic data, especially in housing and also employment data, pushed stocks to their 2013 highs through May. In June, the market witnessed its only, albeit minor, hiccup of the year as the Federal Reserve signaled an eventual slowdown in monetary easing (dubbed as the Federal Reserve’s “tapering”). The uncertainty sparked a rapid increase in long-term interest rates from historically low levels, pressuring the fixed income market. Stocks experienced a short-lived correction on worries less quantitative easing may become a drag on the economy and investor psychology. However, the period ended on a positive note, in part as investors realized the Federal Reserve would only taper to the extent the economy stayed on a sustainable path to recovery. Portfolio Results The Fund’s underperformance relative to the Index in the first half of the year is attributable to style headwinds and stock selection. Investors’ gravitation to cheaper stocks (as defined by several valuation measures including price-to-earnings ratio), to which the Fund is underweight, served as a style headwind given the Fund’s typical underweight to this segment of the market. It is worth noting that this dynamic reversed late in the period (along with the Fund’s relative performance) as interest rates increased, seemingly reducing demand for the cheaper, higher dividend yielding stocks the market desired in the historically low interest rate environment. Stock selection in Information Technology was the largest source of underperformance. Cognizant Technology Solutions and Apple Inc. were the primary detractors in the sector. Allergan within Health Care was another meaningful detractor from return. On the upside, Green Mountain Coffee Roasters (Consumer Staples) and Financials stock selection (JPMorgan Chase and Affiliated Managers Group) helped the Fund partially keep pace with the market. Outlook Looking forward, the importance of central bank policy over the past few years brings plans for future policy into the forefront. The “tapering” of quantitative easing by the Federal Reserve (i.e., the slowing of its bond buying program) and China’s ability to execute a soft landing for its decelerating economy will be closely watched by the marketplace for their impacts on economic growth, global capital flows, and investor psychology. In addition, a potential change in leadership at the Federal Reserve as well as fiscal debate in Washington D.C. regarding the debt ceiling could negatively impact investor psychology. However, we believe that U.S. corporate performance remains solid and that U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and growth as well. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the Fund from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the expected growth and consistency of their business.

June 30, 2013

William Blair Funds

Large Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		9.34	%		15.43	%		16.42	%		5.28	%		5.44	%
Class I		9.46			15.70			16.76			5.56			5.69
Russell 1000^® Growth Index		11.80			17.07			18.68			7.47			7.40

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 1000^®Growth Index consists of large capitalization companies with above average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Large Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—27.3%
	Apple, Inc.		2,605		$	1,032
*	Citrix Systems, Inc.		16,440			992
*	Cognizant Technology Solutions Corporation		19,200			1,202
*	eBay, Inc.		8,360			432
*	Google, Inc.		2,298			2,023
	Mastercard, Inc.		2,135			1,227
	QUALCOMM, Inc.		10,395			635
*	Red Hat, Inc.		11,040			528
*	Trimble Navigation, Ltd.		26,850			698
						8,769

	Consumer Discretionary—17.5%
*	Amazon.com, Inc.		1,540			428
*	Discovery Communications, Inc.		6,280			485
*	Dollar General Corporation		18,700			943
	Harley-Davidson, Inc.		15,130			829
*	O’Reilly Automotive, Inc.		8,440			950
*	priceline.com, Inc.		651			538
	Starbucks Corporation		21,920			1,436
						5,609

	Industrials—13.6%
	Equifax, Inc.		9,330			550
	Precision Castparts Corporation		6,040			1,365
*	Stericycle, Inc.		7,590			838
	The Boeing Co.		3,170			325
	Union Pacific Corporation		8,410			1,297
						4,375

	Financials—11.2%
*	Affiliated Managers Group, Inc.		5,350			877
	Citigroup, Inc.		21,120			1,013
	JPMorgan Chase & Co.		23,630			1,248
	T Rowe Price Group, Inc.		6,440			471
						3,609

	Health Care—9.7%
	Allergan, Inc.		6,925			583
*	Gilead Sciences, Inc.		22,630			1,159
*	IDEXX Laboratories, Inc.		11,820			1,061
	Perrigo Co.		2,650			321
						3,124

	Consumer Staples—7.7%
	Colgate-Palmolive Co.		12,270			703
*	Green Mountain Coffee Roasters, Inc.		12,870			966
	Mead Johnson Nutrition Co.		10,260			813
						2,482

	Issuer	Shares or Principal Amount		Value

	Common Stocks—(continued)

	Materials—5.2%
	Monsanto Co.		11,270		$	1,114
	Praxair, Inc.		4,795			552
						1,666

	Energy—4.5%
	Noble Energy, Inc.		11,420			686
	Schlumberger, Ltd.†		10,680			765
						1,451

	Telecommunication Services—2.0%
*	SBA Communications Corporation		8,500			630

	Total Common Stocks—98.7% (cost $24,741)					31,715

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $395, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17	$	395			395

	Total Repurchase Agreement—1.2% (cost $395)					395

	Total Investments—99.9% (cost $25,136)					32,110
	Cash and other assets, less liabilities—0.1%					33
	Net assets—100.0%				$	32,143

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	MID CAP GROWTH FUND

	The Mid Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Robert C. Lanphier, IV David P. Ricci	The William Blair Mid Cap Growth Fund (Class N shares) posted a 12.49% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell Midcap^®Growth Index (the “Index”), increased 14.70%. Market Review Solid economic and corporate performance provided an upward bias to the market in the first half of the year. Continued improvement in economic data, especially in housing and also employment data, pushed stocks to their 2013 highs through May. In June, the market witnessed its only, albeit minor, hiccup of the year as the Federal Reserve signaled an eventual slowdown in monetary easing (dubbed as the Federal Reserve’s “tapering”). The uncertainty sparked a rapid increase in long-term interest rates from historically low levels, pressuring the fixed income market. Stocks experienced a short-lived correction on worries less quantitative easing may become a drag on the economy and investor psychology. However, the period ended on a positive note, in part as investors realized the Federal Reserve would only taper to the extent the economy stayed on a sustainable path to recovery. Portfolio Results The Fund’s underperformance relative to the Index in the first half of the year is attributable to style headwinds and stock selection. Our more conservative investment style detracted in the period’s rapid ascent, as did investors’ gravitation to cheaper stocks (as defined by several valuation measures including price-to-earnings ratio) to which the Fund is underweight. Stock picks such as HMS Holdings (Health Care), SolarWinds (Information Technology), and Citrix Systems (Information Technology) were the largest detractors from return. In each case, we have maintained or added to each of those positions. On the upside, Green Mountain Coffee Roasters (Consumer Staples), LPL Financial Holdings (Financials), and HealthSouth (Health Care) helped the Fund partially keep pace with the market. Outlook Looking forward, the importance of central bank policy over the past few years brings plans for future policy into the forefront. The “tapering” of quantitative easing by the Federal Reserve (i.e., the slowing of its bond buying program) and China’s ability to execute a soft landing for its decelerating economy will be closely watched by the marketplace for their impacts on economic growth, global capital flows, and investor psychology. In addition, a potential change in leadership at the Federal Reserve as well as fiscal debate in Washington D.C. regarding the debt ceiling could negatively impact investor psychology. However, we believe that U.S. corporate performance remains solid and that U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and growth as well. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the Fund from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the expected growth and consistency of their business.

Semi-Annual Report

June 30, 2013

Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		12.49	%		16.56	%		17.31	%		8.59	%		7.20	%
Class I		12.63			16.88			17.62			8.88			7.50
Russell Midcap^® Growth Index		14.70			22.88			19.53			7.61			6.20

(a)	For the period from February 1, 2006 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in medium capitalization companies involves special risks, including higher volatility and lower liquidity. Medium Capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell MidCap^®Growth Index is an index that is constructed to provide a comprehensive and unbiased barometer of the mid-cap growth market.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

Mid Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—21.0%
*	Akamai Technologies, Inc.		113,900		$	4,846
	Amphenol Corporation		121,500			9,470
*	Citrix Systems, Inc.		197,000			11,885
*	CoStar Group, Inc.		62,277			8,038
	FactSet Research Systems, Inc.		61,900			6,310
*	Gartner, Inc.		40,800			2,325
	Genpact, Ltd.†		589,512			11,342
*	Guidewire Software, Inc.		132,200			5,559
*	Pandora Media, Inc.		355,900			6,549
*	RealPage, Inc.		105,600			1,937
*	Red Hat, Inc.		50,200			2,401
*	SolarWinds, Inc.		303,800			11,790
*	Trimble Navigation, Ltd.		347,608			9,041
*	VeriSign, Inc.		146,900			6,561
						98,054

	Consumer Discretionary—19.7%
*	Bed Bath & Beyond, Inc.		138,060			9,788
*	Chipotle Mexican Grill, Inc.		14,890			5,425
	Dick’s Sporting Goods, Inc.		323,929			16,216
*	Dollar General Corporation		214,805			10,833
*	Fossil Group, Inc.		64,600			6,674
	Harley-Davidson, Inc.		170,700			9,358
	Harman International Industries, Inc.		65,506			3,550
*	Lululemon Athletica, Inc.		103,400			6,775
*	O’Reilly Automotive, Inc.		117,080			13,185
*	Select Comfort Corporation		393,195			9,853
						91,657

	Industrials—18.6%
	AMETEK, Inc.		226,400			9,577
*	B/E Aerospace, Inc.		89,800			5,665
*	Clean Harbors, Inc.		191,400			9,671
	Equifax, Inc.		152,700			8,999
	Fastenal Co.		69,962			3,208
	Graco, Inc.		122,300			7,731
	J.B. Hunt Transport Services, Inc.		121,400			8,770
*	Jacobs Engineering Group, Inc.		170,600			9,405
*	Stericycle, Inc.		125,330			13,840
	TransDigm Group, Inc.		61,750			9,680
						86,546

	Health Care—13.0%
*	BioMarin Pharmaceutical, Inc.		78,200			4,363
*	HealthSouth Corporation		334,624			9,637
*	HMS Holdings Corporation		550,974			12,838
*	IDEXX Laboratories, Inc.		182,472			16,382
*	Mettler-Toledo International, Inc.		11,700			2,354
	Perrigo Co.		88,400			10,696
*	Sirona Dental Systems, Inc.		68,700			4,526
						60,796

		Shares or
		Principal
	Issuer	Amount		Value

	*Common Stocks—(continued)*

	Financials—10.4%
*	Affiliated Managers Group, Inc.		65,575		$	10,751
	First Republic Bank		186,000			7,157
	LPL Financial Holdings, Inc.		251,063			9,480
*	Signature Bank		169,300			14,055
	T Rowe Price Group, Inc.		97,000			7,096
						48,539

	Consumer Staples—5.8%
*	Green Mountain Coffee Roasters, Inc.		135,346			10,159
	McCormick & Co., Inc.		70,500			4,960
	Mead Johnson Nutrition Co.		148,600			11,774
						26,893

	Energy—5.1%
*	FMC Technologies, Inc.		124,300			6,921
	Helmerich & Payne, Inc.		117,627			7,346
	Oceaneering International, Inc.		31,500			2,274
	Range Resources Corporation		90,400			6,990
						23,531

	Materials—2.9%
	Airgas, Inc.		95,917			9,156
	Cytec Industries, Inc.		58,800			4,307
						13,463

	Telecommunication Services—1.0%
*	SBA Communications Corporation		62,500			4,633

	Total Common Stocks—97.5% (cost $399,581)					454,112

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $10,738, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17	$	10,738			10,738

	Total Repurchase Agreement—2.3% (cost $10,738)					10,738

	Total Investments—99.8% (cost $410,319)					464,850
	Cash and other assets, less liabilities—0.2%					1,039
	Net assets—100.0%				$	465,889

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	SMALL-MID CAP GROWTH FUND

	The Small-Mid Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Karl W. Brewer Robert C. Lanphier, IV Matthew A. Litfin	The Small-Mid Cap Growth Fund (Class N shares) posted a 19.07% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 2500^TMGrowth Index (the “Index”), increased 15.82%. Market Review Solid economic and corporate performance provided an upward bias to the market in the first half of the year. Continued improvement in economic data, especially in housing and also employment data, pushed stocks to their 2013 highs through May. In June, the market witnessed its only, albeit minor, hiccup of the year as the Federal Reserve signaled an eventual slowdown in monetary easing (dubbed as the Federal Reserve’s “tapering”). The uncertainty sparked a rapid increase in long-term interest rates from historically low levels, pressuring the fixed income market. Stocks experienced a short-lived correction on worries less quantitative easing may become a drag on the economy and investor psychology. However, the period ended on a positive note, in part as investors realized the Federal Reserve would only taper to the extent the economy stayed on a sustainable path to recovery. Portfolio Results The Fund’s outperformance relative to the Index in the first half of the year is attributable to strong stock selection. Pandora Media (Information Technology) and Green Mountain Coffee Roasters (Consumer Staples) were the two largest contributors to return from a single stock perspective. Industrials stock selection (e.g., ICF International) and Financials stock selection (e.g., Portfolio Recovery Associates) were the largest sources of outperformance by sector. On the downside, while Information Technology as a whole was neutral to relative performance, the Fund’s top four detractors were Information Technology holdings: Real Page, Aruba Networks, Xoom Corp, and SolarWinds. Outlook Looking forward, the importance of central bank policy over the past few years brings plans for future policy into the forefront. The “tapering” of quantitative easing by the Federal Reserve (i.e., the slowing of its bond buying program) and China’s ability to execute a soft landing for its decelerating economy will be closely watched by the marketplace for their impacts on economic growth, global capital flows, and investor psychology. In addition, a potential change in leadership at the Federal Reserve as well as fiscal debate in Washington D.C. regarding the debt ceiling could negatively impact investor psychology. However, we believe that U.S. corporate performance remains solid and that U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and growth as well. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the Fund from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the expected growth and consistency of their business.

June 30, 2013

William Blair Funds

Small-Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		19.07	%		27.23	%		19.05	%		10.82	%		8.93	%
Class I		19.24			27.48			19.32			11.10			9.20
Russell 2500^TM Growth Index		15.82			24.03			20.22			8.94			8.35

(a)	For the period from December 29, 2003 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower liquidity. Smaller and medium capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 2500^TMGrowth Index measures the performance of those Russell 2500 companies with above average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Small-Mid Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Industrials—22.4%
*	B/E Aerospace, Inc.		197,853		$	12,481
	Fortune Brands Home & Security, Inc.		146,500			5,675
	Graco, Inc.		77,500			4,899
	Healthcare Services Group, Inc.		246,832			6,052
*	Huron Consulting Group, Inc.		109,085			5,044
*	ICF International, Inc.		263,525			8,304
	Manpowergroup, Inc.		107,150			5,872
*	Old Dominion Freight Line, Inc.		191,200			7,958
*	Pandora Media, Inc.		555,902			10,229
	Robert Half International, Inc.		219,100			7,281
*	Standard Parking Corporation		176,418			3,786
*	Stericycle, Inc.		153,870			16,992
	The Corporate Executive Board Co.		126,135			7,974
	TransDigm Group, Inc.		10,175			1,595
*	Trimas Corporation		214,740			8,005
						112,147

	Health Care—19.4%
*	ABIOMED, Inc.		244,938			5,281
*	Align Technology, Inc.		176,003			6,519
*	BioMarin Pharmaceutical, Inc.		139,500			7,783
*	Brookdale Senior Living, Inc.		121,876			3,222
*	Catamaran Corporation†		171,132			8,338
*	Haemonetics Corporation		124,100			5,131
*	HealthSouth Corporation		230,584			6,641
*	HMS Holdings Corporation		236,461			5,510
*	Hologic, Inc.		353,700			6,826
*	IDEXX Laboratories, Inc.		83,300			7,479
*	Mettler-Toledo International, Inc.		22,400			4,507
*	Myriad Genetics, Inc.		70,000			1,881
	Perrigo Co.		92,900			11,241
*	Sirona Dental Systems, Inc.		103,483			6,817
*	Team Health Holdings, Inc.		235,811			9,685
						96,861

	Consumer Discretionary—15.7%
	Dick’s Sporting Goods, Inc.		254,390			12,735
*	Fossil Group, Inc.		49,000			5,062
*	Grand Canyon Education, Inc.		219,100			7,061
*	Jarden Corporation		117,350			5,134
*	K12, Inc.		179,814			4,724
*	LKQ Corporation		242,100			6,234
*	Panera Bread Co.		26,000			4,834
	Polaris Industries, Inc.		54,600			5,187
*	Sally Beauty Holdings, Inc.		268,300			8,344
	Six Flags Entertainment Corporation		104,600			3,678
	Tractor Supply Co.		64,800			7,621
*	Under Armour, Inc.		125,520			7,495
						78,109

	Information Technology—16.6%
*	Akamai Technologies, Inc.		124,900			5,314
*	ANSYS, Inc.		50,500			3,692
*	Aruba Networks, Inc.		252,100			3,872
*	CoStar Group, Inc.		47,910			6,184
*	Envestnet, Inc.		179,483			4,415
	FactSet Research Systems, Inc.		50,900			5,189
*	Gartner, Inc.		146,100			8,326
	Genpact, Ltd.†		373,900			7,194
*	Guidewire Software, Inc.		133,100			5,597

	Issuer	Shares or Principal Amount		Value

	Common Stocks—(continued)

	Information Technology—(continued)
	j2 Global, Inc.		101,700		$	4,323
*	Liquidity Services, Inc.		152,720			5,295
*	RealPage, Inc.		317,860			5,830
*	SolarWinds, Inc.		108,500			4,211
*	Ultimate Software Group, Inc.		21,825			2,560
*	WEX, Inc.		76,900			5,898
*	WNS Holdings, Ltd.—ADR		305,065			5,091
						82,991

	Financials—11.4%
*	Affiliated Managers Group, Inc.		76,109			12,477
	CBOE Holdings, Inc.		160,600			7,490
*	Encore Capital Group, Inc.		120,000			3,973
*	First Cash Financial Services, Inc.		112,443			5,533
	First Republic Bank		97,600			3,756
	FirstService Corporation†		120,041			3,755
	Jones Lang LaSalle, Inc.		83,900			7,647
*	Portfolio Recovery Associates, Inc.		79,200			12,168
						56,799

	Energy—5.2%
	Core Laboratories N.V.†		41,400			6,279
	Helmerich & Payne, Inc.		92,900			5,802
*	KiOR, Inc.		282,897			1,615
*	Oasis Petroleum, Inc.		127,800			4,968
	Oceaneering International, Inc.		104,200			7,523
						26,187

	Materials—3.1%
	Celanese Corporation		125,100			5,605
	Cytec Industries, Inc.		55,200			4,043
	Rockwood Holdings, Inc.		92,900			5,948
						15,596

	Consumer Staples—2.3%
*	Green Mountain Coffee Roasters, Inc.		90,623			6,802
	Nu Skin Enterprises, Inc.		75,100			4,590
						11,392

	Telecommunication Services—1.9%
*	SBA Communications Corporation		129,900			9,628

	Total Common Stocks—98.0% (cost $388,649)					489,710

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13 repurchase price $9,541, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17	$	9,540		$	9,540

	Total Repurchase Agreement—1.9% (cost $9,540)					9,540

	Total Investments—99.9% (cost $398,189)					499,250
	Cash and other assets, less liabilities—0.1%					614
	Net assets—100.0%				$	499,864

ADR = American Depository Receipt
* Non-income producing securities
† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	SMALL CAP GROWTH FUND

	The Small Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Michael P. Balkin Karl W. Brewer	The Small Cap Growth Fund (Class N shares) posted a 23.65% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 2000^®Growth Index (the “Index”), increased 17.44%. Market Review Solid economic and corporate performance provided an upward bias to the market in the first half of the year. Continued improvement in economic data, especially in housing and also employment data, pushed stocks to their 2013 highs through May. In June, the market witnessed its only, albeit minor, hiccup of the year as the Federal Reserve signaled an eventual slowdown in monetary easing (dubbed as the Federal Reserve’s “tapering”). The uncertainty sparked a rapid increase in long-term interest rates from historically low levels, pressuring the fixed income market. Stocks experienced a short-lived correction on worries less quantitative easing may become a drag on the economy and investor psychology. However, the period ended on a positive note, in part as investors realized the Federal Reserve would only taper to the extent the economy stayed on a sustainable path to recovery. Portfolio Results The Fund’s outperformance relative to the Index in the first half of the year is attributable to strong stock selection and a modest benefit from the Fund’s smaller-than-benchmark weighted average market capitalization. We witnessed strong stock selection across all sectors during the period. Pandora Media (Information Technology), National Financial Partners (Financials), Nu Skin Enterprises (Consumer Staples), and WNS Holdings (Information Technology) were the largest contributors to relative return. While Information Technology as a sector contributed positively to relative performance, three of our top detractors were holdings in the sector: Liquidity Services, OSI Systems, and Real Page. Stillwater Mining (Materials) was another top detractor. Outlook Looking forward, the importance of central bank policy over the past few years brings plans for future policy into the forefront. The “tapering” of quantitative easing by the Federal Reserve (i.e., the slowing of its bond buying program) and China’s ability to execute a soft landing for its decelerating economy will be closely watched by the marketplace for its impact on economic growth, global capital flows, and investor psychology. A potential change in leadership at the Federal Reserve could negatively impact investor psychology. However, we believe that U.S. corporate performance remains solid and that U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and growth as well. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the Fund from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the expected growth and consistency of their business.

Semi-Annual Report

June 30, 2013

Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		23.65	%		33.79	%		15.15	%		9.65	%		9.45	%
Class I		23.84			34.15			15.47			9.96			9.75
Russell 2000^® Growth Index		17.44			23.67			19.97			8.89			9.62

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller companies involves special risks, including higher volatility and lower liquidity. Smaller Capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 2000^®Growth Index is an unmanaged composite of the smallest 2000 stocks of the Russell 3000^®Growth Index.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—25.4%
*	Audience, Inc.		544,922		$	7,198
*	Cardtronics, Inc.		211,844			5,847
*	CoStar Group, Inc.		73,470			9,483
*	Envestnet, Inc.		210,806			5,186
*	Exar Corporation		741,344			7,984
*	ExlService Holdings, Inc.		168,570			4,983
*	Inphi Corporation		536,971			5,907
*	Inuvo, Inc.		1,886,947			1,509
	j2 Global, Inc.		150,990			6,419
*	Liquidity Services, Inc.		197,070			6,832
	Monolithic Power Systems, Inc.		216,120			5,211
*	Pandora Media, Inc.		767,688			14,125
*	RealPage, Inc.		239,180			4,386
*	ServiceSource International, Inc.		453,880			4,230
*	SolarWinds, Inc.		124,400			4,828
*	Tangoe, Inc.		542,690			8,374
*	TeleTech Holdings, Inc.		178,940			4,193
*	Ultimate Software Group, Inc.		21,252			2,493
*	WEX, Inc.		66,931			5,134
*	WNS Holdings, Ltd.—ADR		591,999			9,880
						124,202

	Industrials—20.5%
	Acorn Energy, Inc.		456,126			3,850
*	Ameresco, Inc.		272,673			2,457
*	Astronics Corporation		128,900			5,268
	Barrett Business Services, Inc.		108,376			5,658
*	CAI International, Inc.		282,177			6,651
*	Clean Harbors, Inc.		103,890			5,249
*	DigitalGlobe, Inc.		159,720			4,953
*	Franklin Covey Co.		636,031			8,561
*	Furmanite Corporation		749,026			5,011
	Healthcare Services Group, Inc.		275,708			6,760
*	Heritage-Crystal Clean, Inc.		184,994			2,703
*	Hudson Technologies, Inc.		677,684			2,162
*	Huron Consulting Group, Inc.		107,937			4,991
*	ICF International, Inc.		211,414			6,662
*	Old Dominion Freight Line, Inc.		102,090			4,249
*	On Assignment, Inc.		201,335			5,380
*	Trimas Corporation		324,835			12,110
	US Ecology, Inc.		272,169			7,468
						100,143

	Health Care—16.8%
*	ABIOMED, Inc.		169,360			3,651
	Air Methods Corporation		130,706			4,428
*	Cyberonics, Inc.		95,780			4,977
*	ExamWorks Group, Inc.		508,141			10,788
*	Globus Medical, Inc.		389,200			6,562
*	Haemonetics Corporation		173,912			7,191
*	HealthSouth Corporation		223,105			6,425



	Issuer	Shares		Value

	Common Stocks—(continued)

	Health Care—(continued)
*	HMS Holdings Corporation		144,236		$	3,361
*	Nanosphere, Inc.		1,139,618			3,498
*	Novadaq Technologies, Inc.†		405,111			5,453
*	NxStage Medical, Inc.		508,822			7,266
*	Quidel Corporation		185,379			4,733
*	Spectranetics Corporation		389,877			7,283
	Trinity Biotech plc—ADR		360,334			6,072
						81,688

	Financials—13.5%
*	Cowen Group, Inc.		2,475,086			7,178
*	Encore Capital Group, Inc.		304,354			10,077
*	First Cash Financial Services, Inc.		207,102			10,192
	FirstService Corporation†		147,838			4,624
	FXCM, Inc.		344,130			5,647
	GFI Group, Inc.		1,682,831			6,580
*	ICG Group, Inc.		519,881			5,927
	Jones Lang LaSalle, Inc.		70,134			6,392
	Manning & Napier, Inc.		229,182			4,070
	Marlin Business Services Corporation		232,681			5,300
						65,987

	Consumer Discretionary—8.5%
	Dorman Products, Inc.		102,161			4,661
*	Gentherm, Inc.		605,314			11,241
*	K12, Inc.		209,672			5,508
	MDC Partners, Inc.†		251,432			4,536
*	SHFL Entertainment, Inc.		372,543			6,598
	Six Flags Entertainment Corporation		191,602			6,737
*	U.S. Auto Parts Network, Inc.		1,985,154			2,283
						41,564

	Materials—5.3%
	Compass Minerals International, Inc.		57,240			4,838
	Cytec Industries, Inc.		34,710			2,543
	HB Fuller Co.		118,770			4,491
*	Horsehead Holding Corporation		551,481			7,064
*	Stillwater Mining Co.		636,486			6,836
						25,772

	Energy—5.2%
*	Atwood Oceanics, Inc.		96,232			5,009
*	Dril-Quip, Inc.		32,006			2,890
	Gulfmark Offshore, Inc.		80,450			3,627
*	Hornbeck Offshore Services, Inc.		78,159			4,181
*	Oasis Petroleum, Inc.		135,890			5,282
*	PDC Energy, Inc.		71,598			3,686
						24,675

	Consumer Staples—2.5%
	Nu Skin Enterprises, Inc.		194,713			11,901

	Total Common Stocks—97.6% (cost $396,167)					476,391

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $8,418, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$8,418		$	8,418

Total Repurchase Agreement—1.7% (cost $8,418)					8,418

Total Investments—99.3% (cost $404,585)					484,809
Cash and other assets, less liabilities—0.7%					3,611
Net assets—100.0%				$	488,420

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

If the Fund’s portfolio holdings represent ownership of 5% or more of the voting securities of a company, the company is deemed to be an affiliate as defined in the Investment Company Act of 1940. The Small Cap Growth Fund had the following transactions during the period ended June 30, 2013 with companies deemed affiliated during the period or at June 30, 2013.

		Share Activity				Period Ended June 30, 2013
						(in thousands)
	Security Name	Balance 12/31/2012	Purchases	Sales	Balance 6/30/2013	Value		Dividends Included in Income
π	Inuvo, Inc.	1,886,947	—	—	1,886,947	$	1,509	—
π	U.S. Auto Parts Network, Inc.	1,091,812	893,342	—	1,985,154		2,283	—
						$	3,792	—

π	Affiliated company at June 30, 2013. The Small Cap Growth Fund’s total value in companies deemed to be affiliated at June 30, 2013 was $ 3,792 (in thousands).

Affiliated companies accounted for $(934) of change in net unrealized appreciation on investments during the period.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	GLOBAL MARKETS OVERVIEW FUND

	Market Summary & Outlook

	The global equity market rallied early in 2013, led by Japan on expectations of pro-growth fiscal and monetary policies. The United States also rose on solid economic data and the sequester non-event, while the USD rallied against most major currencies. In addition, corporate earnings results were generally better than expected, boosting the equity market, along with positive fund flows into equities as investors rotated out of fixed income and cash. This rally faltered in the second quarter as investors viewed Japanese Prime Minister Abe’s announced “third arrow” growth measures as underwhelming, and as Fed Chairman Ben Bernanke announced the Fed would begin tapering its bond purchases in 2014, leading to increased bond yields globally and a strengthening U.S. Dollar (USD). While 10 Year U.S. Treasury yields increased nearly 100 basis points, the impact of changing Fed policy was also felt heavily in emerging markets (EM), as bond yields increased and as investors, who searched for yield in a low yielding post Global Financial Crisis environment, began withdrawing from the bond markets, with equity outflows accelerating as well. In addition, as the carry trade began to unwind, the USD accelerated versus EM currencies, with commodity-exporting and current account deficit countries bearing the brunt of the currency decline. The market’s consternation increased when SHIBOR (the Chinese interbank lending rate) spiked to over 13% in mid-late June, raising concerns about Chinese banking system stability. While the Peoples Bank of China eventually made statements to assuage investor concerns about banking system liquidity, investors began to reduce their growth expectations for China as it appeared that the new government was willing to sacrifice some short term growth in order to implement longer term structural changes. Within this environment, the global equity market fell 0.47% during the second quarter as represented by the MSCI All Country World IMI Index (net), but rose 6.40% year to date, led by the U.S., which was up 2.59% and 13.67%, respectively. Year to date, Japan was up approximately 16% (33% in local terms), while Europe rose 3.52%, led by Switzerland, Ireland, and core Europe. Conversely, Pacific ex-Japan fell 5.38%, led on the downside by Australia, as its currency weakened significantly and as commodity prices eased. Emerging markets fell sharply during the period, down approximately 8.89% year to date, as represented by the MSCI Emerging Markets IMI Index (net). As a result, emerging markets underperformed developed markets by approximately 17.5% year to date in USD terms, the most underperformance in six months since the late 1990s Asian Financial Crisis.Year to date Latin America fell 15.07%, led on the downside by Brazil, which more than offset relative strength in Mexico, which was bolstered by improving economic activity in the U.S. EM Asia fell 5.70% year to date, as China fell 9.53%, on concerns about slowing growth and financial system stability. This decline was somewhat offset by Indonesia’s 7% rally year to date, along with a 2.3% return in Taiwan. EMEA (Emerging Europe, Mid-East, Africa) fell approximately 13% year to date, as weakness in Russia and South Africa (commodity exporters) and Turkey (demonstrations) more than offset positive Hungary and Israeli markets. Year to date, the MSCI World Small Cap Index (net) rose 10.42%, ahead of the 8.43% MSCI World Index (net) return, due to significant outperformance of U.K. and U.S. small cap stocks during the period. Within emerging markets EM small cap stocks outpaced their larger cap counterparts by nearly 6%, on stronger returns in Asia, particularly China and the ASEAN countries. From a sector perspective Healthcare was the strongest sector globally, up approximately 17%, due largely to Biotech and Life Sciences strength, followed by Discretionary, which rallied 14.84%. The Resources sectors were the laggards year to date, with Materials down 13.88%, driven on the downside by Metals/Mining, which was down over 30% on concerns about EM prospective demand. Energy was largely flat during the period as underperformance in Oil/Gas was largely mitigated by positive returns in Services. From a style perspective, companies with strong earnings trends and price momentum performed well globally, with particular strength outside the U.S., while high quality companies did well in emerging markets.

Semi-Annual Report

June 30, 2013

	GLOBAL LEADERS FUND

	The Global Leaders Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

W. George Greig Kenneth J. McAtamney David C. Fording	The William Blair Global Leaders Fund (Class N shares) posted a 4.65% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI All Country World IMI Index (net) (the “Index”), increased 6.40%. Despite its second quarter outperformance, the Fund’s underperfomance against the Index year to date was driven by underperformance in Information Technology (“IT”) and Telecom Services. IT stock selection was hampered by underperformance by Samsung on concerns of declining margins and Solarwinds on negative sentiment following the price paid for its recent announced acquisition. Accenture and SAP also detracted from performance as Accenture warned on near term revenue growth, while SAP missed expectations on lower revenue growth than expected. The Fund’s sole Telecom Services holding, China Mobile, also detracted from results both on negative China sentiment more broadly, but also on concerns about the cost of building the new LTE network and potential earnings impact. Offsetting these negatives was strong Financials and Industrials stock selection, coupled with overall sector positioning. Japanese and U.S. Financials boosted overall sector performance, while Industrials performance was augmented by good operating performance by Rolls-Royce, low cost airline Easyjet and Fortune Brands Home & Security. The United States continues to be the developed economy demonstrating the strongest economic resilience, and we are especially encouraged by the data from the housing market leading to positive implications for labor and overall consumer spending. At the same time, input costs remain subdued in the form of both low/stable wages and lower energy prices. This is bolstering domestic manufacturing activity. Despite the market’s consternation about the Federal Reserve tapering the bond purchasing program, leading to an interest rate tightening cycle, we believe the U.S. economy’s underlying strength without material attendant inflation can remain in an enviable range for economic growth and equities. Year to date the biggest change to Fund positioning was a 5% increase in U.S. holdings. We continue to find the prospects for a resurgent Japan promising. Though evidence of Prime Minister Abe’s “third arrow” of corporate reform remains anecdotal, we are focusing our research on those companies that have demonstrated high or improving returns, growth potential, and shareholder orientation on par with leading companies globally. While we remain modestly underweighted in Japan, we increased its weighting and are evaluating several potential additions to the Fund. We also increased Industrials to approximately 20% of the Fund, well ahead of the 11.4% Index weighting, due to additions in the U.S., U.K., and Japan, which more than offset a reduction in Europe Ex-U.K. Sources of funds for these additions included emerging markets, which decreased to approximately 8.4% as of June 30, along with Resources and Telecom Services. As of June 30, the largest sector overweightings were Consumer Discretionary, Industrials, and IT at the expense of Resources and Staples.

June 30, 2013

William Blair Funds

Global Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Year to Date			1 Year			3 Year			5 Year			Since Inception
Class N(a)		4.65	%		12.93	%		14.83	%		1.89	%		0.02	%
Class I(a)		4.65			13.17			15.06			2.11			0.28
MSCI ACW IMI (net)(a)		6.40			17.08			12.60			2.79			(0.35	)
Institutional Class(b)		4.75			—			—			—			4.42
MSCI ACW IMI (net)(b)		6.40			—			—			—			6.04

(a)	Since inception is for the period from October 15, 2007 (Commencement of Operations) to June 30, 2013.
(b)	Since inception is for the period from December 19, 2012 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower liquidity. Smaller and medium capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution fees (12b-1). Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) All Country World (ACW) Investable Market Index (IMI) (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market of developed and emerging markets. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Global Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	*Common Stocks*

	*Western Hemisphere—48.3%*

	Canada—1.4%
	Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		49,713		$	1,791

	United States—46.9%
*	Affiliated Managers Group, Inc. (Capital markets)		11,281			1,849
	American Express Co. (Consumer finance)		36,685			2,743
*	Citrix Systems, Inc. (Software)		22,775			1,374
	Colgate-Palmolive Co. (Household products)		22,682			1,299
	Costco Wholesale Corporation (Food & staples retailing)		20,638			2,282
	Covidien plc (Health care equipment & supplies)†		31,771			1,997
*	Discovery Communications, Inc. (Media)		29,898			2,308
*	Express Scripts Holding Co. (Health care providers & services)		34,491			2,128
	Exxon Mobil Corporation (Oil, gas & consumable fuels)		25,041			2,262
	Fortune Brands Home & Security, Inc. (Building products)		57,795			2,239
*	Green Mountain Coffee Roasters, Inc. (Food products)		20,725			1,556
	Harley-Davidson, Inc. (Automobiles)		39,336			2,156
*	IDEXX Laboratories, Inc. (Health care equipment & supplies)		16,395			1,472
	Invesco, Ltd. (Capital markets)†		55,080			1,752
*	Jacobs Engineering Group, Inc. (Construction & engineering)		32,373			1,785
	Jones Lang LaSalle, Inc. (Real estate management & development)		18,585			1,694
	JPMorgan Chase & Co. (Diversified financial services)		60,574			3,198
	Marriott International, Inc. Class “A” (Hotels, restaurants & leisure)		45,991			1,857
	Mastercard, Inc. (IT services)		4,437			2,549
*	O’Reilly Automotive, Inc. (Specialty retail)		14,280			1,608
*	Old Dominion Freight Line, Inc. (Road & rail)		21,768			906
*	priceline.com, Inc. (Internet & catalog retail)		2,827			2,338
	QUALCOMM, Inc. (Communications equipment)		31,946			1,951
	Schlumberger, Ltd. (Energy equipment & services)†		36,938			2,647
*	SolarWinds, Inc. (Software)		28,226			1,095
	Starbucks Corporation (Hotels, restaurants & leisure)		22,077			1,446
	The Toro Co. (Machinery)		18,087			821
	The Walt Disney Co. (Media)		40,550			2,561
	Union Pacific Corporation (Road & rail)		17,476			2,696
	Williams-Sonoma, Inc. (Specialty retail)		40,314			2,253
						58,822

	Europe, Mid-East—20.0%

	Denmark—1.0%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		8,054			1,255

	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Europe, Mid-East—(continued)*

	France—4.6%
	BNP Paribas S.A. (Commercial banks)		43,059		$	2,353
	Christian Dior S.A. (Textiles, apparel & luxury goods)		12,146			1,960
	Technip S.A. (Energy equipment & services)		14,527			1,475
						5,788

	Germany—2.8%
	Bayerische Motoren Werke AG (Automobiles)		22,694			1,985
	MTU Aero Engines AG (Aerospace & defense)		7,643			737
	SAP AG (Software)		9,713			711
						3,433

	Ireland—2.4%
	Accenture plc Class “A” (IT services)†		28,748			2,069
	Paddy Power plc (Hotels, restaurants & leisure)		11,283			968
						3,037

	Israel—1.1%
*	Check Point Software Technologies, Ltd. (Software)†		28,127			1,397

	Sweden—1.8%
	Atlas Copco AB Class “A” (Machinery)		92,470			2,234

	Switzerland—6.3%
	Nestle S.A. (Food products)		18,177			1,192
	Partners Group Holding AG (Capital markets)		7,135			1,932
	Roche Holding AG (Pharmaceuticals)		12,463			3,101
	Syngenta AG (Chemicals)		4,375			1,712
						7,937

	*United Kingdom—12.9%*
	ARM Holdings plc (Semiconductors & semiconductor equipment)		133,062			1,609
	Ashmore Group plc (Capital markets)		154,141			806
	Babcock International Group plc (Commercial services & supplies)		48,284			810
	BHP Billiton plc (Metals & mining)		75,691			1,936
	Compass Group plc (Hotels, restaurants & leisure)		174,594			2,231
	Diageo plc (Beverages)		42,186			1,206
	easyJet plc (Airlines)		95,817			1,889
	Experian plc (Professional services)		113,801			1,978
	Hargreaves Lansdown plc (Capital markets)		53,508			723
*	Rolls-Royce Holdings plc (Aerospace & defense)		110,078			1,898
	The Weir Group plc (Machinery)		33,492			1,096
						16,182

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Global Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Shares		Value

*Common Stocks—(continued)*

*Japan—6.2%*
Daikin Industries, Ltd. (Building products)		31,400		$	1,270
Makita Corporation (Machinery)		33,400			1,805
Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		59,500			2,730
Yahoo! Japan Corporation (Internet software & services)		4,055			1,999
					7,804

Emerging Asia—5.9%

India—1.1%
Tata Motors, Ltd. (Automobiles)		304,595			1,442

Indonesia—0.9%
PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		1,470,000			1,148

South Korea—2.0%
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		2,093			2,459

Taiwan—1.9%
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		130,661			2,394

Asia—1.6%

Hong Kong—1.6%
AIA Group, Ltd. (Insurance)		466,600			1,976

Emerging Europe, Mid-East, Africa—1.3%

South Africa—0.6%
Bidvest Group, Ltd. (Industrial conglomerates)		31,765			787

Turkey—0.7%
Turkiye Halk Bankasi A.S. (Commercial banks)		103,121			874

Emerging Latin America—1.2%

Panama—1.2%
Copa Holdings S.A. Class “A” (Airlines)†		11,831			1,551

Total Common Stocks—97.4% (cost $113,425)					122,311

Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $1,641, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$1,641		$	1,641

Total Repurchase Agreement—1.3% (cost $1,641)					1,641

Total Investments—98.7% (cost $115,066)					123,952
Cash and other assets, less liabilities—1.3%					1,660
Net assets—100.0%				$	125,612

ADR = American Depository Receipt

† = U.S. listed foreign security

* Non-income producing securities

For securities primarily traded on exchanges or markets that close before the close of regular trading on the New York Stock Exchange, the Fund may use an independent pricing service to fair value price the securities pursuant to Valuation Procedures approved by the Board of Trustees.

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Consumer Discretionary	20.6	%
Industrials	20.0	%
Financials	19.4	%
Information Technology	17.5	%
Health Care	8.1	%
Consumer Staples	6.2	%
Energy	5.2	%
Materials	3.0	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

U.S. Dollar	55.6	%
British Pound Sterling	13.2	%
Euro	8.4	%
Swiss Franc	6.5	%
Japanese Yen	6.4	%
South Korean Won	2.0	%
Swedish Krona	1.8	%
Hong Kong Dollar	1.6	%
Indian Rupee	1.2	%
Danish Krone	1.0	%
All Other Currencies	2.3	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	GLOBAL SMALL CAP GROWTH FUND

	The Global Small Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Andrew G. Flynn Matthew A. Litfin Karl W. Brewer Jeffrey A. Urbina	The William Blair Global Small Cap Growth Fund (Class N shares) posted a 3.00% increase, net of fees, since its inception date of April 10, 2013. By comparison, the Fund’s benchmark index, the MSCI ACW Small Cap Index (net) (the “Index”), increased 0.75%. The Fund’s outperformance relative to the Index since inception was precipitated by strong performance across most sectors and regions. In particular, the Fund’s Consumer Discretionary holdings were up approximately 13%, well ahead of the 5.69% Index return, with significant value added across Media, Specialty Retail and Textiles/Apparel/Luxury Goods holdings. In addition, Grand Canyon Education, the U.S. for profit education company, outperformed as results were ahead of expectations and management increased guidance. Industrials benefited from strong performance in Aerospace/Defense and Airlines, along with good results by Keller Group, the U.K. ground engineering contractor, as North American revenues were significantly above expectations. Materials performance was augmented by limited Metals/Mining exposure and strong stock selection versus the Index. Somewhat detracting from results was overall regional positioning, given the Fund’s underweighting in the U.S. and, to some extent, the U.K. and overweighting in Latin America. Cash also detracted from results during the initial funding stage, given the market rally during that time. As of June 30, the Fund’s largest weighting was in Industrials, which was 24.1%, above the 17.3% Index weighting, due to a focus in services-oriented and trading companies. Other significant Fund exposures included Consumer Discretionary (17.9%) and Information Technology (15.2%). Financials, which represented 15.9%, was below the approximately 22% Index weighting, due to lower exposure in developed markets including the U.S., despite the higher weighting in emerging markets. Materials was the most underweighted sector at June 30, approximating 3% of the portfolio, well below the 8.6% Index weighting, as the Fund only held Chemicals names. Regionally, 11.0% of the Fund was invested in the U.K., well above the 6.7% Index weighting, while the U.S. was 46.0%, below the 51.9% Index exposure despite significant Industrials holdings. Conversely, emerging markets totaled 12.7% of the Fund, above the 10.8% Index weighting, due largely to Europe, the Middle East and Africa.

June 30, 2013

William Blair Funds

Global Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Since
	Inception(a)
Class N		3.00	%
Class I		3.10
MSCI ACW Small Cap Index (net)		0.75

(a)	For the period from April 10, 2013 (Commencement of Operations) to June 30, 2013.

Note:	Chart is excluded since the Fund is less than six months old.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower liquidity. Smaller and medium capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. From time to time, the investment advisor may waive fees or reimburse expenses to the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institututional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) All Country World (ACW) Small Cap Index (net) is a free float-adjusted market capitalization index designed to measure global developed and emerging market small capitalization equity performance. The Index is unmanaged, does not incur fees or expenses, and cannot be invested in directly.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Global Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Western Hemisphere—48.5%

	Canada—2.5%
*	Legacy Oil + Gas, Inc. (Oil, gas & consumable fuels)		10,126		$	48
	Precision Drilling Corporation (Energy equipment & services)		9,095			77
	Trilogy Energy Corporation (Oil, gas & consumable fuels)		5,242			156
						281

	United States—46.0%
*	Align Technology, Inc. (Health care equipment & supplies)		3,270			121
	Allegiant Travel Co. (Airlines)		1,210			128
*	Aruba Networks, Inc. (Communications equipment)		4,565			70
*	Astronics Corporation (Aerospace & defense)		2,912			119
*	Atwood Oceanics, Inc. (Energy equipment & services)		1,371			71
*	CAI International, Inc. (Trading companies & distributors)		3,862			91
*	Cardtronics, Inc. (IT services)		4,826			133
	CBOE Holdings, Inc. (Diversified financial services)		3,333			156
*	CoStar Group, Inc. (Internet software & services)		1,075			139
*	Cyberonics, Inc. (Health care equipment & supplies)		2,788			145
*	Encore Capital Group, Inc. (Consumer finance)		3,266			108
*	Envestnet, Inc. (Internet software & services)		4,346			107
*	First Cash Financial Services, Inc. (Consumer finance)		2,052			101
*	Gentherm, Inc. (Auto components)		5,444			101
*	Globus Medical, Inc. Class “A” (Health care equipment & supplies)		6,143			104
	Graco, Inc. (Machinery)		1,667			105
*	Grand Canyon Education, Inc. (Diversified consumer services)		4,220			136
*	Guidewire Software, Inc. (Software)		2,572			108
*	Haemonetics Corporation (Health care equipment & supplies)		3,338			138
	Healthcare Services Group, Inc. (Commercial services & supplies)		4,879			120
*	HealthSouth Corporation (Health care providers & services)		5,255			151
	HEICO Corporation (Aerospace & defense)		2,666			134
*	Huron Consulting Group, Inc. (Professional services)		2,487			115
	j2 Global, Inc. (Internet software & services)		2,841			121
	Jones Lang LaSalle, Inc. (Real estate management & development)		1,510			138
*	K 12, Inc. (Diversified consumer services)		3,961			104
*	Middleby Corporation (Machinery)		453			77
	Nu Skin Enterprises, Inc. Class “A” (Personal products)		2,673			163
*	Old Dominion Freight Line, Inc. (Road & rail)		2,885			120

	Issuer	Shares		Value

	Common Stocks—(continued)

	Western Hemisphere—(continued)
*	Portfolio Recovery Associates, Inc. (Consumer finance)		963		$	148
	Robert Half International, Inc. (Professional services)		2,276			76
	Rollins, Inc. (Commercial services & supplies)		4,697			122
*	Signature Bank (Commercial banks)		1,770			147
*	Sirona Dental Systems, Inc. (Health care equipment & supplies)		2,446			161
	Six Flags Entertainment Corporation (Hotels, restaurants & leisure)		3,276			115
*	Standard Parking Corporation (Commercial services & supplies)		4,973			107
*	Team Health Holdings, Inc. (Health care providers & services)		3,360			138
	Texas Roadhouse, Inc. (Hotels, restaurants & leisure)		4,731			118
	The Corporate Executive Board Co. (Professional services)		1,953			124
	The Toro Co. (Machinery)		2,415			110
	US Ecology, Inc. (Commercial services & supplies)		4,664			128
	Watsco, Inc. (Trading companies & distributors)		1,322			111
*	WEX, Inc. (IT services)		1,254			96
	Williams-Sonoma, Inc. (Specialty retail)		1,810			101
						5,226

	United Kingdom—11.0%
*	ASOS plc (Internet & catalog retail)		1,537			95
	Aveva Group plc (Software)		2,894			99
	AZ Electronic Materials S.A. (Chemicals)		21,228			99
	Cineworld Group plc (Media)		17,393			90
*	Countrywide plc (Real estate management & development)		14,391			111
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		8,867			90
	Keller Group plc (Construction & engineering)		8,549			129
	Rightmove plc (Media)		3,799			120
	Senior plc (Machinery)		27,348			104
	Spirax-Sarco Engineering plc (Machinery)		2,585			106
	Ted Baker plc (Textiles, apparel & luxury goods)		4,252			110
	The Restaurant Group plc (Hotels, restaurants & leisure)		12,142			92
						1,245

	Europe—10.3%

	Belgium—0.9%
	Melexis N.V. (Semiconductors & semiconductor equipment)		2,740			58
*	ThromboGenics N.V. (Biotechnology)		1,237			47
						105

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Global Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe—(continued)

	Denmark—1.1%
	GN Store Nord A/S (Health care equipment & supplies)		6,290		$	119

	France—0.8%
*	GameLoft SE (Software)		13,302			93

	Germany—1.9%
	Bertrandt AG (Professional services)		708			76
	Wincor Nixdorf AG (Computers & peripherals)		2,531			137
						213

	Italy—2.4%
	Azimut Holding SpA (Capital markets)		6,694			122
	Brembo SpA (Auto components)		8,486			151
						273

	Norway—3.2%
	Borregaard ASA (Chemicals)		30,641			134
	Fred Olsen Energy ASA (Energy equipment & services)		2,133			84
	Opera Software ASA (Internet software & services)		10,152			79
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		2,442			71
						368

	Japan—8.2%
	ABC-Mart, Inc. (Specialty retail)		1,800			70
	Kakaku.com, Inc. (Internet software & services)		3,600			110
	MISUMI Group, Inc. (Trading companies & distributors)		2,700			74
	MonotaRO Co., Ltd. (Trading companies & distributors)		3,100			76
	Nihon M&A Center, Inc. (Professional services)		1,300			73
	Park24 Co., Ltd. (Commercial services & supplies)		6,300			114
	Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		500			60
	Sundrug Co., Ltd. (Food & staples retailing)		1,800			76
	TS Tech Co., Ltd. (Auto components)		3,600			114
	United Arrows, Ltd. (Specialty retail)		4,000			167
						934

	Emerging Asia—6.5%

	China—2.3%
	China Medical System Holdings, Ltd. (Pharmaceuticals)		94,000			84
	Hilong Holding, Ltd. (Energy equipment & services)		161,000			95
	Sunny Optical Technology Group Co., Ltd. (Electronic equipment, instruments & components)		67,000			81
						260

	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)

	Indonesia—0.5%
*	PT Bank Tabungan Pensiunan Nasional Tbk (Commercial banks)		132,000		$	55

	Malaysia—0.9%
	Guinness Anchor Bhd (Beverages)		11,600			70
	Silverlake Axis, Ltd. (Software)		48,000			28
						98

	Philippines—0.6%
*	East West Banking Corporation (Commercial banks)		101,700			70

	Taiwan—0.9%
	Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		22,000			107

	Thailand—1.3%
	LPN Development PCL (Real estate management & development)		110,200			86
	Tisco Financial Group PCL (Commercial banks)		49,310			65
						151

	Emerging Europe, Mid-East, Africa—4.4%

	Kenya—1.1%
	Safaricom, Ltd. (Wireless telecommunication services)		1,621,000			124

	Poland—0.5%
	LPP S.A. (Textiles, apparel & luxury goods)		32			63

	South Africa—1.3%
	Coronation Fund Managers, Ltd. (Capital markets)		11,570			74
	Oceana Group, Ltd. (Food products)		8,489			72
						146

	Turkey—1.5%
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		15,968			100
	Turkiye Sinai Kalkinma Bankasi A.S. (Commercial banks)		67,774			67
						167

	Asia—3.8%

	Australia—1.9%
	carsales.com, Ltd. (Internet software & services)		9,987			86
	DuluxGroup, Ltd. (Chemicals)		20,000			77
	FlexiGroup, Ltd. (Consumer finance)		13,556			54
						217

	New Zealand—1.0%
	Ryman Healthcare, Ltd. (Health care providers & services)		21,259			105

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Global Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Shares or
	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Asia—(continued)

Singapore—0.9%
ARA Asset Management Ltd.—144A (Capital markets)		74,000		$	102

Emerging Latin America—1.8%

Brazil—1.2%
Iguatemi Empresa de Shopping Centers S.A. (Real estate management & development)		5,800			57
Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		5,800			79
					136

Mexico—0.6%
Banregio Grupo Financiero S.A.B. de C.V. (Commercial banks)		13,474			71

Total Common Stocks—94.5% (cost $10,375)					10,729

Exchange-Traded Fund

India—1.4%
Market Vectors India Small—Cap Index ETF		22,125			157

Total Exchange-Traded Fund—1.4% (cost $198)					157

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $238, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$238			238

Total Repurchase Agreement—2.1% (cost $238)					238

Total Investments—98.0% (cost $10,811)					11,124
Cash and other assets, less liabilities—2.0%					230
Net assets—100.0%				$	11,354

* Non-income producing securities

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Industrials	24.1	%
Consumer Discretionary	17.9	%
Financials	15.9	%
Information Technology	15.2	%
Health Care	12.6	%
Energy	5.5	%
Consumer Staples	3.5	%
Materials	2.8	%
Exchange-Traded Funds	1.4	%
Telecommunication Services	1.1	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

U.S. Dollar	49.4	%
British Pound Sterling	11.4	%
Japanese Yen	8.6	%
Euro	6.9	%
Norwegian Krone	3.4	%
Canadian Dollar	2.6	%
Hong Kong Dollar	2.4	%
Australian Dollar	2.0	%
Turkish Lira	1.5	%
Thai Baht	1.4	%
South African Rand	1.3	%
Brazilian Real	1.3	%
Singapore Dollar	1.2	%
Kenyan Shilling	1.1	%
Danish Krone	1.1	%
All Other Currencies	4.4	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	INTERNATIONAL GROWTH FUND

	The International Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

W. George Greig Jeffrey A. Urbina Simon Fennell	The William Blair International Growth Fund (Class N shares) posted a 1.96% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI ACW Ex-U.S. IMI Index (net) (the “Index”), increased 0.18%. The Fund outperformed the Index as its Consumer Discretionary, Financials, and Materials stock selection was strong, and due to the Fund’s higher weighting in Consumer Discretionary at the expense of Resources. Consumer Discretionary performance was driven by Fuji Heavy, coupled with strong performance in Auto Components, Specialty Retail, and Media. Financials stock selection was bolstered by the 5.3% Commercial Banks return, as compared to the -1.4% Index return, in addition to strong performance by Japanese holdings and Insurance. Materials stock selection benefited from outperformance in the underweighted Metals/Mining industry. The Fund’s focus on companies with above average earnings trends and positive price momentum added value year to date, offsetting the higher quality focus and higher valuation, which hampered results. Somewhat mitigating these performance drivers were underperformance in Oil/Gas and in Europe ex-U.K. more broadly. We increased the Fund’s weighting in Japan from 13.6% at the end of 2012 on an improving fiscal/monetary policy outlook, coupled with improving earnings and moderate valuations. However, in May we reduced the Fund’s weighting in Japan from nearly 18% down to 15.5%, on concerns about valuation, but began increasing the weighting again in June after the market underperformed. As of June 30, the Fund maintained an approximate market weight of 16.5% in Japan, tilted towards Consumer Discretionary and Financials holdings. The U.K. increased from 18.1% to 24.2% of the Fund, well above the 13.7% Index weighting, due primarily to higher weightings in Consumer Discretionary, Financials (Insurers), and Industrials. Emerging markets were reduced from approximately 22% to 19.4%, both due to emerging markets underperformance, coupled with reductions in Korea, South Africa, and Brazil. From a sector perspective, the Fund’s largest weighting was in Financials, which totaled 27.0% of the Fund, above the 25.6% Index weighting, due to higher Capital Markets and Insurance weightings, which more than offset the lower weighting in Commercial Banks. Industrials and Consumer Discretionary each approximated 17% of the Fund, above the Index weighting, while Resources were significantly underweighted at approximately 8% of the Fund, well below the 18% Index weighting.

Semi-Annual Report

June 30, 2013

International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		1.96	%		17.13	%		10.56	%		(0.13	)%		8.94	%
Class I		2.14			17.45			10.87			0.17			9.25
MSCI ACW Ex-U.S. IMI (net)		0.18			13.91			8.13			(0.41	)		8.95

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) All Country World (ACW) Ex-U.S. Investable Market Index (IMI) (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the United States. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Shares		Value

Common Stocks

Europe—28.2%

Austria—0.1%
Andritz AG (Machinery)		76,092		$	3,905

Belgium—0.4%
Colruyt S.A. (Food & staples retailing)		290,449			15,275

Denmark—0.7%
GN Store Nord A/S (Health care equipment & supplies)		1,049,292			19,832
SimCorp A/S (Software)		273,400			8,111
					27,943

Finland—1.5%
Kone Oyj (Machinery)		232,336			18,463
Sampo (Insurance)		1,032,299			40,230
					58,693
France—4.9%
AXA S.A. (Insurance)		3,003,033			59,005
BNP Paribas S.A. (Commercial banks)		566,292			30,940
Hermes International (Textiles, apparel & luxury goods)		43,320			13,984
Publicis Groupe S.A. (Media)		393,947			28,049
Societe BIC S.A. (Commercial services & supplies)		13,050			1,308
Unibail-Rodamco SE (Real estate investment trusts (REITs))		201,025			46,838
Zodiac Aerospace (Aerospace & defense)		48,980			6,484
					186,608

Germany—5.6%
Adidas AG (Textiles, apparel & luxury goods)		290,902			31,481
Bayer AG (Pharmaceuticals)		503,678			53,715
Bayerische Motoren Werke AG (Automobiles)		686,508			60,032
Bertrandt AG (Professional services)		54,018			5,802
Brenntag AG (Trading companies & distributors)		105,977			16,098
Deutsche Wohnen AG (Real estate management & development)		917,068			15,572
Gerry Weber International AG (Textiles, apparel & luxury goods)		51,586			2,182
MTU Aero Engines AG (Aerospace & defense)		203,543			19,632
Wincor Nixdorf AG (Computers & peripherals)		162,392			8,806
					213,320

Italy—1.6%
Azimut Holding SpA (Capital markets)		667,642			12,158
Banca Generali SpA (Capital markets)		260,522			5,616
Brembo SpA (Auto components)		193,675			3,456
Intesa Sanpaolo SpA (Commercial banks)		16,979,569			27,207
Tod’s SpA (Textiles, apparel & luxury goods)		98,438			13,915
					62,352

	Issuer	Shares		Value

	Common Stocks—(continued)

	Luxembourg—0.1%
*	Eurofins Scientific (Life sciences tools & services)		23,494		$	4,963

	Netherlands—1.6%
	Unilever N.V. (Food products)		1,573,083		$	61,950

	Norway—3.5%
*	Algeta ASA (Biotechnology)		125,365			4,771
	Fred Olsen Energy ASA (Energy equipment & services)		150,866			5,961
	Prosafe SE (Energy equipment & services)		609,213			5,351
	Statoil ASA (Oil, gas & consumable fuels)		2,673,972			55,158
	Telenor ASA (Diversified telecommunication services)		2,311,571			45,818
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		577,852			16,790
						133,849

	Spain—0.1%
	Viscofan S.A. (Food products)		36,731			1,840

	Sweden—1.2%
	Atlas Copco AB Class “A” (Machinery)		1,454,149			35,128
	Hexpol AB (Chemicals)		165,901			10,811
						45,939

	Switzerland—6.9%
	Burckhardt Compression Holding AG (Machinery)		14,258			5,676
*	Credit Suisse Group AG (Capital markets)		2,005,034			53,175
	Geberit AG (Building products)		109,554			27,175
	Glencore Xstrata plc (Metals & mining)		13,778,882			57,034
	Partners Group Holding AG (Capital markets)		87,548			23,705
	Roche Holding AG (Pharmaceuticals)		316,608			78,771
	SGS S.A. (Professional services)		9,852			21,163
						266,699

	*United Kingdom—24.2%*
	Abcam plc (Biotechnology)		1,032,007			7,118
	Aberdeen Asset Management plc (Capital markets)		2,813,276			16,379
	Amlin plc (Insurance)		2,410,896			14,422
	Antofagasta plc (Metals & mining)		794,581			9,608
	ARM Holdings plc (Semiconductors & semiconductor equipment)		549,221			6,641
	Ashmore Group plc (Capital markets)		1,305,974			6,827
	AZ Electronic Materials S.A. (Chemicals)		1,177,339			5,501
	Babcock International Group plc (Commercial services & supplies)		1,915,640			32,137
	Berkeley Group Holdings plc (Household durables)		889,740			28,838
	Big Yellow Group plc (Real estate investment trusts (REITs))		959,247			5,611
	BT Group plc (Diversified telecommunication services)		8,866,529			41,697
	Bunzl plc (Trading companies & distributors)		997,727			19,424
	Capita plc (Professional services)		1,050,949			15,441

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	*United Kingdom—(continued)*
	Compass Group plc (Hotels, restaurants & leisure)		3,004,472		$	38,385
	Daily Mail & General Trust plc (Media)		1,169,534			13,688
	Derwent London plc (Real estate investment trusts (REITs))		227,568			7,961
	Diageo plc (Beverages)		1,609,633			46,026
	Dunelm Group plc (Specialty retail)		1,032,488			14,871
	easyJet plc (Airlines)		1,233,540			24,315
	Elementis plc (Chemicals)		2,209,133			7,372
	Experian plc (Professional services)		1,276,640			22,194
	GlaxoSmithKline plc (Pharmaceuticals)		1,916,860			48,047
	Halma plc (Electronic equipment, instruments & components)		1,365,998			10,461
	Hargreaves Lansdown plc (Capital markets)		478,172			6,458
	Hiscox, Ltd. (Insurance)		1,115,330			9,661
	Howden Joinery Group plc (Specialty retail)		2,201,695			8,485
	IG Group Holdings plc (Diversified financial services)		1,280,360			11,295
	IMI plc (Machinery)		811,162			15,298
	InterContinental Hotels Group plc (Hotels, restaurants & leisure)		1,360,031			37,399
	ITV plc (Media)		19,220,646			40,956
	John Wood Group plc (Energy equipment & services)		1,635,209			20,133
	Jupiter Fund Management plc (Capital markets)		1,724,240			7,597
	Keller Group plc (Construction & engineering)		374,316			5,642
	Lancashire Holdings, Ltd. (Insurance)		1,081,998			13,034
	Meggitt plc (Aerospace & defense)		1,934,732			15,228
	Moneysupermarket.com Group plc (Internet software & services)		3,081,548			8,980
*	Nanoco Group plc (Semiconductors & semiconductor equipment)		801,031			1,608
	Oxford Instruments plc (Electronic equipment, instruments & components)		104,503			1,922
	Provident Financial plc (Consumer finance)		416,653			9,436
	Prudential plc (Insurance)		4,416,583			72,212
	Reckitt Benckiser Group plc (Household products)		719,292			50,849
	Restaurant Group plc (Hotels, restaurants & leisure)		462,636			3,518
	Rightmove plc (Media)		470,896			14,926
*	Rolls-Royce Holdings plc (Aerospace & defense)		2,526,183			43,570
	Rotork plc (Machinery)		285,126			11,579
	RPS Group plc (Commercial services & supplies)		1,049,791			3,225
	Senior plc (Machinery)		1,030,368			3,924
	St James’s Place plc (Insurance)		1,386,208			11,385
	Tullow Oil plc (Oil, gas & consumable fuels)		2,424,690			36,915
	William Hill plc (Hotels, restaurants & leisure)		2,904,000			19,474
						927,673

Issuer	Shares		Value

Japan—16.5%
Astellas Pharma, Inc. (Pharmaceuticals)		745,400		$	40,509
Daikin Industries, Ltd. (Building products)		388,300			15,700
Denso Corporation (Auto components)		735,300			34,585
FamilyMart Co., Ltd. (Food & staples retailing)		287,600			12,266
Fuji Heavy Industries, Ltd. (Automobiles)		2,856,000			70,407
Isuzu Motors, Ltd. (Automobiles)		3,831,000			26,228
ITOCHU Corporation (Trading companies & distributors)		3,465,400			40,007
Keyence Corporation (Electronic equipment, instruments & components)		44,000			14,041
Lawson, Inc. (Food & staples retailing)		295,000			22,516
Makita Corporation (Machinery)		549,700			29,708
MISUMI Group, Inc. (Trading companies & distributors)		152,800			4,201
Nexon Co., Ltd. (Software)		1,340,300			14,784
Nitto Denko Corporation (Chemicals)		317,600			20,430
ORIX Corporation (Diversified financial services)		4,134,500			56,486
Park24 Co., Ltd. (Commercial services & supplies)		336,600			6,105
Secom Co., Ltd. (Commercial services & supplies)		388,600			21,158
Shimamura Co., Ltd. (Specialty retail)		100,400			12,198
Shin-Etsu Chemical Co., Ltd. (Chemicals)		311,100			20,640
Ship Healthcare Holdings, Inc. (Health care providers & services)		201,700			7,423
Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		1,944,900			89,225
Sundrug Co., Ltd. (Food & staples retailing)		198,700			8,434
Suruga Bank, Ltd. (Commercial banks)		1,049,000			19,059
TS Tech Co., Ltd. (Auto components)		125,000			3,970
Tsuruha Holdings, Inc. (Food & staples retailing)		71,100			6,731
United Arrows, Ltd. (Specialty retail)		154,300			6,449
Yahoo! Japan Corporation (Internet software & services)		64,625			31,863
					635,123

Emerging Asia—13.6%

China—5.3%
AAC Technologies Holdings, Inc. (Communications equipment)		2,490,000			14,062
Biostime International Holdings, Ltd. (Food products)		224,500			1,259
China Merchants Bank Co., Ltd. Class “H” (Commercial banks)		11,904,500			19,892
China Overseas Grand Oceans Group, Ltd. (Real estate management & development)		6,904,000			8,812
China Overseas Land & Investment, Ltd. (Real estate management & development)		12,300,000			32,272
Great Wall Motor Co., Ltd. Class “H” (Automobiles)		5,831,500			25,150
Haier Electronics Group Co., Ltd. (Household durables)		2,237,000			3,565

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Emerging Asia—(continued)

	China—(continued)
	Haitian International Holdings, Ltd. (Machinery)		1,345,000		$	1,967
*	Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		403,494			5,007
	Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		47,974,000			30,246
	Minth Group, Ltd. (Auto components)		2,588,000			4,024
	Sino Biopharmaceutical (Pharmaceuticals)		17,796,000			11,541
	Tencent Holdings, Ltd. (Internet software & services)		1,096,600			43,010
*	WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		233,977			4,914
						205,721

	India—2.3%
	Eicher Motors, Ltd. (Machinery)		80,335			4,430
	Glenmark Pharmaceuticals, Ltd. (Pharmaceuticals)		1,532,904			14,142
	Gruh Finance, Ltd. (Thrifts & mortgage finance)		870,425			3,350
	HCL Technologies, Ltd. (IT services)		805,794			10,523
	IndusInd Bank, Ltd. (Commercial banks)		1,025,306			8,065
	Ipca Laboratories, Ltd. (Pharmaceuticals)		601,557			6,633
	Lupin, Ltd. (Pharmaceuticals)		744,202			9,786
	Oberoi Realty, Ltd. (Real estate management & development)		872,228			2,904
	Tata Consultancy Services, Ltd. (IT services)		761,381			19,451
	Yes Bank, Ltd. (Commercial banks)		1,069,125			8,296
						87,580

	Indonesia—1.2%
	PT Alam Sutera Realty Tbk (Real estate management & development)		48,407,500			3,658
	PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		21,856,500			17,067
	PT Ciputra Development Tbk (Real estate management & development)		29,420,500			4,002
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		19,360,000			21,944
						46,671

	Philippines—0.1%
	Security Bank Corporation (Commercial banks)		978,390			3,424

	South Korea—1.6%
	GS Home Shopping, Inc. (Internet & catalog retail)		29,524			6,114
	Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		45,873			53,905
						60,019

	Sri Lanka—0.1%
	John Keells Holdings plc (Industrial conglomerates)		1,892,546			3,657

Issuer	Shares		Value

*Emerging Asia—(continued)*

Taiwan—2.2%
Asustek Computer, Inc. (Computers & peripherals)		1,498,000	$	12,895
Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		1,102,000		8,144
St Shine Optical Co., Ltd. (Health care equipment & supplies)		101,000		2,625
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		3,234,522		59,257
				82,921

Thailand—0.8%
Advanced Info Service PCL (Wireless telecommunication services)		900,600		8,189
BEC World PCL (Media)		3,101,400		5,875
Kasikornbank PCL (Commercial banks)		2,207,100		13,948
Kiatnakin Bank PCL (Commercial banks)		1,824,300		3,117
				31,129


Asia—6.6%

Australia—2.6%
CSL, Ltd. (Biotechnology)		503,913		28,380
DuluxGroup, Ltd. (Chemicals)		1,656,717		6,379
REA Group, Ltd. (Media)		150,375		3,786
Seek, Ltd. (Professional services)		667,303		5,535
Super Retail Group, Ltd. (Specialty retail)		383,487		4,198
Telstra Corporation, Ltd. (Diversified telecommunication services)		11,789,844		51,432
				99,710

Hong Kong—2.5%
China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		6,597,000		689
Hutchison Telecommunications Hong Kong Holdings, Ltd. (Diversified telecommunication services)		23,772,000		12,566
Sa Sa International Holdings, Ltd. (Specialty retail)		10,214,000		10,140
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		6,639,000		11,025
Techtronic Industries Co. (Household durables)		6,588,000		15,765
Value Partners Group, Ltd. (Capital markets)		7,014,000		3,780
Wharf Holdings, Ltd. (Real estate management & development)		5,007,000		42,091
				96,056

New Zealand—0.1%
Ryman Healthcare, Ltd. (Health care providers & services)		1,179,202		5,821

Singapore—1.4%
First Resources, Ltd. (Food products)		3,336,000		4,672
Keppel Corporation, Ltd. (Industrial conglomerates)		1,619,300		13,286

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	*Asia—(continued)*

	Singapore—(continued)
	Singapore Technologies Engineering, Ltd. (Aerospace & defense)		8,184,000		$	27,054
	StarHub, Ltd. (Wireless telecommunication services)		2,735,000			9,020
						54,032

	Emerging Europe, Mid-East, Africa—3.0%

	Kenya—0.1%
	Equity Bank, Ltd. (Commercial banks)		5,466,500			1,991
	Kenya Commercial Bank, Ltd. (Commercial banks)		7,519,700			3,243
						5,234

	Nigeria—0.3%
	Guaranty Trust Bank plc (Commercial banks)		70,554,411			10,549

	Poland—0.3%
*	Alior Bank S.A. (Commercial banks)		116,884			3,148
	Eurocash S.A. (Food & staples retailing)		459,791			8,123
						11,271

	South Africa—1.1%
	Bidvest Group, Ltd. (Industrial conglomerates)		725,976			17,990
	Coronation Fund Managers, Ltd. (Capital markets)		703,262			4,464
	FirstRand, Ltd. (Diversified financial services)		5,992,585			17,538
						39,992

	Turkey—0.6%
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		768,066			4,799
	Turkiye Halk Bankasi A.S. (Commercial banks)		2,252,278			19,093
						23,892

	United Arab Emirates—0.6%
	Dragon Oil plc (Oil, gas & consumable fuels)		1,218,607			10,611
	First Gulf Bank PJSC (Commercial banks)		2,968,407			12,890
						23,501

	Canada—2.8%
	Canadian National Railway Co. (Road & rail)†		488,529			47,519
	CI Financial Corporation (Capital markets)		630,623			18,151
	First Quantum Minerals, Ltd. (Metals & mining)		890,340			13,206
	Metro, Inc. (Food & staples retailing)		320,762			21,496
	Westjet Airlines, Ltd. (Airlines)		387,247			8,292
						108,664

	Issuer	Shares or Principal Amount		Value

	*Emerging Latin America—2.2%*

	Brazil—1.4%
*	BB Seguridade Participacoes S.A. (Insurance)		2,339,100	$	18,450
	CCR S.A (Transportation infrastructure)		1,233,700		9,786
	Kroton Educacional S.A. (Diversified consumer services)		886,500		12,276
	Linx S.A. (Software)		347,200		5,602
	Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		361,800		4,898
					51,012
	Chile—0.6%
	Forus S.A. (Textiles, apparel & luxury goods)		607,900		3,465
	Inversiones La Construccion S.A. (Diversified financial services)		210,385		3,222
	Parque Arauco S.A. (Real estate management & development)		5,294,073		11,567
	Sonda S.A. (IT services)		1,750,122		5,098
					23,352

	Mexico—0.2%
	Banregio Grupo Financiero S.A.B. de C.V. (Commercial banks)		1,649,300		8,713

	Total Common Stocks—97.1% (cost $3,338,530)				3,729,053

	Affiliated Fund

	China—0.6%
	William Blair China A-Share Fund, LLC		2,202,200		22,815

	Total Affiliated Fund—0.6% (cost $22,022)				22,815

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $72,519, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$72,519		72,519

	Total Repurchase Agreement—1.9% (cost $72,519)				72,519

	Total Investments—99.6% (cost $3,433,071)				3,824,387
	Cash and other assets, less liabilities—0.4%				15,491
	Net assets—100.0%			$	3,839,878

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.02% of the Fund’s net assets at June 30, 2013.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.02% of the net assets at June 30, 2013.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials		27.0%
Consumer Discretionary		17.0%
Industrials		17.0%
Health Care		9.4%
Information Technology		9.1%
Consumer Staples		7.1%
Telecommunication Services		5.4%
Energy		4.0%
Materials		4.0%
Total		100.0%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling		26.5%
Japanese Yen		16.9%
Euro		16.5%
Hong Kong Dollar		7.9%
Swiss Franc		5.6%
U.S. Dollar		3.6%
Norwegian Krone		3.6%
Australian Dollar		2.7%
Indian Rupee		2.3%
Canadian Dollar		1.6%
South Korean Won		1.6%
Singapore Dollar		1.4%
Brazilian Real		1.4%
Indonesian Rupiah		1.2%
Swedish Krona		1.2%
South African Rand		1.1%
All Other Currencies		4.9%
Total		100.0%

As of June 30, 2013 the Fund invested in William Blair China A-Share Fund, LLC, an affiliated fund. There are no unfunded commitments to the affiliated fund and the Fund may redeem its investment monthly.

Shares Activity Affiliated with China A-Share Fund

Period Ended June 30, 2013

(in thousands)

Fund Name

Balance
12/31/2012

Purchases

Sales

Balance
6/30/2013

Value

William Blair China A-Share Fund, LLC

2,202,200

—

2,202,200

$22,815

Affiliated Funds accounted for $793 of change in net unrealized depreciation on investments during the period.

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	INSTITUTIONAL INTERNATIONAL GROWTH FUND

	The Institutional International Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

W. George Greig Jeffrey A. Urbina Simon Fennell	The William Blair Institutional International Growth Fund posted a 2.22% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI All Country World Ex-U.S. IMI Index (net) (the “Index”), increased 0.18%. The Fund outperformed the Index as its Consumer, Financials, and Materials stock selection was strong, and due to the Fund’s higher weighting in Consumer Discretionary at the expense of Resources. Discretionary performance was driven by Fuji Heavy, coupled with strong performance in Auto Components, Specialty Retail, and Media. Financials stock selection was bolstered by the 5.3% Commercial Banks return, as compared to the -1.4% Index return, in addition to strong performance by Japanese holdings and Insurance. Materials stock selection benefited from outperformance in the underweighted Metals/Mining industry. The Fund’s focus on companies with above average earnings trends and positive price momentum added value year to date, offsetting the higher quality focus and higher valuation, which hampered results. Somewhat mitigating these performance drivers were underperformance in Oil/Gas and in Europe Ex-U.K. more broadly. We increased the Fund’s weighting in Japan from 13.6% at the end of 2012 on an improving fiscal/monetary policy outlook, coupled with improving earnings and moderate valuations. However, in May we reduced the Fund’s weighting in Japan from nearly 18% down to 15.5%, on concerns about valuation, but began increasing the weighting again in June after the market underperformed. As of June 30, the Fund maintained an approximate market weight of 16.5% in Japan, tilted towards Discretionary and Financials holdings. The U.K. increased from 18.2% to 24.1% of the Fund, well above the 13.7% Index weighting, due primarily to higher weightings in Discretionary, Financials (Insurers), and Industrials. Emerging markets were reduced from approximately 22% to 19.3%, both due to emerging markets underperformance, coupled with reductions in Korea, South Africa, and Brazil. From a sector perspective, the Fund’s largest weighting was in Financials, which totaled 27.0% of the Fund, above the 25.6% Index weighting, due to higher Capital Markets and Insurance weightings, which more than offset the lower weighting in Commercial Banks. Industrials and Discretionary each approximated 17% of the Fund, above the Index weighting, while Resources were significantly underweighted at approximately 8% of the Fund, well below the 18% Index weighting.

June 30, 2013

William Blair Funds

Institutional International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			10 Year
Institutional Class		2.22	%		17.47	%		11.20	%		0.35	%		9.36	%
MSCI ACW Ex-U.S. IMI (net)		0.18			13.91			8.13			(0.41	)		8.95

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Institutional International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Shares		Value

Common Stocks

Europe—28.1%

Austria—0.1%
Andritz AG (Machinery)		41,001		$	2,104

Belgium—0.4%
Colruyt S.A. (Food & staples retailing)		156,876			8,251

Denmark—0.7%
GN Store Nord A/S (Health care equipment & supplies)		567,331			10,723
SimCorp A/S (Software)		144,560			4,289
					15,012
Finland—1.5%
Kone Oyj Class ‘‘B’’ (Machinery)		125,489			9,972
Sampo Class ‘‘A’’ (Insurance)		556,846			21,701
					31,673
France—4.9%
AXA S.A. (Insurance)		1,620,463			31,840
BNP Paribas S.A. (Commercial banks)		305,864			16,711
Hermes International (Textiles, apparel & luxury goods)		23,398			7,553
Publicis Groupe S.A. (Media)		212,088			15,101
Societe BIC S.A. (Commercial services & supplies)		7,152			717
Unibail-Rodamco SE (Real estate investment trusts (REITs))		108,577			25,298
Zodiac Aerospace (Aerospace & defense)		26,277			3,478
					100,698
Germany—5.5%
Adidas AG (Textiles, apparel & luxury goods)		156,660			16,953
Bayer AG (Pharmaceuticals)		272,045			29,012
Bayerische Motoren Werke AG (Automobiles)		369,988			32,353
Bertrandt AG (Professional services)		29,130			3,129
Brenntag AG (Trading companies & distributors)		57,240			8,695
Deutsche Wohnen AG (Real estate management & development)		494,646			8,399
Gerry Weber International AG (Textiles, apparel & luxury goods)		27,675			1,171
MTU Aero Engines AG (Aerospace & defense)		109,937			10,604
Wincor Nixdorf AG (Computers & peripherals)		86,190			4,674
					114,990
Italy—1.6%
Azimut Holding SpA (Capital markets)		360,605			6,567
Banca Generali SpA (Capital markets)		140,299			3,024
Brembo SpA (Auto components)		104,693			1,868
Intesa Sanpaolo SpA (Commercial banks)		9,162,321			14,681
Tod’s SpA (Textiles, apparel & luxury goods)		53,168			7,516
					33,656

	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe—(continued)

	Luxembourg—0.1%
*	Eurofins Scientific (Life sciences tools & services)		12,460		$	2,632

	Netherlands—1.6%
	Unilever N.V. (Food products)		849,650			33,460

	Norway—3.5%
*	Algeta ASA (Biotechnology)		66,486			2,530
	Fred Olsen Energy ASA (Energy equipment & services)		79,538			3,143
	Prosafe SE (Energy equipment & services)		323,089			2,838
	Statoil ASA (Oil, gas & consumable fuels)		1,440,774			29,720
	Telenor ASA (Diversified telecommunication services)		1,245,507			24,687
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		311,191			9,042
						71,960
	Spain—0.1%
	Viscofan S.A. (Food products)		19,543			979

	Sweden—1.2%
	Atlas Copco AB Class “A” (Machinery)		785,412			18,973
	Hexpol AB (Chemicals)		89,005			5,800
						24,773
	Switzerland—6.9%
	Burckhardt Compression Holding AG (Machinery)		7,560			3,010
*	Credit Suisse Group AG (Capital markets)		1,080,492			28,655
*	Geberit AG (Building products)		59,172			14,678
	Glencore Xstrata plc (Metals & mining)		7,437,105			30,784
	Partners Group Holding AG (Capital markets)		47,286			12,803
	Roche Holding AG (Pharmaceuticals)		171,006			42,546
	SGS S.A. (Professional services)		5,321			11,430
						143,906

	*United Kingdom—24.1%*
	Abcam plc (Biotechnology)		545,441			3,762
	Aberdeen Asset Management plc (Capital markets)		1,515,284			8,822
	Amlin plc (Insurance)		1,302,167			7,789
	Antofagasta plc (Metals & mining)		428,600			5,183
	ARM Holdings plc (Semiconductors & semiconductor equipment)		285,974			3,458
	Ashmore Group plc (Capital markets)		705,338			3,687
	AZ Electronic Materials S.A. (Chemicals)		624,388			2,917
	Babcock International Group plc (Commercial services & supplies)		1,034,671			17,358
	Berkeley Group Holdings plc (Household durables)		480,564			15,576
	Big Yellow Group plc (Real estate investment trusts (REITs))		517,839			3,029
	BT Group plc (Diversified telecommunication services)		4,774,900			22,455

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—(continued)
	Bunzl plc (Trading companies & distributors)		538,859		$	10,491
	Capita plc (Professional services)		567,775			8,342
	Compass Group plc (Hotels, restaurants & leisure)		1,621,240			20,713
	Daily Mail & General Trust plc Class “A” (Media)		630,132			7,375
	Derwent London plc (Real estate investment trusts (REITs))		122,882			4,299
	Diageo plc (Beverages)		867,970			24,819
	Dunelm Group plc (Specialty retail)		565,546			8,146
	easyJet plc (Airlines)		664,095			13,090
	Elementis plc (Chemicals)		1,176,458			3,926
	Experian plc (Professional services)		688,886			11,976
	GlaxoSmithKline plc (Pharmaceuticals)		1,031,971			25,867
	Halma plc (Electronic equipment, instruments & components)		748,226			5,730
	Hargreaves Lansdown plc (Capital markets)		255,795			3,455
	Hiscox, Ltd. (Insurance)		602,409			5,218
	Howden Joinery Group plc (Specialty retail)		1,185,315			4,568
	IG Group Holdings plc (Diversified financial services)		701,314			6,187
	IMI plc (Machinery)		438,096			8,262
	InterContinental Hotels Group plc (Hotels, restaurants & leisure)		734,578			20,200
	ITV plc (Media)		10,381,410			22,121
	John Wood Group plc (Energy equipment & services)		883,205			10,874
	Jupiter Fund Management plc (Capital markets)		916,912			4,040
	Keller Group plc (Construction & engineering)		201,218			3,033
	Lancashire Holdings, Ltd. (Insurance)		592,661			7,139
	Meggitt plc (Aerospace & defense)		1,044,983			8,225
	Moneysupermarket.com Group plc (Internet software & services)		1,658,536			4,833
*	Nanoco Group plc (Semiconductors & semiconductor equipment)		432,625			869
	Oxford Instruments plc (Electronic equipment, instruments & components)		56,289			1,035
	Provident Financial plc (Consumer finance)		224,490			5,084
	Prudential plc (Insurance)		2,380,727			38,925
	Reckitt Benckiser Group plc (Household products)		388,047			27,433
	Rightmove plc (Media)		254,324			8,061
*	Rolls-Royce Holdings plc (Aerospace & defense)		1,364,436			23,533
	Rotork plc (Machinery)		156,180			6,342
	RPS Group plc (Commercial services & supplies)		552,726			1,698
	Senior plc (Machinery)		548,072			2,087
	St James’s Place plc (Insurance)		747,728			6,141
	The Restaurant Group plc (Hotels, restaurants & leisure)		245,353			1,866
	Tullow Oil plc (Oil, gas & consumable fuels)		1,306,769			19,895

Issuer	Shares		Value

Common Stocks—(continued)

United Kingdom—(continued)
William Hill plc (Hotels, restaurants & leisure)		1,568,024		$	10,515
					500,449

Japan—16.5%
Astellas Pharma, Inc. (Pharmaceuticals)		402,600			21,880
Daikin Industries, Ltd. (Building products)		209,700			8,478
Denso Corporation (Auto components)		397,100			18,678
FamilyMart Co., Ltd. (Food & staples retailing)		155,200			6,619
Fuji Heavy Industries, Ltd. (Automobiles)		1,542,000			38,014
Isuzu Motors, Ltd. (Automobiles)		2,062,000			14,117
ITOCHU Corporation (Trading companies & distributors)		1,865,700			21,539
Keyence Corporation (Electronic equipment, instruments & components)		23,700			7,563
Lawson, Inc. (Food & staples retailing)		159,300			12,159
Makita Corporation (Machinery)		296,900			16,045
MISUMI Group, Inc. (Trading companies & distributors)		81,200			2,233
Nexon Co., Ltd. (Software)		721,600			7,960
Nitto Denko Corporation (Chemicals)		171,000			11,000
ORIX Corporation (Diversified financial services)		2,197,800			30,026
Park24 Co., Ltd. (Commercial services & supplies)		181,400			3,290
Secom Co., Ltd. (Commercial services & supplies)		209,200			11,390
Shimamura Co., Ltd. (Specialty retail)		54,700			6,646
Shin-Etsu Chemical Co., Ltd. (Chemicals)		167,500			11,113
Ship Healthcare Holdings, Inc. (Health care providers & services)		106,800			3,930
Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		1,049,900			48,165
Sundrug Co., Ltd. (Food & staples retailing)		109,500			4,648
Suruga Bank, Ltd. (Commercial banks)		565,000			10,265
TS Tech Co., Ltd. (Auto components)		67,400			2,141
Tsuruha Holdings, Inc. (Food & staples retailing)		37,600			3,560
United Arrows, Ltd. (Specialty retail)		81,100			3,389
Yahoo! Japan Corporation (Internet software & services)		34,792			17,154
					342,002

Emerging Asia—13.5%

China—5.3%
AAC Technologies Holdings, Inc. (Communications equipment)		1,344,000			7,590
Biostime International Holdings, Ltd. (Food products)		120,000			673
China Merchants Bank Co., Ltd. Class “H” (Commercial banks)		6,414,000			10,718
China Overseas Grand Oceans Group, Ltd. (Real estate management & development)		3,804,000			4,856

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Institutional International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*

	China—(continued)
	China Overseas Land & Investment, Ltd. (Real estate management & development)		6,644,000		$	17,432
	Great Wall Motor Co., Ltd. Class “H” (Automobiles)		3,149,500			13,583
	Haier Electronics Group Co., Ltd. (Household durables)		1,205,000			1,920
	Haitian International Holdings, Ltd. (Machinery)		713,000			1,042
*	Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		214,215			2,658
	Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		25,909,000			16,335
	Minth Group, Ltd. (Auto components)		1,382,000			2,149
	Sino Biopharmaceutical (Pharmaceuticals)		9,580,000			6,213
	Tencent Holdings, Ltd. (Internet software & services)		593,500			23,278
*	WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		123,283			2,589
						111,036

	India—2.3%
	Eicher Motors, Ltd. (Machinery)		43,480			2,398
	Glenmark Pharmaceuticals, Ltd. (Pharmaceuticals)		827,948			7,639
	Gruh Finance, Ltd. (Thrifts & mortgage finance)		467,643			1,800
	HCL Technologies, Ltd. (IT services)		442,046			5,772
	IndusInd Bank, Ltd. (Commercial banks)		551,010			4,334
	Ipca Laboratories, Ltd. (Pharmaceuticals)		317,967			3,506
	Lupin, Ltd. (Pharmaceuticals)		399,258			5,250
	Oberoi Realty, Ltd. (Real estate management & development)		461,980			1,538
	Tata Consultancy Services, Ltd. (IT services)		410,825			10,495
	Yes Bank, Ltd. (Commercial banks)		576,197			4,471
						47,203

	Indonesia—1.2%
	PT Alam Sutera Realty Tbk (Real estate management & development)		26,120,000			1,974
	PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		11,799,500			9,214
	PT Ciputra Development Tbk (Real estate management & development)		15,602,500			2,122
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		10,446,000			11,840
						25,150
	Philippines—0.1%
	Security Bank Corporation (Commercial banks)		518,880			1,816

	South Korea—1.5%
	GS Home Shopping, Inc. (Internet & catalog retail)		15,911			3,295

Issuer	Shares		Value

*Common Stocks—(continued)*

*Emerging Asia—(continued)*

South Korea—(continued)
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		24,704		$	29,029
					32,324
Sri Lanka—0.1%
John Keells Holdings plc (Industrial conglomerates)		1,005,757			1,944
Taiwan—2.2%
Asustek Computer, Inc. (Computers & peripherals)		809,000			6,964
Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		594,000			4,390
St Shine Optical Co., Ltd. (Health care equipment & supplies)		62,100			1,614
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		1,747,022			32,006
					44,974

Thailand—0.8%
Advanced Info Service PCL (Wireless telecommunication services)		486,000			4,419
BEC World PCL (Media)		1,640,400			3,107
Kasikornbank PCL (Commercial banks)		1,191,200			7,528
Kiatnakin Bank PCL (Commercial banks)		982,100			1,678
					16,732

Asia—6.6%

Australia—2.6%
CSL, Ltd. (Biotechnology)		272,173			15,328
DuluxGroup, Ltd. (Chemicals)		879,307			3,386
REA Group, Ltd. (Media)		80,361			2,023
Seek, Ltd. (Professional services)		354,742			2,943
Super Retail Group, Ltd. (Specialty retail)		203,865			2,232
Telstra Corporation, Ltd. (Diversified telecommunication services)		6,367,902			27,779
					53,691
Hong Kong—2.5%
China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		3,373,000			352
Hutchison Telecommunications Hong Kong Holdings, Ltd. (Diversified telecommunication services)		12,840,000			6,788
Sa Sa International Holdings, Ltd. (Specialty retail)		5,614,000			5,573
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		3,512,500			5,833
Techtronic Industries Co. (Household durables)		3,562,500			8,525
Value Partners Group, Ltd. (Capital markets)		3,678,000			1,982

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks—(continued)

	Asia—(continued)

	Hong Kong—(continued)
	Wharf Holdings, Ltd. (Real estate management & development)		2,696,000		$	22,664
						51,717

	New Zealand—0.1%
	Ryman Healthcare, Ltd. (Health care providers & services)		626,869			3,094

	Singapore—1.4%
	First Resources, Ltd. (Food products)		1,781,000			2,494
	Keppel Corporation, Ltd. (Industrial conglomerates)		873,300			7,166
	Singapore Technologies Engineering, Ltd. (Aerospace & defense)		4,410,000			14,578
	StarHub, Ltd. (Wireless telecommunication services)		1,478,000			4,874
						29,112

	Emerging Europe, Mid-East, Africa—3.0%

	Kenya—0.1%
	Equity Bank, Ltd. (Commercial banks)		2,895,700			1,055
	Kenya Commercial Bank, Ltd. (Commercial banks)		3,896,900			1,680
						2,735

	Nigeria—0.3%
	Guaranty Trust Bank plc (Commercial banks)		37,969,896			5,677

	Poland—0.3%
*	Alior Bank S.A. (Commercial banks)		62,376			1,680
	Eurocash S.A. (Food & staples retailing)		246,731			4,359
						6,039

	South Africa—1.1%
	Bidvest Group, Ltd. (Industrial conglomerates)		392,112			9,716
	Coronation Fund Managers, Ltd. (Capital markets)		372,967			2,368
	FirstRand, Ltd. (Diversified financial services)		3,236,701			9,473
						21,557

	Turkey—0.6%
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		414,156			2,588
	Turkiye Halk Bankasi A.S. (Commercial banks)		1,216,495			10,312
						12,900

	United Arab Emirates—0.6%
	Dragon Oil plc (Oil, gas & consumable fuels)		661,315			5,759
	First Gulf Bank PJSC (Commercial banks)		1,603,289			6,962
						12,721

	Issuer	Shares		Value

	Western Hemisphere—2.8%

	Canada—2.8%
	Canadian National Railway Co. (Road & rail)†		263,863		$	25,666
	CI Financial Corporation (Capital markets)		340,611			9,804
	First Quantum Minerals, Ltd. (Metals & mining)		480,254			7,124
	Metro, Inc. (Food & staples retailing)		173,249			11,610
	Westjet Airlines, Ltd. (Airlines)		205,630			4,403
						58,607

	Emerging Latin America—2.2%

	Brazil—1.3%
*	BB Seguridade Participacoes S.A. (Insurance)		1,263,100			9,963
	CCR S.A (Transportation infrastructure)		666,200			5,285
	Kroton Educacional S.A. (Diversified consumer services)		479,800			6,644
	Linx S.A. (Software)		187,700			3,028
	Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		190,800			2,583
						27,503
	Chile—0.6%
	Forus S.A. (Textiles, apparel & luxury goods)		328,070			1,870
	Inversiones La Construccion S.A. (Diversified financial services)		110,889			1,698
	Parque Arauco S.A. (Real estate management & development)		2,859,422			6,248
	Sonda S.A. (IT services)		922,766			2,688
						12,504
	Mexico—0.3%
	Banregio Grupo Financiero S.A.B. de C.V. (Commercial banks)		888,600			4,694

	Total Common Stocks—96.8% (cost $1,805,153)					2,010,275

	Affiliated Fund

	China—0.6%
	William Blair China A-Share Fund, LLC		1,183,400			12,260
	Total Affiliated Fund—0.6% (cost $11,834)					12,260

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Institutional International Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Principal Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $39,731, collateralized by U.S. Treasury Notes, 0.750%, due 10/31/17	$39,731	$	39,731

Total Repurchase Agreement—1.9% (cost $39,731)			39,731

Total Investments—99.3% (cost $1,856,718)			2,062,266
Cash and other assets, less liabilities—0.7%			14,310
Net assets—100.0%		$	2,076,576

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.02% of the Fund’s net assets at June 30, 2013.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.02% of the net assets at June 30, 2013.

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials	27.0	%
Consumer Discretionary	17.0	%
Industrials	17.0	%
Health Care	9.4	%
Information Technology	9.1	%
Consumer Staples	7.1	%
Telecommunication Services	5.4	%
Energy	4.0	%
Materials	4.0	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling	26.5	%
Japanese Yen	16.9	%
Euro	16.5	%
Hong Kong Dollar	7.9	%
Swiss Franc	5.6	%
U.S. Dollar	3.6	%
Norwegian Krone	3.6	%
Australian Dollar	2.7	%
Indian Rupee	2.3	%
Canadian Dollar	1.6	%
South Korean Won	1.6	%
Singapore Dollar	1.4	%
Brazilian Real	1.4	%
Indonesian Rupiah	1.2	%
Swedish Krona	1.2	%
South African Rand	1.1	%
All Other Currencies	4.9	%
Total	100.0	%

Shares Activity Affiliated with China A-Share Fund

Period Ended June 30, 2013

(in thousands)

Fund Name

Balance
12/31/2012

Purchases

Sales

Balance
6/30/2013

Value

William Blair China A-Share Fund, LLC

1,183,400

—

1,183,400

$12,260

Affiliated Funds accounted for $426 of change in net unrealized depreciation on investments during the period.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	INTERNATIONAL EQUITY FUND

	The International Equity Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGER

David Merjan	The William Blair International Equity Fund (Class N shares) posted a 2.90% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI World Ex-U.S. Index (net) (the “Index”), increased 3.01%. The key detractor from year to date results was the Fund’s regional positioning, which detracted approximately 2% from relative performance. In particular, the Fund’s emerging markets exposure averaged 12% during the period, which detracted from results, given the severe underperformance of emerging markets relative to developed markets. In addition, the underweighting in Japan hampered performance, given market strength, coupled with the Fund’s strong stock selection. Conversely, stock selection was strong across most regions, with particular value added in Japan. Fuji Heavy, the manufacturer of Subarus, was a key contributor to performance, on good operating results and positive guidance, coupled with positive sentiment surrounding Japanese stocks generally, and exporters particularly. The Fund’s overweighting of Japanese Financials added value, as they were up nearly 24% during the period, bolstered by strong results across most holdings. Yahoo Japan was another key contributor, given increased ad spend and increased guidance. Canadian stock selection was bolstered by minimal Resources holdings, while the Healthcare overweighting and Industrials stock selection drove Europe Ex-U.K. results. Overall sector positioning did not change substantially during the period. Financials, which totaled approximately 22% of the Fund, was below the 26.2% Index weighting, due primarily to the underweighting in Commercial Banks. Industrials was approximately 6% overweighted versus the Index, while Information Technology was approximately 10% overweighted. Conversely, Energy, and Materials were underweighted as was Consumer Staples. Regionally, the Fund’s emerging markets weighting 10.5%, due primarily to a focus on Asian exporters. This weighting represented a decrease since the beginning of the year. The Fund was also overweighted in the U.K., which totaled 27.0% of the Fund, above the 17.5% Index weighting, given significant exposure in Financials and Industrials. Conversely, Europe was most underweighted at 34.4% of the Fund, well below the 41.2% Index weighting, despite the significant Healthcare weighting, given limited Energy and Financials exposure.

Semi-Annual Report

June 30, 2013

International Equity Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception(a)
Class N		2.90	%		15.72	%		8.80	%		(2.23	)%		4.11	%
Class I		3.12			16.13			9.07			(1.97	)		4.40
MSCI World Ex-U.S. Index (net)		3.01			17.07			9.43			(0.84	)		5.99

(a)	For the period from May 24, 2004 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company L.L.C. without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) World Ex-U.S. Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets, excluding the United States. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

International Equity Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Europe—34.4%

	Belgium—1.2%
	UCB S.A. (Pharmaceuticals)		15,077		$	812

	Denmark—2.0%
	Coloplast A/S Class “B” (Health care equipment & supplies)		11,347			636
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		4,880			761
						1,397

	France—10.7%
	BNP Paribas S.A. (Commercial banks)		11,535			630
	Christian Dior S.A. (Textiles, apparel & luxury goods)		4,463			720
	Dassault Systemes S.A. (Software)		5,388			659
	Essilor International S.A. (Health care equipment & supplies)		8,339			887
	L’Oreal S.A. (Personal products)		3,923			645
	Publicis Groupe S.A. (Media)		14,968			1,066
	Sanofi (Pharmaceuticals)		12,381			1,283
	Technip S.A. (Energy equipment & services)		9,228			937
	Unibail-Rodamco SE (Real estate investment trusts (REITs))		3,365			784
						7,611

	Germany—4.9%
	BASF SE (Chemicals)		14,271			1,275
	Bayer AG (Pharmaceuticals)		12,705			1,355
	MTU Aero Engines AG (Aerospace & defense)		8,408			811
						3,441

	Ireland—3.7%
	Accenture plc Class “A” (IT services)†		13,726			988
	Ryanair Holdings plc—ADR (Airlines)		13,383			689
	Shire plc (Pharmaceuticals)		30,527			968
						2,645

	Netherlands—1.9%
	Unilever N.V. (Food products)		34,957			1,377

	Norway—1.4%
	Telenor ASA (Diversified telecommunication services)		49,914			989

	Spain—0.7%
	Inditex S.A. (Specialty retail)		4,128			510

	Sweden—1.3%
	Atlas Copco AB Class “A” (Machinery)		37,527			906

	Switzerland—6.6%
*	Credit Suisse Group AG (Capital markets)		45,145			1,197
*	Geberit AG (Building products)		2,224			552
	Nestle S.A. (Food products)		12,373			812
	Roche Holding AG (Pharmaceuticals)		4,841			1,204
	Syngenta AG (Chemicals)		2,412			944
						4,709

	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—27.0%
	Antofagasta plc (Metals & mining)		74,639		$	903
	ARM Holdings plc (Semiconductors & semiconductor equipment)		56,014			677
	Babcock International Group plc (Commercial services & supplies)		50,694			851
	Burberry Group plc (Textiles, apparel & luxury goods)		26,290			540
	Capita plc (Professional services)		24,305			357
	Compass Group plc (Hotels, restaurants & leisure)		131,520			1,680
	Diageo plc (Beverages)		47,620			1,362
	Experian plc (Professional services)		46,172			803
	GlaxoSmithKline plc (Pharmaceuticals)		33,707			845
	HSBC Holdings plc (Commercial banks)		110,400			1,145
	IMI plc (Machinery)		52,335			987
	InterContinental Hotels Group plc (Hotels, restaurants & leisure)		25,213			693
	John Wood Group plc (Energy equipment & services)		73,510			905
	Prudential plc (Insurance)		64,137			1,049
	Reckitt Benckiser Group plc (Household products)		7,948			562
	Regus plc (Commercial services & supplies)		203,517			487
*	Rolls-Royce Holdings plc (Aerospace & defense)		85,080			1,467
	St James’s Place plc (Insurance)		128,543			1,056
	Standard Life plc (Insurance)		216,123			1,136
	Tullow Oil plc (Oil, gas & consumable fuels)		42,835			652
	Wolseley plc (Trading companies & distributors)		21,304			983
						19,140

	Japan—20.3%
	Astellas Pharma, Inc. (Pharmaceuticals)		16,600			902
	Chiyoda Corporation (Construction & engineering)		28,000			330
	Daikin Industries, Ltd. (Building products)		23,500			950
	Denso Corporation (Auto components)		21,400			1,007
	Fuji Heavy Industries, Ltd. (Automobiles)		31,000			764
	ITOCHU Corporation (Trading companies & distributors)		54,100			625
	Japan Exchange Group, Inc. (Diversified financial services)		8,000			808
	Keyence Corporation (Electronic equipment, instruments & components)		1,400			447
	Makita Corporation (Machinery)		13,400			724
	Nitto Denko Corporation (Chemicals)		10,700			688
	ORIX Corporation (Diversified financial services)		69,500			950
	Otsuka Corporation (IT services)		8,200			911
	Shin-Etsu Chemical Co., Ltd. (Chemicals)		12,900			856
	Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		26,500			1,216
	Sumitomo Mitsui Trust Holdings, Inc. (Commercial banks)		289,000			1,349
	Trend Micro, Inc. (Software)		27,500			873

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

International Equity Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Shares		Value

Common Stocks—(continued)

Japan—(continued)
Yahoo! Japan Corporation (Internet software & services)		1,960		$	966
					14,366

Emerging Asia—7.2%

China—0.8%
CNOOC, Ltd. (Oil, gas & consumable fuels)		346,000			587

India—0.8%
Tata Consultancy Services, Ltd. (IT services)		22,107			565

Papua New Guinea—0.7%
Oil Search, Ltd. (Oil, gas & consumable fuels)		68,769			486

South Korea—1.8%
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		1,078			1,267

Taiwan—1.7%
Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		106,000			514
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		37,881			694
					1,208

Thailand—1.4%
Kasikornbank PCL (Commercial banks)		161,200			1,019

Asia—3.4%

Hong Kong—2.5%
AIA Group, Ltd. (Insurance)		415,800			1,761

Singapore—0.9%
Keppel REIT (Real estate investment trusts (REITs))		619,800			633

Canada—3.4%
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		38,360			1,382
Canadian National Railway Co. (Road & rail)†		10,310			1,003
					2,385

Emerging Latin America—2.0%

Mexico—1.2%
Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		8,041			830

Panama—0.8%
Copa Holdings S.A. Class “A” (Airlines)† .		4,283			561

Emerging Europe, Mid-East, Africa—1.3%

South Africa—1.3%
FirstRand, Ltd. (Diversified financial services)		312,106			913

	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Total Common Stocks—99.0% (cost $60,288)				$	70,118

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $865, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$865			865

Total Repurchase Agreement—1.2% (cost $865)					865

Total Investments—100.2% (cost $61,153)					70,983
Liabilities, plus cash and other assets—(0.2)%					(119	)
Net assets—100.0%				$	70,864

ADR = American Depository Receipt

† = U.S. listed foreign security

* Non-income producing securities

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials	22.2	%
Industrials	18.6	%
Information Technology	14.2	%
Health Care	13.8	%
Consumer Discretionary	10.0	%
Consumer Staples	8.0	%
Materials	6.7	%
Energy	5.1	%
Telecommunication Services	1.4	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling	28.7	%
Japanese Yen	20.5	%
Euro	19.6	%
U.S. Dollar	8.8	%
Swiss Franc	6.7	%
Hong Kong Dollar	3.3	%
Danish Krone	2.0	%
South Korean Won	1.8	%
Thai Baht	1.5	%
Norwegian Krone	1.4	%
South African Rand	1.3	%
Swedish Krona	1.3	%
All Other Currencies	3.1	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	INSTITUTIONAL INTERNATIONAL EQUITY FUND

	The Institutional International Equity Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGER

David Merjan	The William Blair Institutional International Equity Fund posted a 3.14% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI World Ex-U.S. Index (net) (the “Index”), increased 3.01%. Stock selection was strong across most regions, with particular value added in Japan. Fuji Heavy, the manufacturer of Subarus, was a key contributor to performance, on good operating results and positive guidance, coupled with positive sentiment surrounding Japanese stocks generally, and exporters particularly. The Fund’s overweighting of Japanese Financials added value, as they were up nearly 24% during the period, bolstered by strong results across most holdings. Yahoo Japan was another key contributor, given increased ad spend and increased guidance. Canadian stock selection was bolstered by minimal Resources holdings, while the Healthcare overweighting and Industrials stock selection drove Europe ex-U.K. results. The key detractor from year to date results was the Fund’s regional positioning, which detracted approximately 2% from relative performance. In particular, the Fund’s emerging markets exposure averaged 14% during the period, which detracted from results, given the severe underperformance of emerging markets relative to developed markets. In addition, the underweighting in Japan hampered performance, given market strength, coupled with the Fund’s strong stock selection. Overall sector positioning did not change substantially during the period. Financials, which totaled approximately 22% of the Fund, was below the 26.2% Index weighting, due primarily to the underweighting in Commercial Banks. Industrials was approximately 6% overweighted versus the Index, while Information Technology was approximately 10% overweighted. Conversely, Energy, and Materials were underweighted as was Staples. Regionally, the Fund’s emerging markets weighting 10.5%, due primarily to a focus on Asian exporters. This weighting represented a decrease since the beginning of the year. The Fund was also overweighted in the U.K., which totaled 27.1% of the Fund, above the 17.5% Index weighting, given significant exposure in Financials and Industrials. Conversely, Europe was most underweighted at 34.5% of the Fund, well below the 41.1% Index weighting, despite the significant Healthcare weighting, given limited Energy and Financials exposure.

Semi-Annual Report

June 30, 2013

Institutional International Equity Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Institutional Class		3.14	%		16.26	%		9.50	%		(2.06	)%		3.78	%
MSCI World Ex-U.S.Index (net)		3.01			17.07			9.43			(0.84	)		4.43

(a)	For the period from December 1, 2004 (Commencement of Operations) to June 30, 2013.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

Institutional International Equity Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe—34.5%

	Belgium—1.1%
	UCB S.A. (Pharmaceuticals)		19,240		$	1,036

	Denmark—2.0%
	Coloplast A/S Class “B” (Health care equipment & supplies)		14,480			812
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		6,221			969
						1,781

	France—10.8%
	BNP Paribas S.A. (Commercial banks)		14,719			804
	Christian Dior S.A. (Textiles, apparel & luxury goods)		5,695			919
	Dassault Systemes S.A. (Software)		6,875			841
	Essilor International S.A. (Health care equipment & supplies)		10,642			1,132
	L’Oreal S.A. (Personal products)		5,006			823
	Publicis Groupe S.A. (Media)		19,100			1,360
	Sanofi (Pharmaceuticals)		15,799			1,637
	Technip S.A. (Energy equipment & services)		11,776			1,196
	Unibail-Rodamco SE (Real estate investment trusts (REITs))		4,317			1,006
						9,718

	Germany—4.9%
	BASF SE (Chemicals)		18,210			1,627
	Bayer AG (Pharmaceuticals)		16,213			1,729
	MTU Aero Engines AG (Aerospace & defense)		10,729			1,035
						4,391

	Ireland—3.7%
	Accenture plc Class “A” (IT services)†		17,482			1,258
	Ryanair Holdings plc—ADR (Airlines)		17,057			879
	Shire plc (Pharmaceuticals)		38,955			1,235
						3,372

	Netherlands—1.9%
	Unilever N.V. (Food products)		44,608			1,757

	Norway—1.4%
	Telenor ASA (Diversified telecommunication services)		63,694			1,263

	Spain—0.7%
	Inditex S.A. (Specialty retail)		5,268			650

	Sweden—1.3%
	Atlas Copco AB Class “A” (Machinery)		47,887			1,157

	Switzerland—6.7%
*	Credit Suisse Group AG (Capital markets)		57,609			1,528
*	Geberit AG (Building products)		2,838			704
	Nestle S.A. (Food products)		15,789			1,035
	Roche Holding AG (Pharmaceuticals)		6,177			1,537
	Syngenta AG (Chemicals)		3,071			1,202
						6,006



	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—27.1%
	Antofagasta plc (Metals & mining)		95,055		$	1,149
	ARM Holdings plc (Semiconductors & semiconductor equipment)		71,323			862
	Babcock International Group plc (Commercial services & supplies)		64,690			1,085
	Burberry Group plc (Textiles, apparel & luxury goods)		33,548			689
	Capita plc (Professional services)		32,395			476
	Compass Group plc (Hotels, restaurants & leisure)		167,830			2,144
	Diageo plc (Beverages)		60,767			1,738
	Experian plc (Professional services)		58,919			1,024
	GlaxoSmithKline plc (Pharmaceuticals)		42,922			1,076
	HSBC Holdings plc (Commercial banks)		140,583			1,458
	IMI plc (Machinery)		66,783			1,260
	InterContinental Hotels Group plc (Hotels, restaurants & leisure)		32,174			885
	John Wood Group plc (Energy equipment & services)		93,804			1,155
	Prudential plc (Insurance)		81,843			1,338
	Reckitt Benckiser Group plc (Household products)		10,142			717
	Regus plc (Commercial services & supplies)		259,751			622
*	Rolls-Royce Holdings plc (Aerospace & defense)		108,569			1,873
	St James’s Place plc (Insurance)		163,864			1,346
	Standard Life plc (Insurance)		275,789			1,450
	Tullow Oil plc (Oil, gas & consumable fuels)		54,660			832
	Wolseley plc (Trading companies & distributors)		27,186			1,254
						24,433

	Japan—20.3%
	Astellas Pharma, Inc. (Pharmaceuticals)		21,200			1,152
	Chiyoda Corporation (Construction & engineering)		36,000			424
	Daikin Industries, Ltd. (Building products)		29,900			1,209
	Denso Corporation (Auto components)		27,400			1,289
	Fuji Heavy Industries, Ltd. (Automobiles)		39,000			961
	ITOCHU Corporation (Trading companies & distributors)		69,000			796
	Japan Exchange Group, Inc. (Diversified financial services)		10,200			1,030
	Keyence Corporation (Electronic equipment, instruments & components)		1,900			606
	Makita Corporation (Machinery)		17,000			919
	Nitto Denko Corporation (Chemicals)		13,600			875
	ORIX Corporation (Diversified financial services)		88,700			1,212
	Otsuka Corporation (IT services)		10,300			1,144
	Shin-Etsu Chemical Co., Ltd. (Chemicals)		16,500			1,095
	Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		33,900			1,555
	Sumitomo Mitsui Trust Holdings, Inc. (Commercial banks)		369,000			1,723
	Trend Micro, Inc. (Software)		35,000			1,112

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Institutional International Equity Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Japan—(continued)
Yahoo! Japan Corporation (Internet software & services)		2,497		$	1,231
					18,333

Emerging Asia—7.2%

China—0.8%
CNOOC, Ltd. (Oil, gas & consumable fuels)		442,000			750

India—0.8%
Tata Consultancy Services, Ltd. (IT services)		28,210			721

Papua New Guinea—0.7%
Oil Search, Ltd. (Oil, gas & consumable fuels)		87,755			620

South Korea—1.8%
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		1,375			1,616

Taiwan—1.7%
Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		135,000			655
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		48,338			886
					1,541

Thailand—1.4%
Kasikornbank PCL (Commercial banks)		205,300			1,297

Asia—3.4%

Hong Kong—2.5%
AIA Group, Ltd. (Insurance)		530,600			2,247

Singapore—0.9%
Keppel REIT (Real estate investment trusts (REITs))		790,600			808

Canada—3.2%
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		43,789			1,578
Canadian National Railway Co. (Road & rail)†		13,141			1,278
					2,856

Emerging Latin America—2.0%

Mexico—1.2%
Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		10,261			1,059

Panama—0.8%
Copa Holdings S.A. Class “A” (Airlines)†		5,462			716

Emerging Europe, Mid-East, Africa—1.3%

South Africa—1.3%
FirstRand, Ltd. (Diversified financial services)		398,270			1,166

Total Common Stocks—99.0% (cost $76,662)					89,294


Issuer	Principal Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $3,446, collateralized by FNMA, 0.875%, due 10/26/17		$3,446		$	3,446

Total Repurchase Agreement—3.8% (cost $3,446)					3,446

Total Investments—102.8% (cost $80,108)					92,740
Liabilities, plus cash and other assets—(2.8)%					(2,544	)
Net assets—100.0%				$	90,196

ADR = American Depository Receipt

† = U.S. listed foreign security

* Non-income producing securities

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials	22.3	%
Industrials	18.7	%
Information Technology	14.0	%
Health Care	13.8	%
Consumer Discretionary	10.0	%
Consumer Staples	8.0	%
Materials	6.7	%
Energy	5.1	%
Telecommunication Services	1.4	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling	28.7	%
Japanese Yen	20.5	%
Euro	19.7	%
U.S. Dollar	8.6	%
Swiss Franc	6.7	%
Hong Kong Dollar	3.4	%
Danish Krone	2.0	%
South Korean Won	1.8	%
Thai Baht	1.5	%
Norwegian Krone	1.4	%
South African Rand	1.3	%
Swedish Krona	1.3	%
All Other Currencies	3.1	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	INTERNATIONAL LEADERS FUND

	The International Leaders Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

W. George Greig Kenneth J. McAtamney Simon Fennell	The William Blair International Leaders Fund (Class N shares) posted a 2.50% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI ACW ex-U.S. IMI Index (net) (the “Index”), increased 0.18%. The Fund’s outperformance relative to the Index was driven by overall sector positioning, coupled with Materials and Financials stock selection and regional stock selection more broadly. Within Materials, the Fund’s underweighting and stock selection in Mining added value, as did performance in the overweighted Chemicals industry. Financials stock selection was driven by Insurance performance, as the Fund’s stocks rose 11.5%, compared to the 6.2% Index return. In addition, Japanese financials added value, as did Partners Group. Regionally, developed Asia performance was strong, while Europe ex-U.K. lagged due to weakness in Consumer Discretionary, Energy, Healthcare, and Materials, as did Emerging Asia. We continue to find the prospects for a resurgent Japan promising. Though evidence of Prime Minister Abe’s “third arrow” of corporate reform remains anecdotal, we are focusing our research on those companies that have demonstrated high or improving returns, growth potential, and shareholder orientation on par with leading companies globally. Thus, the biggest regional change was the 7.8% increased Japanese weighting to 17.8% of the Fund. More broadly, we purchased companies in the Consumer Discretionary and Industrial sectors where the growth outlook was improving while valuations remained reasonable. The sources of funds for these purchases came primarily from sales in the emerging markets and Financials. Emerging markets declined approximately 4%, while Financials was reduced approximately 5%. As of June 30, the largest sector overweightings were in Consumer Discretionary, Healthcare, and Industrials, while the largest underweightings were in the Resources-related sectors and Consumer Staples.

Semi-Annual Report

June 30, 2013

International Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Year to Date			Since Inception
Class N(a)		2.50	%		10.86	%
Class I(a)		2.68			11.16
MSCI ACW Ex-U.S. IMI (net)(a)		0.18			9.81
Institutional Class(b)		2.78			8.61
MSCI ACW Ex-U.S. IMI (net)(b)		0.18			4.93

(a)	Since inception is for the period from August 16, 2012 (Commencement of Operations) to June 30, 2013.
(b)	Since inception is for the period from November 2, 2012 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company L.L.C. without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

International Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe, Mid-East—40.5%

	Denmark—2.9%
	Coloplast A/S Class “B” (Health care equipment & supplies)		17,480		$	980
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		4,982			777
						1,757

	France—8.4%
	BNP Paribas S.A. (Commercial banks)		33,805			1,847
	Dassault Systemes S.A. (Software)		9,916			1,213
	Publicis Groupe S.A. (Media)		15,496			1,104
	Technip S.A. (Energy equipment & services)		9,851			1,000
						5,164

	Germany—6.6%
	Bayerische Motoren Werke AG (Automobiles)		15,425			1,349
	Brenntag AG (Trading companies & distributors)		5,282			802
	Fresenius SE & Co. KGaA (Health care providers & services)		11,428			1,409
	SAP AG (Software)		6,880			504
						4,064

	Ireland—1.6%
	Ryanair Holdings plc—ADR (Airlines)		19,593			1,010

	Israel—1.4%
*	Check Point Software Technologies, Ltd. (Software)†		17,664			877

	Netherlands—1.8%
	Unilever N.V. (Food products)		27,819			1,095

	Norway—2.8%
	Statoil ASA (Oil, gas & consumable fuels)		42,311			873
	Telenor ASA (Diversified telecommunication services)		16,067			318
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		19,443			565
						1,756

	Spain—1.1%
	Inditex S.A. (Specialty retail)		5,584			689

	Sweden—2.1%
	Atlas Copco AB Class “A” (Machinery)		53,597			1,295

	Switzerland—11.8%
	Cie Financiere Richemont S.A. (Textiles, apparel & luxury goods)		13,614			1,204
*	Geberit AG (Building products)		3,938			977
	Glencore Xstrata plc (Metals & mining)		209,623			868
	Partners Group Holding AG (Capital markets)		4,325			1,171
	Roche Holding AG (Pharmaceuticals)		7,682			1,911
	Syngenta AG (Chemicals)		3,019			1,181
						7,312



	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—24.7%
	ARM Holdings plc (Semiconductors & semiconductor equipment)		66,052		$	799
	Babcock International Group plc (Commercial services & supplies)		48,461			813
	Berkeley Group Holdings plc (Household durables)		28,759			932
	Compass Group plc (Hotels, restaurants & leisure)		102,837			1,314
	Diageo plc (Beverages)		32,370			926
	Experian plc (Professional services)		60,121			1,045
	HSBC Holdings plc (Commercial banks)		130,800			1,370
	InterContinental Hotels Group plc (Hotels, restaurants & leisure)		36,582			1,006
	John Wood Group plc (Energy equipment & services)		56,641			697
	Johnson Matthey plc (Chemicals)		25,621			1,024
	Meggitt plc (Aerospace & defense)		127,755			1,006
*	Rolls-Royce Holdings plc (Aerospace & defense)		43,287			747
	St James’s Place plc (Insurance)		94,527			776
	The Weir Group plc (Machinery)		28,450			931
	Tullow Oil plc (Oil, gas & consumable fuels)		48,025			731
	Wolseley plc (Trading companies & distributors)		25,564			1,179
						15,296

	Japan—17.8%
	Astellas Pharma, Inc. (Pharmaceuticals)		23,000			1,250
	Fuji Heavy Industries, Ltd. (Automobiles)		51,959			1,281
	Lawson, Inc. (Food & staples retailing)		8,600			656
	Makita Corporation (Machinery)		21,400			1,156
	ORIX Corporation (Diversified financial services)		113,100			1,545
	Secom Co., Ltd. (Commercial services & supplies)		21,500			1,171
	Shin-Etsu Chemical Co., Ltd. (Chemicals)		15,300			1,015
	Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		35,500			1,629
	Yahoo! Japan Corporation (Internet software & services)		2,636			1,300
						11,003

	Emerging Europe, Mid-East, Africa—5.7%

	Kenya—1.0%
	Safaricom, Ltd. (Wireless telecommunication services)		8,105,800			624

	South Africa—4.0%
	Aspen Pharmacare Holdings, Ltd. (Pharmaceuticals)		25,489			585
	Bidvest Group, Ltd. (Industrial conglomerates)		33,796			837
	Discovery, Ltd. (Insurance)		120,126			1,022
						2,444

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

International Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Emerging Europe, Mid-East, Africa—(continued)

Turkey—0.7%
Turkiye Halk Bankasi A.S. (Commercial banks)		51,526		$	437

Emerging Asia—4.4%

India—1.3%
Tata Motors, Ltd.—ADR (Automobiles)		34,700			813

Indonesia—1.0%
PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		815,000			637

South Korea—2.1%
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		1,087			1,277

Asia—2.9%

Hong Kong—2.9%
AIA Group, Ltd. (Insurance)		429,000			1,817

Canada—2.0%
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		34,240			1,233

Emerging Latin America—1.5%

Mexico—1.5%
Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		9,012			930

Total Common Stocks—99.5% (cost $60,848)					61,530

Total Investments—99.5% (cost $60,848)					61,530
Cash and other assets, less liabilities—0.5%					283
Net assets—100.0%				$	61,813

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Industrials	21.1%
Financials	19.9%
Consumer Discretionary	15.8%
Information Technology	11.7%
Health Care	11.2%
Materials	6.6%
Energy	6.3%
Consumer Staples	5.9%
Telecommunication Services	1.5%
Total	100.0%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling	24.0%
Euro	17.9%
Japanese Yen	17.9%
Swiss Franc	10.5%
U.S. Dollar	7.9%
Hong Kong Dollar	5.2%
South African Rand	4.0%
Danish Krone	2.9%
Norwegian Krone	2.8%
Swedish Krona	2.1%
South Korean Won	2.1%
Indonesian Rupiah	1.0%
Kenyan Shilling	1.0%
All Other Currencies	0.7%
Total	100.0%

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	INTERNATIONAL SMALL CAP GROWTH FUND

	The International Small Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Jeffrey A. Urbina Andrew G. Flynn	The William Blair International Small Cap Growth Fund (Class N shares) posted a 6.91% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI All Country World Ex-U.S. Small Cap Index (net) (the “Index”), increased 1.83%. The Fund’s outperformance relative to the Index was driven by stock selection in Consumer Discretionary, Financials, and Materials. The Fund’s Consumer Discretionary stocks rallied approximately 19%, well ahead of the 10.3% Index return, as U.K. and Japanese specialty and internet retailers added value, in addition to Japanese auto component manufacturers. The Fund’s Financials stocks rose approximately 8.5% during the period, well ahead of the 2% Index return, due to strong performance by the Fund’s REIT holdings, coupled with Suruga Bank, the Japanese regional bank, which rose on positive results and positive Japanese sentiment, and Azimut, the Italian asset management company, on good earnings results amidst strong positive fund flows. Materials benefited from strong stock performance by Hoganas, the Fund’s sole Metals/Mining holding, which was up approximately 25% during the period, as it was acquired. Emerging Markets stock selection also augmented results, as did strong performance across developed market regions. The Fund’s focus on Japan and the U.K. at the expense of Canada was additive as well. Somewhat detracting from positive year to date results was Energy and Telecom Services stock selection, coupled with the underweighting in Financials. After increasing Japanese holdings in the first quarter, we reduced Japan on valuation concerns in May, as the market rallied substantially with cash largely reinvested in Europe-Ex U.K. holdings. As of June 30, the U.K. remained the most overweighted at 26.2% of the Fund, well ahead of the 14.2% Index weighting, while emerging markets totaled 12.8%, well below the 22.6% weighting of the Index, and a decline since December 31, due to concerns about slower growth in the short term. From a sector perspective, the Fund remained most overweighted versus the Index in Consumer Discretionary (25.3% v. 18.4%), Healthcare (13.9% v. 5.7%), and Information Technology (“IT”) (17.3% v. 10.4%), and most underweighted versus the Index in Financials (12.9% v. 19.9%) and Industrials (10.5% v. 19.0%). Since year end, IT increased from 11.8% to 17.3% of the Fund, while Consumer Staples, Energy, and Telecom Services declined.

Semi-Annual Report

June 30, 2013

International Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		6.91	%		21.58	%		13.47	%		3.11	%		6.67	%
Class I		7.07			22.00			13.84			3.46			7.01
Institutional Class		7.18			22.22			14.08			3.67			7.20
MSCI ACW Ex-U.S. Small Cap Index (net)		1.83			15.94			9.16			2.65			5.85

(a)	For the period from November 1, 2005 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Smaller capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company L.L.C. without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) All Country World (ACW) Ex-U.S. Small Cap Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of small capitalization developed and emerging markets, excluding the United States. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe—26.7%

	Belgium—0.8%
	Melexis N.V. (Semiconductors & semiconductor equipment)		56,818		$	1,195
*	ThromboGenics N.V. (Biotechnology)		120,666			4,626
						5,821

	Denmark—4.1%
	GN Store Nord A/S (Health care equipment & supplies)		629,397			11,896
*	Matas A/S (Specialty retail)		29,430			603
	SimCorp A/S (Software)		238,665			7,081
*	Topdanmark A/S (Insurance)		470,613			11,991
						31,571

	Finland—1.1%
	Tikkurila Oyj (Chemicals)		361,521			8,164

	France—0.4%
*	GameLoft SE (Software)		480,904			3,368

	Germany—6.9%
	Bertrandt AG (Professional services)		33,076			3,553
	Deutsche Wohnen AG (Real estate management & development)		531,568			9,026
	ElringKlinger AG (Auto components)		168,825			5,635
	Gerry Weber International AG (Textiles, apparel & luxury goods)		73,524			3,110
	Pfeiffer Vacuum Technology AG (Machinery)		41,396			4,289
	Wincor Nixdorf AG (Computers & peripherals)		294,776			15,985
	Wirecard AG (IT services)		426,204			11,600
						53,198

	Ireland—1.1%
	Paddy Power plc (Hotels, restaurants & leisure)		92,993			7,979

	Italy—4.4%
	Azimut Holding SpA (Capital markets)		724,559			13,195
	Brembo SpA (Auto components)		244,301			4,360
	De’Longhi SpA (Household durables)		80,675			1,261
	Recordati SpA (Pharmaceuticals)		854,881			9,486
*	Yoox SpA (Internet & catalog retail)		254,867			5,477
						33,779

	Norway—2.6%
*	Algeta ASA (Biotechnology)		73,510			2,798
	Borregaard ASA (Chemicals)		944,414			4,120
	Opera Software ASA (Internet software & services)		830,051			6,423
	Prosafe SE (Energy equipment & services)		757,542			6,653
						19,994

	Spain—1.1%
	Viscofan S.A. (Food products)		172,370			8,636



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe—(continued)

	Sweden—3.4%
	Axis Communications AB (Communications equipment)		291,710		$	7,212
	Hexpol AB (Chemicals)		158,759			10,345
	JM AB (Household durables)		320,661			6,766
	Nolato AB (Communications equipment)		118,780			2,055
						26,378

	Switzerland—0.8%
	Burckhardt Compression Holding AG (Machinery)		15,516			6,176

	United Kingdom—26.2%
	Abcam plc (Biotechnology)		1,125,991			7,766
	Alent plc (Chemicals)		982,962			4,904
*	ASOS plc (Internet & catalog retail)		252,047			15,506
	Aveva Group plc (Software)		318,176			10,908
	AZ Electronic Materials S.A. (Chemicals)		2,256,662			10,544
	Big Yellow Group plc (Real estate investment trusts (REITs))		312,614			1,829
	Booker Group plc (Food & staples retailing)		6,372,000			11,775
	Cineworld Group plc (Media)		622,515			3,212
*	Countrywide plc (Real estate management & development)		1,045,557			8,031
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		463,189			4,723
	Dunelm Group plc (Specialty retail)		889,020			12,805
	Elementis plc (Chemicals)		2,010,113			6,708
	Fidessa Group plc (Software)		196,525			5,763
	Howden Joinery Group plc (Specialty retail)		3,035,504			11,699
	Keller Group plc (Construction & engineering)		115,914			1,747
	Lancashire Holdings, Ltd. (Insurance)		888,860			10,707
	Moneysupermarket.com Group plc (Internet software & services)		2,892,596			8,429
*	Nanoco Group plc (Semiconductors & semiconductor equipment)		1,762,211			3,538
*	Ocado Group plc (Internet & catalog retail)		1,148,326			5,210
	Oxford Instruments plc (Electronic equipment, instruments & components)		366,684			6,743
	Provident Financial plc (Consumer finance)		632,216			14,318
	Regus plc (Commercial services & supplies)		3,062,555			7,327
	Restaurant Group plc (Hotels, restaurants & leisure)		993,062			7,552
	RPS Group plc (Commercial services & supplies)		724,487			2,226
*	Salamander Energy plc (Oil, gas & consumable fuels)		1,574,706			3,449
	Senior plc (Machinery)		1,831,788			6,976
	Synergy Health plc (Health care providers & services)		196,553			3,372
	Ted Baker plc (Textiles, apparel & luxury goods)		129,909			3,359
						201,126

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Japan—20.2%
	Cosmos Pharmaceutical Corporation (Food & staples retailing)		77,200		$	7,815
	CyberAgent, Inc. (Media)		1,705			3,266
	Don Quijote Co., Ltd. (Multiline retail)		166,300			8,090
	F.C.C. Co., Ltd. (Auto components)		486,709			11,503
	Kakaku.com, Inc. (Internet software & services)		446,700			13,624
	M3, Inc. (Health care technology)		1,778			3,994
	Miraca Holdings, Inc. (Health care providers & services)		166,800			7,669
	MISUMI Group, Inc. (Trading companies & distributors)		262,300			7,212
	MonotaRO Co., Ltd. (Trading companies & distributors)		154,600			3,768
	Nihon M&A Center, Inc. (Professional services)		62,300			3,474
	Nippon Kayaku Co., Ltd. (Chemicals)		260,000			3,240
*	Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		443			3,855
	Nissan Chemical Industries, Ltd. (Chemicals)		618,900			8,337
	Park24 Co., Ltd. (Commercial services & supplies)		676,100			12,264
	Ryohin Keikaku Co., Ltd. (Multiline retail)		125,400			10,292
	Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		74,000			8,841
	Ship Healthcare Holdings, Inc. (Health care providers & services)		173,300			6,378
	Sundrug Co., Ltd. (Food & staples retailing)		264,600			11,232
	TS Tech Co., Ltd. (Auto components)		378,000			12,005
	United Arrows, Ltd. (Specialty retail)		198,300			8,287
						155,146

	Emerging Asia—11.1%

	China—3.3%
	China Medical System Holdings, Ltd. (Pharmaceuticals)		8,867,000			7,911
	China Overseas Grand Oceans Group, Ltd. (Real estate management & development)		5,478,000			6,992
	Dongyue Group (Chemicals)		6,363,000			2,543
	Haitian International Holdings, Ltd. (Machinery)		3,828,496			5,598
	Sino Biopharmaceutical (Pharmaceuticals)		3,176,000			2,060
						25,104

	India—3.4%
	Glenmark Pharmaceuticals, Ltd. (Pharmaceuticals)		1,208,859			11,153
	Ipca Laboratories, Ltd. (Pharmaceuticals)		694,363			7,656
	Motherson Sumi Systems, Ltd. (Auto components)		1,904,902			6,355
	Oberoi Realty, Ltd. (Real estate management & development)		328,318			1,093
						26,257



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)

	Indonesia—0.5%
	PT Ace Hardware Indonesia Tbk (Specialty retail)		26,233,000		$	1,956
	PT Mitra Adiperkasa Tbk (Multiline retail)		2,160,500			1,524
						3,480

	Malaysia—0.4%
	Hartalega Holdings Bhd (Health care equipment & supplies)		986,300			1,998
	Silverlake Axis, Ltd. (Software)		2,304,000			1,354
						3,352

	South Korea—0.9%
*	Cheil Worldwide, Inc. (Media)		328,150			7,068

	Taiwan—2.6%
	Chipbond Technology Corporation (Semiconductors & semiconductor equipment)		1,827,527			4,482
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		511,000			3,776
	Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		2,417,000			11,734
						19,992

	Asia—7.8%

	Australia—4.0%
	carsales.com, Ltd. (Internet software & services)		1,054,661			9,096
	Domino’s Pizza Enterprises, Ltd. (Hotels, restaurants & leisure)		190,884			1,950
	DuluxGroup, Ltd. (Chemicals)		1,657,035			6,380
	FlexiGroup, Ltd. (Consumer finance)		874,056			3,485
	Super Retail Group, Ltd. (Specialty retail)		908,115			9,941
						30,852

	Hong Kong—1.3%
	Sa Sa International Holdings, Ltd. (Specialty retail)		3,608,000			3,582
	SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		3,847,500			6,389
						9,971

	New Zealand—1.0%
	Ryman Healthcare, Ltd. (Health care providers & services)		1,476,767			7,290

	Singapore—1.5%
	ARA Asset Management Ltd.—144A (Capital markets)		1,345,300			1,847
	First Resources, Ltd. (Food products)		4,865,000			6,813
	SATS, Ltd. (Transportation infrastructure)		1,160,000			3,011
						11,671

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares or Principal Amount		Value

	Common Stocks—(continued)

	Canada—4.5%
	Canadian Energy Services & Technology Corporation (Energy equipment & services)		423,357		$	6,574
*	Legacy Oil + Gas, Inc. (Oil, gas & consumable fuels)		1,312,910			6,180
	Precision Drilling Corporation (Energy equipment & services)		919,619			7,826
	Total Energy Services, Inc. (Energy equipment & services)		216,430			2,994
	Westjet Airlines, Ltd. (Airlines)		521,374			11,164
						34,738

	Emerging Europe, Mid-East, Africa—1.4%

	Turkey—1.4%
	Dogus Otomotiv Servis ve Ticaret A.S. (Distributors)		358,552			1,818
	Turkiye Sinai Kalkinma Bankasi A.S. (Commercial banks)		8,640,409			8,557
						10,375

	Emerging Latin America—0.3%

	Mexico—0.3%
*	Macquarie Mexico Real Estate Management S.A. de C.V.—144A (Real estate investment trusts (REITs))		874,140			1,889

	Total Common Stocks—98.2% (cost $671,270)					753,375

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $15,669, collateralized by FNMA, 0.875%, due 10/26/17		$15,669			15,669

	Total Repurchase Agreement—2.0% (cost $15,669)					15,669

	Total Investments—100.2% (cost $686,939)					769,044
	Liabilities, plus cash and other assets—(0.2)%					(1,835	)
	Net assets—100.0%				$	767,209

* Non-income producing securities

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Consumer Discretionary	25.3	%
Information Technology	17.3	%
Health Care	13.9	%
Financials	12.9	%
Industrials	10.5	%
Materials	8.7	%
Consumer Staples	6.1	%
Energy	4.5	%
Telecommunication Services	0.8	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

British Pound Sterling	26.7	%
Japanese Yen	20.6	%
Euro	16.0	%
Hong Kong Dollar	4.7	%
Canadian Dollar	4.6	%
Danish Krone	4.2	%
Australian Dollar	4.1	%
Swedish Krona	3.5	%
Indian Rupee	3.5	%
Norwegian Krone	2.7	%
New Taiwan Dollar	2.6	%
Singapore Dollar	1.7	%
Turkish Lira	1.4	%
All Other Currencies	3.7	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	EMERGING MARKETS GROWTH FUND

	The Emerging Markets Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Todd M. McClone Jeffrey A. Urbina	The William Blair Emerging Markets Growth Fund (Class N shares) posted a 6.27% decrease, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets IMI Index (net) (the “Index”), decreased 8.89%. While the Fund outperformed the Index, it was down in absolute terms, given weakness in Emerging Markets in general during the period. This weakness was precipitated by lower demand for commodities, coupled with concerns of a structural slowdown in China and expectations of rising interest rates in the United States. The Fund’s performance relative to the Index was driven by strong performance across sectors and regions, coupled with overall sector positioning. In particular, the Fund’s Materials stocks added value year to date, due largely to the underweighting and stock selection in Metals/Mining, coupled with good results by Indocement Tunggal Prakarsa, the Indonesian cement company. Industrials stock selection was strong, as the Fund’s holdings were up 2.31%, well ahead of the -9.41% Index return. Low cost airlines added value, as did solid operating results from Industries Qatar and Haitian International Holdings. Consumer Staples and Financials stock selection were also additive to results. Somewhat detracting from year to date performance was Energy stock selection, particularly in Chinese Oil/Gas, as Shenhua Energy, CNOOC, and Kunlun underperformed. Regionally, Asian stock selection was bolstered by good relative performance in China, India, and Thailand, more than offsetting weakness in South Korea, particularly Hyundai Motors, which we sold on margin pressure and increasing competition. Europe, the Middle East and Africa benefited from frontier markets exposure in Qatar, UAE, Nigeria, and Kenya, coupled with good stock selection in Russia and South Africa. The Fund’s focus on companies with above average earnings trends and positive price momentum added value year to date, offsetting the higher quality focus and higher valuation, which hampered results. Consumer Discretionary and Consumer Staples each represented approximately 12% of the Fund, ahead of the Index weightings, while Information Technology totaled 19.6% of the Fund, above the 14.8% Index weighting. Conversely, Resources were significantly underweighted, as Energy represented approximately 5% of the Fund, half the Index weighting, and Materials totaled 2.0% of the Fund, well below the 9.8% Index weighting. Regionally, the Fund remained underweighted in Asia, due largely to underweighting in Taiwan and Korea, which more than offset the India overweighting. EMEA increased to 19.5% of the Fund, despite underweightings in Europe and Russia, due largely to 5.3% exposure in Middle East and African frontier markets.

June 30, 2013

William Blair Funds

Emerging Markets Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		(6.27	)%		5.66	%		6.46	%		(1.87	)%		9.51	%
Class I		(6.07	)		5.93			6.78			(1.60	)		9.80
Institutional Class		(6.03	)		6.18			6.98			(1.43	)		9.98
MSCI Emerging Markets IMI (net)		(8.89	)		3.66			3.43			0.16			9.49

(a)	For the period from June 6, 2005 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company L.L.C. without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) Emerging Markets Investable Market Index (IMI) (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of emerging markets. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—53.8%

	Cambodia—0.3%
	NagaCorp, Ltd. (Hotels, restaurants & leisure)		2,874,000		$	2,242

	China—17.4%
	AAC Technologies Holdings, Inc. (Communications equipment)		767,959			4,337
	Biostime International Holdings, Ltd. (Food products)		299,000			1,677
	China BlueChemical, Ltd. (Chemicals)		3,590,609			2,194
	China Mobile, Ltd. (Wireless telecommunication services)		2,570,309			26,843
	China Overseas Grand Oceans Group, Ltd. (Real estate management & development)		1,642,000			2,096
	China Overseas Land & Investment, Ltd. (Real estate management & development)		5,102,000			13,386
	China Unicom Hong Kong, Ltd. (Diversified telecommunication services)		10,364,000			13,763
	Dongyue Group (Chemicals)		3,907,287			1,562
	ENN Energy Holdings, Ltd. (Gas utilities)		1,744,000			9,298
	Haier Electronics Group Co., Ltd. (Household durables)		5,489,000			8,747
	Haitian International Holdings, Ltd. (Machinery)		2,315,870			3,386
	Kunlun Energy Co., Ltd. (Oil, gas & consumable fuels)		7,518,000			13,338
	Shenzhou International Group Holdings, Ltd. (Textiles, apparel & luxury goods)		667,000			1,918
	Sino Biopharmaceutical (Pharmaceuticals)		3,796,000			2,462
	Sun Art Retail Group, Ltd. (Food & staples retailing)		5,387,245			7,793
	Sunny Optical Technology Group Co., Ltd. (Electronic equipment, instruments & components)		1,719,000			2,074
	Tencent Holdings, Ltd. (Internet software & services)		702,835			27,566
	Want Want China Holdings, Ltd. (Food products)		6,612,217			9,311
*	WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		143,757			3,019
						154,770

	India—15.3%
	Apollo Hospitals Enterprise, Ltd. (Health care providers & services)		154,479			2,739
	Bajaj Auto, Ltd. (Automobiles)		226,153			7,322
	HCL Technologies, Ltd. (IT services)		990,957			12,940
	HDFC Bank, Ltd. (Commercial banks)		828,401			9,333
	Housing Development Finance Corporation (Thrifts & mortgage finance)		1,063,733			15,735
	IndusInd Bank, Ltd. (Commercial banks)		650,266			5,115
	ITC, Ltd. (Tobacco)		3,985,041			21,751
	Lupin, Ltd. (Pharmaceuticals)		559,430			7,357
	Marico, Ltd. (Personal products)		567,382			1,983

	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)

	India—(continued)
	Motherson Sumi Systems, Ltd. (Auto components)		1,011,710		$	3,375
	Sun Pharmaceutical Industries, Ltd. (Pharmaceuticals)		713,243			12,141
	Tata Consultancy Services, Ltd. (IT services)		518,104			13,236
	Tata Motors, Ltd. (Automobiles)		4,501,204			21,307
	Yes Bank, Ltd. (Commercial banks)		273,097			2,119
						136,453

	Indonesia—3.4%
	PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		12,047,321			9,407
	PT Indocement Tunggal Prakarsa Tbk (Construction materials)		1,795,500			4,423
	PT Jasa Marga Persero Tbk (Transportation infrastructure)		3,771,000			2,299
	PT Kalbe Farma Tbk (Pharmaceuticals)		17,712,915			2,570
*	PT Matahari Department Store Tbk (Multiline retail)		2,078,000			2,429
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		8,042,000			9,115
						30,243

	Malaysia—2.7%
	CIMB Group Holdings Bhd (Commercial banks)		6,379,787			16,720
	Guinness Anchor Bhd (Beverages)		331,400			1,999
*	IHH Healthcare Bhd (Health care providers & services)		4,520,000			5,651
						24,370

	Papua New Guinea—1.0%
	Oil Search, Ltd. (Oil, gas & consumable fuels)		1,299,864			9,189

	Philippines—1.1%
	SM Prime Holdings, Inc. (Real estate management & development)		18,287,700			6,900
	Universal Robina Corporation (Food products)		1,069,710			3,096
						9,996

	South Korea—5.0%
*	Cheil Worldwide, Inc. (Media)		105,200			2,266
	GS Home Shopping, Inc. (Internet & catalog retail)		10,945			2,267
	Hana Tour Service, Inc. (Hotels, restaurants & leisure)		36,196			2,279
	LG Household & Health Care, Ltd. (Household products)		4,622			2,258
	Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		29,840			35,064
						44,134

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)

	Taiwan—5.1%
	Asustek Computer, Inc. (Computers & peripherals)		941,000		$	8,100
	Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		693,000			3,364
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		1,647,918			30,190
	TPK Holding Co., Ltd. (Electronic equipment, instruments & components)		251,979			4,036
						45,690

	Thailand—2.5%
	Advanced Info Service PCL (Wireless telecommunication services)		836,262			7,603
	Bangkok Dusit Medical Services PCL (Health care providers & services)		472,000			2,397
	BEC World PCL (Media)		1,113,300			2,109
	Kasikornbank PCL (Commercial banks)		1,598,182			10,100
						22,209

	Emerging Europe, Mid-East, Africa—19.5%

	Kenya—0.1%
	Safaricom, Ltd. (Wireless telecommunication services)		15,213,800			1,170

	Nigeria—1.2%
	Guaranty Trust Bank plc (Commercial banks)		40,269,497			6,021
	Nestle Nigeria plc (Food products)		344,565			2,056
	Nigerian Breweries plc (Beverages)		2,375,731			2,282
						10,359

	Poland—0.4%
	Eurocash S.A. (Food & staples retailing)		220,047			3,888

	Qatar—2.3%
	Industries Qatar QSC (Industrial conglomerates)		406,490			17,698
	Qatar National Bank S.A.Q. (Commercial banks)		59,840			2,613
						20,311

	Russia—4.0%
*	Etalon Group Ltd.—144A—GDR (Real estate management & development)		448,600			1,539
	M Video OJSC (Specialty retail)		278,070			2,014
	Magnit OJSC (Food & staples retailing)^†		64,131			14,756
	Mail.ru Group Ltd.—144A—GDR (Internet software & services)^†		28,376			813
	Mail.ru Group, Ltd.—GDR (Internet software & services)		74,481			2,135
*	Yandex N.V. Class “A” (Internet software & services)†		517,514			14,299
						35,556

	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—(continued)

	South Africa—6.9%
	Bidvest Group, Ltd. (Industrial conglomerates)		285,076		$	7,064
	Discovery, Ltd. (Insurance)		329,789			2,804
	FirstRand, Ltd. (Diversified financial services)		3,406,500			9,970
	Life Healthcare Group Holdings, Ltd. (Health care providers & services)		634,643			2,408
	Mr. Price Group, Ltd. (Specialty retail)		233,156			3,177
	MTN Group, Ltd. (Wireless telecommunication services)		633,027			11,783
	Naspers, Ltd. (Media)		236,721			17,481
	Shoprite Holdings, Ltd. (Food & staples retailing)		370,345			6,950
						61,637

	Turkey—2.9%
	Coca-Cola Icecek A.S. (Beverages)		217,949			6,272
*	Pegasus Hava Tasimaciligi A.S. (Airlines)		233,156			2,768
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		786,224			4,912
	Turkiye Halk Bankasi A.S. (Commercial banks)		1,384,825			11,740
						25,692

	United Arab Emirates—1.7%
	Dragon Oil plc (Oil, gas & consumable fuels)		491,246			4,277
	First Gulf Bank PJSC (Commercial banks)		2,402,721			10,434
						14,711

	Emerging Latin America—19.4%

	Argentina—0.3%
	MercadoLibre, Inc. (Internet software & services)		27,576			2,972

	Brazil—8.8%
*	BB Seguridade Participacoes S.A. (Insurance)		1,662,300			13,112
	BR Malls Participacoes S.A. (Real estate management & development)		466,890			4,181
	CCR S.A (Transportation infrastructure)		1,177,489			9,340
	Cia de Bebidas das Americas—ADR (Beverages)		472,321			17,641
	Embraer S.A.—ADR (Aerospace & defense)		237,821			8,773
	Grendene S.A. (Textiles, apparel & luxury goods)		213,900			1,942
	Iguatemi Empresa de Shopping Centers S.A. (Real estate management & development)		205,200			2,021
	Iochpe-Maxion S.A. (Machinery)		30,800			332
	Kroton Educacional S.A. (Diversified consumer services)		302,680			4,192
	Localiza Rent a Car S.A. (Road & rail)		188,510			2,670
	Lojas Renner S.A. (Multiline retail)		107,722			3,087
	Totvs S.A. (Software)		146,232			2,293
	Tractebel Energia S.A. (Independent power producers & energy traders)		551,538			8,570
						78,154

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	Shares		Value

Common Stocks—(continued)

Emerging Latin America—19.4%

Chile—2.0%
Banco Santander Chile—ADR (Commercial banks)		107,230		$	2,622
CFR Pharmaceuticals S.A. (Pharmaceuticals)		9,180,599			2,073
Inversiones La Construccion S.A. (Diversified financial services)		170,487			2,611
S.A.C.I. Falabella (Multiline retail)		718,000			7,773
Sonda S.A. (IT services)		902,353			2,628
					17,707

Colombia—2.0%
Ecopetrol S.A. (Oil, gas & consumable fuels)		3,456,625			7,339
Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		601,269			10,559
					17,898

Mexico—4.6%
Fibra Uno Administracion S.A. de C.V. (Real estate investment trusts (REITs))		1,818,769			6,107
Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		44,841			4,627
Grupo Financiero Banorte S.A.B. de C.V. (Commercial banks)		2,801,210			16,733
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		3,009,067			8,709
Grupo Sanborns S.A. de C.V. (Multiline retail)		2,008,600			4,483
					40,659

Panama—0.4%
Copa Holdings S.A. Class “A” (Airlines)^†		28,320			3,713

Peru—1.3%
Credicorp, Ltd. (Commercial banks)^†		74,469			9,529
Intercorp Financial Services, Inc. (Diversified financial services)		68,646			2,265
					11,794

Total Common Stocks—92.7% (cost $793,867)					825,517

Preferred Stock

Brazil—2.3%
Itau Unibanco Holding S.A. (Commercial banks)		1,625,385			20,957

Total Preferred Stock—2.3% (cost $23,239)					20,957

Affiliated Fund

China—2.7%
William Blair China A-Share Fund, LLC		2,362,400			24,474

Total Affiliated Fund—2.7% (cost $23,624)					24,474

Issuer	Principal Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $8,594, collateralized by FNMA, 1.160%, due 6/28/17		$8,594		$	8,594

Total Repurchase Agreement—1.0% (cost $8,594)					8,594

Total Investments—98.7% (cost $849,324)					879,542
Cash and other assets, less liabilities—1.3%					11,339
Net assets—100.0%				$	890,881

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials	25.4	%
Information Technology	19.6	%
Consumer Staples	12.9	%
Consumer Discretionary	12.4	%
Telecommunication Services	8.3	%
Industrials	6.9	%
Energy	5.3	%
Health Care	5.1	%
Utilities	2.1	%
Materials	2.0	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

Hong Kong Dollar	18.0	%
U.S. Dollar	16.2	%
Indian Rupee	15.7	%
Brazilian Real	8.3	%
South African Rand	7.1	%
South Korean Won	5.1	%
Mexican Peso	4.1	%
Indonesian Rupiah	3.5	%
Turkish Lira	2.9	%
Malaysian Ringgit	2.8	%
Thai Baht	2.6	%
Qatari Rial	2.3	%
New Taiwan Dollar	1.8	%
Chilean Peso	1.7	%
Canadian Dollar	1.2	%
UAE Dirham	1.2	%
Nigerian Naira	1.2	%
Philippine Peso	1.1	%
Australian Dollar	1.1	%
All Other Currencies	2.1	%
Total	100.0	%

Shares Activity Affiliated with China A-Share Fund

Period Ended June 30, 2013

(in thousands)

Fund Name

Balance
12/31/2012

Purchases

Sales

Balance
6/30/2013

Value

William Blair China A-Share Fund, LLC

2,362,400

—

2,362,400

$24,474

Affiliated Funds accounted for $850 of change in net unrealized depreciation on investments during the period.

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	EMERGING MARKETS LEADERS FUND

	The Emerging Markets Leaders Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Todd M. McClone Jeffrey A. Urbina	The William Blair Emerging Markets Leaders Fund (Class N shares) posted a 7.50% decrease, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Index (net) decreased 9.57%. While the Fund outperformed the Index it was down in absolute terms, given weakness in Emerging Markets in general during the period. This weakness was precipitated by lower demand for commodities, coupled with concerns of a structural slowdown in China and expectations of rising interest rates in the United States. The Fund’s performance relative to the Index resulted from strong stock selection across most sectors, coupled with overall sector positioning. The Fund’s focus on Healthcare and Staples at the expense of Materials and Energy added value. In addition, the Fund’s Industrials stocks were up 0.3%, well above the -10% Index return, due largely to a lack of Machinery holdings. Within Materials, performance benefited from an underweighting in Metals/Mining. In addition, Grupo Mexico outpaced the Mining industry as a whole during the period. The Fund’s Healthcare stocks rose 19.6%, well ahead of the 2% Index return, given strong performance by Sun Pharmaceutical and IHH Healthcare. Detracting from results was the Fund’s Energy stock selection, as oil/gas holdings underperformed. Regionally, stock selection added value across all regions, with particular value added in Europe, the Middle East and Africa, and Latin America. In EMEA, strong performance by stocks held in Qatar and the UAE (frontier markets) added value, as did strong stock selection in Russia and South Africa, given the lack of Resources exposure. Within Latin America, strong performance in Brazil and Chile more than offset weakness in Resource-oriented holdings (Ecopetrol and Pacific Rubiales) in the region. While overall positioning did not change substantially, we reduced Financials from approximately 30% to 29%, due to a reduction in Commercial Banks, which more than offset additional weightings in Insurance names. This reduction funded an increase in Industrials to 8.7%, above the 6.3% Index weighting. We also reduced Resources on continued concerns about slowing demand and stagnating prices. Regionally, EMEA increased from approximately 17% to 19.8%, above the 17.2% Index weighting, due largely to a 4.7% weighting in frontier countries, coupled with increased exposure in South African consumer and financials-related holdings. While Latin America was slightly overweighted versus the Index, Emerging Asia totaled 53.5%, and remained significantly underweighted versus the Index, given lower weightings in Korea and Taiwan, which more than offset the higher India exposure.

June 30, 2013

William Blair Funds

Emerging Markets Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception
Class N(b)		(7.50	)%		4.15	%		4.16	%		—			1.88	%
Class I(a)		(7.41	)		4.47			4.38			(0.22	)		(0.92	)
Institutional Class(a)		(7.41	)		4.63			4.54			(0.10	)		(0.78	)
MSCI Emerging Markets Index (net)(a)		(9.57	)		2.87			3.38			(0.43	)		(0.62	)
MSCI Emerging Markets Large Cap Index (net)(a)		(9.65	)		2.73			3.54			(0.82	)		(0.73	)

(a)	Since Inception is for the period from March 26, 2008 (Commencement of Operations) to June 30, 2013.
(b)	Since Inception for Class N is for the period from May 3, 2010 (Commencement of Operations) to June 30, 2013. The corresponding benchmark inception returns for the MSCI Emerging Index (net) and the MSCI Emerging Markets Large Cap Index (net) are 0.36% and 0.42%, respectively.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) Emerging Markets Index (net) is a free float-adjusted market-capitalization-weighted index that is designed to measure equity market performance of emerging markets. This series approximates the minimum possible dividend reinvestment.

The Morgan Stanley Capital International (MSCI) Emerging Markets Large Cap Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure market performance of large capitalization stocks in emerging markets. This series approximates the minimum possible dividend reinvestment.

On December 31, 2012, the Fund’s Benchmark changed from the Morgan Stanley Capital International (MSCI) Emerging Markets Large Cap Index (net) to the Morgan Stanley Capital International (MSCI) Emerging Markets Index (net). The primary reason for this change is to compare the Fund to a benchmark that more closely reflects the market capitalization focus the Fund uses in its investment strategy.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—53.5%

	China—17.4%
	China Mobile, Ltd. (Wireless telecommunication services)		156,500		$	1,634
	China Overseas Land & Investment, Ltd. (Real estate management & development)		634,000			1,663
	China Unicom Hong Kong, Ltd. (Diversified telecommunication services)		906,000			1,203
	Great Wall Motor Co., Ltd. Class “H” (Automobiles)		286,500			1,236
	Kunlun Energy Co., Ltd. (Oil, gas & consumable fuels)		818,000			1,451
	Sun Art Retail Group, Ltd. (Food & staples retailing)		445,500			645
	Tencent Holdings, Ltd. (Internet software & services)		47,700			1,871
	Want Want China Holdings, Ltd. (Food products)		677,000			953
						10,656

	India—14.8%
	Bajaj Auto, Ltd. (Automobiles)		24,311			787
	HCL Technologies, Ltd. (IT services)		115,477			1,508
	HDFC Bank, Ltd. (Commercial banks)		55,042			620
	Housing Development Finance Corporation (Thrifts & mortgage finance)		99,909			1,478
	ITC, Ltd. (Tobacco)		233,908			1,277
	Lupin, Ltd. (Pharmaceuticals)		37,040			487
	Sun Pharmaceutical Industries, Ltd. (Pharmaceuticals)		68,613			1,168
	Tata Consultancy Services, Ltd. (IT services)		35,589			909
	Tata Motors, Ltd. (Automobiles)		164,913			781
						9,015

	Indonesia—3.5%
	PT Bank Rakyat Indonesia Persero Tbk (Commercial banks)		1,113,000			869
	PT Jasa Marga Persero Tbk (Transportation infrastructure)		499,500			305
	PT Kalbe Farma Tbk (Pharmaceuticals)		1,435,000			208
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		685,500			777
						2,159

	Malaysia—4.1%
	CIMB Group Holdings Bhd (Commercial banks)		618,800			1,622
*	IHH Healthcare Bhd (Health care providers & services)		722,700			903
						2,525

	Philippines—1.2%
	SM Prime Holdings, Inc. (Real estate management & development)		1,881,700			710

	South Korea—5.2%
	LG Household & Health Care, Ltd. (Household products)		1,194			584



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*

	South Korea—(continued)
	Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		2,194		$	2,578
						3,162

	Taiwan—4.8%
	Asustek Computer, Inc. (Computers & peripherals)		61,000			525
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		131,675			2,412
						2,937

	Thailand—2.5%
	Advanced Info Service PCL (Wireless telecommunication services)		75,700			688
	Kasikornbank PCL (Commercial banks)		136,000			860
						1,548

	*Emerging Latin America—20.7%*

	Brazil—8.8%
*	BB Seguridade Participacoes S.A. (Insurance)		144,200			1,137
	BR Malls Participacoes S.A. (Real estate management & development)		49,600			444
	CCR S.A (Transportation infrastructure)		97,700			775
	Cia de Bebidas das Americas—ADR (Beverages)		39,768			1,485
	Embraer S.A.—ADR (Aerospace & defense)		15,067			556
	Kroton Educacional S.A. (Diversified consumer services)		50,000			693
	Localiza Rent a Car S.A. (Road & rail)		18,870			267
						5,357

	Chile—1.0%
	S.A.C.I. Falabella (Multiline retail)		58,155			629

	Colombia—3.0%
	Ecopetrol S.A. (Oil, gas & consumable fuels)		300,750			639
	Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		68,067			1,195
						1,834

	Mexico—6.3%
	Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		9,354			965
	Grupo Financiero Banorte S.A.B. de C.V. (Commercial banks)		243,100			1,452
	Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		353,600			1,023
	Grupo Sanborns S.A. de C.V. (Multiline retail)		186,100			416
						3,856

	Panama—0.5%
	Copa Holdings S.A. Class “A” (Airlines)†		2,410			316

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Latin America—(continued)*

	Peru—1.1%
	Credicorp, Ltd. (Commercial banks)†		5,437		$	696

	*Emerging Europe, Mid-East, Africa—19.8%*

	Nigeria—0.5%
	Guaranty Trust Bank plc (Commercial banks)		2,213,912			331

	Qatar—3.5%
	Industries Qatar QSC (Industrial conglomerates)		44,788			1,950
	Qatar National Bank S.A.Q. (Commercial banks)		3,717			162
						2,112

	Russia—5.0%
*	Magnit OJSC—144A—GDR (Food & staples retailing)†		31,246			1,787
*	Yandex N.V. Class “A” (Internet software & services)†		45,629			1,261
						3,048

	South Africa—6.9%
	Bidvest Group, Ltd. (Industrial conglomerates)		38,813			962
	Discovery, Ltd. (Insurance)		75,243			640
	FirstRand, Ltd. (Diversified financial services)		271,290			794
	Naspers, Ltd. (Media)		16,045			1,185
	Shoprite Holdings, Ltd. (Food & staples retailing)		33,471			628
						4,209

	Turkey—2.6%
	Coca-Cola Icecek A.S. (Beverages)		14,528			418
	Turkiye Halk Bankasi A.S. (Commercial banks)		136,887			1,160
						1,578

	United Arab Emirates—1.3%
	First Gulf Bank PJSC (Commercial banks)		189,402			823

	Total Common Stocks—94.0% (cost $55,962)					57,501

	*Preferred Stock*

	Brazil—2.7%
	Itau Unibanco Holding S.A. (Commercial banks)		129,600			1,671

	Total Preferred Stock—2.7% (cost $1,849)					1,671


	Principal
Issuer	Amount			Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $2,926, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$2,926			$	2,926

Total Repurchase Agreement—4.8% (cost $2,926)						2,926
			��
Total Investments—101.5% (cost $60,737)						62,098
Liabilities, plus cash and other assets—(1.5)%						(928	)
Net assets—100.0%					$	61,170

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Financials	28.9	%
Information Technology	18.6	%
Consumer Staples	14.8	%
Consumer Discretionary	9.7	%
Industrials	8.7	%
Telecommunication Services	7.3	%
Energy	5.6	%
Health Care	4.7	%
Materials	1.7	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

Hong Kong Dollar	18.0	%
U.S. Dollar	16.0	%
Indian Rupee	15.2	%
Brazilian Real	8.4	%
South African Rand	7.1	%
South Korean Won	5.3	%
Mexican Peso	4.9	%
Malaysian Ringgit	4.3	%
Indonesian Rupiah	3.7	%
Qatari Rial	3.6	%
Turkish Lira	2.7	%
Thai Baht	2.6	%
Canadian Dollar	2.0	%
UAE Dirham	1.4	%
Philippine Peso	1.2	%
Colombian Peso	1.1	%
Chilean Peso	1.1	%
All Other Currencies	1.4	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	EMERGING MARKETS SMALL CAP GROWTH FUND

	The Emerging Markets Small Cap Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Todd M. McClone Jeffrey A. Urbina	The William Blair Emerging Markets Small Cap Growth Fund (Class N shares) posted a 6.54% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Small Cap Index (net) (the “Index”), decreased 3.58%. Year to date, the Fund significantly outpaced the Index due to strong stock selection across all sectors, with all sectors except Materials posting positive absolute returns. In particular, the Fund’s Consumer Discretionary stocks rallied 10.64%, while the Index fell 2.72%. Performance was bolstered by strong results in Hotels/Restaurants and Textiles/Apparel/Luxury Goods. In addition, GS Home Shopping added value on strong earnings results on increased mobile sales, and Nagacorp, the Cambodian casino added value, as visitation growth accelerated during the first quarter and the company announced new initiatives to drive the Chinese VIP segment. Consumer Staples outperformed due to strong operating performance from Prince Frog, the Chinese child care products company, and good performance in Food Products, while Energy benefited from the focused exposure in Energy Equipment/Services, particularly with Dayang Enterprises. Industrials stock selection was bolstered by strong performance in low cost airlines, coupled with good performance by Haitian Holdings, the Chinese plastic injection molding machine supplier, as 2012 results were better than expected due to improving product mix and increased average sales prices. The Fund’s Materials stocks were down 2.58%, well above the -14.63% Index return, due to a focus on and stock selection in Chemicals at the expense of Mining. The Fund’s underweighting in Energy, Industrials, and Materials were key detractors from results, as was the underweighting in Emerging Asia, as the Fund’s regional return rallied 12.37%, well ahead of the flat Index return. Overall positioning did not change markedly year to date. The Fund remained significantly overweighted in Consumer Discretionary at approximately 27% versus the 18% Index weighting, as well as in Consumer Staples, which totaled approximately 15% of the Fund, versus the 8% Index weighting. Financials remained above the Index weighting, due to higher Commercial Banks and REIT weightings, which more than offset underweightings elsewhere. Resources remained significantly underweighted versus the Index, with Energy and Materials combined approximating 4% of the Fund, well below the nearly 14% Index weighting. Regionally, the Fund was underweighted in Asia, due to South Korea and Taiwan, which more than offset higher India and Philippines exposure. Europe, the Middle East and Africa totaled approximately 19% of the Fund, well above the Index weighting, given approximately 6% invested in frontier markets. Latin America, while overweighted, declined since December 31, due to reductions across most markets in the region.

June 30, 2013

William Blair Funds

Emerging Markets Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013

	Year to Date			1 Year			Since Inception
Class N(a)		6.54	%		25.14	%		21.67	%
Class I(a)		6.62			25.36			21.92
MSCI Emerging Markets Small Cap Index (net)(a)		(3.58	)		9.86			6.04
Institutional Class(b)		6.62			—			8.37
MSCI Emerging Markets Small Cap Index (net)(b)		(3.58	)		—			(2.20	)

(a)	Since inception is for the period from October 24, 2011 (Commencement of Operations) to June 30, 2013.
(b)	Since inception is for the period from December 20, 2012 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company L.L.C. without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Morgan Stanley Capital International (MSCI) Emerging Markets Small Cap Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of emerging markets. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—63.0%

	Cambodia—1.8%
	NagaCorp, Ltd. (Hotels, restaurants & leisure)		1,918,000		$	1,496

	China—13.7%
	AAC Technologies Holdings, Inc. (Communications equipment)		180,000			1,017
	Biostime International Holdings, Ltd. (Food products)		213,500			1,198
	China Medical System Holdings, Ltd. (Pharmaceuticals)		485,000			433
	China Overseas Grand Oceans Group, Ltd. (Real estate management & development)		636,000			812
	CIMC Enric Holdings, Ltd. (Machinery)		812,000			1,263
	Haitian International Holdings, Ltd. (Machinery)		968,000			1,415
	Hilong Holding, Ltd. (Energy equipment & services)		812,000			477
	Minth Group, Ltd. (Auto components)		910,000			1,415
	Prince Frog International Holdings, Ltd. (Personal products)		1,609,000			1,112
	Sunny Optical Technology Group Co., Ltd. (Electronic equipment, instruments & components)		698,000			842
	Tiangong International Co., Ltd. (Metals & mining)		1,290,000			319
*	WuXi PharmaTech Cayman, Inc.-ADR (Life sciences tools & services)		42,762			898
						11,201

	India—13.5%
	Amara Raja Batteries, Ltd. (Electrical equipment)		112,474			486
	Apollo Hospitals Enterprise, Ltd. (Health care providers & services)		34,561			613
	Bata India, Ltd. (Textiles, apparel & luxury goods)		14,278			201
	Bayer CropScience, Ltd. (Chemicals)		24,473			574
	Berger Paints India, Ltd. (Chemicals)		171,755			663
	Colgate-Palmolive India, Ltd. (Personal products)		10,410			238
	Eicher Motors, Ltd. (Machinery)		9,672			533
	Emami, Ltd. (Personal products)		86,931			702
	Glenmark Pharmaceuticals, Ltd. (Pharmaceuticals)		74,634			689
	Gruh Finance, Ltd. (Thrifts & mortgage finance)		148,808			573
	Havells India, Ltd. (Electrical equipment) .		42,292			523
	IndusInd Bank, Ltd. (Commercial banks)		136,138			1,071
	Ipca Laboratories, Ltd. (Pharmaceuticals)		97,345			1,073
	Marico, Ltd. (Personal products)		116,461			407
	Motherson Sumi Systems, Ltd. (Auto components)		149,233			498
	Page Industries, Ltd. (Textiles, apparel & luxury goods)		9,114			628
	Pidilite Industries, Ltd. (Chemicals)		179,947			809
	Yes Bank, Ltd. (Commercial banks)		97,845			759
						11,040



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)

	Indonesia—3.9%
	PT Ace Hardware Indonesia Tbk (Specialty retail)		7,033,000		$	524
	PT Alam Sutera Realty Tbk (Real estate management & development)		4,404,500			333
	PT Ciputra Development Tbk (Real estate management & development)		3,079,000			419
	PT Mitra Adiperkasa Tbk (Multiline retail)		757,500			534
	PT Pakuwon Jati Tbk (Real estate management & development)		24,503,000			852
	PT Sumber Alfaria Trijaya Tbk (Food & staples retailing)		496,000			337
*	PT Tower Bersama Infrastructure Tbk (Wireless telecommunication services)		456,000			239
						3,238

	Malaysia—5.6%
	Aeon Co. M Bhd (Multiline retail)		179,500			841
	Aeon Credit Service M Bhd (Consumer finance)		191,400			1,043
	Dayang Enterprise Holdings Bhd (Energy equipment & services)		394,300			612
	Guinness Anchor Bhd (Beverages)		105,200			635
	Hartalega Holdings Bhd (Health care equipment & supplies)		230,100			466
	Oldtown Bhd (Food products)		1,021,900			889
	Silverlake Axis, Ltd. (Software)		140,000			82
						4,568

	Philippines—4.0%
	Alliance Global Group, Inc. (Industrial conglomerates)		1,441,100			781
*	East West Banking Corporation (Commercial banks)		638,000			441
	Puregold Price Club, Inc. (Food & staples retailing)		1,279,900			1,075
	Security Bank Corporation (Commercial banks)		93,630			328
	Universal Robina Corporation (Food products)		234,140			677
						3,302

	South Korea—5.6%
*	Cheil Worldwide, Inc. (Media)		8,010			173
	GS Home Shopping, Inc. (Internet & catalog retail)		6,397			1,325
	Hana Tour Service, Inc. (Hotels, restaurants & leisure)		12,637			796
	Kolao Holdings (Automobiles)		26,298			678
	Medy-Tox, Inc. (Biotechnology)		3,448			303
	Paradise Co., Ltd. (Hotels, restaurants & leisure)		67,020			1,358
						4,633

	Sri Lanka—1.4%
	Commercial Bank of Ceylon plc (Commercial banks)		661,457			589

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Emerging Asia—(continued)

Sri Lanka—(continued)
John Keells Holdings plc (Industrial conglomerates)		288,842		$	558
					1,147

Taiwan—7.8%
Chipbond Technology Corporation (Semiconductors & semiconductor equipment)		63,000			154
Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		115,000			850
Ginko International Co., Ltd. (Health care equipment & supplies)		49,000			827
Makalot Industrial Co., Ltd. (Textiles, apparel & luxury goods)		204,000			973
Merida Industry Co., Ltd. (Leisure equipment & products)		185,000			1,099
Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		249,000			1,209
St Shine Optical Co., Ltd. (Health care equipment & supplies)		48,000			1,248
					6,360

Thailand—5.7%
Bangkok Chain Hospital PCL (Health care providers & services)		2,076,375			526
Dynasty Ceramic PCL (Building products)		308,600			634
Home Product Center PCL (Specialty retail)		717,513			266
Kiatnakin Bank PCL (Commercial banks)		179,300			306
LPN Development PCL (Real estate management & development)		432,200			336
Major Cineplex Group PCL (Media)		844,700			572
Minor International PCL (Hotels, restaurants & leisure)		745,310			596
Robinson Department Store PCL (Multiline retail)		201,600			397
Siam Global House PCL (Specialty retail)		444,400			334
Thai Tap Water Supply PCL (Water utilities)		885,200			288
Tisco Financial Group PCL (Commercial banks)		315,450			417
					4,672

Emerging Europe, Mid—East, Africa—19.3%

Kenya—3.2%
East African Breweries, Ltd. (Beverages)		117,700			466
Equity Bank, Ltd. (Commercial banks)		1,066,200			388
Kenya Commercial Bank, Ltd. (Commercial banks)		894,600			386
Safaricom, Ltd. (Wireless telecommunication services)		17,886,000			1,376
					2,616

Nigeria—2.6%
Access Bank plc (Commercial banks)		6,022,024			404
Guaranty Trust Bank plc (Commercial banks)		5,382,745			805



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—(continued)

	Nigeria—(continued)
	Nestle Nigeria plc (Food products)		160,382		$	957
						2,166

	Poland—3.5%
*	Alior Bank S.A. (Commercial banks)		26,677			718
	Eurocash S.A. (Food & staples retailing)		52,543			928
	LPP S.A. (Textiles, apparel & luxury goods)		605			1,193
						2,839

	Russia—0.3%
	MD Medical Group Investments plc-144A-GDR (Health care providers & services)		15,831			230

	South Africa—4.5%
	Coronation Fund Managers, Ltd. (Capital markets)		199,521			1,267
	Discovery, Ltd. (Insurance)		49,210			418
	Famous Brands, Ltd. (Hotels, restaurants & leisure)		94,956			912
	Life Healthcare Group Holdings, Ltd. (Health care providers & services)		71,255			270
	Oceana Group, Ltd. (Food products)		101,506			865
						3,732

	Turkey—4.7%
	Anadolu Hayat Emeklilik A.S. (Insurance)		179,274			396
	Bizim Toptan Satis Magazalari A.S. (Food & staples retailing)		62,724			1,021
	Dogus Otomotiv Servis ve Ticaret A.S. (Distributors)		60,229			306
*	Pegasus Hava Tasimaciligi A.S. (Airlines)		56,786			674
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		154,179			963
	Turkiye Sinai Kalkinma Bankasi A.S. (Commercial banks)		492,339			488
						3,848

	United Arab Emirates—0.5%
	NMC Health plc (Health care providers & services)		94,279			387


	Emerging Latin America—14.6%

	Brazil—5.1%
	Arezzo Industria e Comercio S.A. (Textiles, apparel & luxury goods)		16,000			243
	Iguatemi Empresa de Shopping Centers S.A. (Real estate management & development)		24,300			239
	International Meal Co. Holdings S.A. (Hotels, restaurants & leisure)		73,000			697
	Kroton Educacional S.A. (Diversified consumer services)		97,020			1,344
	Linx S.A. (Software)		35,500			573
	Lojas Renner S.A. (Multiline retail)		2,150			62
	Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		75,686			1,025
						4,183

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Latin America—(continuied)

	Chile—2.1%
	Forus S.A. (Textiles, apparel & luxury goods)		45,499		$	259
	Inversiones La Construccion S.A. (Diversified financial services)		28,448			436
	Parque Arauco S.A. (Real estate management & development)		178,536			390
	Sonda S.A. (IT services)		204,237			595
						1,680

	Mexico—5.2%
	Alsea S.A.B. de C.V. (Hotels, restaurants & leisure)		148,055			351
	Banregio Grupo Financiero S.A.B. de C.V. (Commercial banks)		117,438			620
	Concentradora Fibra Hotelera Mexicana S.A. de C.V. (Real estate investment trusts (REITs))		268,406			536
	Fibra Uno Administracion S.A. de C.V. (Real estate investment trusts (REITs))		199,700			671
*	Macquarie Mexico Real Estate Management S.A. de C.V.-144A (Real estate investment trusts (REITs))		584,095			1,262
	TF Administradora Industrial S de RL de C.V. (Real estate investment trusts (REITs))		401,756			837
						4,277

	Panama—0.6%
	Copa Holdings S.A. (Airlines)†		3,893			510

	Peru—1.6%
	Alicorp S.A. (Food products)		199,423			670
	Grana y Montero S.A. (Construction & engineering)		164,658			652
						1,322

	Total Common Stocks—96.9% (cost $77,009)					79,447

	Preferred Stock

	Brazil—0.3%
	Marcopolo S.A. (Machinery)		40,400			231

	Total Preferred Stock—0.3% (cost $247)					231


Issuer	Principal Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $1,563, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$1,563		$	1,563

Total Repurchase Agreement—1.9% (cost $1,563)					1,563

Total Investments—99.1% (cost $78,819)					81,241
Cash and other assets, less liabilities—0.9%					738
Net assets—100.0%				$	81,979

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

At June 30, 2013, the Fund’s Portfolio of Investments includes the following industry categories:

Consumer Discretionary	27.3	%
Financials	23.3	%
Consumer Staples	15.3	%
Industrials	11.7	%
Health Care	10.0	%
Information Technology	5.6	%
Materials	3.0	%
Telecommunication Services	2.0	%
Energy	1.4	%
Utilities	0.4	%
Total	100.0	%

At June 30, 2013, the Fund’s Portfolio of Investments includes the following currency categories:

Hong Kong Dollar	14.8	%
Indian Rupee	13.8	%
New Taiwan Dollar	8.0	%
Thai Baht	5.9	%
South Korean Won	5.8	%
Malaysian Ringgit	5.6	%
Brazilian Real	5.5	%
Mexican Peso	5.4	%
Turkish Lira	4.8	%
South African Rand	4.7	%
Philippine Peso	4.1	%
Indonesian Rupiah	4.1	%
Kenyan Shilling	3.3	%
Nigerian Naira	2.7	%
Euro	2.7	%
Chilean Peso	2.1	%
U.S. Dollar	2.1	%
Peruvian Nouveau Sol	1.7	%
Sri Lanka Rupee	1.4	%
All Other Currencies	1.5	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	LARGE CAP VALUE FUND

	The Large Cap Value Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGER

David F. Hone	The William Blair Large Cap Value Fund (Class N shares) posted a 15.08% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 1000^®Value Index (the “Index”), increased 15.90%. Market Review The market’s strong performance during the first five months of the year was fueled by positive economic data. More specifically, improvements in housing and employment data helped instill confidence that the recovery in the market was self-sustaining. The tide seemed to turn in mid-June as questions about Federal Reserve Chairman Ben Bernanke’s tenure and possible successors injected uncertainty into the market. The Federal Reserve’s plans of “tapering” quantitative easing (i.e., the slowing of its bond buying program) added to the markets concerns regarding sustainable growth domestically and contributed to a spike in bond yields. Within the next week, stocks around the world sold off over 4.5% before finding some footing and reversing course to close out the quarter. Adding to the questions about tapering and who will succeed Chairman Bernanke, investors were also concerned with a slowdown in emerging markets, China in particular, and the implications a slowdown may have on global and domestic growth. Portfolio Results The Fund’s slightly positive contribution from stock selection was more than offset by a negative allocation effect in the first half of the year. The largest detractors from performance came from poor stock selection within Information Technology and Health Care; the top two performing sectors in the market. Positive stock selection within Energy and Financials were not able to offset the negative performance from these two sectors. Given the strong market performance year-to-date, the Fund’s cash position was a drag on performance. From a style perspective, growth factors were in favor. All companies have a growth rate associated with them, even value stocks. Because the Fund tends to have an overweight to higher growth companies and an underweight to slower growth companies, this was a nice tailwind for the Fund and contributed to relative performance. Looking specifically at stock selection, VeriFone Systems, American Tower Corp., and Freeport McMoRan Cooper & Gold were the largest detractors from relative performance. Offsetting the underperformance were investments in Hewlett-Packard, Lincoln National Corp., and Boeing. Outlook Despite currently being overshadowed by the other political and legislative agendas, the fiscal debate in Washington D.C. regarding the debt ceiling and potential spending cuts could be headwinds to growth as we move into the second half of 2013. Even in the face of these headwinds, we believe the domestic economy will continue to grind ahead in a slow growth environment. Domestically, we may benefit in the face of strong or weak economic data: strong economic data is good and should help move the markets higher, whereas weaker data may delay tapering of quantitative easing, resulting in support for the markets. Corporate performance remains solid and U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and GDP as well. For the Fund, we continue to find attractive opportunities on a valuation basis across most sectors. As always, our focus remains on fundamental analysis to identify quality companies that are temporarily out of favor with investors but have prospects for longer-term growth reacceleration. Over time, we believe investors can benefit from attractive value creation as these companies return toward historical growth trends and investor sentiment improves.

June 30, 2013

William Blair Funds

Large Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			Since Inception(a)
Class N		15.08	%		23.28	%		19.12	%
Class I		15.15			23.51			19.38
Russell 1000^®Value Index		15.90			25.32			21.30

(a)	For the period from October 24, 2011 (Commencement of Operations) to June 30, 2013.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 1000^®Value Index consists of large capitalization companies with above average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Large Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Financials—26.3%
*	American International Group, Inc.		1,559		$	70
	American Tower Corporation		833			61
	Bank of America Corporation		5,313			68
*	CBRE Group, Inc. Class “A”		1,334			31
	Citigroup, Inc.		1,840			88
	CNA Financial Corporation		740			24
	Discover Financial Services		952			45
	JPMorgan Chase & Co.		2,157			114
	Lazard, Ltd. Class “A”†		1,444			46
	Lincoln National Corporation		1,777			65
	Morgan Stanley		2,626			64
	Regions Financial Corporation		4,605			44
	State Street Corporation		857			56
	SunTrust Banks, Inc.		1,666			53
	The Allstate Corporation		887			43
	The Goldman Sachs Group, Inc.		101			15
	Wells Fargo & Co.		2,008			83
	Zions Bancorporation		1,862			54
						1,024

	Energy—13.7%
	Anadarko Petroleum Corporation		471			41
	Apache Corporation		430			36
	Baker Hughes, Inc.		1,032			48
	Chevron Corporation		754			89
	Devon Energy Corporation		1,042			54
	Exxon Mobil Corporation		1,376			124
	Hess Corporation		627			42
	Occidental Petroleum Corporation		740			66
*	Southwestern Energy Co.		877			32
						532

	Health Care—12.2%
	Baxter International, Inc.		618			43
*	Boston Scientific Corporation		2,100			19
	Cardinal Health, Inc.		1,133			54
*	Express Scripts Holding Co.		758			47
	Merck & Co., Inc.		1,802			84
	Pfizer, Inc.		3,547			99
	UnitedHealth Group, Inc.		1,181			77
	Zimmer Holdings, Inc.		684			51
						474

	Information Technology—10.0%
*	Adobe Systems, Inc.		1,045			48
	Broadcom Corporation Class “A”		880			30
	Corning, Inc.		3,828			54
	Hewlett-Packard Co.		2,948			73
	Intel Corporation		2,491			60
	Microsoft Corporation		1,033			36
*	NetApp, Inc.		949			36
	Symantec Corporation		1,476			33
*	VeriFone Systems, Inc.		1,160			19
						389



	Issuer	Shares		Value

	Common Stocks—(continued)

	Industrials—9.4%
	General Electric Co.		4,520		$	105
	Honeywell International, Inc.		215			17
	Kansas City Southern		442			47
	SPX Corporation		464			33
	Textron, Inc.		2,010			52
	The ADT Corporation		775			31
	The Boeing Co.		497			51
	Union Pacific Corporation		195			30
						366

	Consumer Discretionary—8.1%
*	Big Lots, Inc.		1,103			35
	Brunswick Corporation		1,071			34
	Coach, Inc.		472			27
*	General Motors Co.		1,436			48
	Kohl’s Corporation		735			37
	Lear Corporation		609			37
*	MGM Resorts International		1,257			18
	The Walt Disney Co.		596			38
	Time Warner Cable, Inc.		383			43
						317

	Consumer Staples—6.3%
	General Mills, Inc.		997			49
	Kimberly-Clark Corporation		248			24
	Philip Morris International, Inc.		533			46
	The Procter & Gamble Co.		974			75
	Walgreen Co.		1,131			50
						244

	Utilities—4.5%
	CMS Energy Corporation		2,096			57
	NextEra Energy, Inc.		819			67
	Wisconsin Energy Corporation		1,270			52
						176

	Materials—3.9%
	Alcoa, Inc.		3,029			24
	Cliffs Natural Resources, Inc.		427			7
	Freeport-McMoRan Copper & Gold, Inc.		1,241			34
*	Owens-Illinois, Inc.		1,794			50
	Rockwood Holdings, Inc.		570			36
						151

	Telecommunication Services—3.1%
	AT&T, Inc.		2,095			74
	CenturyLink, Inc.		1,337			47
						121

	Total Common Stocks—97.5% (cost $3,361)					3,794

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Large Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $115, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$115		$	115

Total Repurchase Agreement—3.0% (cost $115)					115

Total Investments—100.5% (cost $3,476)					3,909
Liabilities, plus cash and other assets—(0.5)%					(19	)
Net assets—100.0%				$	3,890

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	MID CAP VALUE FUND

	The Mid Cap Value Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Chad M. Kilmer Mark T. Leslie David S. Mitchell	The William Blair Mid Cap Value Fund (Class N shares) posted a 15.28% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell Midcap^®Value Index (the “Index”), increased 16.10%. Market Review The market’s strong performance during the first five months of the year was fueled by positive economic data. More specifically, improvements in housing and employment data helped instill confidence that the recovery in the market was self-sustaining. The tide seemed to turn mid-June as questions about Federal Reserve Chairman Ben Bernanke’s tenure and possible successors injected uncertainty into the market. The Federal Reserve’s plans of “tapering” quantitative easing (i.e., the slowing of its bond buying program) added to the market’s concerns regarding sustainable growth domestically and contributed to a spike in bond yields. Within the next week, stocks around the world sold off over 4.5% before finding some footing and reversing course to close out the quarter. Adding to the questions about tapering and who will succeed Chairman Bernanke, investors were also concerned with a slowdown in emerging markets, China in particular, and the implications a slowdown may have on global and domestic growth. Portfolio Results The Fund narrowly trailed its benchmark in the first half 2013 due to stock selection. Detracting from performance was selection within Information Technology, Industrials, and Health Care. The sector that contributed most to relative returns was Energy, which was one of the worst performing sectors in the first half of the year. The lack of exposure to Coal and Consumables contributed almost one-third of the positive relative performance within Energy. From a style perspective, growth factors were in favor. All companies have a growth rate associated with them, even value stocks. Because the Fund tends to have an overweight to higher growth companies and an underweight to slower growth companies, this was a nice tailwind for the Fund and contributed to relative performance. Looking specifically at stock selection, Joy Global, American Campus Communities, and Carpenter Technology Corp. were the largest detractors from relative performance. Partially offsetting the underperformance were investments in H&R Block, Pioneer Natural Resources, and The Hartford Services Group. Outlook Despite currently being overshadowed by the other political and legislative agendas, the fiscal debate in Washington D.C. regarding the debt ceiling and potential spending cuts could be headwinds to growth as we move into the second half of 2013. Even in the face of these headwinds, we believe the domestic economy will continue to grind ahead in a slow growth environment. Domestically, we may benefit in the face of strong or weak economic data: strong economic data is good and should help move the markets higher, whereas weaker data may delay tapering of quantitative easing, resulting in support for the markets. Corporate performance remains solid and U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and GDP as well. In the end, while we are cognizant of various economic scenarios and incorporate these into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. As always, we remain focused on finding quality companies at discount prices and corporate transformation opportunities, and we continue to find good ideas across sectors. We believe building a fund with these types of companies should produce solid investment results over the long term.

June 30, 2013

William Blair Funds

Mid Cap Value Fund

Performance Highlights (Unaudited)

’

Average Annual Total Return at 6/30/2013

	Year to Date			1 Year			3 Year			Since Inception(a)
Class N		15.28	%		25.04	%		17.65	%		11.54	%
Class I		15.45			25.37			17.89			11.80
Russell Midcap^® Value Index		16.10			27.65			19.53			12.57

(a)	For the period from May 3, 2010 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower liquidity. Medium Capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell Midcap^®Value Index consists of midcap-capitalization companies with below average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Mid Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Financials—31.7%
	Allied World Assurance Co. Holdings, Ltd.†		485	$	44
	American Campus Communities, Inc.		1,285		52
	Ameriprise Financial, Inc.		840		68
*	CIT Group, Inc.		1,265		59
	Comerica, Inc.		1,275		51
	DDR Corporation		2,515		42
	Digital Realty Trust, Inc.		590		36
	East West Bancorp, Inc.		1,705		47
	Essex Property Trust, Inc.		265		42
	Fifth Third Bancorp		2,990		54
	First Horizon National Corporation		3,895		44
*	Forest City Enterprises, Inc.		2,480		44
	General Growth Properties, Inc.		2,100		42
*	Genworth Financial, Inc.		3,988		45
	Hartford Financial Services Group, Inc.		2,640		82
	Host Hotels & Resorts, Inc.		2,795		47
	Marsh & McLennan Cos., Inc.		1,650		66
	People’s United Financial, Inc.		2,960		44
	Post Properties, Inc.		645		32
	SL Green Realty Corporation		715		63
	SunTrust Banks, Inc.		2,050		65
	Taubman Centers, Inc.		555		42
	The Hanover Insurance Group, Inc.		1,080		53
	Validus Holdings, Ltd.†		1,530		55
	Ventas, Inc.		920		64
	Zions Bancorporation		1,140		33
					1,316

	Industrials—11.6%
	Dover Corporation		800		62
	Eaton Corporation plc†		650		43
	EMCOR Group, Inc.		1,035		42
	Generac Holdings, Inc.		735		27
	Hubbell, Inc.		655		65
	Pall Corporation		925		61
	Pentair, Ltd.†		1,090		63
	Rockwell Collins, Inc.		865		55
	Towers Watson & Co.		775		64
					482

	Information Technology—11.0%
*	Atmel Corporation		5,975		44
*	Cadence Design Systems, Inc.		3,735		54
	Genpact, Ltd.†		2,345		45
*	Juniper Networks, Inc.		2,255		43
	Linear Technology Corporation		1,195		44
*	ON Semiconductor Corporation		4,185		34
*	PTC, Inc.		1,835		45
	TE Connectivity, Ltd.†		1,705		78
	Xerox Corporation		7,800		71
					458

	Consumer Discretionary—10.2%
	Autoliv, Inc.		475		37
*	Bed Bath & Beyond, Inc.		755		53
	DISH Network Corporation		1,235		52
	H&R Block, Inc.		1,435		40

	Issuer	Shares		Value

	Common Stocks—(continued)

	Consumer Discretionary—(continued)
	Kohl’s Corporation		1,355	$	68
	Macy’s, Inc.		1,180		57
	Newell Rubbermaid, Inc.		2,350		62
	VF Corporation		290		56
					425

	Utilities—10.2%
	American Water Works Co., Inc.		1,440		59
	CMS Energy Corporation		1,750		48
	DTE Energy Co.		880		59
	Northeast Utilities		1,465		62
	Pinnacle West Capital Corporation		580		32
	Sempra Energy		760		62
	Southwest Gas Corporation		880		41
	Xcel Energy, Inc.		2,095		59
					422

	Energy—7.5%
*	Cameron International Corporation		670		41
	Noble Energy, Inc.		870		52
	Pioneer Natural Resources Co.		460		67
*	Rowan Cos. plc†		1,420		48
*	Superior Energy Services, Inc.		1,575		41
*	Whiting Petroleum Corporation		1,375		63
					312

	Health Care—7.4%
*	CareFusion Corporation		1,695		62
	CIGNA Corporation		1,230		89
*	Laboratory Corporation of America Holdings		465		47
*	Mettler-Toledo International, Inc.		257		52
	Zimmer Holdings, Inc.		780		58
					308

	Consumer Staples—4.7%
	ConAgra Foods, Inc.		2,155		75
	Ingredion, Inc.		915		60
	The Kroger Co.		1,775		62
					197

	Materials—4.5%
	Airgas, Inc.		425		41
	Carpenter Technology Corporation		1,005		45
	FMC Corporation		945		58
	Steel Dynamics, Inc.		3,025		45
					189

	Total Common Stocks—98.8% (cost $3,299)				4,109

	Total Investments—98.8% (cost $3,299)				4,109
	Cash and other assets, less liabilities—1.2%				48
	Net assets—100.0%			$	4,157

† = U.S. listed foreign security

* Non-income producing securities

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	SMALL-MID CAP VALUE FUND

	The Small-Mid Cap Value Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Chad M. Kilmer Mark T. Leslie David S. Mitchell	The William Blair Small-Mid Cap Value Fund (Class N shares) posted a 16.74% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 2500^TMValue Index (the “Index”), increased 15.10%. Market Review The market’s strong performance during the first five months of the year was fueled by positive economic data. More specifically, improvements in housing and employment data helped instill confidence that the recovery in the market was self-sustaining. The tide seemed to turn mid-June as questions about Federal Reserve Chairman Ben Bernanke’s tenure and possible successors injected uncertainty into the market. The Federal Reserve’s plans of “tapering” quantitative easing (i.e., the slowing of its bond buying program) added to the market’s concerns regarding sustainable growth domestically and contributed to a spike in bond yields. Within the next week, stocks around the world sold off over 4.5% before finding some footing and reversing course to close out the quarter. Adding to the questions about tapering and who will succeed Chairman Bernanke, investors were also concerned with a slowdown in emerging markets, China in particular, and the implications a slowdown may have on global and domestic growth. Portfolio Results The Fund’s first half 2013 outperformance relative to the Index was driven by positive stock selection in most sectors of the market. The Fund’s biggest contribution to relative performance came from Financials. This more than offset stock selection within Industrials and Consumer Staples, which detracted from relative performance. The Fund also benefitted from positive relative performance in Energy and Consumer Discretionary. From a style perspective, growth factors were in favor. All companies have a growth rate associated with them, even value stocks. Because the Fund tends to have an overweight to higher growth companies and an underweight to slower growth companies, this was a nice tailwind for the Fund and contributed to relative performance. Looking specifically at stock selection, ESCO Technologies, Joy Global, and Quanex Building Products were the largest detractors from relative performance. More than offsetting the underperformance were investments in Krispy Kreme Doughnuts, WMS Industries, and National Financial Partners. Outlook Despite currently being overshadowed by the other political and legislative agendas, the fiscal debate in Washington D.C. regarding the debt ceiling and potential spending cuts could be headwinds to growth as we move into the second half of 2013. Even in the face of these headwinds, we believe the domestic economy will continue to grind ahead in a slow growth environment. Domestically, we may benefit in the face of strong or weak economic data: strong economic data is good and should help move the markets higher, whereas weaker data may delay tapering of quantitative easing, resulting in support for the markets. Corporate performance remains solid and U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and GDP as well. In the end, while we are cognizant of various economic scenarios and incorporate these into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. As always, we remain focused on finding quality companies at discount prices and corporate transformation opportunities, and we continue to find good ideas across sectors. We believe building a fund with these types of companies should produce solid investment results over the long term.

Semi-Annual Report

June 30, 2013

Small-Mid Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			Since Inception(a)
Class N		16.74	%		24.95	%		22.40	%
Class I		16.92			25.33			22.70
Russell 2500^TMValue Index		15.10			26.88			26.09

(a)	For the period from December 15, 2011 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower liquidity. Smaller and medium capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

Russell 2500^TMValue Index consists of midcap-capitalization companies with below average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

June 30, 2013

William Blair Funds

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	Financials—31.0%
	Acadia Realty Trust		865		$	21
	Allied World Assurance Co. Holdings AG†		225			21
	American Assets Trust, Inc.		935			29
	American Campus Communities, Inc.		705			29
	Bank of the Ozarks, Inc.		600			26
	Banner Corporation		655			22
*	CIT Group, Inc.		370			17
	CNO Financial Group, Inc.		1,970			26
	Comerica, Inc.		820			33
	Coresite Realty Corporation		351			11
	East West Bancorp, Inc.		755			21
	EastGroup Properties, Inc.		470			26
	Essex Property Trust, Inc.		180			29
	First Horizon National Corporation		2,500			28
*	Forest City Enterprises, Inc.		1,310			23
*	Genworth Financial, Inc.		2,908			33
	Hartford Financial Services Group, Inc.		1,220			38
	Highwoods Properties, Inc.		610			22
	LaSalle Hotel Properties		815			20
	Old National Bancorp		1,390			19
	PacWest Bancorp		909			28
	Pebblebrook Hotel Trust		818			21
	People’s United Financial, Inc.		1,890			28
	Post Properties, Inc.		440			22
	ProAssurance Corporation		514			27
	Prosperity Bancshares, Inc.		540			28
	Radian Group, Inc.		2,005			23
	Selective Insurance Group, Inc.		985			23
	SL Green Realty Corporation		355			31
	Susquehanna Bancshares, Inc.		1,935			25
	Taubman Centers, Inc.		280			21
	The Hanover Insurance Group, Inc.		500			24
	Validus Holdings, Ltd.†		840			30
*	Western Alliance Bancorp		980			16
	Zions Bancorporation		1,085			31
						872

	Industrials—14.8%
	Actuant Corporation		1,002			33
	Belden, Inc.		505			25
	CIRCOR International, Inc.		565			29
	EMCOR Group, Inc.		885			36
*	FTI Consulting, Inc.		805			26
	G&K Services, Inc.		720			34
	Generac Holdings, Inc.		505			19
	Hubbell, Inc. Class “B”		320			32
	Interface, Inc.		1,261			21
*	Moog, Inc.		665			34
	Pall Corporation		495			33
	Simpson Manufacturing Co., Inc.		980			29
	Towers Watson & Co.		405			33
	Werner Enterprises, Inc.		1,270			31
						415



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	Consumer Discretionary—13.4%
	Autoliv, Inc.		330		$	26
*	Big Lots, Inc.		828			26
	Dana Holding Corporation		970			19
*	Genesco, Inc.		310			21
	H&R Block, Inc.		740			21
*	Krispy Kreme Doughnuts, Inc.		2,530			44
*	Life Time Fitness, Inc.		665			33
	Meredith Corporation		575			27
	Newell Rubbermaid, Inc.		1,080			28
	Pier 1 Imports, Inc.		1,085			26
	Regis Corporation		1,125			18
*	The Children’s Place Retail Stores, Inc.		450			25
	The Men’s Wearhouse, Inc.		755			29
*	The PEP Boys-Manny, Moe & Jack		1,510			17
	Vail Resorts, Inc.		295			18
						378

	Information Technology—11.1%
*	Acxiom Corporation		1,500			34
	ADTRAN, Inc.		1,113			27
*	Atmel Corporation		3,995			29
*	Cadence Design Systems, Inc.		2,520			37
	Earthlink, Inc.		4,710			29
	Genpact, Ltd.†		1,480			29
*	Integrated Device Technology, Inc.		4,490			36
	j2 Global, Inc.		570			24
	Monolithic Power Systems, Inc.		858			21
*	ON Semiconductor Corporation		2,650			21
*	PTC, Inc.		1,010			25
						312

	Utilities—8.0%
	ALLETE, Inc.		525			26
	American Water Works Co., Inc.		790			33
	Cleco Corporation		540			25
	CMS Energy Corporation		930			25
	Pinnacle West Capital Corporation		340			19
	PNM Resources, Inc.		1,170			26
	Southwest Gas Corporation		625			29
	UIL Holdings Corporation		365			14
	WGL Holdings, Inc.		645			28
						225

	Energy—7.1%
*	Bonanza Creek Energy, Inc.		465			16
	Gulfmark Offshore, Inc.		535			24
*	Gulfport Energy Corporation		362			17
*	Helix Energy Solutions Group, Inc.		930			21
*	Oasis Petroleum, Inc.		435			17
*	Rosetta Resources, Inc.		370			16
*	Rowan Cos. plc†		710			24
*	Superior Energy Services, Inc.		795			21
*	TETRA Technologies, Inc.		2,535			26
*	Whiting Petroleum Corporation		410			19
						201

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	Materials—6.5%
	Airgas, Inc.		200		$	19
	Carpenter Technology Corporation		370			17
	FMC Corporation		430			26
	Minerals Technologies, Inc.		525			22
	PolyOne Corporation		1,210			30
*	RTI International Metals, Inc.		695			19
	Sensient Technologies Corporation		420			17
	Silgan Holdings, Inc.		299			14
	Steel Dynamics, Inc.		1,245			19
						183

	Health Care—5.8%
*	CareFusion Corporation		845			31
	CONMED Corporation		425			13
*	Greatbatch, Inc.		535			18
*	HealthSouth Corporation		875			25
*	Magellan Health Services, Inc.		295			17
*	Mednax, Inc.		365			33
*	Mettler-Toledo International, Inc.		130			26
						163

	Consumer Staples—2.2%
	Ingredion, Inc.		540			35
	J&J Snack Foods Corporation		260			20
	Spartan Stores, Inc.		295			6
						61

	Total Common Stocks—99.9% (cost $2,314)					2,810


Issuer	Principal Amount		Value

*Repurchase Agreement*

State Street Bank and Trust Company, 0.010% dated 6/28/13, due 7/1/13, repurchase price $35, collateralized by FHLMC, 2.070% due 11/07/2022		$35		$	35

Total Repurchase Agreement—1.2% (cost $35)					35

Total Investments—101.1% (cost $2,349)					2,845
Liabilities, plus cash and other assets—(1.1)%					(32	)
Net assets—100.0%				$	2,813

† = U.S. listed foreign security

* Non-income producing securities

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

	SMALL CAP VALUE FUND

	The Small Cap Value Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Chad M. Kilmer Mark T. Leslie David S. Mitchell	The William Blair Small Cap Value Fund (Class N shares) posted a 17.58% increase, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Russell 2000^®Value Index (the “Index”), increased 14.39%. Market Review The market’s strong performance during the first five months of the year was fueled by positive economic data. More specifically, improvements in housing and employment data helped instill confidence that the recovery in the market was self-sustaining. The tide seemed to turn mid-June as questions about Federal Reserve Chairman Ben Bernanke’s tenure and possible successors injected uncertainty into the market. The Federal Reserve’s plans of “tapering” quantitative easing (i.e., the slowing of its bond buying program) added to the market’s concerns regarding sustainable growth domestically and contributed to a spike in bond yields. Within the next week, stocks around the world sold off over 4.5% before finding some footing and reversing course to close out the quarter. Adding to the questions about tapering and who will succeed Chairman Bernanke, investors were also concerned with a slowdown in emerging markets, China in particular, and the implications a slowdown may have on global and domestic growth. Portfolio Results The Fund’s first half 2013 outperformance relative to the Index was driven by positive stock selection in almost every sector of the market. The most significant sectors contributing to relative performance were Financials and Energy. Slightly detracting from performance was a cash drag and stock selection within Industrials. From a style perspective, growth factors were in favor. All companies have a growth rate associated with them, even value stocks. Because the Fund tends to have an overweight to higher growth companies and an underweight to slower growth companies, this was a nice tailwind for the Fund and contributed to relative performance. The Fund’s higher market cap bias versus the Index was a sizeable headwind in the first half of the year as stocks with a market capitalization over $2 billion were the only size segment to underperform during the period. Even in the face of this headwind, our stock selection within this market cap segment was additive to relative performance. Looking specifically at stock selection, ESCO Technologies, Quanex Building Products, and EarthLink were the detractors from relative performance. More than offsetting the underperformance were investments in Krispy Kreme Doughnuts, WMS Industries, and National Financial Partners. Outlook Despite currently being overshadowed by the other political and legislative agendas, the fiscal debate in Washington D.C. regarding the debt ceiling and potential spending cuts could be headwinds to growth as we move into the second half of 2013. Even in the face of these headwinds, we believe the domestic economy will continue to grind ahead in a slow growth environment. Domestically, we may benefit in the face of strong or weak economic data: strong economic data is good and should help move the markets higher, whereas weaker data may delay tapering of quantitative easing, resulting in support for the markets. Corporate performance remains solid and U.S. stocks have been a relative safe haven versus more interest rate-sensitive asset classes, commodities, and stocks outside the U.S. Broadly speaking, the U.S. housing market remains a tailwind for U.S. employment and GDP as well.

Semi-Annual Report

June 30, 2013

In the end, while we are cognizant of various economic scenarios and incorporate these into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. As always, we remain focused on finding quality companies at discount prices and corporate transformation opportunities, and we continue to find good ideas across sectors. We believe building a fund with these types of companies should produce solid investment results over the long term.

June 30, 2013

William Blair Funds

Small Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		17.58	%		25.41	%		17.09	%		9.84	%		9.36	%
Class I		17.80			25.82			17.39			10.09			9.59
Russell 2000^®Value Index		14.39			24.76			17.33			8.59			9.30

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller companies involves special risks, including higher volatility and lower liquidity. Smaller Capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Russell 2000^®Value Index consists of small-capitalization companies with below average price-to-book ratios and forecasted growth rates.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total long-term securities.

Semi-Annual Report

June 30, 2013

Small Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares		Value

	Common Stocks

	Financials—31.8%
	Acadia Realty Trust		138,320		$	3,415
	American Assets Trust, Inc.		103,105			3,182
	Bank of the Ozarks, Inc.		87,650			3,798
	Banner Corporation		103,400			3,494
	Berkshire Hills Bancorp, Inc.		126,290			3,506
	Boston Private Financial Holdings, Inc.		373,213			3,971
	CNO Financial Group, Inc.		317,385			4,113
	CoBiz Financial, Inc.		307,945			2,556
	Coresite Realty Corporation		67,945			2,161
*	Eagle Bancorp, Inc.		165,055			3,694
	East West Bancorp, Inc.		129,955			3,574
	EastGroup Properties, Inc.		63,195			3,556
	Education Realty Trust, Inc.		338,760			3,465
	First Horizon National Corporation		269,600			3,020
*	Forest City Enterprises, Inc.		151,480			2,713
	FXCM, Inc.		164,068			2,692
	Highwoods Properties, Inc.		67,155			2,391
	LaSalle Hotel Properties		95,425			2,357
	Old National Bancorp		186,176			2,575
	PacWest Bancorp		133,773			4,100
	Pebblebrook Hotel Trust		146,829			3,796
	Post Properties, Inc.		46,880			2,320
	ProAssurance Corporation		61,675			3,217
	Prosperity Bancshares, Inc.		73,120			3,787
	Radian Group, Inc.		266,470			3,096
*	Safeguard Scientifics, Inc.		226,506			3,635
	Selective Insurance Group, Inc.		153,285			3,529
	Susquehanna Bancshares, Inc.		268,620			3,452
	The Hanover Insurance Group, Inc.		74,100			3,626
*	Western Alliance Bancorp		211,100			3,342
						98,133

	Industrials—14.3%
	Actuant Corporation		112,458			3,708
	Belden, Inc.		60,650			3,028
	CIRCOR International, Inc.		70,185			3,570
	EMCOR Group, Inc.		116,106			4,720
*	FTI Consulting, Inc.		103,233			3,395
	G&K Services, Inc.		88,938			4,233
	Generac Holdings, Inc.		54,830			2,029
	Interface, Inc.		154,569			2,623
	Kadant, Inc.		90,954			2,744
*	Moog, Inc.		89,369			4,605
*	Northwest Pipe Co.		94,690			2,642
	Simpson Manufacturing Co., Inc.		116,065			3,415
	Werner Enterprises, Inc.		142,820			3,452
						44,164

	Consumer Discretionary—13.3%
*	Big Lots, Inc.		89,065			2,808
	Core-Mark Holding Co., Inc.		33,015			2,097
	Dana Holding Corporation		171,920			3,311
*	Genesco, Inc.		40,400			2,706
*	Krispy Kreme Doughnuts, Inc.		341,840			5,965
*	Life Time Fitness, Inc.		77,670			3,892
	Meredith Corporation		72,435			3,455
	Pier 1 Imports, Inc.		143,455			3,370

	Issuer	Shares		Value

	Common Stocks—(continued)

	Consumer Discretionary—(continued)
	Regis Corporation		140,475		$	2,307
*	The Children’s Place Retail Stores, Inc.		57,080			3,128
	The Men’s Wearhouse, Inc.		91,100			3,448
*	The PEP Boys-Manny, Moe & Jack		200,680			2,324
	Vail Resorts, Inc.		37,170			2,287
						41,098

	Information Technology—13.0%
*	Acxiom Corporation		161,160			3,655
	ADTRAN, Inc.		149,335			3,675
*	Atmel Corporation		429,340			3,156
*	Cadence Design Systems, Inc.		271,800			3,936
	Earthlink, Inc.		558,760			3,470
	Genpact, Ltd.†		167,520			3,223
*	Inphi Corporation		189,706			2,087
*	Integrated Device Technology, Inc.		480,082			3,812
*	IntraLinks Holdings, Inc.		250,720			1,820
	j2 Global, Inc.		55,125			2,343
	Monolithic Power Systems, Inc.		92,464			2,229
*	ON Semiconductor Corporation		293,270			2,369
*	PTC, Inc.		119,635			2,935
*	Ultra Clean Holdings		250,572			1,516
						40,226

	Energy—6.3%
*	Bonanza Creek Energy, Inc.		62,020			2,199
	Gulfmark Offshore, Inc.		72,244			3,257
*	Gulfport Energy Corporation		49,320			2,321
*	Helix Energy Solutions Group, Inc.		154,365			3,557
*	Oasis Petroleum, Inc.		59,135			2,299
*	Rosetta Resources, Inc.		50,425			2,144
*	TETRA Technologies, Inc.		358,175			3,675
						19,452

	Utilities—6.1%
	ALLETE, Inc.		62,115			3,096
	Chesapeake Utilities Corporation		11,027			568
	Cleco Corporation		66,860			3,104
	PNM Resources, Inc.		139,985			3,106
	Southwest Gas Corporation		69,650			3,259
	UIL Holdings Corporation		71,152			2,722
	WGL Holdings, Inc.		71,360			3,084
						18,939

	Materials—5.8%
	Minerals Technologies, Inc.		91,560			3,785
	PolyOne Corporation		204,545			5,069
*	RTI International Metals, Inc.		101,635			2,816
	Sensient Technologies Corporation		82,660			3,345
	Silgan Holdings, Inc.		64,385			3,024
						18,039

	Health Care—5.0%
	CONMED Corporation		90,585			2,830
*	Greatbatch, Inc.		104,475			3,426
*	HealthSouth Corporation		105,305			3,033
*	Magellan Health Services, Inc.		42,505			2,383
*	Mednax, Inc.		40,203			3,682
						15,354

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Small Cap Value Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Shares or
	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Consumer Staples—2.0%
J&J Snack Foods Corporation		38,687		$	3,010
Spartan Stores, Inc.		170,094			3,136
					6,146
Total Common Stocks—97.6% (cost $243,678)					301,551

Repurchase Agreement
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $8,134, collateralized by U.S. Treasury Note, 0.750%, due 10/31/17		$8,134			8,134

Total Repurchase Agreement—2.7% (cost $8,134)					8,134

Total Investments—100.3% (cost $251,812)					309,685
Liabilities, plus cash and other assets—(0.3)%					(818	)
Net assets—100.0%				$	308,867

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

	BOND FUND

	The Bond Fund seeks to outperform the Barclays Capital U.S. Aggregate Bond Index by maximizing total return through a combination of income and capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Christopher T. Vincent Paul J. Sularz	The William Blair Bond Fund (Class N shares) posted a 3.37% decrease, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Barclays U.S. Aggregate Bond Index (the “Index”), decreased 2.44%. Portfolio Results The Fund’s underperformance year-to-date was caused primarily by two factors: an overweight to investment-grade corporate bonds and an allocation to U.S. Treasury Inflation-Protected Securities (“TIPS”). Factors that had a positive impact on the Fund’s performance year-to-date included security selection among mortgage-backed securities (“MBS”) and an allocation to high yield corporate bonds. The Fund’s overweight to investment-grade corporate bonds detracted year-to-date. Corporate risk spreads widened during the second quarter of 2013 due to elevated levels of volatility created by uncertainty regarding when and how the Federal Open Market Committee (“FOMC”) will end its quantitative easing programs. The Fund’s allocation to TIPS also had a negative effect on performance year-to-date. TIPS underperformed the broad market because the market’s expectations for inflation declined due to the FOMC’s signals that it will slow down the pace of purchases in its quantitative easing programs, with the result being less inflationary pressures. Despite the Fund’s underperformance, there were some themes that contributed year-to-date. Security selection among MBS impacted performance favorably. The Fund avoided mortgages that the FOMC purchased in its quantitative easing programs, and that helped performance as those bonds struggled during the quarter. The MBS owned in the Fund performed better than the Index and were a source of relative value. The Fund’s allocation to high yield corporate bonds also provided some performance benefits. High yield corporate bonds outperformed the Index, and their inclusion in the Fund helped mitigate declines year-to-date. Fixed Income Markets Summary & Outlook Fixed income instruments declined year-to-date after a volatile second quarter. Interest rates rose, interest rate volatility spiked, and risk spreads widened. The 10-year Treasury note yielded 2.49% at June 30, 2013. We believe that the threat of a sustained, rapid rise in interest rates is subdued, though longer-term interest rates may trend higher. Interest rate volatility has increased due to uncertainty surrounding the timing and magnitude of the FOMC’s exit from its quantitative easing programs. However, the FOMC continues to assert that its policy interest rate will be maintained at low levels until the unemployment rate declines below 6.5% and inflation expectations are well-anchored, and the market’s prices imply that will occur in late 2014 at the earliest. With corporations holding record levels of cash, the corporate bond market remains concerned about shareholder-friendly activities such as leveraged buyouts (“LBOs”), large share repurchases, and special dividends. We believe idiosyncratic risks are among the top issues for investment-grade corporate bond investors, but we do not believe the market will enter a period of excessive LBO activity. We believe that spread sectors are poised to lead the market. Risk premiums across all spread sectors remain elevated versus long-term averages but not approaching the historically cheap levels experienced in prior years. In addition, fundamentals are strong, as corporations’ balance sheets are strong given their historically high level of cash holdings. For these reasons, coupled with the low level of Treasury interest rates, we are bullish on spread products relative to Treasuries.

June 30, 2013

William Blair Funds

Bond Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		(3.37	)%		0.73	%		4.84	%		6.31	%		5.80	%
Class I		(3.26	)		0.94			5.02			6.48			5.97
Institutional Class		(3.19	)		1.09			5.18			6.64			6.13
Barclays U.S. Aggregate Bond Index		(2.44	)		(0.69	)		3.51			5.19			5.18

(a)	For the period from May 1, 2007 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Barclays U.S. Aggregate Bond Index indicates broad intermediate government/corporate bond market performance.

This report identifies the Fund’s investments on June 30, 2013. These holdings are subject to change. Not all investments in the Fund performed the same, nor is there any guarantee that these investments will perform as well in the future. Market forecasts provided in this report may not necessarily come to pass.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total investments.

Semi-Annual Report

June 30, 2013

Bond Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	Principal Amount		Value

	U.S. Government and U.S. Government Agency—44.8%

	U.S. Treasury Inflation Indexed Notes/Bonds—7.1%
	U.S. Treasury Inflation Indexed
	Note, 2.375%, due 1/15/17		$4,612		$	5,113
	U.S. Treasury Inflation Indexed
	Bond, 3.875%, due 4/15/29		9,336			13,455
	Total U.S. Treasury Inflation
	Indexed Notes/Bonds					18,568

	U.S. Treasury—0.6%
	U.S. Treasury Strip Principal,
	0.000%, due 5/15/20		1,800			1,575

	Government National Mortgage Association (GNMA)—2.0%
#	344902, 6.250%, due 3/15/14		2			2
#	623162, 6.500%, due 7/15/18		31			33
#	616250, 6.000%, due 2/15/24		8			9
#	422470, 7.500%, due 3/15/26		1			1
#	509405, 7.500%, due 8/15/29		1			1
	GNR 2004–2 M5, 4.891%, due 7/16/34		125			130
#	699118, 6.000%, due 9/15/38		4,431			4,980
	Total GNMA Mortgage Obligations					5,156

	Federal Home Loan Mortgage Corp. (FHLMC)—6.5%
#	J16051, 4.500%, due 7/1/26		1,090			1,164
#	G01728, 7.500%, due 7/1/32		233			279
#	C01385, 6.500%, due 8/1/32		208			236
#	A13303, 5.000%, due 9/1/33		423			470
#	C01623, 5.500%, due 9/1/33		275			298
#	A15039, 5.500%, due 10/1/33		4			5
#	G01843, 6.000%, due 6/1/35		52			58
#	G02141, 6.000%, due 3/1/36		1,145			1,282
#	A62179, 6.000%, due 6/1/37		528			580
#	A63539, 6.000%, due 7/1/37		700			781
#	A62858, 6.500%, due 7/1/37		364			407
#	G03170, 6.500%, due 8/1/37		911			1,017
#	A66843, 6.500%, due 10/1/37		1,442			1,627
#	A78138, 5.500%, due 6/1/38		807			894
#	G04544, 6.000%, due 8/1/38		2,225			2,436
#	A81799, 6.500%, due 9/1/38		1,565			1,761
#	A86143, 5.000%, due 5/1/39		97			106
#	G06017, 5.500%, due 6/1/40		359			397
#	C03665, 9.000%, due 4/1/41		1,493			1,823
#	G06583, 5.000%, due 6/1/41		1,194			1,334
	Total FHLMC Mortgage Obligations					16,955

	Federal National Mortgage Association (FNMA)—28.6%
#	576553, 8.000%, due 2/1/16		6			7
#	580793, 6.000%, due 4/1/16		1			1
#	624506, 6.000%, due 1/1/17		1			2
#	679247, 7.000%, due 8/1/17		7			7
#	689612, 5.000%, due 5/1/18		192			205
#	695910, 5.000%, due 5/1/18		377			403
#	697593, 5.000%, due 5/1/18		341			364
#	770395, 5.000%, due 4/1/19		7			8

	Issuer	Principal Amount		Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal National Mortgage Association (FNMA)—(continued)
#	900725, 6.000%, due 8/1/21	$	99	$	109
#	893325, 7.000%, due 9/1/21		7		8
#	AA2924, 4.500%, due 4/1/24		668		727
#	932095, 4.000%, due 11/1/24		2,759		2,978
#	255956, 5.500%, due 10/1/25		43		48
#	AH2671, 4.000%, due 1/1/26		364		393
#	890329, 4.000%, due 4/1/26		403		434
#	AI4872, 4.500%, due 6/1/26		708		771
#	AL2851, 4.000%, due 8/1/26		6,199		6,689
#	AI9811, 4.500%, due 8/1/26		462		503
#	AH9564, 3.500%, due 9/1/26		951		1,003
#	AJ8149, 3.500%, due 12/1/26		1,161		1,225
#	AJ9402, 4.000%, due 12/1/26		2,026		2,188
#	AB4818, 4.000%, due 4/1/27		1,129		1,220
#	AP0446, 3.500%, due 7/1/27		5,101		5,382
#	AL2590, 4.000%, due 7/1/27		2,197		2,373
#	252925, 7.500%, due 12/1/29		2		3
#	535977, 6.500%, due 4/1/31		18		20
#	253907, 7.000%, due 7/1/31		3		3
#	587849, 6.500%, due 11/1/31		27		31
#	545437, 7.000%, due 2/1/32		107		122
#	545759, 6.500%, due 7/1/32		1,067		1,181
#	678007, 6.000%, due 9/1/32		21		23
#	254548, 5.500%, due 12/1/32		44		49
#	684601, 6.000%, due 3/1/33		1,048		1,159
#	703391, 5.000%, due 5/1/33		155		167
#	708993, 5.000%, due 6/1/33		65		72
#	190340, 5.000%, due 9/1/33		128		138
#	254868, 5.000%, due 9/1/33		14		15
#	727056, 5.000%, due 9/1/33		693		772
#	739243, 6.000%, due 9/1/33		1,321		1,483
#	739331, 6.000%, due 9/1/33		642		721
#	555800, 5.500%, due 10/1/33		146		159
#	555946, 5.500%, due 11/1/33		568		636
#	756153, 5.500%, due 11/1/33		1,348		1,508
#	762505, 5.500%, due 11/1/33		273		305
#	725017, 5.500%, due 12/1/33		66		73
#	725205, 5.000%, due 3/1/34		1,739		1,881
#	725232, 5.000%, due 3/1/34		1,842		1,992
#	725238, 5.000%, due 3/1/34		654		708
#	763798, 5.500%, due 3/1/34		195		218
#	776964, 5.000%, due 4/1/34		522		579
#	725611, 5.500%, due 6/1/34		265		291
#	783786, 5.500%, due 7/1/34		200		223
#	786546, 6.000%, due 7/1/34		566		632
#	787816, 6.000%, due 7/1/34		655		736
#	190353, 5.000%, due 8/1/34		192		207
#	794474, 6.000%, due 10/1/34		116		129
#	745092, 6.500%, due 7/1/35		782		875
#	357944, 6.000%, due 9/1/35		58		65
#	829306, 6.000%, due 9/1/35		614		669
#	836140, 5.500%, due 10/1/35		99		110
#	843487, 6.000%, due 10/1/35		182		204
#	849191, 6.000%, due 1/1/36		382		425
#	848782, 6.500%, due 1/1/36		495		558
#	745349, 6.500%, due 2/1/36		747		843

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

	Issuer	NRSRO Rating		Principal Amount		Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal National Mortgage Association (FNMA)—(continued)
#	888305, 7.000%, due 3/1/36			$	20	$	23
#	895637, 6.500%, due 5/1/36				267		300
#	831540, 6.000%, due 6/1/36				86		96
#	745802, 6.000%, due 7/1/36				366		411
#	886220, 6.000%, due 7/1/36				799		896
#	893318, 6.500%, due 8/1/36				104		117
#	902974, 6.000%, due 12/1/36				748		830
#	909480, 6.000%, due 2/1/37				732		814
#	938440, 6.000%, due 7/1/37				362		401
#	928561, 6.000%, due 8/1/37				463		519
#	948689, 6.000%, due 8/1/37				640		703
#	946646, 6.000%, due 9/1/37				220		246
#	888967, 6.000%, due 12/1/37				1,495		1,677
#	889385, 6.000%, due 2/1/38				425		473
#	962058, 6.500%, due 3/1/38				3,201		3,613
#	934006, 6.500%, due 9/1/38				946		1,067
#	986856, 6.500%, due 9/1/38				649		725
#	991911, 7.000%, due 11/1/38				549		619
#	AA7611, 5.000%, due 5/1/39				1,090		1,217
#	AA8443, 5.000%, due 6/1/39				417		466
#	931492, 6.000%, due 7/1/39				306		343
#	AA6898, 6.000%, due 7/1/39				1,606		1,805
#	932279, 5.000%, due 12/1/39				187		206
#	AE0082, 5.000%, due 5/1/40				1,047		1,155
#	AB1200, 5.500%, due 7/1/40				2,302		2,569
#	AL0913, 6.000%, due 7/1/41				2,854		3,159
#	AK2733, 5.000%, due 2/1/42				3,065		3,430
	Total FNMA Mortgage Obligations						74,913

	Non-Agency Mortgage-Backed Obligations—0.1%
*	First Plus Home Loan Owner Trust,
	1997-4, Tranche M1,
	7.640%, 9/11/23§**		D		199		167

	Asset-Backed Securities—3.6%
	Avis Budget Rental Car Funding
	AESOP LLC—144A, 2010–3A,
	Tranche A, 4.640%, 5/20/16		Aaa		100		106
	Centre Point Funding LLC—144A,
	2010–1A, Tranche 1,
	5.430%, 7/20/16		A2		1,625		1,695
	Hertz Vehicle Financing LLC—144A,
	2013–1A, Tranche B1,
	1.860%, 8/25/17		Baa1		1,500		1,480
	GE Capital Credit Card Master Note
	Trust, 2012–6, Tranche B,
	1.830%, 8/17/20		AA-		3,000		2,930
	SLM Student Loan Trust, 2002–1,
	Tranche B,
	0.746%, 1/25/21, VRN		Aaa		1,500		1,490
	Centre Point Funding LLC—144A,
	2012–2A, Tranche 1,
	2.610%, 8/20/21		Baa2		1,722		1,727
	Total Asset-Backed Securities						9,428

Issuer	NRSRO Rating		Principal Amount		Value

Corporate Obligations—51.8%

Ally Financial, Inc., 5.500%, due 2/15/17		BB-		$1,788	$	1,868
Penske Truck Leasing Co. L.P.—144A, 3.750%, due 5/11/17		BBB+		2,000		2,093
JPMorgan Chase & Co., 6.125%, due 6/27/17		A		1,100		1,241
General Motors Financial Co., Inc.—144A, 4.750%, due 8/15/17		BB		1,000		1,025
Capital One Financial Corporation, 6.750%, due 9/15/17		A-		1,900		2,238
Exelon Generation Co. LLC, 6.200%, due 10/1/17		BBB+		1,160		1,326
Toll Brothers Finance Corporation, 8.910%, due 10/15/17		BBB-		1,050		1,244
American Tower Corporation, 4.500%, due 1/15/18		BBB		1,625		1,733
Intesa Sanpaolo SpA, 3.875%, due 1/16/18		BBB+		3,000		2,881
Banco Davivienda S.A.—144A, 2.950%, due 1/29/18		BBB-		2,000		1,890
Wyndham Worldwide Corporation, 2.500%, due 3/1/18		BBB-		500		491
Morgan Stanley, 6.625%, due 4/1/18		A		2,575		2,919
International Lease Finance Corporation, 3.875%, due 4/15/18		BBB-		1,400		1,316
Regions Financial Corporation, 2.000%, due 5/15/18		BBB-		2,500		2,363
Merrill Lynch & Co., Inc., 6.875%, due 11/15/18		A		1,100		1,281
Glencore Funding LLC—144A, 1.574%, due 1/15/19, VRN		BBB		3,000		2,788
Petrobras Global Finance BV, 2.414%, due 1/15/19, VRN		A3		2,900		2,842
CSX Corporation, 7.375%, due 2/1/19		BBB		870		1,073
Cemex S.A.B. de C.V.—144A, 5.875%, due 3/25/19		B+		1,500		1,455
Citigroup, Inc., 8.500%, due 5/22/19		A		2,050		2,583
Roper Industries, Inc., 6.250%, due 9/1/19		BBB		1,850		2,153
Republic Services, Inc., 5.500%, due 9/15/19		BBB		1,725		1,952
SBA Communications Corp.—144A, 5.625%, due 10/1/19		B2		1,250		1,238
Boston Properties L.P., 5.875%, due 10/15/19		A-		1,575		1,817
Toll Brothers Finance Corporation, 6.750%, due 11/1/19		BBB-		500		565
Ford Motor Credit Co. LLC, 8.125%, due 1/15/20		Baa3		3,050		3,674
Jarden Corporation, 7.500%, due 1/15/20		B1		1,550		1,658
Johnson Controls, Inc., 5.000%, due 3/30/20		BBB+		1,675		1,840

See accompanying Notes to Financial Statements.

Semi-Annual Report

June 30, 2013

Bond Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

Issuer	NRSRO Rating		Principal Amount		Value

Corporate Obligations—(continued)
The Goldman Sachs Group, Inc., 6.000%, due 6/15/20		A	$	2,575	$	2,893
Hologic, Inc., 6.250%, due 8/1/20		BB		1,100		1,141
Alcoa, Inc., 6.150%, due 8/15/20		BBB-		2,050		2,100
Omnicom Group, Inc., 4.450%, due 8/15/20		BBB+		2,075		2,156
The Goodyear Tire & Rubber Co., 8.250%, due 8/15/20		B+		1,500		1,642
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20		A		1,500		1,673
Standard Pacific Corporation, 8.375%, due 1/15/21		B+		1,750		1,995
ArcelorMittal, 6.000%, due 3/1/21		BB+		1,600		1,592
Wyndham Worldwide Corporation, 5.625%, due 3/1/21		BBB-		1,000		1,072
Ball Corporation, 5.750%, due 5/15/21		BB+		1,550		1,631
Energizer Holdings, Inc., 4.700%, due 5/19/21		BBB-		2,050		2,081
Hewlett-Packard Co., 4.300%, due 6/1/21		A-		2,900		2,836
JBS USA LLC / JBS USA Finance, Inc.—144A, 7.250%, due 6/1/21		BB		1,500		1,500
O’Reilly Automotive, Inc., 4.625%, due 9/15/21		BBB		2,275		2,381
Corporation Nacional del Cobre de Chile—144A, 3.875%, due 11/3/21		A1		1,900		1,853
Itau Unibanco Holding S.A.—144A, 6.200%, due 12/21/21		BBB		2,500		2,531
SLM Corporation, 7.250%, due 1/25/22		BBB-		2,000		2,100
Fresenius Medical Care US Finance II, Inc.—144A, 5.875%, due 1/31/22		BB+		1,000		1,053
Masco Corporation, 5.950%, due 3/15/22		BBB-		1,675		1,759
BE Aerospace, Inc., 5.250%, due 4/1/22		BB		1,550		1,542
Discover Financial Services, 5.200%, due 4/27/22		BBB		2,150		2,219
Embraer S.A., 5.150%, due 6/15/22		BBB		2,500		2,506
Bancolombia S.A., 5.125%, due 9/11/22		BBB-		1,750		1,667
DR Horton, Inc., 4.375%, due 9/15/22		BB		1,350		1,283
Mexichem S.A.B. de C.V.—144A, 4.875%, due 9/19/22		BBB-		1,500		1,508
WEA Finance LLC—144A, 3.375%, due 10/3/22		A2		2,650		2,498
American Axle & Manufacturing, Inc., 6.625%, due 10/15/22		B		1,550		1,573

Issuer	NRSRO Rating		Principal Amount		Value

Corporate Obligations—(continued)
Southern Copper Corporation, 3.500%, due 11/8/22		BBB+	$	1,750	$	1,571
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22		Baa2		1,650		1,619
Owens Corning, 4.200%, due 12/15/22		BBB-		500		484
Royal Bank of Scotland Group plc, 6.125%, due 12/15/22		BB+		3,200		3,045
Carlyle Holdings Finance LLC—144A, 3.875%, due 2/1/23		A-		2,425		2,347
Jaguar Land Rover Automotive plc—144A, 5.625%, due 2/1/23		BB-		1,500		1,455
Corporation Lindley S.A.—144A, 4.625%, due 4/12/23		BBB-		2,150		2,085
Toll Brothers Finance Corporation, 4.375%, due 4/15/23		BBB-		1,300		1,209
The Kroger Co., 8.000%, due 9/15/29		BBB		450		565
Comcast Corporation, 6.450%, due 3/15/37		A-		650		777
Yum! Brands, Inc., 6.875%, due 11/15/37		BBB		625		747
JPMorgan Chase & Co., 6.400%, due 5/15/38		A+		1,470		1,724
Philip Morris International, Inc., 6.375%, due 5/16/38		A		2,175		2,585
General Electric Capital Corporation, 6.875%, due 1/10/39		AA+		750		924
Burlington Northern Santa Fe LLC, 5.750%, due 5/1/40		A3		1,565		1,743
Express Scripts Holding Co., 6.125%, due 11/15/41		BBB+		2,500		2,887
Gilead Sciences, Inc., 5.650%, due 12/1/41		A-		1,775		1,974
Bank of America Corporation, 5.875%, due 2/7/42		A		2,375		2,655
Odebrecht Finance Ltd.—144A, 7.125%, due 6/26/42		BBB-		2,000		1,940
Jefferies Group LLC, 6.500%, due 1/20/43		BBB		755		723
Total Corporate Obligations						135,391

Total Long-Term Investments—100.3% (cost $257,776)						262,153

Total Investments—100.3% (cost $257,776)						262,153
Liabilities, plus cash and other assets—(0.3)%						(821	)
Net assets—100.0%					$	261,332

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)

NRSRO = Nationally Recognized Statistical Rating Organization—The credit quality ratings of the securities in the Fund reflect the highest category rating by either Fitch Ratings, Moody’s Investors Service Inc., or Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. The obligations of certain U. S. Government-sponsored securities are neither issued nor guaranteed by the U. S. Treasury.

VRN = Variable Rate Note

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.06% of the net assets at June 30, 2013.

* = Non-income producing security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.06% of the Fund’s net assets at June 30, 2013.

See accompanying Notes to Financial Statements.

100

Semi-Annual Report

June 30, 2013

	INCOME FUND

	The Income Fund seeks a high level of current income with relative stability of principal.

	AN OVERVIEW FROM THE PORTFOLIO MANAGER

Christopher T. Vincent	The William Blair Income Fund (Class N shares) posted a 2.45% decrease, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Barclays U.S. Intermediate Government/Credit Index (the “Index”), decreased 1.45%. Portfolio Results The Fund’s underperformance year-to-date was caused primarily by two factors: an overweight to investment-grade corporate bonds and an allocation to U.S. Treasury Inflation-Protected Securities (“TIPS”). Factors that had a positive impact on the Fund’s performance year-to-date included security selection among mortgage-backed securities (“MBS”) and its defensive position on interest rate exposure. The Fund’s overweight to investment-grade corporate bonds detracted year-to-date. Corporate risk spreads widened during the second quarter of 2013 due to elevated levels of volatility created by uncertainty regarding when and how the Federal Open Market Committee (“FOMC”) will end its quantitative easing programs. The Fund’s allocation to TIPS also had a negative effect on performance year-to-date. TIPS underperformed the broad market because the market’s expectations for inflation declined due to the FOMC’s signals that it will slow down the pace of purchases in its quantitative easing programs, with the result being less inflationary pressures. Despite the Fund’s underperformance, there were some themes that contributed year-to-date. Security selection among MBS impacted performance favorably. The MBS owned in the Fund were higher-coupon pools that generated consistent levels of income. These pools performed better than the Index and were a source of relative value. The Fund was also positioned defensively on interest rate risk; its duration was shorter than that of its Index. This position helped mitigate declines as interest rates rose year-to-date, and interest rates rose significantly during the second quarter of 2013. Fixed Income Markets Summary & Outlook Fixed income instruments declined year-to-date after a volatile second quarter. Interest rates rose, interest rate volatility spiked, and risk spreads widened. The 10-year Treasury note yielded 2.49% at June 30, 2013. We believe that the threat of a sustained, rapid rise in interest rates is subdued, though longer-term interest rates may trend higher. Interest rate volatility has increased due to uncertainty surrounding the timing and magnitude of the FOMC’s exit from its quantitative easing programs. However, the FOMC continues to assert that its policy interest rate will be maintained at low levels until the unemployment rate declines below 6.5% and inflation expectations are well-anchored, and the market’s prices imply that will occur in late 2014 at the earliest. With corporations holding record levels of cash, the corporate bond market remains concerned about shareholder-friendly activities such as leveraged buyouts (“LBOs”), large share repurchases, and special dividends. We believe idiosyncratic risks are among the top issues for investment-grade corporate bond investors, but we do not believe the market will enter a period of excessive LBO activity. We believe that spread sectors are poised to lead the market. Risk premiums across all spread sectors remain elevated versus long-term averages but not approaching the historically cheap levels experienced in prior years. In addition, fundamentals are strong, as corporations’ balance sheets are strong given their historically high level of cash holdings. For these reasons, coupled with the low level of Treasury interest rates, we are bullish on spread products relative to Treasuries.

June 30, 2013

William Blair Funds

101

Income Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date		1 Year		3 Year		5 Year		10 Year
Class N	(2.45	)%	0.45	%	3.54	%	4.36	%	3.19	%
Class I	(2.36	)	0.67		3.80		4.59		3.38
Barclays U.S. Intermediate Government/Credit Bond Index	(1.45	)	0.28		3.14		4.57		4.03

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Barclays Capital U.S. Intermediate Government/Credit Bond Index indicates broad intermediate government/corporate bond market performance.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total investments.

102

Semi-Annual Report

June 30, 2013

Income Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	Principal Amount			Value

	U.S. Government and U.S. Government Agency—55.5%

	U.S. Treasury Inflation Indexed Notes/Bonds—7.5%
	U.S. Treasury Inflation Indexed Note, 2.375%, due 1/15/17		$	4,180		$	4,633
	U.S. Treasury Inflation Indexed Note, 1.125%, due 1/15/21			4,943			5,287
	Total U.S. Treasury Inflation Indexed Notes/Bonds						9,920

	U.S. Treasury—0.7%
	U.S. Treasury Strip Principal, 0.000%, due 5/15/20			1,000			875

	Government National Mortgage Association (GNMA)—0.1%
#	780405, 9.500%, due 11/15/17			66			70
#	357322, 7.000%, due 9/15/23			50			57
	Total GNMA Mortgage Obligations						127

	Federal Home Loan Mortgage Corp. (FHLMC)—8.1%
#	E72924, 7.000%, due 10/1/13			16			16
#	E81703, 7.000%, due 5/1/15			52			53
#	E81697, 8.000%, due 5/1/15			216			225
#	E81908, 8.500%, due 12/1/15			19			19
#	J02184, 8.000%, due 4/1/16			117			121
#	G90022, 8.000%, due 9/17/16			68			69
#	M30028, 5.500%, due 5/1/17			8			8
#	E90398, 7.000%, due 5/1/17			295			314
#	E97112, 4.000%, due 5/1/18			128			134
#	D95621, 6.500%, due 7/1/22			1,292			1,434
#	J16051, 4.500%, due 7/1/26			2,019			2,157
#	J19032, 3.500%, due 5/1/27			1,309			1,385
#	A45790, 7.500%, due 5/1/35			170			196
#	G02141, 6.000%, due 3/1/36			573			642
#	A66843, 6.500%, due 10/1/37			653			736
#	A81799, 6.500%, due 9/1/38			877			987
#	C03665, 9.000%, due 4/1/41			724			884
#	G06583, 5.000%, due 6/1/41			1,194			1,334
	Total FHLMC Mortgage Obligations						10,714

	Federal National Mortgage Association (FNMA)—39.1%
#	593561, 9.500%, due 8/1/14			16			17
#	567027, 7.000%, due 9/1/14			76			78
#	567026, 6.500%, due 10/1/14			40			41
#	458124, 7.000%, due 12/15/14			17			17
#	576554, 8.000%, due 1/1/16			268			282
#	576553, 8.000%, due 2/1/16			385			406
#	555747, 8.000%, due 5/1/16			26			28
#	735569, 8.000%, due 10/1/16			182			192
#	725410, 7.500%, due 4/1/17			53			55
#	643217, 6.500%, due 6/1/17			113			121
#	679247, 7.000%, due 8/1/17			391			416
#	695910, 5.000%, due 5/1/18			392			419
#	740847, 6.000%, due 10/1/18			236			252
#	323501, 6.500%, due 1/1/19			77			83
#	751313, 5.000%, due 3/1/19			337			365
#	852864, 7.000%, due 7/1/20			899			989
#	458147, 10.000%, due 8/15/20			203			232


	Issuer	Principal Amount			Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal National Mortgage Association (FNMA)—(continued)
#	835563, 7.000%, due 10/1/20		$	346		$	380
#	831430, 5.500%, due 3/1/21			582			626
#	735574, 8.000%, due 3/1/22			235			263
#	679253, 6.000%, due 10/1/22			616			681
FNR G93–19 SH, 11.234%, due 4/25/23, VRN				11			13
#	982878, 4.500%, due 5/1/23			470			506
#	932095, 4.000%, due 11/1/24			8,755			9,449
#	AC5124, 4.000%, due 11/1/24			537			579
#	AC6257, 4.000%, due 12/1/24			132			142
#	AD8164, 4.000%, due 8/1/25			735			793
#	AE1176, 4.000%, due 8/1/25			649			700
#	255956, 5.500%, due 10/1/25			130			143
#	AB2256, 3.500%, due 2/1/26			1,062			1,120
#	890329, 4.000%, due 4/1/26			2,016			2,168
#	AL2851, 4.000%, due 8/1/26			2,657			2,867
#	AI9811, 4.500%, due 8/1/26			693			755
#	AJ2322, 3.500%, due 10/1/26			838			884
#	AJ3203, 4.000%, due 10/1/26			1,745			1,884
#	AJ8149, 3.500%, due 12/1/26			2,300			2,426
#	AJ7724, 4.000%, due 12/1/26			804			868
#	AK0498, 3.500%, due 1/1/27			491			518
#	256639, 5.000%, due 2/1/27			28			30
#	AB4818, 4.000%, due 4/1/27			873			943
#	AP0446, 3.500%, due 7/1/27			3,246			3,425
#	AL2590, 4.000%, due 7/1/27			2,728			2,946
#	806458, 8.000%, due 6/1/28			186			215
#	880155, 8.500%, due 7/1/29			322			378
#	797846, 7.000%, due 3/1/32			547			608
#	745519, 8.500%, due 5/1/32			182			214
#	654674, 6.500%, due 9/1/32			93			105
#	733897, 6.500%, due 12/1/32			262			293
#	254693, 5.500%, due 4/1/33			20			22
#	555531, 5.500%, due 6/1/33			55			60
#	555591, 5.500%, due 7/1/33			33			36
#	762505, 5.500%, due 11/1/33			273			305
#	725231, 5.000%, due 2/1/34			416			450
#	725220, 5.000%, due 3/1/34			403			436
#	725232, 5.000%, due 3/1/34			397			430
#	725238, 5.000%, due 3/1/34			225			244
#	776964, 5.000%, due 4/1/34			783			869
#	725424, 5.500%, due 4/1/34			214			234
#	255630, 5.000%, due 3/1/35			23			25
#	888884, 5.500%, due 12/1/35			403			450
#	886220, 6.000%, due 7/1/36			569			638
#	928658, 6.500%, due 9/1/37			70			78
#	889385, 6.000%, due 2/1/38			993			1,105
#	962058, 6.500%, due 3/1/38			1,121			1,266
#	991911, 7.000%, due 11/1/38			351			395
#	AB1200, 5.500%, due 7/1/40			767			856
#	AL0028, 5.000%, due 2/1/41			393			439
#	AL0913, 6.000%, due 7/1/41			2,075			2,297
	Total FNMA Mortgage Obligations						51,550

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

103

Income Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	NRSRO Rating	Principal Amount			Value

	U.S. Government and U.S. Government Agency—(continued)

	Non-Agency Mortgage-Backed Obligations—0.8%
*	First Plus Home Loan Owner Trust, 1997–4, Tranche M1, 7.640%, 9/11/23§**	D		$	676		$	565
*	First Plus Home Loan Owner Trust, 1997–4, Tranche M2, 7.830%, 9/11/23§**	D			143			104
*	First Plus Home Loan Owner Trust, 1998–3, Tranche M2, 7.920%, 5/10/24§**	Caa1ø			256			247
*	Lehman Structured Securities Corp.—144A, 2004–2, Tranche M1, 2.694%, 2/28/33, VRN§	CCC			291			143
	Total Non-Agency Mortgage-Backed Obligations							1,059

	Asset-Backed Securities—5.7%
	Centre Point Funding LLC—144A, 2010–1A, Tranche 1, 5.430%, 7/20/16	A2			832			868
	Chase Issuance Trust, 2008-A8, Tranche A8, 1.393%, 5/15/17, VRN	AAA			1,250			1,272
	Citibank Credit Card Issuance Trust, 2008-A6, Tranche A6, 1.392%, 5/22/17, VRN	AAA			700			713
	Citibank Omni Master Trust—144A, 2009-A14A, Tranche A14, 2.943%, 8/15/18, VRN	Aaa			1,000			1,027
	GE Capital Credit Card Master Note Trust, 2012–6, Tranche B, 1.830%, 8/17/20	AA-			1,705			1,665
	SLM Student Loan Trust, 2002–1, Tranche B, 0.746%, 1/25/21, VRN	Aaa			2,000			1,986
	Total Asset-Backed Securities							7,531

	Corporate Obligations—36.8%
	The Goldman Sachs Group, Inc., 3.300%, due 5/3/15	A			600			618
	Bank of America Corporation, 1.093%, due 3/22/16, VRN	A			1,000			997
	BHP Billiton Finance USA, Ltd., 5.400%, due 3/29/17	A+			1,000			1,128
	JPMorgan Chase & Co., 6.125%, due 6/27/17	A			1,750			1,974
	American Express Co., 6.150%, due 8/28/17	A+			1,500			1,738
	Capital One Financial Corporation, 6.750%, due 9/15/17	A-			1,000			1,178
	Standard Chartered Bank—144A, 6.400%, due 9/26/17	A+			1,000			1,125
	Wells Fargo & Co., 5.625%, due 12/11/17	AA-			1,250			1,421


Issuer	NRSRO Rating	Principal Amount			Value

U.S. Government and U.S. Government Agency—(continued)

Corporate Obligations—(continued)
Intesa Sanpaolo SpA, 3.875%, due 1/16/18	BBB+		$	1,000		$	960
Morgan Stanley, 6.625%, due 4/1/18	A			1,250			1,417
General Electric Capital Corporation, 5.625%, due 5/1/18	AA+			1,200			1,376
Philip Morris International, Inc., 5.650%, due 5/16/18	A			1,250			1,441
Simon Property Group L.P., 6.125%, due 5/30/18	A			1,250			1,469
John Deere Capital Corporation, 5.750%, due 9/10/18	A			1,300			1,517
Merrill Lynch & Co., Inc., 6.875%, due 11/15/18	A			1,000			1,165
Glencore Funding LLC—144A, 1.574%, due 1/15/19, VRN	BBB			1,000			929
Petrobras Global Finance BV, 2.414%, due 1/15/19, VRN	A3			1,250			1,225
Honeywell International, Inc., 5.000%, due 2/15/19	A			1,280			1,463
The Procter & Gamble Co., 4.700%, due 2/15/19	AA-			500			564
Citigroup, Inc., 8.500%, due 5/22/19	A			1,250			1,575
Burlington Northern Santa Fe LLC, 4.700%, due 10/1/19	A3			1,000			1,110
Boston Properties L.P., 5.875%, due 10/15/19	A-			1,350			1,557
Royal Bank of Scotland Group plc, 6.400%, due 10/21/19	A			750			833
The Goldman Sachs Group, Inc., 6.000%, due 6/15/20	A			1,250			1,405
Alcoa, Inc., 6.150%, due 8/15/20	BBB-			750			768
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20	A			1,000			1,115
Hewlett-Packard Co., 4.300%, due 6/1/21	A-			1,250			1,222
Corporation Nacional del Cobre de Chile—144A, 3.875%, due 11/3/21	A1			1,000			975
Gilead Sciences, Inc., 4.400%, due 12/1/21	A-			1,425			1,530
Itau Unibanco Holding S.A.—144A, 6.200%, due 12/21/21	BBB			750			759
SLM Corporation, 7.250%, due 1/25/22	BBB-			750			788
Masco Corporation, 5.950%, due 3/15/22	BBB-			1,000			1,050
Potomac Electric Power Co., 3.050%, due 4/1/22	A			1,000			987
American International Group, Inc., 4.875%, due 6/1/22	A-			1,275			1,359
Odebrecht Finance Ltd.—144A, 5.125%, due 6/26/22	BBB-			1,000			980

See accompanying Notes to Financial Statements.

104

Semi-Annual Report

June 30, 2013

Income Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating	Principal Amount			Value

U.S. Government and U.S. Government Agency—(continued)

Corporate Obligations—(continued)
Bancolombia S.A., 5.125%, due 9/11/22	BBB-		$	1,000		$	953
Mexichem S.A.B. de C.V.—144A, 4.875%, due 9/19/22	BBB-			750			754
WEA Finance LLC—144A, 3.375%, due 10/3/22	A2			1,000			943
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22	Baa2			625			613
Royal Bank of Scotland Group plc, 6.125%, due 12/15/22	BB+			800			761
Carlyle Holdings Finance LLC—144A, 3.875%, due 2/1/23	A-			1,200			1,161
Corporation Lindley S.A.—144A, 4.625%, due 4/12/23	BBB-			750			728
Toll Brothers Finance Corporation, 4.375%, due 4/15/23	BBB-			900			837
Total Corporate Obligations							48,468

Total Long-Term Investments—98.8% (cost $129,503)							130,244

Total Investments—98.8% (cost $129,503)							130,244
Cash and other assets, less liabilities—1.2%							1,605
Net assets—100.0%						$	131,849

The obligations of certain U. S. Government-sponsored securities are neither issued nor guaranteed by the U. S. Treasury.

VRN = Variable Rate Note

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. These holdings represent 0.80% of the net assets at June 30, 2013.

* = Non-income producing securities

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. These holdings represent 0.69% of the Fund’s net assets at June 30, 2013.

ø = Moody’s withdrew its rating as of July 29, 2011. The rating shown represents the last issued. The bond currently is not rated by a NRSRO.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

105

	LOW DURATION FUND

	The Low Duration Fund seeks to maximize total return. Total return includes both income and capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Christopher T. Vincent Paul J. Sularz	The William Blair Low Duration Fund (Class N shares) posted a 1.27% decrease, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark index, the Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index (the “Index”), increased 0.11%. Portfolio Results The Fund’s underperformance year-to-date was caused primarily by the performance of mortgage-backed securities (“MBS”) held in the Fund, as MBS comprises the majority of the Fund’s assets (approximately 70%). An allocation to U.S. Treasury Inflation-Protected Securities (“TIPS”) also detracted from performance. Factors that had a positive impact on the Fund’s performance year-to-date included its exposures to floating-rate instruments in the corporate and asset-backed sectors. The Fund’s positioning in MBS detracted year-to-date. MBS risk spreads widened during the second quarter of 2013 due to elevated levels of volatility created by uncertainty regarding when and how the Federal Open Market Committee (“FOMC”) will end its quantitative easing programs. MBS were one of the segments of the bond market that the FOMC targeted in its purchases for the quantitative easing programs. The Fund’s allocation to TIPS also had a negative effect on performance year-to-date. TIPS underperformed the broad market because the market’s expectations for inflation declined due to the FOMC’s signals that it will slow down the pace of purchases in its quantitative easing programs, with the result being less inflationary pressures. An allocation to floating-rate instruments in the corporate and asset-backed sectors mitigated declines year-to-date. The floating-rate instruments helped preserve principal as interest rates rose rapidly during the second quarter of 2013. Fixed Income Markets Summary & Outlook Fixed income instruments declined year-to-date after a volatile second quarter. Interest rates rose, interest rate volatility spiked, and risk spreads widened. The 10-year Treasury note yielded 2.49% at June 30, 2013. We believe that the threat of a sustained, rapid rise in interest rates is subdued, though longer-term interest rates may trend higher. Interest rate volatility has increased due to uncertainty surrounding the timing and magnitude of the FOMC’s exit from its quantitative easing programs. However, the FOMC continues to assert that its policy interest rate will be maintained at low levels until the unemployment rate declines below 6.5% and inflation expectations are well-anchored, and the market’s prices imply that will occur in late 2014 at the earliest. With corporations holding record levels of cash, the corporate bond market remains concerned about shareholder-friendly activities such as leveraged buyouts (“LBOs”), large share repurchases, and special dividends. We believe idiosyncratic risks are among the top issues for investment-grade corporate bond investors, but we do not believe the market will enter a period of excessive LBO activity. We believe that spread sectors are poised to lead the market. Risk premiums across all spread sectors remain elevated versus long-term averages but not approaching the historically cheap levels experienced in prior years. In addition, fundamentals are strong, as corporations’ balance sheets are strong given their historically high level of cash holdings. For these reasons, coupled with the low level of Treasury interest rates, we are bullish on spread products relative to Treasuries.

106

Semi-Annual Report

June 30, 2013

Low Duration Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2013
	Year to Date			1 Year			3 Year			Since Inception(a)
Class N		(1.27	)%		(0.09	)%		1.22	%		1.25	%
Class I		(1.20	)		0.06			1.36			1.39
Institutional Class		(1.01	)		0.32			1.53			1.58
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index		0.11			0.32			0.41			0.44

(a)	For the period from December 1, 2009 (Commencement of Operations) to June 30, 2013.

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees. Institutional Class Shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

The performance highlights and graph presented above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

The Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index is comprised of a single U.S. Treasury Note issue purchased at the beginning of the month and held for a full month. Each month the index is rebalanced and the issue selected is the outstanding U.S. Treasury Note that matures closest to, but not beyond one year from the rebalancing date.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total investments.

June 30, 2013

William Blair Funds

107

Low Duration Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	Principal Amount		Value

	U.S. Government and U.S. Government Agency—72.8%

	U.S. Treasury Inflation Indexed Notes/Bonds—2.2%
	U.S. Treasury Inflation Indexed Note, 2.375%, due 1/15/17		$3,748		$	4,154
	U.S. Treasury Inflation Indexed Note, 1.625%, due 1/15/18		2,220			2,430
	Total U.S. Treasury Inflation Indexed Notes/Bonds					6,584

	Government National Mortgage Association (GNMA)—0.9%
#	623159, 5.000%, due 11/15/13		6			6
#	628400, 6.000%, due 11/15/13		15			15
#	002682, 6.500%, due 11/20/13		2			2
#	623182, 5.000%, due 12/15/13		14			16
#	781010, 6.500%, due 4/15/14		12			12
#	002761, 6.000%, due 5/20/14		11			11
#	002787, 5.500%, due 7/20/14		2			2
#	781275, 6.000%, due 10/15/14		38			39
	GNR 2011–24 VA, 3.500%, due 2/20/16		1,054			1,100
#	561031, 5.500%, due 9/15/16		144			153
#	003180, 6.000%, due 1/20/17		22			23
#	781567, 5.000%, due 2/15/18		59			63
#	606406, 5.000%, due 4/15/18		82			89
#	003438, 4.500%, due 9/20/18		142			153
#	003465, 4.500%, due 11/20/18		47			51
#	004430, 4.500%, due 5/20/24		749			803
	Total GNMA Mortgage Obligations					2,538

	Federal Home Loan Mortgage Corp. (FHLMC)—18.6%
#	G12631, 5.500%, due 4/1/17		201			215
#	G13127, 4.500%, due 4/1/18		54			56
#	G11606, 4.500%, due 5/1/18		22			23
#	E96962, 4.000%, due 6/1/18		98			103
#	E01418, 4.000%, due 7/1/18		22			23
#	E01424, 4.000%, due 8/1/18		11			12
#	E99160, 4.500%, due 9/1/18		117			122
#	E99582, 5.000%, due 9/1/18		29			30
#	E99659, 4.500%, due 10/1/18		160			167
#	B11362, 5.500%, due 12/1/18		17			18
#	G13367, 5.500%, due 12/1/18		378			404
#	B11849, 5.500%, due 1/1/19		194			208
#	B12826, 4.500%, due 3/1/19		637			671
#	B13051, 4.500%, due 4/1/19		86			92
#	B13143, 4.500%, due 4/1/19		428			457
#	B14961, 4.500%, due 6/1/19		86			92
#	B15141, 4.500%, due 6/1/19		85			90
#	G11604, 5.000%, due 7/1/19		166			177
#	G11596, 5.500%, due 8/1/19		141			152
#	G11605, 5.500%, due 9/1/19		66			72
#	B17142, 4.500%, due 11/1/19		1,047			1,115
#	B17161, 4.500%, due 11/1/19		29			31
#	G11697, 5.500%, due 4/1/20		1,100			1,189
#	J02537, 5.000%, due 9/1/20		66			70
#	G12113, 5.500%, due 5/1/21		198			214
#	E02322, 5.500%, due 5/1/22		56			61
#	J06484, 5.500%, due 11/1/22		460			498


	Issuer	Principal Amount		Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal Home Loan Mortgage Corp. (FHLMC)—(continued)
#	J06871, 5.500%, due 1/1/23		$ 161		$	174
#	J08703, 5.500%, due 9/1/23		72			78
#	J10351, 4.000%, due 7/1/24		288			310
#	C00351, 8.000%, due 7/1/24		99			116
#	G13695, 4.000%, due 9/1/24		1,361			1,465
#	G00363, 8.000%, due 6/1/25		139			161
#	J12853, 4.000%, due 8/1/25		200			215
#	C80329, 8.000%, due 8/1/25		26			30
#	J13022, 4.000%, due 9/1/25		2,473			2,662
#	J14491, 4.000%, due 2/1/26		6,741			7,335
#	G14150, 4.500%, due 4/1/26		3,235			3,455
#	E02912, 5.000%, due 6/1/26		991			1,062
#	J16051, 4.500%, due 7/1/26		4,083			4,362
#	J18361, 3.500%, due 3/1/27		3,323			3,515
#	J19032, 3.500%, due 5/1/27		1,549			1,640
#	G04053, 5.500%, due 3/1/38		2,696			2,984
#	G04424, 6.000%, due 6/1/38		202			223
#	G04778, 6.000%, due 7/1/38		192			215
#	A81372, 6.000%, due 8/1/38		72			80
#	G04544, 6.000%, due 8/1/38		1,113			1,218
#	G04687, 6.000%, due 9/1/38		268			296
#	G04745, 6.000%, due 9/1/38		130			143
#	A81799, 6.500%, due 9/1/38		824			927
#	G06964, 5.500%, due 11/1/38		4,237			4,779
#	G05723, 6.500%, due 11/1/38		3,769			4,232
#	A92646, 5.500%, due 6/1/40		358			398
#	G06017, 5.500%, due 6/1/40		2,344			2,593
#	G06583, 5.000%, due 6/1/41		1,592			1,779
#	4122, Tranche FP, 0.593%, due 10/15/42, VRN		1,314			1,313
	Total FHLMC Mortgage Obligations					54,122

	Federal National Mortgage Association (FNMA)—51.1%
#	679220, 6.000%, due 12/1/14		9			9
#	256224, 5.500%, due 4/1/16		16			17
#	254181, 5.000%, due 1/1/17		51			55
#	256559, 5.500%, due 1/1/17		9			10
#	256606, 5.500%, due 2/1/17		12			13
#	256646, 5.500%, due 3/1/17		10			11
#	545862, 5.000%, due 8/1/17		54			57
#	545898, 5.500%, due 9/1/17		298			314
#	545899, 5.500%, due 9/1/17		314			331
#	254510, 5.000%, due 11/1/17		50			53
#	555029, 5.000%, due 11/1/17		39			42
#	254545, 5.000%, due 12/1/17		22			23
#	254590, 5.000%, due 1/1/18		25			26
#	257067, 5.000%, due 1/1/18		58			62
#	663692, 5.000%, due 1/1/18		116			124
#	674713, 5.000%, due 1/1/18		9			10
#	679305, 5.000%, due 1/1/18		46			49
#	254591, 5.500%, due 1/1/18		233			246
#	678938, 5.500%, due 2/1/18		23			25
#	683100, 5.500%, due 2/1/18		301			318
#	254684, 5.000%, due 3/1/18		15			16
#	675717, 5.000%, due 3/1/18		180			193

See accompanying Notes to Financial Statements.

108

Semi-Annual Report

June 30, 2013

Low Duration Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	Principal Amount	Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal National Mortgage Association (FNMA)—(continued)
#	681361, 5.000%, due 3/1/18	$ 66		$	70
#	656564, 5.000%, due 4/1/18	1,115			1,191
#	696677, 5.000%, due 4/1/18	72			77
#	702888, 5.000%, due 4/1/18	107			115
#	695838, 5.500%, due 4/1/18	70			74
#	254721, 5.000%, due 5/1/18	180			193
#	697593, 5.000%, due 5/1/18	182			194
#	702332, 5.000%, due 5/1/18	36			39
#	704049, 5.500%, due 5/1/18	703			743
#	735357, 5.500%, due 5/1/18	979			1,037
#	656573, 5.000%, due 6/1/18	179			191
#	709848, 5.000%, due 6/1/18	161			172
#	728715, 5.000%, due 7/1/18	294			314
#	735003, 5.500%, due 7/1/18	1,001			1,060
#	711991, 5.000%, due 8/1/18	156			166
#	190341, 5.000%, due 9/1/18	42			45
#	743183, 5.000%, due 10/1/18	65			70
#	555872, 5.000%, due 11/1/18	162			173
#	749596, 5.000%, due 11/1/18	246			266
#	745237, 5.000%, due 12/1/18	48			51
#	753866, 6.000%, due 12/1/18	337			362
#	761246, 5.000%, due 1/1/19	340			369
#	761267, 4.500%, due 2/1/19	567			617
#	255079, 5.000%, due 2/1/19	42			45
#	766059, 5.500%, due 2/1/19	250			270
#	766276, 5.000%, due 3/1/19	372			400
#	742086, 4.500%, due 4/1/19	2,090			2,275
#	779363, 5.000%, due 6/1/19	71			77
#	785259, 5.000%, due 8/1/19	289			311
#	761489, 5.500%, due 9/1/19	165			178
#	788424, 5.500%, due 9/1/19	69			75
#	725953, 5.000%, due 10/1/19	87			95
#	745877, 5.000%, due 1/1/20	195			212
#	735401, 5.500%, due 3/1/20	191			202
#	357865, 5.000%, due 7/1/20	190			205
#	357978, 5.000%, due 9/1/20	204			221
#	745735, 5.000%, due 3/1/21	638			685
#	879607, 5.500%, due 4/1/21	103			111
#	831497, 6.000%, due 4/1/21	373			408
#	880993, 6.000%, due 1/1/22	24			26
#	972934, 5.500%, due 2/1/23	297			321
#	889342, 5.000%, due 3/1/23	120			128
#	982878, 4.500%, due 5/1/23	425			458
#	555734, 5.000%, due 7/1/23	822			903
#	254908, 5.000%, due 9/1/23	54			58
#	AE0011, 5.500%, due 9/1/23	166			179
#	747339, 5.500%, due 10/1/23	406			449
#	255165, 4.500%, due 3/1/24	86			92
#	934808, 4.500%, due 3/1/24	216			232
#	AA4519, 4.500%, due 3/1/24	1,663			1,805
#	AA2922, 4.000%, due 4/1/24	960			1,035
#	AA5028, 4.500%, due 4/1/24	318			346
#	190988, 9.000%, due 6/1/24	142			160
#	993231, 4.000%, due 7/1/24	1,225			1,323
#	AC1520, 4.000%, due 9/1/24	140			150
#	AC3674, 4.500%, due 10/1/24	1,632			1,776


	Issuer	Principal Amount		Value

	U.S. Government and U.S. Government Agency—(continued)

	Federal National Mortgage Association (FNMA)—(continued)
#	AC5410, 4.500%, due 10/1/24		$ 625		$	678
#	932095, 4.000%, due 11/1/24		8,067			8,707
#	AC5124, 4.000%, due 11/1/24		1,073			1,158
#	AC6600, 4.500%, due 11/1/24		83			90
#	AC6257, 4.000%, due 12/1/24		3,749			4,045
#	AC8857, 4.500%, due 12/1/24		65			71
#	AC9560, 5.000%, due 1/1/25		3,503			3,799
#	AL3422, 5.000%, due 1/1/25		1,408			1,578
#	932449, 4.000%, due 2/1/25		429			463
#	932629, 4.000%, due 3/1/25		470			507
#	AD0855, 4.000%, due 3/1/25		349			375
#	932723, 4.000%, due 4/1/25		502			542
#	AD4073, 4.000%, due 5/1/25		185			200
#	935995, 4.000%, due 6/1/25		186			201
#	AD4677, 4.000%, due 6/1/25		1,845			1,991
#	AD8164, 4.000%, due 8/1/25		4,023			4,341
#	AE1176, 4.000%, due 8/1/25		730			787
#	AB1459, 4.000%, due 9/1/25		359			387
#	AD8190, 4.000%, due 9/1/25		1,616			1,738
#	AH2671, 4.000%, due 1/1/26		1,711			1,847
#	890329, 4.000%, due 4/1/26		3,025			3,252
#	AI4856, 4.500%, due 6/1/26		3,043			3,313
#	AL2851, 4.000%, due 8/1/26		3,542			3,822
#	AH9564, 3.500%, due 9/1/26		4,287			4,522
#	AB3497, 4.000%, due 9/1/26		1,787			1,922
#	AB3608, 3.500%, due 10/1/26		4,259			4,493
#	AI7363, 3.500%, due 10/1/26		1,119			1,180
#	AJ2322, 3.500%, due 10/1/26		3,924			4,139
#	AB3975, 3.500%, due 12/1/26		1,532			1,616
#	AJ8149, 3.500%, due 12/1/26		3,006			3,171
#	AJ7724, 4.000%, due 12/1/26		2,412			2,605
#	AK0498, 3.500%, due 1/1/27		811			855
#	AK2768, 3.500%, due 3/1/27		2,724			2,873
#	AK7384, 4.000%, due 3/1/27		3,460			3,737
#	AB4818, 4.000%, due 4/1/27		2,620			2,829
#	AP0446, 3.500%, due 7/1/27		6,921			7,304
#	AP0462, 3.500%, due 7/1/27		1,108			1,169
#	AL2590, 4.000%, due 7/1/27		6,387			6,899
#	AQ8404, 3.000%, due 12/1/27		2,970			3,068
#	809926, 5.500%, due 2/1/35		197			219
#	829306, 6.000%, due 9/1/35		92			101
#	886762, 7.000%, due 9/1/36		983			1,126
#	928574, 6.000%, due 7/1/37		191			210
#	889385, 6.000%, due 2/1/38		1,418			1,578
#	975649, 6.000%, due 7/1/38		302			328
#	AA8706, 5.500%, due 6/1/39		4,623			5,352
#	935532, 4.500%, due 8/1/39		96			105
#	AC0505, 5.500%, due 9/1/39		1,480			1,713
#	AC3270, 5.500%, due 9/1/39		3,065			3,550
#	AC6651, 4.500%, due 12/1/39		125			136
#	AD3360, 5.500%, due 5/1/40		4,081			4,571
#	AB1146, 5.000%, due 6/1/40		449			495
#	AD8810, 5.500%, due 6/1/40		1,676			1,941
#	AL0913, 6.000%, due 7/1/41		5,708			6,318
Total FNMA Mortgage Obligations						148,821

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

109

Low Duration Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	NRSRO Rating	Principal Amount		Value

Asset-Backed Securities—14.5%
	Nissan Auto Receivables Owner Trust, 2010-A, Tranche A3, 0.870%, 7/15/14	Aaa		$ 49		$	49
	CarMax Auto Owner Trust, 2012–1, Tranche A2, 0.590%, 3/16/15	AAA		263			263
	CNH Equipment Trust, 2010-C, Tranche A3, 1.170%, 5/15/15	AAA		87			87
	Harley-Davidson Motorcycle Trust, 2011–2, Tranche A2, 0.710%, 5/15/15	Aaa		167			168
	FPL Recovery Funding LLC, 2007-A, Tranche A2, 5.044%, 8/1/15	AAA		160			161
	Chase Issuance Trust, 2008-A13, Tranche A13, 1.773%, 9/15/15, VRN	AAA		100			100
	Hertz Vehicle Financing LLC—144A, 2009–2A, Tranche A2, 5.290%, 3/25/16	Aaa		2,950			3,132
	CNH Equipment Trust, 2010-C, Tranche A4, 1.750%, 5/16/16	AAA		60			61
	Avis Budget Rental Car Funding AESOP LLC—144A, 2010–3A, Tranche A, 4.640%, 5/20/16	Aaa		1,400			1,481
	Citibank Credit Card Issuance Trust, 2002-A4, Tranche A4, 0.443%, 6/7/16, VRN	AAA		2,200			2,200
	Centre Point Funding LLC—144A, 2010–1A, Tranche 1, 5.430%, 7/20/16	A2		1,457			1,519
	CNH Equipment Trust, 2011-B, Tranche A3, 0.910%, 8/15/16	AAA		590			590
	Discover Card Execution Note Trust, 2011-A1, Tranche A1, 0.543%, 8/15/16, VRN	Aaa		1,400			1,401
	Bank of America Credit Card Trust, 2007-A6, Tranche A6, 0.253%, 9/15/16, VRN	AAA		20			20
	Enterprise Fleet Financing LLC—144A, 2011–2, Tranche A2, 1.430%, 10/20/16	AAA		686			686
	GE Capital Credit Card Master Note Trust, 2011–1, Tranche A, 0.743%, 1/15/17, VRN	Aaa		620			621
	Ford Credit Floorplan Master Owner Trust A—144A, 2010–3, Tranche A2, 1.893%, 2/15/17, VRN	AAA		2,000			2,040
	GE Dealer Floorplan Master Note Trust, 2012–1, Tranche A, 0.762%, 2/20/17, VRN	Aaa		2,010			2,016
	Bank of America Credit Card Trust, 2007-A15, Tranche A15, 0.543%, 4/17/17, VRN	AAA		100			100
	Chase Issuance Trust, 2008-A8, Tranche A8, 1.393%, 5/15/17, VRN	AAA		3,000			3,054


	Issuer	NRSRO Rating	Principal Amount		Value

Asset-Backed Securities—(continued)
	Nissan Master Owner Trust, 2012-A, Tranche A, 0.663%, 5/15/17, VRN	Aaa		$2,196		$	2,193
	Citibank Credit Card Issuance Trust, 2008-A6, Tranche A6, 1.392%, 5/22/17, VRN	AAA		200			204
	Ally Master Owner Trust, 2010–4, Tranche A, 1.263%, 8/15/17, VRN	Aaa		125			126
	GE Dealer Floorplan Master Note Trust, 2012–4, Tranche A, 0.632%, 10/20/17, VRN	Aaa		2,000			1,986
	Ford Credit Floorplan Master Owner Trust, 2013–1, Tranche A2, 0.573%, 1/15/18, VRN	AAA		1,900			1,899
	Discover Card Execution Note Trust, 2010-A2, Tranche A2, 0.773%, 3/15/18, VRN	AAA		350			352
	Citibank Omni Master Trust—144A, 2009-A14A, Tranche A14, 2.943%, 8/15/18, VRN	Aaa		2,000			2,054
	Bank of America Credit Card Trust, 2007-A11, Tranche A11, 0.263%, 12/15/19, VRN	AAA		75			74
	Capital One Multi-Asset Execution Trust, 2007-A2, Tranche A2, 0.273%, 12/16/19, VRN	AAA		215			213
	American Express Credit Account Secured Note Trust, 2012–4, Tranche A, 0.433%, 5/15/20, VRN	AAA		2,200			2,193
	SLM Student Loan Trust, 2002–1, Tranche B, 0.746%, 1/25/21, VRN	Aaa		4,500			4,469
	MBNA Credit Card Master Note Trust, 2004-A3, Tranche A3, 0.453%, 8/16/21, VRN	AAA		475			469
	SLM Student Loan Trust, 2008–5, Tranche A4, 1.976%, 7/25/23, VRN	Aaa		4,000			4,132
	SLM Private Education Loan Trust—144A, 2011-A, Tranche A3, 2.693%, 1/15/43, VRN	AAA		2,000			2,070
	Total Asset-Backed Securities						42,183

Corporate Obligations—11.1%
	Morgan Stanley, 6.000%, due 5/13/14	A		1,300			1,352
	Daimler Finance North America LLC—144A, 0.879%, due 1/9/15, VRN	A-		1,000			1,003
	The Goldman Sachs Group, Inc., 0.777%, due 1/12/15, VRN	A		1,000			998
	The Goldman Sachs Group, Inc., 5.125%, due 1/15/15	A		1,000			1,055
	American International Group, Inc., 3.000%, due 3/20/15	A-		1,150			1,185

See accompanying Notes to Financial Statements.

110

Semi-Annual Report

June 30, 2013

Low Duration Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


	Issuer	NRSRO Rating	Principal Amount		Value

Corporate Obligations—(continued)
	JPMorgan Chase & Co., 1.875%, due 3/20/15	A+		$1,525		$	1,543
	Citigroup, Inc., 4.700%, due 5/29/15	A		1,300			1,381
	American Express Credit Corporation, 2.750%, due 9/15/15	A+		1,000			1,037
	Royal Bank of Scotland Group, PLC, 2.550%, due 9/18/15	A		3,000			3,050
	AbbVie, Inc.—144A, 1.200%, due 11/6/15	A		1,250			1,251
	Capital One Financial Corporation, 1.000%, due 11/6/15	A-		3,000			2,959
	McKesson Corporation, 0.950%, due 12/4/15	A-		1,000			997
	General Electric Capital Corporation, 1.000%, due 1/8/16	AA+		1,000			995
	Petrobras International Finance Co., 3.875%, due 1/27/16	A3		3,000			3,087
	Morgan Stanley, 1.523%, due 2/25/16, VRN	A		1,700			1,695
	Bank of America Corporation, 1.093%, due 3/22/16, VRN	A		3,000			2,991
	Capital One NA, 0.723%, due 3/22/16, VRN	A3		2,500			2,483
	Petrobras Global Finance BV, 1.894%, due 5/20/16, VRN	A3		1,400			1,392
	Hewlett-Packard Co., 3.300%, due 12/9/16	A-		2,000			2,076
	Total Corporate Obligations						32,530

	Total Long-Term Investments—98.4% (cost $288,575)						286,778

	Total Investments—98.4% (cost $288,575)						286,778
	Cash and other assets, less liabilities—1.6%						4,537
	Net assets—100.0%					$	291,315

The obligations of certain U. S. Government-sponsored securities are neither issued nor guaranteed by the U. S. Treasury.

VRN = Variable Rate Note

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

111

Christopher T. Vincent

Kathleen M. Lynch

READY RESERVES FUND

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The William Blair Ready Reserves Fund (Class N shares) posted a 0.00% return, net of fees, for the six months ended June 30, 2013. By comparison, the Fund’s benchmark, AAA Rated Money Market Funds, increased 0.01%.

Portfolio Results

The Fund preserved principal successfully year-to-date while investing in accordance with the SEC’s Rule 2a-7 for money market funds. The Fund invested primarily in commercial paper issued by Tier 1 industrial companies and repurchase agreements. The Fund’s weighted average maturity has been maintained at a defensive level that has been shorter than what is required by the SEC’s Rule 2a-7.

Money Market Outlook

Short-term interest rates continue to be held down by the weight of the Federal Open Market Committee’s (FOMC) large-scale asset purchases, known as quantitative easing (QE). The FOMC continues to purchase securities that dealers are pledging as collateral for reverse repurchase agreements (repo). These agreements are collateralized short-term loans that are generally employed by money market funds to meet Rule 2a-7 mandated liquidity requirements. The FOMC is purchasing collateral which is effectively shrinking the repo market and creating a significant amount of demand for other money market eligible securities such as corporate commercial paper. The corporate commercial paper market is also exhibiting low interest rates as corporations’ balances sheets are flushed with cash, limiting the need for short-term funding.

We do not anticipate that this trend will reverse in the near-term. It is widely expected that the FOMC will begin to trim its QE activities in the next several months; however, the Fed continues to assert that the federal funds’ rate will remain at exceptionally low levels until the unemployment rate improves below 6.5% and inflation expectations are well-anchored.

In June, the U.S. Securities and Exchange Commission (SEC) unanimously agreed to propose rule amendments that govern money market funds. The proposed rule amendments were designed to address money market funds susceptibility to heavy redemptions, improve their ability to manage and mitigate potential contagion from such redemptions and increase transparency of portfolio risks while preserving as much as possible the benefits of money market funds.

The SEC has requested money market participants to submit comments on two alternatives. The first alternative would require prime institutional money market funds to float their net asset values. The second alternative would allow money market funds to maintain a constant net asset value at $1.00 and require the implementation of liquidity fees and redemption gates. The comment period closes on September 17, 2013. At which time, the SEC will collect and study the merits of the comments. We do not anticipate hearing from the SEC on this matter until the first quarter 2014.

112

Semi-Annual Report

June 30, 2013

Ready Reserves Fund

Performance Highlights (Unaudited)

The Fund’s 7 day yield on June 30, 2013 was 0.01%.

Average Annual Total Returns—Class N Shares
period ended 6/30/2013

	Year to Date		1 Year		3 Year		5 Year		10 Year
Class N	0.00	%	0.01	%	0.01	%	0.19	%	1.51	%
AAA Rated Money Market Funds	0.01		0.01		0.02		0.23		1.49
30 Day Treasury Bills	0.02		0.05		0.07		0.16		1.54

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Class N Shares are available to the general public without a sales load. Total return includes reinvestment of income. Yields fluctuate and are not guaranteed. An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corp. (FDIC) or any government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

The AAA Rated Money Market Funds represents the average annual composite performance of all AAA rated First Tier Retail Money Market Funds listed by iMoneyNet data.

This report identifies the Fund’s investments on June 30, 2013. These holdings are subject to change. Not all fixed-income securities in the Fund performed the same, nor is there any guarantee that these fixed-income securities will perform as well in the future. Market forecasts provided in this report may not necessarily come to pass.

Sector Diversification (Unaudited)

The sector diversification shown is based on the total investments.

June 30, 2013

William Blair Funds

113

Ready Reserves Fund

Portfolio of Investments, June 30, 2013 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount			Amortized Cost

U.S. Government and U.S. Government Agency—4.7%

Federal National Mortgage Association (FNMA)—3.1%
Federal National Mortgage Association, 0.500%-4.375%, 7/17/13-9/17/13		$37,620		$	37,654
Total Federal National Mortgage Association (FNMA)					37,654

U.S. Treasury—1.6%
U.S. Treasury Bill, 0.014%, 7/11/13		20,000			20,000

*Corporate Notes—9.7%*
Bristol-Myers Squibb Co., 5.250%, 8/15/13		3,450			3,471
Caterpillar Financial Services Corporation, 1.550%-4.900%, 8/15/13-1/15/14		14,028			14,155
CME Group, Inc., 5.400%, 8/1/13		2,127			2,136
Deere & Co., 6.950%, 4/25/14		1,000			1,054
EI du Pont de Nemours & Co., 1.750%, 3/25/14		10,000			10,108
General Electric Capital Corporation, 1.875%-5.900%, 9/16/13-5/13/14		39,077			39,726
International Business Machines Corporation, 1.000%-1.250%, 8/5/13-5/12/14		22,972			23,073
John Deere Capital Corporation, 4.900%, 9/9/13		7,211	��		7,274
PepsiCo, Inc., 0.875%, 10/25/13		2,000			2,004
Pfizer, Inc., 4.500%, 2/15/14		7,505			7,702
Toyota Motor Credit Corporation, 1.375%, 8/12/13		650			651
Wal-Mart Stores, Inc., 0.750%-1.625%, 10/25/13-4/15/14		7,302			7,365
Total Corporate Notes					118,719

*Commercial Paper—66.3%*
Abbott Laboratories, 0.080%-0.110%, 7/18/13-9/4/13		43,000			42,993
American Honda Finance Corporation, 0.050%-0.110%, 7/8/13-8/23/13		43,000			42,997
Caterpillar Financial Services Corporation, 0.080%-0.170%, 7/25/13-9/26/13		29,000			28,994
Chevron Corporation, 0.050%-0.080%, 7/2/13-7/22/13		36,000			35,999
Coca-Cola Co. (The), 0.050%-0.110%, 7/10/13-9/24/13		43,274			43,270
Colgate Palmolive Co., 0.040%-0.060%, 7/8/13-7/16/13		20,000			20,000
ConocoPhillips Qatar Funding, Ltd., 0.090%-0.130%, 7/18/13-7/29/13		32,800			32,797
Dover Corporation, 0.080%-0.100%, 7/1/13-7/11/13		46,000			46,000
EI du Pont de Nemours & Co., 0.060%-0.080%, 7/8/13-7/23/13		34,000			34,000
Illinois Tool Works, Inc., 0.080%-0.100%, 7/1/13-7/12/13		30,000			30,000


Issuer	Principal Amount		Amortized Cost

Commercial Paper—(continued)
International Business Machines Corporation, 0.030%-0.040%, 7/1/13-7/8/13		$ 20,000	$	20,000
John Deere Financial Ltd., 0.080%-0.100%, 7/1/13-7/25/13		36,100		36,099
Johnson & Johnson, 0.030%, 7/15/13		10,000		10,000
Kimberly-Clark Worldwide, Inc., 0.060%, 7/8/13		10,800		10,800
Merck & Co., Inc., 0.060%-0.080%, 7/15/13-7/26/13		42,000		42,000
Nestle Capital Corporation, 0.070%-0.100%, 7/11/13		6,000		6,000
PACCAR Financial Corporation, 0.070%-0.090%, 7/2/13-7/24/13		42,100		42,099
PepsiCo, Inc., 0.050%-0.070%, 7/8/13-8/1/13		42,000		42,000
Pfizer, Inc., 0.030%-0.050%, 7/2/13-7/16/13		42,000		42,000
Praxair, Inc., 0.040%-0.050%, 7/5/13-7/22/13		29,700		29,700
Private Export Funding Corporation, 0.120%, 7/17/13		7,000		6,999
Procter & Gamble Co. 0.080%-0.140%, 8/1/13-8/6/13		24,691		24,687
Roche Holdings, Inc., 0.070%, 7/8/13-7/26/13		32,000		32,000
Toyota Credit de Puerto Rico Corporation, 0.040%-0.090%, 7/1/13-7/31/13		43,000		42,999
Unilever Capital Corporation, 0.060%-0.110%, 7/3/13-8/6/13		42,000		41,998
Wal-Mart Stores, Inc., 0.050%-0.090%, 7/1/13-9/16/13		28,000		27,999
Total Commercial Paper				814,430

Repurchase Agreements—19.2%
Bank of America, 0.110% dated 6/28/13, due 7/1/13, repurchase price $60,001, collateralized by FMAC, 2.500%-5.200%, due 7/1/24–10/1/32, and FNMA, 2.500%-5.000%, due 8/1/23–2/1/43		60,000		60,000
Fixed Income Clearing Corporation, 0.010% dated 6/28/13, due 7/1/13, repurchase price $116,088, collateralized by FHLB, 3.300%-5.500%, due 8/27/32–7/15/36, and FNMA, 3.430%, due 5/27/33		116,088		116,088
Goldman Sachs, 0.120% dated 6/28/13, due 7/1/13, repurchase price $60,001, collateralized by FMAC, 3.000%, due 6/1/33, and FNMA, 4.000%, due 3/1/42		60,000		60,000
Total Repurchase Agreements				236,088

Total Investments—99.9% (cost $1,226,891)				1,226,891

Cash and other assets, less liabilities—0.1%				995
Net assets—100.0%			$	1,227,886
Portfolio Weighted Average Maturity				33 days

See accompanying Notes to Financial Statements.

114

Semi-Annual Report

June 30, 2013

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

	Growth Fund			Large Cap Growth Fund			Mid Cap Growth Fund			Small-Mid Cap Growth Fund
*Assets*
Investments in securities, at cost	$	614,379		$	25,136		$	410,319		$	398,189
Investments in securities, at value	$	793,274		$	32,110		$	464,850		$	499,250
Receivable for securities sold		2,065			163			373			687
Receivable for fund shares sold		3,200			60			1,299			1,349
Receivable from Advisor		—			5			2			13
Dividend and interest receivable		319			15			66			12
Total assets		798,858			32,353			466,590			501,311

*Liabilities*
Payable for investment securities purchased		2,001			163			—			547
Payable for fund shares redeemed		488			—			319			267
Management fee payable		490			21			362			413
Distribution and shareholder administration fees payable		54			1			10			12
Other payables and accrued expenses		258			25			10			208
Total liabilities		3,291			210			701			1,447
Net Assets	$	795,567		$	32,143		$	465,889		$	499,864

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	57		$	4		$	31		$	29
Capital paid in excess of par value		575,826			24,451			392,434			380,051
Accumulated net investment income (loss)		(1,067	)		(15	)		(1,485	)		(1,710	)
Accumulated realized gain (loss)		41,856			729			20,378			20,433
Net unrealized appreciation (depreciation) of investments and foreign currencies		178,895			6,974			54,531			101,061
Net Assets	$	795,567		$	32,143		$	465,889		$	499,864

Class N Shares
Net Assets	$	263,854		$	5,046		$	46,346		$	59,354
Shares Outstanding		19,627,809			566,775			3,257,148			3,508,771
Net Asset Value Per Share	$	13.44			8.90		$	14.23		$	16.92
Class I Shares
Net Assets	$	531,713		$	27,097		$	419,543		$	440,510
Shares Outstanding		37,810,914			2,963,933			28,858,246			25,389,382
Net Asset Value Per Share	$	14.06			9.14		$	14.54		$	17.35

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

115

Statements of Operations

For the Period Ended June 30, 2013 (all amounts in thousands) (unaudited)

				Large Cap				Mid Cap				Small-Mid
	Growth			Growth					Growth			Cap Growth
	Fund			Fund					Fund			Fund
Investment income
Dividends	$	2,638			$	139			$	898			$	804
Less foreign tax withheld		—				—				—				(6	)
Interest		2				—				4				3
Total income		2,640				139				902				801
Expenses
Investment advisory fees		2,892				124				2,012				2,246
Distribution fees		326				6				56				60
Custodian fees		11				15				16				18
Transfer agent fees		74				5				19				26
Sub-transfer agent fees
Class N		168				3				31				32
Class I		158				5				183				83
Professional fees		25				10				16				17
Registration fees		21				17				24				16
Shareholder reporting fees		22				2				28				22
Trustee fees		14				1				7				7
Other expenses		4				2				5				4
Total expenses before waiver		3,715				190				2,397				2,531
Expenses reimbursed to (waived or absorbed by) the Advisor		—				(36	)			(10	)			(20	)
Net expenses		3,715				154				2,387				2,511
Net investment income (loss)		(1,075	)			(15	)			(1,485	)			(1,710	)
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities		29,967				1,812				21,225				16,869
Total net realized gain (loss)		29,967				1,812				21,225				16,869
Change in net unrealized appreciation (depreciation) of:
Investments		55,145				954				27,807				61,864
Change in net unrealized appreciation (depreciation)		55,145				954				27,807				61,864
Net increase (decrease) in net assets resulting from operations	$	84,037			$	2,751			$	47,547			$	77,023

See accompanying Notes to Financial Statements.

116

Semi-Annual Report

June 30, 2013

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

							Large Cap						Mid Cap						Small-Mid
	Growth Fund						Growth Fund						Growth Fund						Cap Growth Fund
	2013			2012			2013			2012			2013			2012			2013			2012
Operations
Net investment income (loss)	$	(1,075	)	$	1,123		$	(15	)	$	(1	)	$	(1,485	)	$	484		$	(1,710	)	$	1,480
Net realized gain (loss) on investments and other assets		29,967			29,181			1,812			2,407			21,225			7,689			16,869			11,592
Change in net unrealized appreciation (depreciation) on investments		55,145			60,237			954			2,131			27,807			15,618			61,864			22,741
Net increase (decrease) in net assets resulting from operations		84,037			90,541			2,751			4,537			47,547			23,791			77,023			35,813
Distributions to shareholders from
Net investment income
Class N		—			(10	)		—			—			—			—			—			(61	)
Class I		—			(1,133	)		—			—			—			(488	)		—			(1,426	)
Net realized gain
Class N		—			(7,281	)		—			—			—			(905	)		—			(1,028	)
Class I		—			(12,939	)		—			—			—			(7,042	)		—			(8,102	)
Total Distributions		—			(21,363	)		—			—			—			(8,435	)		—			(10,617	)
Capital stock transactions
Net proceeds from sale of shares		61,025			178,095			2,400			3,967			79,678			273,232			81,793			188,047
Shares issued in reinvestment of income dividends and capital gain distributions		—			19,820			—			—			—			8,342			—			9,387
Less cost of shares redeemed		(65,740	)		(117,590	)		(1,421	)		(5,040	)		(31,571	)		(72,449	)		(50,312	)		(84,867	)
Net increase (decrease) in net assets resulting from capital share transactions		(4,715	)		80,325			979			(1,073	)		48,107			209,125			31,481			112,567
Increase (decrease) in net assets		79,322			149,503			3,730			3,464			95,654			224,481			108,504			137,763
Net assets
Beginning of period		716,245			566,742			28,413			24,949			370,235			145,754			391,360			253,597
End of period	$	795,567		$	716,245		$	32,143		$	28,413		$	465,889		$	370,235		$	499,864		$	391,360
Accumulated net investment income (loss) at the end of the period	$	(1,067	)	$	8		$	(15	)	$	—		$	(1,485	)	$	—		$	(1,710	)	$	—

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

117

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

							Global
	Small Cap			Global			Small Cap			International
	Growth			Leaders			Growth			Growth
	Fund			Fund			Fund			Fund
Assets
Investments in securities, at cost	$	379,965		$	115,066		$	10,811		$	3,411,049
Investments in affiliated companies, at cost		24,620			—			—			22,022
Investments in securities, at value	$	481,017		$	123,952		$	11,124		$	3,801,572
Investments in affiliated companies, at value		3,792			—			—			22,815
Foreign currency, at value ($—; $144; $—; $6,204)		—			144			—			6,164
Receivable for securities sold		3,865			398			72			7,204
Receivable for fund shares sold		1,530			22,000			200			9,436
Receivable from Advisor		15			7			11			—
Dividend and interest receiveable		106			226			13			12,556
Unrealized appreciation on forward currency contracts		—			—			—			6,195
Total assets		490,325			146,727			11,420			3,865,942
Liabilities
Payable for investment securities purchased		974			20,951			31			16,351
Payable for fund shares redeemed		259			—			—			4,717
Payable to custodian		—			—			—			4
Management fee payable		444			86			9			3,222
Distribution and shareholder administration fees payable		32			8			1			270
Foreign tax liability		—			12			—			672
Other payables and accrued expenses		196			58			25			828
Total liabilities		1,905			21,115			66			26,064
Net Assets	$	488,420		$	125,612		$	11,354		$	3,839,878
Capital
Composition of Net Assets
Par value of shares of beneficial interest	$	16		$	13		$	1		$	166
Capital paid in excess of par value		353,994			128,034			11,062			4,265,717
Accumulated net investment income (loss)		(1,984	)		502			21			29,027
Accumulated realized gain (loss)		56,170			(11,814	)		(43	)		(852,661	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		80,224			8,877			313			397,629
Net Assets	$	488,420		$	125,612		$	11,354		$	3,839,878

Class N Shares
Net Assets	$	154,734		$	5,557		$	291		$	1,291,137
Shares Outstanding		5,283,804			561,085			28,266			56,459,011
Net Asset Value Per Share	$	29.28		$	9.91		$	10.30		$	22.87
Class I Shares
Net Assets	$	333,686		$	48,384		$	11,063		$	2,548,741
Shares Outstanding		10,927,644			4,881,879			1,073,535			108,802,179
Net Asset Value Per Share	$	30.54		$	9.91		$	10.31		$	23.43
Class Institutional
Net Assets				$	71,671
Shares Outstanding					7,224,435
Net Asset Value Per Share				$	9.92

See accompanying Notes to Financial Statements.

118

Semi-Annual Report

June 30, 2013

Statements of Operations

For the Year Ended June 30, 2013 (all amounts in thousands) (unaudited)

									Global
	Small Cap				Global				Small Cap				International
	Growth				Leaders				Growth				Growth
	Fund				Fund				Fund(a)				Fund
Investment income
Dividends		$	1,004			$	1,171			$	58			$	74,713
Less foreign tax withheld			(13	)			(108	)			(6	)			(7,191	)
Interest			3				1				—				18
Total income			994				1,064				52				67,540
Expenses
Investment advisory fees			2,464				462				23				19,480
Distribution fees			178				7				—				1,659
Shareholder administration fees			—				40				3				—
Custodian fees			18				38				19				308
Transfer agent fees			52				9				1				173
Sub-transfer agent fees
Class N			94				2				—				758
Class I			200				9				—				994
Professional fees			24				14				8				144
Registration fees			21				23				2				38
Shareholder reporting fees			121				4				—				172
Trustee fees			12				1				—				78
Other expenses			3				2				—				19
Total expenses before waiver			3,187				611				56				23,823
Expenses reimbursed to (waived or absorbed by) the Advisor			(209	)			(56	)			(25	)			—
Net expenses			2,978				555				31				23,823
Net investment income (loss)			(1,984	)			509				21				43,717
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			55,550				2,256				(37	)			276,133
Forward foreign currency contracts			—				—				—				(4,434	)
Foreign currency transactions			—				(29	)			(6	)			(2,334	)
Total net realized gain (loss)			55,550				2,227				(43	)			269,365
Change in net unrealized appreciation (depreciation) of:
Investments			40,314				589				313				(243,846	)
Forward foreign currency contracts			—				—				—				6,195
Foreign currency transactions			—				(9	)			—				(212	)
Change in net unrealized appreciation (depreciation)			40,314				580				313				(237,863	)
Net increase (decrease) in net assets resulting from operations		$	93,880			$	3,316			$	291			$	75,219

(a)	For the period from April 10, 2013 (commencement of operations) to June 30, 2013.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

119

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

													Global
													Small Cap
	Small Cap						Global						Growth				International
	Growth Fund						Leaders Fund						Fund				Growth Fund
	2013			2012			2013			2012			2013(a)				2013			2012
Operations
Net investment income (loss)	$	(1,984	)	$	(3,984	)	$	509		$	258			$	21		$	43,717		$	49,275
Net realized gain (loss) on investments, forwards, and foreign currency		55,550			71,506			2,227			3,704				(43	)		269,365			105,420
Change in net unrealized appreciation (depreciation) on investments, forwards, and foreign currency		40,314			18,864			580			3,879				313			(237,863	)		580,675
Net increase (decrease) in net assets resulting from operations		93,880			86,386			3,316			7,841				291			75,219			735,370
Distributions to shareholders from
Net investment income
Class N		—			—			—			(15	)			—			—			(37,353	)
Class I		—			—			—			(227	)			—			—			(74,977	)
Class Institutional		—			—			—			—				—			—			—
Net realized gain
Class N		—			(564	)		—			—				—			—			—
Class I		—			(1,107	)		—			—				—			—			—
Class Institutional		—			—			—			—				—			—			—
Total Distributions		—			(1,671	)		—			(242	)			—			—			(112,330	)
Capital stock transactions
Net proceeds from sale of shares		50,509			93,413			60,627			32,763				11,063			418,377			673,026
Shares issued in reinvestment of income dividends and capital gain distributions		—			1,627			—			234				—			—			103,180
Less cost of shares redeemed		(52,782	)		(337,680	)		(5,325	)		(16,176	)			—			(326,351	)		(955,515	)
Net increase (decrease) in net assets resulting from capital share transactions		(2,273	)		(242,640	)		55,302			16,821				11,063			92,026			(179,309	)
Increase (decrease) in net assets		91,607			(157,925	)		58,618			24,420				11,354			167,245			443,731
Net assets
Beginning of period		396,813			554,738			66,994			42,574				—			3,672,633			3,228,902
End of period	$	488,420		$	396,813		$	125,612		$	66,994			$	11,354		$	3,839,878		$	3,672,633
Accumulated net investment income (loss) at the end of the period	$	(1,984	)	$	—		$	502		$	(7	)		$	21		$	29,027		$	(14,690	)

(a)	For the period from April 10, 2013 (commencement of operations) to June 30, 2013.

See accompanying Notes to Financial Statements.

120

Semi-Annual Report

June 30, 2013

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

		Institutional							Institutional				International
		International			International				International				Leaders
	Growth Fund				Equity Fund				Equity Fund				Fund
Assets
Investments in securities, at cost		$	1,844,884			$	61,153			$	80,108			$	60,848
Investments in affiliated companies, at cost			11,834				—				—				—
Investments in securities, at value		$	2,050,006			$	70,983			$	92,740			$	61,530
Investments in affiliated companies, at value			12,260				—				—				—
Foreign currency, at value ($3,119; $95; $149; $94)			3,099				95				148				95
Receivable for securities sold			3,885				15				19				552
Receivable for fund shares sold			8,744				1				—				—
Receivable from Advisor			—				17				1				9
Dividend and interest receivable			6,258				128				192				163
Unrealized appreciation on forward currency contracts			3,340				—				—				—
Total assets			2,087,592				71,239				93,100				62,349
Liabilities
Payable for investment securities purchased			8,803				263				2,767				298
Payable for fund shares redeemed			90				—				—				—
Payable to custodian			—				—				—				164
Management fee payable			1,616				65				73				50
Distribution and shareholder administration fees payable			—				1				—				2
Foreign tax liability			365				4				5				7
Other payables and accrued expenses			142				42				59				15
Total liabilities			11,016				375				2,904				536
Net Assets		$	2,076,576			$	70,864			$	90,196			$	61,813
Capital
Composition of Net Assets
Par value of shares of beneficial interest		$	136			$	6			$	8			$	6
Capital paid in excess of par value			1,893,137				148,521				190,466				61,711
Accumulated net investment income (loss)			18,078				562				695				617
Accumulated realized gain (loss)			(43,567	)			(88,052	)			(113,597	)			(1,202	)
Net unrealized appreciation (depreciation) of investments and foreign currencies			208,792				9,827				12,624				681
Net Assets		$	2,076,576			$	70,864			$	90,196			$	61,813

Class N Shares
Net Assets						$	3,844							$	101
Shares Outstanding							309,920								9,104
Net Asset Value Per Share						$	12.40							$	11.08
Class I Shares
Net Assets						$	67,020							$	11,555
Shares Outstanding							5,337,425								1,041,126
Net Asset Value Per Share						$	12.56							$	11.10
Institutional Class Shares
Net Assets		$	2,076,576							$	90,196			$	50,157
Shares Outstanding			136,465,422								8,079,727				4,517,826
Net Asset Value Per Share		$	15.22							$	11.16			$	11.10

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

121

Statements of Operations

For the Period Ended June 30, 2013 (all amounts in thousands) (unaudited)

	Institutional International Growth Fund				International Equity Fund				Institutional International Equity Fund				International Leaders Fund
Investment income
Dividends		$	40,112			$	1,250			$	1,561			$	983
Less foreign tax withheld			(3,866	)			(121	)			(153	)			(111	)
Interest			9				—				1				—
Total income			36,255				1,129				1,409				872
Expenses
Investment advisory fees			9,737				399				470				222
Distribution fees			—				6				—				—
Shareholder administration fees			—				—				—				7
Custodian fees			195				35				39				39
Transfer agent fees			21				3				2				3
Sub-transfer agent fees
Class N			—				3				—				—
Class I			—				37				—				—
Professional fees			78				14				15				15
Registration fees			16				18				9				16
Shareholder reporting fees			6				1				—				5
Trustee fees			39				2				3				—
Other expenses			9				1				2				2
Total expenses before waiver			10,101				519				540				309
Expenses reimbursed to (waived or absorbed by) the Advisor			—				(78	)			(22	)			(57	)
Net expenses			10,101				441				518				252
Net investment income (loss)			26,154				688				891				620
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			141,537				4,248				9,893				(858	)
Forward foreign currency contracts			(2,353	)			—				—				(175	)
Foreign currency transactions			(1,326	)			(33	)			(46	)			(65	)
Total net realized gain (loss)			137,858				4,215				9,847				(1,098	)
Change in net unrealized appreciation (depreciation) of:
Investments			(124,387	)			(2,619	)			(7,384	)			(30	)
Forward foreign currency contracts			3,340				—				—				—
Foreign currency translations			551				1				(3	)			(1	)
Change in net unrealized appreciation (depreciation)			(120,496	)			(2,618	)			(7,387	)			(31	)
Net increase (decrease) in net assets resulting from operations		$	43,516			$	2,285			$	3,351			$	(509	)

See accompanying Notes to Financial Statements.

122

Semi-Annual Report

June 30, 2013

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

	Institutional International Growth Fund						International Equity Fund						Institutional International Equity Fund						International Leaders Fund
	2013			2012			2013			2012			2013			2012			2013			2012(a)
Operations
Net investment income (loss)	$	26,154		$	29,169		$	688		$	799		$	891		$	1,465		$	620		$	3
Net realized gain (loss) on investments, forwards, and foreign currency		137,858			35,136			4,215			2,041			9,847			5,793			(1,098	)		(94	)
Change in net unrealized appreciation (depreciation) on investments, forwards, and foreign currency		(120,496	)		314,439			(2,618	)		8,569			(7,387	)		11,762			(31	)		712
Net increase (decrease) in net assets resulting from operations		43,516			378,744			2,285			11,409			3,351			19,020			(509	)		621
Distributions to shareholders from
Net investment income
Class N		—			—			—			(172	)		—			—			—			—
Class I		—			—			—			(2,061	)		—			—			—			(6	)
Class Institutional		—			(62,889	)		—			—			—			(1,482	)		—			(10	)
Net realized gain
Class N		—			—			—			—			—			—			—			—
Class I		—			—			—			—			—			—			—			—
Class Institutional		—			—			—			—			—			—			—			—
Total Distributions		—			(62,889	)		—			(2,233	)		—			(1,482	)		—			(16	)
Capital stock transactions
Net proceeds from sale of shares		153,499			283,364			4,819			3,288			3,150			9,705			53,790			9,543
Shares issued in reinvestment of income dividends and capital gain distributions		—			58,949			—			1,945			—			1,482			—			16
Less cost of shares redeemed		(94,569	)		(226,632	)		(6,424	)		(19,882	)		(25,995	)		(30,509	)		(1,632	)		—
Net increase (decrease) in net assets resulting from capital share transactions		58,930			115,681			(1,605	)		(14,649	)		(22,845	)		(19,322	)		52,158			9,559
Increase (decrease) in net assets		102,446			431,536			680			(5,473	)		(19,494	)		(1,784	)		51,649			10,164
Net assets
Beginning of period		1,974,130			1,542,594			70,184			75,657			109,690			111,474			10,164			—
End of period	$	2,076,576		$	1,974,130		$	70,864		$	70,184		$	90,196		$	109,690		$	61,813		$	10,164
Accumulated net investment income (loss) at the end of the period	$	18,078		$	(8,076	)	$	562		$	(126	)	$	695		$	(196	)	$	617		$	(3	)

(a)	For the period from August 16, 2012 (commencement of Operations) to December 31, 2012.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

123

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

	International Small Cap Growth Fund			Emerging Markets Growth Fund			Emerging Markets Leaders Fund				Emerging Markets Small Cap Growth Fund
Assets
Investments in securities, at cost		$	686,939		$	825,700		$	60,737			$	78,819
Investments in affiliated companies, at cost			—			23,624			—				—
Investments in securities, at value		$	769,044		$	855,068		$	62,098			$	81,241
Investments in affiliated companies, at value			—			24,474			—				—
Foreign currency, at value ($2,222; $8,949; $369; $534)			2,224			8,903			367				534
Receivable for securities sold			3,251			9,766			155				349
Receivable for fund shares sold			537			270			262				742
Receivable from Advisor			—			—			12				34
Dividend and interest receivable			1,519			1,404			71				115
Total assets			776,575			899,885			62,965				83,015
Liabilities
Payable for investment securities purchased			7,606			6,181			1,658				875
Payable for fund shares redeemed			445			849			11				—
Unrealized depreciation on forward currency contracts			469			125			5				—
Management fee payable			635			883			56				76
Distribution and shareholder administration fees payable			55			23			4				8
Other payables and accrued expenses			156			943			61				77
Total liabilities			9,366			9,004			1,795				1,036
Net Assets		$	767,209		$	890,881		$	61,170			$	81,979
Capital
Composition of Net Assets
Par value of shares of beneficial interest		$	53		$	70		$	7			$	6
Capital paid in excess of par value			670,486			847,330			60,777				79,456
Accumulated net investment income (loss)			4,672			4,378			367				284
Accumulated realized gain (loss)			10,404			9,797			(1,338	)			(133	)
Net unrealized appreciation (depreciation) of investments and foreign currencies			81,594			29,306			1,357				2,366
Net Assets		$	767,209		$	890,881		$	61,170			$	81,979

Class N Shares
Net Assets		$	15,339		$	13,912		$	199			$	10,194
Shares Outstanding			1,065,831			1,107,470			23,435				736,807
Net Asset Value Per Share		$	14.39		$	12.56		$	8.50			$	13.84
Class I Shares
Net Assets		$	399,781		$	143,033		$	31,061			$	32,301
Shares Outstanding			27,492,161			11,283,027			3,654,625				2,331,490
Net Asset Value Per Share		$	14.54		$	12.68		$	8.50			$	13.85
Institutional Class Shares
Net Assets		$	352,089		$	733,936		$	29,910			$	39,484
Shares Outstanding			24,079,224			57,489,299			3,518,695				2,847,880
Net Asset Value Per Share		$	14.62		$	12.77		$	8.51			$	13.86

See accompanying Notes to Financial Statements.

124

Semi-Annual Report

June 30, 2013

Statements of Operations

For the Period Ended June 30, 2013 (all amounts in thousands) (unaudited)

	International Small Cap Growth Fund				Emerging Markets Growth Fund				Emerging Markets Leaders Fund				Emerging Markets Small Cap Growth Fund
Investment income
Dividends		$	11,646			$	14,236			$	940			$	847
Less foreign tax withheld			(725	)			(1,318	)			(77	)			(80	)
Interest			4				5				—				—
Total income			10,925				12,923				863				767
Expenses
Investment advisory fees			3,742				5,606				378				344
Distribution fees			19				20				—				9
Shareholder administration fees			303				124				22				22
Custodian fees			85				274				52				108
Transfer agent fees			17				22				9				5
Sub-transfer agent fees
Class N			10				7				—				—
Class I			159				42				1				—
Professional fees			36				71				26				35
Registration fees			22				29				25				23
Shareholder reporting fees			45				40				3				1
Trustee fees			16				22				1				—
Other expenses			7				8				3				1
Total expenses before waiver			4,461				6,265				520				548
Expenses reimbursed to (waived or absorbed by) the Advisor			—				—				(68	)			(124	)
Net expenses			4,461				6,265				452				424
Net investment income (loss)			6,464				6,658				411				343
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			68,179				48,333				3,723				(5	)
Forward foreign currency contracts			279				—				—				—
Foreign currency transactions			(460	)			(1,142	)			(74	)			(124	)
Total net realized gain (loss)			67,998				47,191				3,649				(129	)
Change in net unrealized appreciation (depreciation) of:
Investments			(23,663	)			(122,792	)			(8,773	)			583
Forward foreign currency contracts			(469	)			(125	)			(5	)			—
Foreign currency translations			(37	)			939				1				(30	)
Change in net unrealized appreciation (depreciation)			(24,169	)			(121,978	)			(8,777	)			553
Net increase (decrease) in net assets resulting from operations		$	50,293			$	(68,129	)		$	(4,717	)		$	767

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

125

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

	International Small Cap Growth Fund						Emerging Markets Growth Fund						Emerging Markets Leaders Fund						Emerging Markets Small Cap Growth Fund
		2013			2012			2013			2012			2013			2012			2013			2012
Operations
Net investment income (loss)	$	6,464		$	7,217		$	6,658		$	10,446		$	411		$	496		$	343		$	39
Net realized gain (loss) on investments, forwards, and foreign currency		67,998			9,291			47,191			(10,469	)		3,649			(2,390	)		(129	)		48
Change in net unrealized appreciation (depreciation) on investments, forwards, and foreign currency		(24,169	)		125,993			(121,978	)		170,595			(8,777	)		12,693			553			1,831
Net increase (decrease) in net assets resulting from operations		50,293			142,501			(68,129	)		170,572			(4,717	)		10,799			767			1,918
Distributions to shareholders from
Net investment income
Class N		—			(274	)		—			(88	)		—			(1	)		—			(13	)
Class I		—			(7,774	)		—			(1,209	)		—			(169	)		—			(65	)
Class Institutional		—			(8,146	)		—			(7,965	)		—			(303	)		—			—
Total Distributions		—			(16,194	)		—			(9,262	)		—			(473	)		—			(78	)
Capital stock transactions
Net proceeds from sale of shares		53,982			122,084			137,296			260,741			8,998			29,723			61,168			25,035
Shares issued in reinvestment of income dividends and capital gain distributions		—			14,490			—			8,174			—			413			—			52
Less cost of shares redeemed		(56,574	)		(261,594	)		(142,523	)		(283,834	)		(12,090	)		(19,305	)		(6,977	)		(3,178	)
Net increase (decrease) in net assets resulting from capital share transactions		(2,592	)		(125,020	)		(5,227	)		(14,919	)		(3,092	)		10,831			54,191			21,909
Increase (decrease) in net assets		47,701			1,287			(73,356	)		146,391			(7,809	)		21,157			54,958			23,749
Net assets
Beginning of period		719,508			718,221			964,237			817,846			68,979			47,822			27,021			3,272
End of period	$	767,209		$	719,508		$	890,881		$	964,237		$	61,170		$	68,979		$	81,979		$	27,021
Accumulated net investment income (loss) at the end of the period	$	4,672		$	(1,792	)	$	4,378		$	(2,280	)	$	367		$	(44	)	$	284		$	(59	)

See accompanying Notes to Financial Statements.

126

Semi-Annual Report

June 30, 2013

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

	Large Cap Value Fund			Mid Cap Value Fund			Small-Mid Cap Value Fund			Small Cap Value Fund
Assets
Investments in securities, at cost		$	3,476		$	3,299		$	2,349		$	251,812
Investments in securities, at value		$	3,909		$	4,109		$	2,845		$	309,685
Cash			—			40			—			—
Receivable for securities sold			—			179			118			7,317
Receivable for fund shares sold			—			—			—			1,041
Receivable from Advisor			7			8			6			1
Dividend and interest receivable			6			6			3			217
Total assets			3,922			4,342			2,972			318,261
Liabilities
Payable for investment securities purchased			—			164			110			8,884
Payable for fund shares redeemed			—			—			10			106
Management fee payable			3			3			2			279
Distribution and shareholder administration fees payable			—			��			—			8
Other payables and accrued expenses			29			18			37			117
Total liabilities			32			185			159			9,394
Net Assets		$	3,890		$	4,157		$	2,813		$	308,867
Capital
Composition of Net Assets
Par value of shares of beneficial interest		$	—		$	—		$	—		$	19
Capital paid in excess of par value			2,976			3,050			2,140			236,216
Accumulated net investment income (loss)			17			18			6			149
Accumulated realized gain (loss)			464			279			171			14,610
Net unrealized appreciation (depreciation) of investments and foreign currencies			433			810			496			57,873
Net Assets		$	3,890		$	4,157		$	2,813		$	308,867

Class N Shares
Net Assets		$	1,236		$	179		$	1,034		$	41,272
Shares Outstanding			93,096			13,611			78,414			2,571,050
Net Asset Value Per Share		$	13.28		$	13.13		$	13.18		$	16.05
Class I Shares
Net Assets		$	2,654		$	3,978		$	1,779		$	267,595
Shares Outstanding			199,553			302,450			134,755			16,367,934
Net Asset Value Per Share		$	13.30		$	13.15		$	13.20		$	16.35

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

127

Statements of Operations

For the Period Ended June 30, 2013 (all amounts in thousands) (unaudited)

	Large Cap Value Fund				Mid Cap Value Fund				Small-Mid Cap Value Fund				Small Cap Value Fund
Investment income
Dividends		$	33			$	41			$	21			$	1,818
Interest			—				—				—				2
Total income			33				41				21				1,820
Expenses
Investment advisory fees			13				20				13				1,553
Distribution fees			1				—				1				49
Custodian fees			20				16				19				24
Transfer agent fees			2				2				2				19
Sub-transfer agent fees
Class N			—				—				—				26
Class I			—				—				—				96
Professional fees			10				10				15				15
Registration fees			16				19				13				20
Shareholder reporting fees			—				1				—				17
Trustee fees			—				—				—				5
Other expenses			1				2				1				2
Total expenses before waiver			63				70				64				1,826
Expenses reimbursed to (waived or absorbed by) the Advisor			(47	)			(46	)			(49	)			(58	)
Net expenses			16				24				15				1,768
Net investment income (loss)			17				17				6				52
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			463				269				149				15,442
Total net realized gain (loss)			463				269				149				15,442
Change in net unrealized appreciation (depreciation) of:
Investments			25				336				252				28,736
Change in net unrealized appreciation (depreciation)			25				336				252				28,736
Net increase (decrease) in net assets resulting from operations		$	505			$	622			$	407			$	44,230

See accompanying Notes to Financial Statements.

128

Semi-Annual Report

June 30, 2013

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

	Large Cap Value Fund								Mid Cap Value Fund								Small-Mid Cap Value Fund								Small Cap Value Fund
	2013				2012				2013				2012				2013				2012				2013				2012
*Operations*
Net investment income (loss)		$	17			$	37			$	17			$	39			$	6			$	20			$	52			$	2,073
Net realized gain (loss) on investments			463				5				269				186				149				93				15,442				6,771
Change in net unrealized appreciation (depreciation) on investments			25				415				336				377				252				150				28,736				19,569
Net increase (decrease) in net assets resulting from operations			505				457				622				602				407				263				44,230				28,413
*Distributions to shareholders from*
Net investment income
Class N			—				(12	)			—				(1	)			—				(7	)			—				(256	)
Class I			—				(25	)			—				(35	)			—				(14	)			—				(1,734	)
Net realized gain
Class N			—				—				—				(3	)			—				(27	)			—				(164	)
Class I			—				—				—				(148	)			—				(41	)			—				(782	)
Total Distributions			—				(37	)			—				(187	)			—				(89	)			—				(2,936	)
Capital stock transactions
Net proceeds from sale of shares			2,164				957				135				303				127				72				58,504				47,641
Shares issued in reinvestment of income dividends and capital gain distributions			—				15				—				158				—				20				—				2,750
Less cost of shares redeemed			(2,624	)			—				(737	)			(1,312	)			(113	)			(30	)			(29,135	)			(71,998	)
Net increase (decrease) in net assets resulting from capital share transactions			(460	)			972				(602	)			(851	)			14				62				29,369				(21,607	)
Increase (decrease) in net assets			45				1,392				20				(436	)			421				236				73,599				3,870
Net assets
Beginning of period			3,845				2,453				4,137				4,573				2,392				2,156				235,268				231,398
End of period		$	3,890			$	3,845			$	4,157			$	4,137			$	2,813			$	2,392			$	308,867			$	235,268
Accumulated net investment income (loss) at the end of the period		$	17			$	—			$	18			$	1			$	6			$	—			$	149			$	97

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

129

Statements of Assets and Liabilities

As of June 30, 2013 (dollar amounts in thousands) (unaudited)

	Bond Fund			Income Fund			Low Duration Fund			Ready Reserves Fund
Assets
Investments in securities, at cost	$	257,776		$	129,503		$	288,575		$	990,803
Repurchase agreements, at cost		—			—			—			236,088
Investments in securities, at value	$	262,153		$	130,244		$	286,778		$	990,803
Repurchase agreements, at value		—			—			—			236,088
Receivable for securities sold		5,327			3,919			22,689			—
Receivable for fund shares sold		255			126			1,001			—
Receivable from Advisor		16			—			—			511
Dividend and interest receivable		2,243			769			962			1,074
Total assets		269,994			135,058			311,430			1,228,476
Liabilities
Payable for investment securities purchased		2,896			1,167			16,813			—
Payable for fund shares redeemed		662			882			2,365			—
Payable to custodian		4,769			1,052			653			2
Management fee payable		63			41			68			168
Distribution and shareholder administration fees payable		25			7			22			336
Shareholder distributions payable		210			39			137			—
Other payables and accrued expenses		37			21			57			84
Total liabilities		8,662			3,209			20,115			590
Net Assets	$	261,332		$	131,849		$	291,315		$	1,227,886
Capital
Composition of Net Assets
Par value of shares of beneficial interest	$	26		$	15		$	30		$	1,226
Capital paid in excess of par value		253,400			166,792			300,849			1,226,569
Accumulated net investment income (loss)		(1,248	)		(638	)		(2,076	)		112
Accumulated realized gain (loss)		4,777			(35,061	)		(5,691	)		(21	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		4,377			741			(1,797	)		—
Net Assets	$	261,332		$	131,849		$	291,315		$	1,227,886

Class N Shares
Net Assets	$	21,558		$	59,339		$	10,127		$	1,227,886
Shares Outstanding		2,014,483			6,465,899			1,054,911			1,227,942,335
Net Asset Value Per Share	$	10.70		$	9.18		$	9.59		$	1.00
Class I Shares
Net Assets	$	160,098		$	72,510		$	173,829
Shares Outstanding		15,107,750			7,959,906			18,109,350
Net Asset Value Per Share	$	10.60		$	9.11		$	9.59
Institutional Class Shares
Net Assets	$	79,676					$	107,359
Shares Outstanding		7,524,826						11,180,911
Net Asset Value Per Share	$	10.59					$	9.60

See accompanying Notes to Financial Statements.

130

Semi-Annual Report

June 30, 2013

Statements of Operations

For the Period Ended June 30, 2013 (all amounts in thousands) (unaudited)

	Bond Fund				Income Fund				Low Duration Fund				Ready Reserves Fund
Investment income
Interest		$	5,111			$	2,020			$	2,532			$	779
Total income			5,111				2,020				2,532				779
Expenses
Investment advisory fees			434				274				444				1,605
Distribution fees			23				51				9				—
Shareholder administration fees			152				—				136				2,352
Custodian fees			30				25				35				25
Transfer agent fees			17				19				15				17
Sub-transfer agent fees
Class N			18				40				1				—
Class I			28				7				6				—
Professional fees			14				32				21				60
Registration fees			30				21				29				13
Shareholder reporting fees			9				10				6				65
Trustee fees			6				3				4				29
Other expenses			5				2				4				9
Total expenses before waiver			766				484				710				4,175
Expenses reimbursed to (waived or absorbed by) the Advisor			(84	)			—				—				(3,463	)
Net expenses			682				484				710				712
Net investment income (loss)			4,429				1,536				1,822				67
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			3,384				702				(883	)			—
Total net realized gain (loss)			3,384				702				(883	)			—
Change in net unrealized appreciation (depreciation) of:
Investments			(17,036	)			(5,569	)			(4,033	)			—
Change in net unrealized appreciation (depreciation)			(17,036	)			(5,569	)			(4,033	)			—
Net increase (decrease) in net assets resulting from operations		$	(9,223	)		$	(3,331	)		$	(3,094	)		$	67

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

131

Statements of Changes in Net Assets

For the Period Ended June 30, 2013 (unaudited) and Year Ended December 31, 2012 (all amounts in thousands)

	Bond Fund						Income Fund						Low Duration Fund						Ready Reserves Fund
	2013			2012			2013			2012			2013			2012			2013			2012
Operations
Net investment income (loss)	$	4,429		$	9,312		$	1,536		$	3,393		$	1,822		$	3,071		$	67		$	131
Net realized gain (loss) on investments		3,384			4,348			702			2,712			(883	)		192			—			—
Change in net unrealized appreciation (depreciation) on investments		(17,036	)		8,020			(5,569	)		1,352			(4,033	)		1,977			—			—
Net increase (decrease) in net assets resulting from operations		(9,223	)		21,680			(3,331	)		7,457			(3,094	)		5,240			67			131
Distributions to shareholders from
Net investment income
Class N		(567	)		(961	)		(1,009	)		(1,884	)		(144	)		(219	)		(67	)		(131	)
Class I		(3,359	)		(6,754	)		(1,165	)		(2,587	)		(2,185	)		(2,909	)		—			—
Class Institutional		(1,753	)		(3,467	)		—			—			(1,569	)		(2,382	)		—			—
Net realized gain
Class N		—			(211	)		—			—			—			—			—			—
Class I		—			(1,126	)		—			—			—			—			—			—
Class Institutional		—			(597	)		—			—			—			—			—			—
Total Distributions		(5,679	)		(13,116	)		(2,174	)		(4,471	)		(3,898	)		(5,510	)		(67	)		(131	)
Capital stock transactions
Net proceeds from sale of shares		32,176			82,419			38,382			71,248			68,664			191,001			349,973			867,610
Shares issued in reinvestment of income dividends and capital gain distributions		4,468			10,216			1,867			3,667			3,101			4,275			67			131
Less cost of shares redeemed		(57,152	)		(36,473	)		(44,672	)		(48,109	)		(60,288	)		(65,323	)		(637,484	)		(624,157	)
Net increase (decrease) in net assets resulting from capital share transactions		(20,508	)		56,162			(4,423	)		26,806			11,477			129,953			(287,444	)		243,584
Increase (decrease) in net assets		(35,410	)		64,726			(9,928	)		29,792			4,485			129,683			(287,444	)		243,584
Net assets
Beginning of period		296,742			232,016			141,777			111,985			286,830			157,147			1,515,330			1,271,746
End of period	$	261,332		$	296,742		$	131,849		$	141,777		$	291,315		$	286,830		$	1,227,886		$	1,515,330
Accumulated net investment income (loss) at the end of the period	$	(1,248	)	$	2		$	(638	)	$	—		$	(2,076	)	$	—		$	112		$	112

See accompanying Notes to Financial Statements.

132

Semi-Annual Report

June 30, 2013

Notes to Financial Statements

(1) Significant Accounting Policies

The following is a summary of William Blair Funds’ (the “Trust”) significant accounting policies in effect during the period covered by the financial statements, which are in accordance with U.S. generally accepted accounting principles.

(a) Description of the Trust

The Trust is a mutual fund registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company. The Trust currently consists of the following twenty-six funds (the “Funds”), each with its own investment objective and policies. For each Fund, the number of shares authorized is unlimited.

Domestic Equity Funds
Growth
Large Cap Growth
Mid Cap Growth
Small-Mid Cap Growth
Small Cap Growth
Large Cap Value
Mid Cap Value
Small-Mid Cap Value
Small Cap Value

Global Equity Fund
Global Leaders
Global Small Cap Growth

Multi-Asset and Alternative Funds
Macro Allocation
Commodity Strategy Long/Short

International Equity Funds
International Growth
Institutional International Growth
International Equity
Institutional International Equity
International Leaders
International Small Cap Growth
Emerging Markets Growth
Emerging Markets Leaders
Emerging Markets Small Cap Growth

Fixed-Income Funds
Bond
Income
Low Duration

Money Market Fund
Ready Reserves

The Macro Allocation Fund and the Commodity Strategy Long/Short Fund have a fiscal year-end of October 31, and issue a separate report.

The investment objectives of the Funds are as follows:

Domestic Equity	Long-term capital appreciation.
Global Equity	Long-term capital appreciation.
International Equity	Long-term capital appreciation.
Fixed-Income	High level of current income with relative stability of principal.
	(Maximize total return-Low Duration)
Money Market	Current income, a stable share price and daily liquidity.

(b) Share Classes

Three different classes of shares currently exist: N, I and Institutional (“Inst.”).

Class		Description
N		Class N shares are sold to the general public, either directly through the Trust’s distributor or through a select number of financial intermediaries. Class N shares are sold without any sales load, and carry an annual 12b-1 distribution fee (0.25% for the Equity, Global Equity and International Equity Funds and 0.15% for the Fixed-Income Funds) or a service fee (0.35% for the Money Market Fund), a sub-transfer agent fee that is not a fixed rate and may vary by Fund and class, and an annual shareholder administration fee (0.15% for the Global Leaders, the International Leaders, the International Small Cap Growth, the Emerging Markets Growth, the Emerging Markets Leaders, the Emerging Markets Small Cap Growth, the Bond and the Low Duration Funds)

June 30, 2013

William Blair Funds

133

Class		Description
I		Class I shares are sold to a limited group of investors. They do not carry any sales load or distribution fees and generally have lower ongoing expenses than the Class N shares. Class I shares have a sub-transfer agent fee that is not a fixed rate and may vary by Fund and class and the Global Leaders, the International Leaders, the International Small Cap Growth, the Emerging Markets Growth, the Emerging Markets Leaders, the Emerging Markets Small Cap Growth, the Bond and the Low Duration Funds carry an annual shareholder administration fee of 0.15%.

Inst.		The Institutional share class is sold to institutional investors, including but not limited to employee benefit plans, endowments, foundations, trusts and corporations, who are able to meet the Fund’s high minimum investment requirement. The minimum initial investment required is $5 million.

Sub-transfer agent fees: For Class N and Class I Shares the Funds may reimburse William Blair & Company, L.L.C. for fees paid to intermediaries such as banks, broker-dealers, financial advisors or other financial institutions for sub-transfer agency, sub-administration and other services provided to investors whose shares of record are held in omnibus, other group accounts, retirement plans or accounts traded through registered securities clearing agents. These fees may vary based on, for example, the nature of services provided, but generally range up to 0.15% of the assets of the class serviced or maintained by the intermediary or up to $15 per sub-account maintained by the intermediary.

Investment income, realized and unrealized gains and losses, and certain Fund level expenses and expense reductions, if any, are allocated based on the relative net assets of each class, except for certain class specific expenses, which are charged directly to the appropriate class. Differences in class expenses may result in the payment of different per share dividends by class. All share classes of the Funds have equal rights with respect to voting subject to class specific arrangements.

(c) Investment Valuation

The market value of domestic equity securities is determined by valuing securities traded on national securities markets or in the over-the-counter markets at the last sale price or, if applicable, the official closing price or, in the absence of a recent sale on the date of determination, the mean between the last reported bid and ask price.

The value of foreign equity securities is generally determined based upon the last sale price on the foreign exchange or market on which it is primarily traded and in the currency of that market as of the close of the appropriate exchange or, if there have been no sales during that day, the mean between the last reported bid and ask price. The Board of Trustees has determined that the passage of time between when the foreign exchanges or markets close and when the Funds compute their net asset values could cause the value of foreign equity securities to no longer be representative or accurate and, as a result, may necessitate that such securities be fair valued. Accordingly, for foreign equity securities, the Funds may use an independent pricing service to fair value the security as of the close of regular trading on the New York Stock Exchange. As a result, a Fund’s value for a security may be different from the last sale price (or the mean between the last reported bid and ask price).

Fixed-income securities are generally valued using evaluated prices provided by an independent pricing service. The evaluated prices are formed using various market inputs the pricing service believes accurately represent the fair market value of a security at a particular point in time. The pricing service determines evaluated prices for fixed-income securities using inputs including, but not limited to, recent transaction prices, dealer quotes, transaction prices for securities with similar characteristics, collateral characteristics, credit quality, payment history, liquidity and market conditions.

Securities, and other assets, for which a market price is not available or is deemed unreliable, (e.g., securities affected by unusual or extraordinary events, such as natural disasters or securities affected by market or economic events, such as bankruptcy filings), or the value of which is affected by a significant valuation event, are valued at a fair value as determined in good faith by, or under the direction of, the Board of Trustees and in accordance with the Trust’s Valuation Procedures. The value of fair valued securities may be different from the last sale price (or the mean between the last reported bid and ask price), and there is no guarantee that a fair valued security will be sold at the price at which a Fund is carrying the security.

Investments in other funds that are not exchange-traded funds are valued at the underlying fund’s net asset value on the date of valuation. Securities held in the Ready Reserves Fund are valued at amortized cost, which approximates fair value.

As of June 30, 2013, there were securities held in the International Growth, Institutional International Growth, Bond and Income Funds requiring fair valuation pursuant to the Trust’s Valuation Procedures.

(d) Investment income and transactions

Dividend income is recorded on the ex-dividend date, except for those dividends from certain foreign securities that are recorded when the information is available.

134

Semi-Annual Report

June 30, 2013

Interest income is recorded on an accrual basis, adjusted for amortization of premium or accretion of discount. Variable rate bonds and floating rate notes earn interest at coupon rates that fluctuate at specific time intervals. The interest rates shown in the Portfolio of Investments for the Bond, Income, Low Duration and Ready Reserves Funds were the rates in effect on June 30, 2013. Put bonds may be redeemed at the discretion of the holder on specified dates prior to maturity.

Premiums and discounts are accreted and amortized on a straight-line basis for short-term investments and on an effective interest method for long-term investments.

Paydown gains and losses on mortgage-backed and asset-backed securities are treated as an adjustment to interest income. For the period ended June 30, 2013, the Bond, Income and Low Duration Funds recognized a reduction of interest income and a decrease of net realized loss of $(1,249), $(636) and $(2,075), respectively (in thousands). This reclassification had no effect on the net asset value or the net assets of the Funds.

The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign currency gains or losses arise from disposition of foreign currency, the difference in the foreign exchange rates between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the ex-date or accrual date and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes (due to the changes in the exchange rate) in the value of foreign currency and other assets and liabilities denominated in foreign currencies held at period end.

Security and shareholder transactions are accounted for no later than one business day following the trade date. However, for financial reporting purposes, security and shareholder transactions are accounted for on the trade date of the last business day of the reporting period. Realized gains and losses from securities transactions are recognized on a specifically identified cost basis.

Awards from class action litigation may be recorded as a reduction of cost. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains.

(e) Share Valuation and Distributions to Shareholders

Shares are sold and redeemed on a continuous basis at net asset value. The net asset value per share is determined separately for each class by dividing the Fund’s net assets attributable to that class by the number of shares of the class outstanding as of the close of regular trading on the New York Stock Exchange (the “Exchange”), which is generally 4:00 p.m. Eastern time, on each day the Exchange is open. Redemption fees may be applicable to redemptions or exchanges within 60 days of purchase. For both Class N and Class I shares, the Domestic Equity Funds assess a 1% redemption fee on shares sold or exchanged that have been owned 60 days or less and the Global Equity and International Equity Funds assess a 2% redemption fee on shares sold or exchanged that have been owned 60 days or less as disclosed within the Fund’s Prospectus. The redemption fees collected by the Fund are netted against the amount of redemptions for presentation on the Statements of Changes in Net Assets.

The redemption fees collected by the Funds were as follows (in thousands):

Fund	Period Ended June 30, 2013		Year Ended December 31, 2012
Growth	$	3	$	7
Large Cap Growth		—		—
Mid Cap Growth		4		12
Small-Mid Cap Growth		4		9
Small Cap Growth		5		4
Global Leaders		1		1
Global Small Cap Growth		—	N/A
International Growth		35		38
International Equity		—		7
International Leaders		13		—
International Small Cap Growth		—		19
Emerging Markets Growth		—		1
Emerging Markets Leaders		—		1
Emerging Markets Small Cap Growth		23		3
Large Cap Value		—		—
Mid Cap Value		—		—
Small-Mid Cap Value		—		1
Small Cap Value		7		8

June 30, 2013

William Blair Funds

135

Distributions from net investment income, if any, of all Equity Funds are declared and paid at least annually. Distributions from the Bond, Income, Low Duration and Ready Reserves Funds are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid at least annually in December. Distributions payable to shareholders are recorded on the ex-dividend date.

(f) Foreign Currency Translation and Forward Foreign Currency Contracts

The Global Equity and International Equity Funds may invest in securities denominated in foreign currencies. As such, assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the current exchange rate on the date of valuation. The values of foreign investments, open forward foreign currency contracts, and cash denominated in foreign currencies are translated into U.S. dollars using a spot market rate of exchange as of the time of the determination of each Fund’s Net Asset Value, typically 4:00 p.m. Eastern time on days when there is regular trading on the New York Stock Exchange. Payables and receivables for securities transactions, dividends, interest income and tax reclaims are translated into U.S. dollars using a spot market rate of exchange as of 4:00 p.m. Eastern time. Settlement of purchases and sales and dividend and interest receipts are translated into U.S. dollars using a spot market rate of exchange as of 11:00 a.m. Eastern time.

(g) Income Taxes

Each Fund intends to comply with the provisions of Subchapter M of the Internal Revenue Code available to regulated investment companies. Each Fund intends to make the requisite distributions of income and capital gains to its shareholders sufficient to relieve it from all, or substantially all, federal income and excise taxes. No provision for federal income and excise taxes has been made.

Certain Funds may be subject to foreign income taxes imposed on realized gains on securities of issuers from certain foreign countries.

Management has evaluated all of the uncertain tax positions of the Funds and has determined that no liability is required to be recorded in the financial statements.

The statute of limitations on the Funds’ tax returns for each of the tax years in the four year period ended December 31, 2012, remains open and the returns are subject to examination.

The Funds have elected to mark-to-market their investments in Passive Foreign Investment Companies (“PFICs”) for federal income tax purposes. The Funds also treat the deferred loss associated with current and prior year wash sales as an adjustment to the cost of investments for tax purposes. The cost of investments for federal income tax purposes and related gross unrealized appreciation/(depreciation) and net unrealized appreciation (depreciation) at June 30, 2013, were as follows (in thousands):

Fund	Cost of Investments			Gross Unrealized Appreciation			Gross Unrealized Depreciation			Net Unrealized Appreciation/ (Depreciation)
Growth		$	615,510		$	181,920		$	4,156		$	177,764
Large Cap Growth			25,309			7,065			264			6,801
Mid Cap Growth			412,300			59,539			6,989			52,550
Small-Mid Cap Growth			400,815			104,002			5,567			98,435
Small Cap Growth			408,804			105,478			29,473			76,005
Global Leaders			115,361			10,572			1,981			8,591
Global Small Cap Growth			10,816			691			383			308
International Growth			3,444,437			505,910			125,960			379,950
Institutional International Growth			1,862,544			266,673			66,951			199,722
International Equity			61,334			11,090			1,441			9,649
Institutional International Equity			80,572			13,783			1,615			12,168
International Leaders			60,866			2,957			2,293			664
International Small Cap Growth			690,056			107,809			28,821			78,988
Emerging Markets Growth			857,646			56,297			34,401			21,896

136

Semi-Annual Report

June 30, 2013

Fund	Cost of Investments			Gross Unrealized Appreciation			Gross Unrealized Depreciation			Net Unrealized Appreciation/ (Depreciation)
Emerging Markets Leaders		$	61,449		$	3,393		$	2,744		$	649
Emerging Markets Small Cap Growth			79,139			5,277			3,175			2,102
Large Cap Value			3,502			443			36			407
Mid Cap Value			3,310			819			20			799
Small-Mid Cap Value			2,351			511			17			494
Small Cap Value			253,808			57,862			1,985			55,877
Bond			257,776			8,399			4,022			4,377
Income			129,503			2,932			2,191			741
Low Duration			288,574			912			2,708			(1,796	)
Ready Reserves			1,226,891			—			—			—

In addition, the Funds may periodically record reclassifications among certain capital accounts to reflect differences between financial reporting and income tax basis distributions. The reclassifications were reported in order to reflect the tax treatment for certain permanent differences that exist between income tax regulations and U.S. generally accepted accounting principles. The reclassifications generally relate to net operating losses, Section 988 currency gains and losses, PFICs gains and losses, expiration of capital loss carryforward, recharacterization of dividends received from investments in Real Estate Investment Trust, paydown gains and losses, and redemptions in-kind. These reclassifications have no impact on the net asset values of the Funds. Accordingly, at December 31, 2012, the following reclassifications were recorded (in thousands):

Fund	Accumulated Undistributed Net Investment Income (Loss)				Accumulated Undistributed Net Realized Gain/(Loss)				Capital Paid in Excess of Par Value
Growth		$	28			$	(28	)		$	—
Large Cap Growth			1				(1	)			—
Mid Cap Growth			4				—				(4	)
Small-Mid Cap Growth			7				(7	)			—
Small Cap Growth			3,984				—				(3,984	)
Global Leaders			(20	)			20				—
International Growth			20,416				(20,416	)			—
Institutional International Growth			9,629				(9,629	)			—
International Equity			(71	)			71				—
Institutional International Equity			(154	)			154				—
International Leaders			10				(10	)			—
International Small Cap Growth			2,643				(2,665	)			22
Emerging Markets Growth			(1,511	)			1,511				—
Emerging Markets Leaders			(53	)			53				—
Emerging Markets Small Cap Growth			(7	)			6				1
Large Cap Value			—				—				—
Mid Cap Value			(2	)			(32	)			34
Small-Mid Cap Value			—				—				—
Small Cap Value			(12	)			12				—
Bond			1,870				(1,870	)			—
Income			1,078				1,412				(2,490	)
Low Duration			2,439				(2,439	)			—
Ready Reserves			4				20				(24	)

The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal income tax regulations that may differ from U.S. generally accepted accounting principles. As a result, net investment income or loss and net realized gain or loss for a reporting period may differ from the amount distributed during such period.

June 30, 2013

William Blair Funds

137

Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes. The tax character of distributions paid during 2012 and 2011 was as follows (in thousands):

	Distributions Paid in 2012								Distributions Paid in 2011
	Ordinary Income				Long-Term Capital Gains				Return of Capital				Ordinary Income				Long-Term Capital Gains
Fund	Class N		Class I		Class N		Class I		Class N		Class I		Class N		Class I		Class N		Class I
Growth	$	10	$	1,133	$	7,281	$	12,939	$	—	$	—	$	—	$	329	$	5,882	$	10,199
Large Cap Growth		—		—		—		—		—		—		—		37		—		—
Mid Cap Growth		—		488		905		7,042		—		—		—		—		2,378		8,679
Small-Mid Cap Growth		63		1,436		1,026		8,092		—		—		595		3,772		2,542		16,104
Small Cap Growth		—		—		564		1,107		—		—		—		—		—		—
Global Leaders		15		227		—		—		—		—		4		170		—		—
International Growth		37,353		74,977		—		—		—		—		—		6,046		—		—
International Equity		172		2,061		—		—		—		—		—		—		—		—
International Leaders		—		6		—		—		—		—		—		—		—		—
International Small Cap Growth		274		7,774		—		—		—		—		193		5,147		—		—
Emerging Markets Growth		88		1,209		—		—		—		—		—		466		2,577		18,690
Emerging Markets Leaders		1		169		—		—		—		11		1		582		3		1,287
Emerging Markets Small Cap Growth		13		65		—		—		—		—		—		—		—		—
Large Cap Value		12		25		—		—		—		—		3		4		—		—
Mid Cap Value		1		62		3		121		—		—		1		64		—		34
Small-Mid Cap Value		34		55		—		—		—		—		—		—		—		—
Small Cap Value		256		1,734		164		782		60		273		6		483		1,471		6,717
Bond		961		6,754		211		1,126		—		—		229		6,707		66		1,188
Income		1,884		2,587		—		—		—		—		1,377		2,800		—		—
Low Duration		219		2,909		—		—		—		—		152		2,098		—		—
Ready Reserves		131		—		—		—		—		—		125		—		—		—

	Distributions Paid in 2012						Distributions Paid in 2011
	Ordinary Income			Long-Term Capital Gains			Return of Capital			Ordinary Income			Long-Term Capital Gains
	Institutional			Institutional			Institutional			Institutional			Institutional
Global Leaders		$	—		$	—		$	—		$	—		$	—
Institutional International Growth			62,889			—			—			1,997			—
Institutional International Equity			1,482			��			—			2,326			—
International Leaders			10			—			—			—			—
International Small Cap Growth			8,146			—			—			5,384			—
Emerging Markets Growth			7,965			—			—			3,984			93,763
Emerging Markets Leaders			303			—			14			695			1,443
Emerging Markets Small Cap Growth			—			—			—			—			—
Bond			3,467			597			—			2,764			577
Low Duration			2,382			—			—			1,853			—

As of December 31, 2012, the components of distributable earnings on a tax basis were as follows (in thousands):

Fund	Undistributed Ordinary Income			Accumulated Capital and Other Losses			Undistributed Long-Term Capital Gain			Net Unrealized Appreciation/ Depreciation
Growth		$	10	$	—			$	13,481		$	122,156
Large Cap Growth			—		(887	)			—			5,824
Mid Cap Growth			—		(168	)			3,258			22,787
Small-Mid Cap Growth			—		1				6,952			35,809
Small Cap Growth			—		—				6,887			33,642
Global Leaders			2		(13,781	)			—			8,028
International Growth			16,303		(1,105,046	)			—			587,519
Institutional International Growth			8,836		(175,273	)			—			306,224
International Equity			120		(91,971	)			—			11,903
Institutional International Equity			191		(122,787	)			—			18,967
International Leaders			30		(104	)			—			679
International Small Cap Growth			1,592		(53,929	)			—			98,714
Emerging Markets Growth			155		(28,010	)			—			139,465
Emerging Markets Leaders			57		(3,213	)			—			8,259
Emerging Markets Small Cap Growth			56		(37	)			36			1,695
Large Cap Value			1		—				5			403
Mid Cap Value			8		—				14			463

138

Semi-Annual Report

June 30, 2013

Fund	Undistributed Ordinary Income			Accumulated Capital and Other Losses				Undistributed Long-Term Capital Gain			Net Unrealized Appreciation/ Depreciation
Small-Mid Cap Value		$	14		$	—			$	8		$	244
Small Cap Value			83			—				1,441			26,878
Bond			2			(104	)			1,498			21,412
Income			—			(35,763	)			—			6,310
Low Duration			—			(4,807	)			—			2,235
Ready Reserves			113			(22	)			—			—

As of December 31, 2012, the Funds have unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows (in thousands):

Fund	2013		2014		2015		2016		2017		2018		Total
Large Cap Growth	$	—	$	—	$	—	$	—	$	887	$	—	$	887
Global Leaders		—		—		—		644		13,127		—		13,771
International Growth		—		—		—		—		1,101,382		—		1,101,382
Institutional International Growth		—		—		—		—		172,315		—		172,315
International Equity		—		—		—		10,048		81,926		—		91,974
Institutional International Equity		—		—		—		9,705		113,087		—		122,792
International Small Cap Growth		—		—		—		—		53,954		—		53,954
Income		3,398		4,138		9,190		14,459		4,577		—		35,762
Low Duration		—		—		—		—		—		955		955
Ready Reserves		—		—		2		—		—		—		2

Under current law, the Funds may carry forward net capital losses indefinitely to use to offset capital gains realized in future years. Previous law limited the carry forward of capital losses to the eight tax years following the year the capital loss was realized. If a Fund has capital losses that are subject to current law and also has capital losses subject to prior law, the losses realized under current law will be utilized to offset capital gains before any of the losses governed by prior law can be used. As a result of these ordering rules, capital losses realized under previous law may be more likely to expire unused. Capital losses realized under current law will carry forward retaining their classification as long-term or short-term losses; as compared to under prior law in which all capital losses were carried forward as short term capital losses.

As of December 31, 2012, the Funds incurred the following capital losses which will not expire (in thousands):

Fund	Short- Term		Long- Term
International Leaders	$	33	$	—
Emerging Markets Growth		23,905		—
Emerging Markets Leaders		2,240		—
Low Duration		2,054		1,296
Ready Reserves		19		—

In order to meet certain excise tax distribution requirements, the Funds are required to measure and distribute annually, net capital gains realized during a twelve month period ending October 31 and net investment income earned during a twelve month period ending December 31. In connection with this, the Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any net capital losses incurred between November 1 and the end of their fiscal year, December 31, 2012. Qualified late year ordinary losses are comprised of losses related to foreign currency and PFICs, incurred between November 1 and the end of their fiscal year, December 31, 2012.

At December 31, 2012, the following Funds deferred, on a tax basis, qualified late year losses of:

	Qualified Late Year Losses
Fund	Ordinary Income			Short-Term Capital			Long-Term Capital
Mid Cap Growth		$	—		$	168		$	—
Global Leaders			10			—			—
International Growth			—			4,050			—
Institutional International Growth			—			2,341			—
International Leaders			—			71			—
Emerging Markets Growth			—			2,380			—

June 30, 2013

William Blair Funds

139

	Qualified Late Year Losses
Fund	Ordinary Income		Short-Term Capital			Long-Term Capital
Emerging Markets Leaders		$—		$	464		$	507
Emerging Markets Small Cap Growth		—			7			—
Bond		—			104			—
Low Duration		—			291			210

(h) Repurchase Agreements

In a repurchase agreement, a Fund buys a security at one price and at the time of sale, the seller agrees to repurchase the security at a mutually agreed upon time and price (usually within seven days). The repurchase agreement thereby determines the yield during the purchaser’s holding period, while the seller’s obligation to repurchase is secured by the value of the underlying security. William Blair & Company, L.L.C. (“William Blair” or the “Advisor”) will monitor, on an ongoing basis, the value of the underlying securities to ensure that the value always equals or exceeds the repurchase price plus accrued interest. Repurchase agreements could involve certain risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon a Fund’s ability to dispose of the underlying securities. The risk to a Fund is limited to the ability of the seller to pay the agreed upon sum on the delivery date. In the event of default, a repurchase agreement provides that a Fund is entitled to sell the underlying collateral. The loss, if any, to a Fund will be the difference between the proceeds from the sale and the repurchase price. However, if bankruptcy proceedings are commenced with respect to the seller of the security, disposition of the collateral by the Fund may be delayed or limited. Although no definitive creditworthiness criteria are used, the Advisor reviews the creditworthiness of the banks and non-bank dealers with which a Fund enters into repurchase agreements to evaluate those risks. A Fund may, for tax purposes, deem repurchase agreements collateralized by U.S. Government securities to be investments in U.S. Government securities.

(i) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates.

(j) Indemnification

In the normal course of business, the Funds have entered into contracts in which the Funds agree to indemnify the other party or parties against various potential costs or liabilities. The Funds’ maximum exposure under these arrangements is unknown. No claim has been made for indemnification pursuant to any such agreement of the Funds.

(k) Fair Value Measurements

Fair value is defined as the price that a Fund would receive upon selling a security in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. Various inputs are used in determining the value of a Fund’s investments. A three-tier hierarchy of inputs is used to classify fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:

	•	Level 1—Quoted prices (unadjusted) in active markets for an identical security.

	•	Level 2—Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. In addition, other observable inputs such as foreign exchange rates, benchmark securities indices and foreign futures contracts may be utilized in the valuation of certain foreign securities when significant events occur between the last sale on the foreign securities exchange and the time the net asset value of the Fund is calculated.

	•	Level 3—Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

140

Semi-Annual Report

June 30, 2013

Any transfers between Level 1 and Level 2 are disclosed, effective as of the beginning of the period, in the following tables with the reasons for the transfers disclosed in a note to the tables, if applicable.

As of June 30, 2013, the hierarchical input levels of securities in each Fund, segregated by security class, are as follows (in thousands):

Investments in securities	Growth		Large Cap Growth		Mid Cap Growth		Small-Mid Cap Growth		Small Cap Growth
Level 1—Quoted prices Common Stocks	$	787,724	$	31,715	$	454,112	$	489,710	$	476,391
Level 2—Other significant observable inputs Short-Term Investments		5,550		395		10,738		9,540		8,418
Level 3—Significant unobservable inputs None		—		—		—		—		—
Total investments in securities	$	793,274	$	32,110	$	464,850	$	499,250	$	484,809

Investments in securities	Global Leaders		Global Small Cap Growth		International Growth		Institutional International Growth		International Equity		Institutional International Equity
Level 1—Quoted prices Common Stocks	$	122,311	$	10,729	$	3,728,364	$	2,009,923	$	70,118	$	89,294
Exchange-Traded Funds		—		157		—		—		—		—
Level 2—Other significant observable inputs Affiliated Fund		—		—		22,815		12,260		—		—
Short-Term Investments		1,641		238		72,519		39,731		865		3,446
Level 3—Significant unobservable inputs Common stock		—		—		689		352		—		—
Total investments in securities.	$	123,952	$	11,124	$	3,824,387	$	2,062,266	$	70,983	$	92,740
Level 1 and Level 2 transfers Transfers from Level 1 to Level 2		—		—		—		—		—		—
Transfers from Level 2 to Level 1 (a)		23,732		—		2,066,827		1,112,905		48,727		76,072
Other financial instruments
Level 2—Other significant observable inputs Forward foreign currency contracts		—		—		6,195		3,340		—		—

Investments in securities	International Leaders		International Small Cap Growth			Emerging Markets Growth			Emerging Markets Leaders			Emerging Markets Small Cap Growth
Level 1—Quoted prices Common Stocks	$	61,530	$	753,375		$	825,517		$	57,501		$	79,447
Preferred stock		—		—			20,957			1,671			231
Level 2—Other significant observable inputs Short-Term Investments		—		15,669			8,594			2,926			1,563
Affiliated Fund		—		—			24,474			—			—
Level 3—Significant unobservable inputs None		—		—			—			—			—
Total investments in securities	$	61,530	$	769,044		$	879,542		$	62,098		$	81,241
Level 1 and Level 2 transfers
Transfers from Level 1 to Level 2		—		—			—			—			—
Transfers from Level 2 to Level 1 (a)		7,088		414,868			473,910			31,452			13,076
Other financial instruments
Assets
Level 2—Other significant observable inputs Forward foreign currency contracts		—		192			—			—			—
Liabilities
Level 2—Other significant observable inputs Forward foreign currency contracts		—		(661	)		(125	)		(5	)		—

June 30, 2013

William Blair Funds

141

Investments in securities	Large Cap Value		Mid Cap Value		Small-Mid Cap Value		Small Cap Value
Level 1—Quoted prices Common Stocks	$	3,794	$	4,109	$	2,810	$	301,551
Level 2—Other significant observable inputs Short-Term Investments		115		—		35		8,134
Level 3—Significant unobservable inputs None		—		—		—		—
Total investments in securities	$	3,909	$	4,109	$	2,845	$	309,685

Investments in securities	Bond		Income		Low Duration		Ready Reserves
Level 1—Quoted Prices None		—		—		—		—
Level 2—Other significant observable inputs US Government and Agency Bonds	$	117,167	$	73,186	$	212,065	$	57,654
Corporate Bonds		135,391		48,468		32,530		118,719
Asset Backed Bonds		9,428		7,674		42,183		—
Commercial Paper		—		—		—		814,430
Short-Term Investments		—		—		—		236,088
Level 3—Significant unobservable inputs Asset Backed Bonds		167		916		—		—
Total investments in securities	$	262,153	$	130,244	$	286,778	$	1,226,891

(a)	Fair valuation estimates were obtained from the Portfolios’ pricing vendor and applied to certain foreign securities at December 31, 2012 but not at June 30, 2013.

Level 1 Common Stocks are exchange-traded securities with a quoted price. See Portfolio of Investments for Sector Classification.

The fair value estimates for the Level 3 securities in the International Growth, Institutional International Growth, Bond and Income Funds were determined in good faith by the Pricing Committee in consultation with the Valuation Committee, pursuant to the Valuation Procedures adopted by the Board of Trustees. There were various factors considered in reaching this fair value determination, including, but not limited to, the following: the type of security, the extent of public trading of the security, information obtained from a broker-dealer for the security, analysis of the company’s performance, market trends that influence its performance and the potential for an adverse outcome in pending litigation. Level 3 securities represented 0.02%, 0.02%, 0.06% and 0.69% as a percentage of Net Assets in the International Growth, Institutional International Growth, Bond and Income Funds, respectively. The change in net unrealized gain (loss) related to those securities held at June 30, 2013 is included in the change in net unrealized appreciation (depreciation) of investments on the Statements of Operations.

(2) Transactions with Affiliates

(a) Management and Expense Limitation Agreements

Each Fund has a management agreement with the Advisor for investment advisory, clerical, bookkeeping and administrative services. Each Fund pays the Advisor an annual fee, payable monthly, based on a specified percentage of its average daily net assets. A summary of the annual rates expressed as a percentage of average daily net assets is as follows:

Domestic Equity Funds
Growth	0.75	%
Large Cap Growth	0.80	%
Mid Cap Growth	0.95	%
Small-Mid Cap Growth	1.00	%
Small Cap Growth	1.10	%
Large Cap Value	0.80	%
Mid Cap Value	0.95	%
Small-Mid Cap Value	1.00	%
Small Cap Value	1.10	%

Global Equity Fund
Global Leaders	1.00	%
Global Small Cap Growth	1.00	%

Fixed-Income Funds
Bond	0.30	%
Income*:
First $250 million	0.25	%
In excess of $250 million	0.20	%
Low Duration	0.30	%

Money Market Fund
Ready Reserves:
First $250 million	0.275	%
Next $250 million	0.25	%
Next $2 billion	0.225	%
In excess of $2.5 billion	0.20	%

142

Semi-Annual Report

June 30, 2013

International Equity Funds
International Growth:
First $250 million	1.10	%
Next $4.75 billion	1.00	%
Next $5 billion	0.95	%
Next $5 billion	0.925	%
In excess of $15 billion	0.90	%
Institutional International Growth:
First $500 million	1.00	%
Next $500 million	0.95	%
Next $1.5 billion	0.90	%
Next $2.5 billion	0.875	%
Next $5 billion	0.85	%
Next $5 billion	0.825	%
In excess of $15 billion	0.80	%


International Equity:
First $250 million	1.10	%
In excess of $250 million	1.00	%
Institutional International Equity:
First $500 million	1.00	%
Next $500 million	0.95	%
In excess of $1 billion	0.90	%
International Leaders	0.95	%
International Small Cap Growth	1.00	%
Emerging Markets Growth	1.10	%
Emerging Markets Leaders	1.10	%
Emerging Markets Small Cap Growth	1.10	%

*Management fee also includes a charge of 5% of gross income.

Some of the Funds have also entered into an amended and restated Expense Limitation Agreement with the Advisor. Under the terms of the agreement, the Advisor will waive its management fee and/or reimburse the Fund for expenses in excess of the agreed upon rate. The amount the Advisor owes a Fund as of the reporting date is recorded as the Receivable from Advisor on the Statements of Assets and Liabilities. The Advisor reimburses the Funds on a monthly basis. Under the terms of the agreement, the Advisor has agreed to waive its advisory fees and/or absorb other operating expenses through April 30, 2014, if total expenses for each class of the following Funds exceed the following rates (as a percentage of average daily net assets):

	Class N						Class I						Institutional Class
Fund	Effective May 1, 2013 through April 30, 2014			Effective May 1, 2012 through April 30, 2013			Effective May 1, 2013 through April 30, 2014			Effective May 1, 2012 through April 30, 2013			Effective May 1, 2013 through April 30, 2014			Effective May 1, 2012 through April 30, 2013
Growth		N/A			N/A			N/A			N/A			N/A			N/A
Large Cap Growth		1.20	%		1.20	%		0.95	%		0.95	%		N/A			N/A
Mid Cap Growth		1.35	%		1.35	%		1.10	%		1.10	%		N/A			N/A
Small-Mid Cap Growth		1.35	%		1.35	%		1.10	%		1.10	%		N/A			N/A
Small Cap Growth		1.50	%		1.50	%		1.25	%		1.25	%		N/A			N/A
Global Leaders		1.50	%		1.50	%		1.25	%		1.25	%		1.10	%		1.10	%
Global Small Cap Growth		1.65	%(b)		N/A			1.40	%(b)		N/A			1.25	%(b)		N/A
International Growth		1.45	%		1.45	%		1.20	%		1.20	%		N/A			N/A
Institutional International Growth		N/A			N/A			N/A			N/A			N/A			N/A
International Equity		1.45	%		1.45	%		1.20	%		1.20	%		N/A			N/A
Institutional International Equity		N/A			N/A			N/A			N/A			1.10	%		1.10	%
International Leaders		1.45	%		1.45	%(a)		1.20	%		1.20	%(a)		1.05	%		1.05	%(a)
International Small Cap Growth		1.65	%		1.65	%		1.40	%		1.40	%		1.25	%		1.25	%
Emerging Markets Growth		1.70	%		1.70	%		1.45	%		1.45	%		1.30	%		1.30	%
Emerging Markets Leaders		1.65	%		1.65	%		1.40	%		1.40	%		1.25	%		1.25	%
Emerging Markets Small Cap Growth		1.65	%		1.65	%		1.40	%		1.40	%		1.25	%		1.25	%
Large Cap Value		1.20	%		1.20	%		0.95	%		0.95	%		N/A			N/A
Mid Cap Value		1.35	%		1.35	%		1.10	%		1.10	%		N/A			N/A
Small-Mid Cap Value		1.40	%		1.40	%		1.15	%		1.15	%		N/A			N/A
Small Cap Value		1.50	%		1.45	%		1.25	%		1.20	%		N/A			N/A
Bond		0.65	%		0.65	%		0.50	%		0.50	%		0.35	%		0.35	%
Income		0.85	%		0.85	%		0.70	%		0.70	%		N/A			N/A
Low Duration		0.70	%		0.70	%		0.55	%		0.55	%		0.40	%		0.40	%
Ready Reserves		N/A			N/A			N/A			N/A			N/A			N/A

(a)	Effective August 16, 2012 through April 30, 2014
(b)	Effective April 10, 2013 through April 30, 2014

June 30, 2013

William Blair Funds

143

The Advisor has agreed to voluntarily waive fees and reimburse expenses incurred for the Ready Reserves Fund in order to maintain a minimum yield given the current interest rate environment.

For a period of three years subsequent to the commencement of operations, the Advisor is entitled to reimbursement for previously waived fees and reimbursed expenses to the extent the overall expense ratio remains below the expense limitation in place at the time the fee was waived and/or the expense was reimbursed. The total amounts available for recapture at June 30, 2013 were as follows (in thousands):

Fund	Available for Recapture
Global Small Cap Growth	$	25
International Leaders		114
Emerging Markets Small Cap Growth		377
Large Cap Value		177
Small-Mid Cap Value		177

For the period ended June 30, 2013, the fee waivers and/or reimbursements for each Fund were as follows (in thousands):

Fund	Fund Level Waiver		Class I Specific Waiver		Class N Specific Waiver		Total Waiver
Growth	$	—	$	—	$	—	$	—
Large Cap Growth		28		5		3		36
Mid Cap Growth		—		—		10		10
Small-Mid Cap Growth		—		—		20		20
Small Cap Growth		—		143		66		209
Global Leaders		45		9		2		56
Global Small Cap Growth		25		—		—		25
International Growth		—		—		—		—
Institutional International Growth		—		—		—		—
International Equity		38		37		3		78
Institutional International Equity		22		—		—		22
International Leaders		57		—		—		57
International Small Cap Growth		—		—		—		—
Emerging Markets Growth		—		—		—		—
Emerging Markets Leaders		67		1		—		68
Emerging Markets Small Cap Growth		124		—		—		124
Large Cap Value		47		—		—		47
Mid Cap Value		46		—		—		46
Small-Mid Cap Value		49		—		—		49
Small Cap Value		—		41		17		58
Bond		38		28		18		84
Income		—		—		—		—
Low Duration		—		—		—		—
Ready Reserves		3,463		—		—		3,463

(b) Underwriting, Distribution Services and Service Agreements

Each Fund, except the Institutional International Growth Fund, the Institutional International Equity Fund, and the Ready Reserves Fund, has a Distribution Agreement with William Blair for distribution services to the Funds’ Class N shares. Each Fund pays William Blair an annual fee, payable monthly, based on a specified percentage of its average daily net assets of Class N shares. The annual rate expressed as a percentage of average daily net assets for Class N is 0.25% for all Funds except the Income, Bond and Low Duration Funds, which is 0.15%. Pursuant to the Distribution Agreement, William Blair enters into related selling group agreements with various firms at various rates for sales of the Funds’ Class N shares.

The Ready Reserves Fund has entered into a Service Agreement with the Advisor under which the Advisor agrees to provide certain support services to Class N shareholders, including shareholder services and automatic sweep services, for a fee of 0.35% of the Fund’s average daily net assets attributable to Class N shares. The Board of Trustees has determined that the amount payable for “service fees” (as defined by FINRA, Financial Industry Regulatory Authority) does not exceed 0.25% of the average annual net assets attributable to the Class N shares of the Ready Reserves Fund.

144

Semi-Annual Report

June 30, 2013

The Global Leaders, Global Small Cap Growth, International Leaders, International Small Cap Growth, Emerging Markets Growth, Emerging Markets Leaders, Emerging Markets Small Cap Growth, Bond and Low Duration Funds have a Shareholder Administration Agreement with William Blair to provide shareholder administration services to Class N and Class I shares. Class N and Class I shares of the Funds pay William Blair an annual fee, payable monthly, based upon 0.15% of average daily net assets attributable to each class, respectively. For the period ended June 30, 2013, the following fees were incurred (in thousands):

Fund	Class N		Class I		Total
Global Leaders	$	4	$	36	$	40
Global Small Cap Growth		—		3		3
International Leaders		—		7		7
International Small Cap Growth		11		292		303
Emerging Markets Growth		12		112		124
Emerging Markets Leaders		—		22		22
Emerging Markets Small Cap Growth		6		16		22
Bond		23		129		152
Low Duration		9		127		136
Ready Reserves		2,352		—		2,352

(3) Investment Transactions

Investment transactions, excluding money market instruments, repurchase agreements and demand notes for the period ended June 30, 2013, were as follows (in thousands):

Fund	Purchases		Sales
Growth	$	191,316	$	(194,211	)
Large Cap Growth		7,975		(7,128	)
Mid Cap Growth		200,906		(153,823	)
Small-Mid Cap Growth		109,795		(85,800	)
Small Cap Growth		189,515		(190,535	)
Global Leaders		81,064		(24,825	)
Global Small Cap Growth		12,688		(2,079	)
International Growth		2,171,218		(2,053,260	)
Institutional International Growth		1,173,809		(1,106,627	)
International Equity		29,844		(30,950	)
Institutional International Equity		37,413		(59,241	)
International Leaders		67,671		(15,218	)
International Small Cap Growth		463,834		(451,515	)
Emerging Markets Growth		609,793		(608,687	)
Emerging Markets Leaders		44,449		(47,942	)
Emerging Markets Small Cap Growth		95,652		(42,119	)
Large Cap Value		2,303		(2,798	)
Mid Cap Value		1,022		(1,625	)
Small-Mid Cap Value		975		(937	)
Small Cap Value		115,776		(91,920	)
Bond		83,199		(99,271	)
Income		42,364		(46,746	)
Low Duration		128,965		(98,536	)

(4) Forward Foreign Currency Contracts

The Global Equity and International Equity Funds from time to time may enter into forward foreign currency contracts with the Fund’s custodian and other counterparties in an attempt to hedge against a decline in the value of foreign currency against the U.S. dollar. The Funds bear the market risk that arises from changes in foreign currency rates and bear the credit risk if the counterparty fails to perform under the contract.

June 30, 2013

William Blair Funds

145

For the period ended June 30, 2013, the International Growth, Institutional International Growth, International Leaders, International Small Cap Growth, Emerging Markets Growth and Emerging Markets Leaders Funds engaged in forward foreign currency contracts with notional volume (in thousands) of:

Fund	Average Monthly Notional Value
International Growth	$	857,890
Institutional International Growth		458,966
International Leaders		5,877
International Small Cap Growth		55,135
Emerging Markets Growth		2,025
Emerging Markets Leaders		58

The following tables present the value of forward foreign currency contracts as of June 30, 2013 and their respective location on the Statements of Assets and Liabilities (values in thousands):

Assets

Liabilities

Fund

Statement of Assets
and Liabilities Location

Value

Statement of Assets
and Liabilities Location

Value

International Growth

Unrealized appreciation on foreign forward currency contracts

6,195

Unrealized depreciation on foreign forward currency contracts

—

Institutional
International Growth

Unrealized appreciation on foreign forward currency contracts

3,340

Unrealized depreciation on foreign forward currency contracts

—

International Leaders

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

—

International Small
Cap Growth

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

469

Emerging Markets Growth

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

125

Emerging Markets Leaders

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

The effect of forward foreign currency contracts on the Statements of Operations for the period ended June 30, 2013 (values in thousands):

Realized gain (loss) recognized on forward foreign currency contracts
Fund	Value
International Growth	$	4,434
Institutional International Growth		2,353
International Leaders		(175	)
International Small Cap Growth		279
Emerging Markets Growth		—
Emerging Markets Leaders		—

Change in net unrealized gain (loss) recognized on forward foreign currency contracts
Fund		Value
International Growth	$	6,195
Institutional International Growth		3,340
International Leaders		—
International Small Cap Growth		(469	)
Emerging Markets Growth		(125	)
Emerging Markets Leaders		(5	)

146

Semi-Annual Report

June 30, 2013

The following table presents open forward foreign currency contracts as of June 30, 2013 (values in thousands):

International Growth

Counterparty

(S)hort
(B)uy to
cover

Currency Description

Settlement
Date

Local
Currency

Current
Value (USD)

Net Unrealized
Gain/(Loss)

State Street Bank

Pound Sterling

8/14/2013

(65,057,000

)

98,918

3,085

Bank Of New York

Japanese Yen

8/13/2013

(6,048,222,000

)

60,994

3,110

6,195

Institutional International Growth

Counterparty

(S)hort
(B)uy to
cover

Currency Description

Settlement
Date

Local
Currency

Current
Value (USD)

Unrealized
Gain/(Loss)

State Street Bank

Pound Sterling

8/14/2013

(35,098,000

)

53,366

1,665

Bank Of New York

Japanese Yen

8/13/2013

(3,256,868,000

)

32,844

1,675

3,340

International Small Cap Growth

Counterparty

(S)hort
(B)uy to
cover

Currency Description

Settlement
Date

Local
Currency

Current
Value (USD)

Unrealized
Gain/(Loss)

Bank Of New York

Japanese Yen

8/13/2013

(2,807,630,000

)

28,314

(661

)

Bank Of New York

Japanese Yen

8/13/2013

(910,034,000

)

9,177

192

(469

)

Emerging Markets Growth

Counterparty

(S)hort
(B)uy to
cover

Currency Description

Settlement
Date

Local
Currency

Current
Value (USD)

Unrealized
Gain/(Loss)

Bank Of New York

South African Rand

8/5/2013

(71,687,000

)

7,214

(125

)

Emerging Markets Leaders

Counterparty

(S)hort
(B)uy to
cover

Currency Description

Settlement
Date

Local
Currency

Current
Value (USD)

Unrealized
Gain/(Loss)

Bank Of New York

South African Rand

8/5/2013

(4,053,000

)

$408

$(5

)

(5) Statement of Assets and Liabilities Offsetting

The Global and International Equity Funds from time to time may enter into foreign currency contracts. These contracts are subject to master netting agreements with each counterparty.

						Gross Amounts Not Offset in the Statement of Assets and Liabilities
Fund		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments		Net Amount
	Foreign Currency Contracts
International Growth		$	6,195		$ —	$	6,195	$	—	$	6,195
Institutional International Growth			3,340		—		3,340		—		3,340
	Repurchase Agreements
Growth		$	5,550		$ —	$	5,550	$	5,550	$	—
Large Cap Growth			395		—		395		395		—
Mid Cap Growth			10,738		—		10,738		10,738		—
Small-Mid Cap Growth			9,540		—		9,540		9,540		—
Small Cap Growth			8,418		—		8,418		8,418		—
Global Leaders			1,641		—		1,641		1,641		—
Global Small Cap Growth			238		—		238		238		—
International Growth			72,519		—		72,519		72,519		—
Institutional International Growth			39,731		—		39,731		39,731		—

June 30, 2013

William Blair Funds

147

							Gross Amounts Not Offset in the Statement of Assets and Liabilities
Fund		Gross Amounts of Recognized Assets			Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Assets Presented in the Statement of Assets and Liabilities			Financial Instruments		Net Amount
	Repurchase Agreements
International Equity		$	865			$ —	$	865		$	865	$	—
Institutional International Equity			3,446			—		3,446			3,446		—
International Small Cap Growth			15,669			—		15,669			15,669		—
Emerging Markets Growth			8,594			—		8,594			8,594		—
Emerging Markets Leaders			2,926			—		2,926			2,926		—
Emerging Markets Small Cap Growth .			1,563			—		1,563			1,563		—
Large Cap Value			115			—		115			115		—
Small-Mid Cap Value			35			—		35			35		—
Small Cap Value			8,134			—		8,134			8,134		—
Ready Reserves			236,088			—		236,088			236,088		—

							Gross Amounts Not Offset in the Statement of Assets and Liabilities
Fund		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities			Financial Instruments		Net Amount
	Foreign Currency Contracts
International Small Cap Growth		$	(661	)		$ 192	$	(469	)	$	—	$	(469	)
Emerging Markets Growth			(125	)		—		(125	)		—		(125	)
Emerging Markets Leaders			(5	)		—		(5	)		—		(5	)

(6) Subsequent Event

On July 22, 2013, the William Blair Income Fund (the “Fund”) was named as a defendant in the case entitled OCWEN Loan Servicing, LLC, et al. v. State Street Bank, et al., No. 13-104 (JGK) (S.D.N.Y filed January 4, 2013). OCWEN Loan Servicing (“OCWEN”) determined that it made errors in its calculation and seeks to recover alleged overpayments made in 2007 and 2008 on certain mortgage pass-through securities (the “Bonds”) formerly owned by the Fund. The Fund sold the Bonds in 2008 at a price reflecting the allegedly erroneous overpayments before OCWEN discovered the errors. The total amount of the claim is $494,806.44. The Fund believes that OCWEN’s claims are without merit and intends to vigorously defend the action.

148

Semi-Annual Report

June 30, 2013

(7) Fund Share Transactions

The following tables summarizes the activity in capital shares of each fund for the period ended June 30, 2013 (in thousands) (unaudited):

	Class N
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	17,073	$	—	$	29,889	$	(12,816	)		1,319		—		2,284		(965	)
Large Cap Growth		706		—		302		404			81		—		35		46
Mid Cap Growth		6,774		—		6,511		263			494		—		472		22
Small Mid-Cap Growth		14,342		—		5,136		9,206			872		—		320		552
Small Cap Growth		13,568		—		19,202		(5,634	)		494		—		717		(223	)
Global Leaders		1,251		—		1,158		93			126		—		115		11
Global Small Cap Growth (a)		292		—		—		292			28		—		—		28
International Growth		134,288		—		138,940		(4,652	)		5,762		—		5,911		(149	)
International Equity		264		—		2,233		(1,969	)		20		—		179		(159	)
International Leaders		3		—		455		(452	)		—		—		41		(41	)
International Small Cap Growth		1,922		—		2,338		(416	)		136		—		167		(31	)
Emerging Markets Growth		733		—		2,545		(1,812	)		54		—		195		(141	)
Emerging Markets Leaders		—		—		116		(116	)		9		—		13		(4	)
Emerging Markets Small Cap Growth		10,596		—		3,236		7,360			731		—		226		505
Large Cap Value	$	952		—		1,309		(357	)		74		—		104		(30	)
Mid Cap Value		86		—		6		80			7		—		—		7
Small-Mid Cap Value		27		—		102		(75	)		2		—		8		(6	)
Small Cap Value		5,841		—		10,095		(4,254	)		384		—		677		(293	)
Bond		4,761		563		15,087		(9,763	)		451		24		1,374		(899	)
Income		19,146		943		27,088		(6,999	)		2,076		46		2,875		(753	)
Low Duration		4,176		58		5,051		(817	)		430		3		519		(86	)
Ready Reserves		349,973		67		637,484		(287,444	)		350,006		35		637,486		(287,445	)

	Class I
	Dollars											Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	43,952	$	—	$	35,851	$	8,101			3,223		—		2,612		611
Large Cap Growth		1,694		—		1,119		575			190		—		123		67
Mid Cap Growth		72,904		—		25,060		47,844			5,143		—		1,785		3,358
Small Mid-Cap Growth		67,451		—		45,176		22,275			4,156		—		2,768		1,388
Small Cap Growth		36,941		—		33,580		3,361			1,309		—		1,187		122
Global Leaders		4,077		—		3,528		549			412		—		359		53
Global Small Cap Growth (a)		10,771		—		—		10,771			1,074		—		—		1,074
International Growth		284,089		—		187,411		96,678			11,899		—		7,827		4,072
International Equity		4,555		—		4,191		364			366		—		328		38
International Leaders		7,690		—		535		7,155			690		—		50		640
International Small Cap Growth		39,152		—		24,703		14,449			2,734		—		1,713		1,021
Emerging Markets Growth		12,401		—		5,054		7,347			923		—		374		549
Emerging Markets Leaders		8,915		—		1,127		7,788			990		—		127		863
Emerging Markets Small Cap Growth		27,246		—		3,716		23,530			1,919		—		262		1,657
Large Cap Value		1,212		—		1,315		(103	)		94		—		104		(10	)
Mid Cap Value		49		—		731		(682	)		4		—		58		(54	)
Small-Mid Cap Value		100		—		11		89			8		—		1		7
Small Cap Value		52,663		—		19,040		33,623			3,468		—		1,231		2,237
Bond		22,796		2,463		29,098		(3,839	)		2,178		106		2,644		(360	)
Income		19,236		924		17,584		2,576			2,118		45		1,887		276
Low Duration		62,420		1,442		43,206		20,656			6,471		70		4,429		2,112
Ready Reserves		—		—		—		—			—		—		—		—

(a)	For the period from April 10, 2013 (Commencement of Operations) to June 30, 2013.

June 30, 2013

William Blair Funds

149

	Institutional
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	55,299	$	—	$	639	$	54,660			5,599		—		65.00		5,534
Institutional International Growth		153,499		—		94,569		58,930			9,948		—		6,071		3,877
Institutional International Equity		3,150		—		25,995		(22,845	)		288		—		2,343		(2,055	)
International Leaders		46,097		—		642		45,455			4,088		—		59		4,029
International Small Cap Growth		12,908		—		29,533		(16,625	)		885		—		2,107		(1,222	)
Emerging Markets Growth		124,162		—		134,924		(10,762	)		8,974		—		10,562		(1,588	)
Emerging Markets Leaders		83		—		10,847		(10,764	)		—		—		1,179		(1,179	)
Emerging Markets Small Cap Growth		23,326		—		25		23,301			1,675		—		—		1,675
Bond		4,619		1,442		12,967		(6,906	)		486		63		1,178		(629	)
Low Duration		2,068		1,601		12,031		(8,362	)		297		78		1,238		(863	)

	Total
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	61,025	$	—	$	65,740	$	(4,715	)		4,542		—		4,896		(354	)
Large Cap Growth		2,400		—		1,421		979			271		—		158		113
Mid Cap Growth		79,678		—		31,571		48,107			5,637		—		2,257		3,380
Small Mid-Cap Growth		81,793		—		50,312		31,481			5,028		—		3,088		1,940
Small Cap Growth		50,509		—		52,782		(2,273	)		1,803		—		1,904		(101	)
Global Leaders		60,627		—		5,325		55,302			6,137		—		539		5,598
Global Small Cap Growth (a)		11,063		—		—		11,063			1,102		—		—		1,102
International Growth		418,377		—		326,351		92,026			17,661		—		13,738		3,923
Institutional International Growth		153,499		—		94,569		58,930			9,948		—		6,071		3,877
International Equity		4,819		—		6,424		(1,605	)		386		—		507		(121	)
Institutional International Equity		3,150		—		25,995		(22,845	)		288		—		2,343		(2,055	)
International Leaders		53,790		—		1,632		52,158			4,778		—		150		4,628
International Small Cap Growth		53,982		—		56,574		(2,592	)		3,755		—		3,987		(232	)
Emerging Markets Growth		137,296		—		142,523		(5,227	)		9,951		—		11,131		(1,180	)
Emerging Markets Leaders		8,998		—		12,090		(3,092	)		999		—		1,319		(320	)
Emerging Markets Small Cap Growth		61,168		—		6,977		54,191			4,325		—		488		3,837
Large Cap Value		2,164		—		2,624		(460	)		168		—		208		(40	)
Mid Cap Value		135		—		737		(602	)		11		—		58		(47	)
Small-Mid Cap Value		127		—		113		14			10		—		9		1
Small Cap Value		58,504		—		29,135		29,369			3,852		—		1,908		1,944
Bond		32,176		4,468		57,152		(20,508	)		3,115		193		5,196		(1,888	)
Income		38,382		1,867		44,672		(4,423	)		4,194		91		4,762		(477	)
Low Duration		68,664		3,101		60,288		11,477			7,198		151		6,186		1,163
Ready Reserves		349,973		67		637,484		(287,444	)		350,006		35		637,486		(287,445	)

(a)	For the period from April 10, 2013 (Commencement of Operations) to June 30, 2013.

150

Semi-Annual Report

June 30, 2013

The following tables summarizes the activity in capital shares of each fund for the period ended December 31, 2012 (in thousands):

	Class N
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	78,696	$	7,021	$	66,403	$	19,314			6,511		581		5,556		1,536
Large Cap Growth		910		—		679		231			117		—		88		29
Mid Cap Growth		23,163		883		15,631		8,415			1,835		70		1,251		654
Small Mid-Cap Growth		21,591		1,057		18,344		4,304			1,549		74		1,290		333
Small Cap Growth		11,395		558		114,495		(102,542	)		507		24		5,073		(4,542	)
Global Leaders		2,165		14		1,342		837			237		1		150		88
International Growth		201,960		36,834		478,336		(239,542	)		9,747		1,647		23,161		(11,767	)
International Equity		230		172		2,397		(1,995	)		20		14		207		(173	)
International Leaders (a)		501		—		—		501			50		—		—		50
International Small Cap Growth		1,764		249		8,879		(6,866	)		140		19		734		(575	)
Emerging Markets Growth		439		71		4,491		(3,981	)		35		5		358		(318	)
Emerging Markets Leaders		182		1		10		173			22		—		1		21
Emerging Markets Small Cap Growth		3,152		12		1,607		1,557			261		1		134		128
Large Cap Value		247		2		—		249			23		—		—		23
Mid Cap Value		27		4		16		15			2		—		1		1
Small-Mid Cap Value		22		1		2		21			2		—		—		2
Small Cap Value		13,727		412		20,304		(6,165	)		1,057		30		1,543		(456	)
Bond		29,217		1,107		6,469		23,855			2,628		99		579		2,148
Income		46,878		1,690		25,694		22,874			4,948		178		2,712		2,414
Low Duration		13,181		97		8,314		4,964			1,337		10		843		504
Ready Reserves		867,610		131		624,157		243,584			867,610		131		624,157		243,584

	Class I
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	99,399	$	12,799	$	51,187	$	61,011			7,918		1,014		4,123		4,809
Large Cap Growth		3,057		—		4,361		(1,304	)		382		—		550		(168	)
Mid Cap Growth		250,069		7,459		56,818		200,710			19,576		576		4,392		15,760
Small Mid-Cap Growth		166,456		8,330		66,523		108,263			11,543		570		4,593		7,520
Small Cap Growth		82,018		1,069		223,185		(140,098	)		3,541		44		9,629		(6,044	)
Global Leaders		14,574		220		14,834		(40	)		1,589		24		1,585		28
International Growth		471,066		66,346		477,179		60,233			22,026		2,899		22,367		2,558
International Equity		3,058		1,773		17,485		(12,654	)		266		146		1,569		(1,157	)
International Leaders (a)		4,042		6		—		4,048			401		—		—		401
International Small Cap Growth		70,906		6,537		146,425		(68,982	)		5,547		483		11,369		(5,339	)
Emerging Markets Growth		14,379		863		19,348		(4,106	)		1,140		64		1,558		(354	)
Emerging Markets Leaders		5,784		109		6,173		(280	)		702		12		745		(31	)
Emerging Markets Small Cap Growth		6,883		40		1,571		5,352			568		3		129		442
Large Cap Value		710		13		—		723			63		1		—		64
Mid Cap Value		276		154		1,296		(866	)		24		14		113		(75	)
Small-Mid Cap Value		50		19		28		41			5		2		3		4
Small Cap Value		33,914		2,338		51,694		(15,442	)		2,556		169		3,881		(1,156	)
Bond		30,744		5,895		23,329		13,310			2,776		531		2,114		1,193
Income		24,370		1,977		22,415		3,932			2,595		210		2,382		423
Low Duration		106,781		1,897		34,142		74,536			10,837		192		3,465		7,564
Ready Reserves		—		—		—		—			—		—		—		—

(a)	For the period from August 16, 2012 (Commencement of Operations) to December 31, 2012.

June 30, 2013

William Blair Funds

151

	Institutional
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	16,024	$	—	$	—	$	16,024			1,690		—		—		1,690
Institutional International Growth		283,364		58,949		226,632		115,681			20,453		3,970		16,310		8,113
Institutional International Equity		9,705		1,482		30,509		(19,322	)		987		137		3,013		(1,889	)
International Leaders (a)		5,000		10		—		5,010			488		1		—		489
International Small Cap Growth		49,414		7,704		106,290		(49,172	)		3,936		567		8,279		(3,776	)
Emerging Markets Growth		245,923		7,240		259,995		(6,832	)		19,326		537		20,495		(632	)
Emerging Markets Leaders		23,757		303		13,122		10,938			2,826		33		1,581		1,278
Emerging Markets Small Cap Growth		15,000		—		—		15,000			1,173		—		—		1,173
Bond		22,458		3,214		6,675		18,997			2,035		290		604		1,721
Low Duration		71,039		2,281		22,867		50,453			7,207		231		2,321		5,117

	Net Change in Net Assets Relating to Fund Share Activity
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	178,095	$	19,820	$	117,590	$	80,325			14,429		1,595		9,679		6,345
Large Cap Growth		3,967		—		5,040		(1,073	)		499		—		638		(139	)
Mid Cap Growth		273,232		8,342		72,449		209,125			21,411		646		5,643		16,414
Small Mid-Cap Growth		188,047		9,387		84,867		112,567			13,092		644		5,883		7,853
Small Cap Growth		93,413		1,627		337,680		(242,640	)		4,048		68		14,702		(10,586	)
Global Leaders		32,763		234		16,176		16,821			3,516		25		1,735		1,806
International Growth		673,026		103,180		955,515		(179,309	)		31,773		4,546		45,528		(9,209	)
Institutional International Growth		283,364		58,949		226,632		115,681			20,453		3,970		16,310		8,113
International Equity		3,288		1,945		19,882		(14,649	)		286		160		1,776		(1,330	)
Institutional International Equity		9,705		1,482		30,509		(19,322	)		987		137		3,013		(1,889	)
International Leaders (a)		9,543		16		—		9,559			939		1		—		940
International Small Cap Growth		122,084		14,490		261,594		(125,020	)		9,623		1,069		20,382		(9,690	)
Emerging Markets Growth		260,741		8,174		283,834		(14,919	)		20,501		606		22,411		(1,304	)
Emerging Markets Leaders		29,723		413		19,305		10,831			3,550		45		2,327		1,268
Emerging Markets Small Cap Growth		25,035		52		3,178		21,909			2,002		4		263		1,743
Large Cap Value		957		15		—		972			86		1		—		87
Mid Cap Value		303		158		1,312		(851	)		26		14		114		(74	)
Small-Mid Cap Value		72		20		30		62			7		2		3		6
Small Cap Value		47,641		2,750		71,998		(21,607	)		3,613		199		5,424		(1,612	)
Bond		82,419		10,216		36,473		56,162			7,439		920		3,297		5,062
Income		71,248		3,667		48,109		26,806			7,543		388		5,094		2,837
Low Duration		191,001		4,275		65,323		129,953			19,381		433		6,629		13,185
Ready Reserves		867,610		131		624,157		243,584			867,610		131		624,157		243,584

(a)	For the period from August 16, 2012 (Commencement of Operations) to December 31, 2012.

152

Semi-Annual Report

June 30, 2013

Financial Highlights

Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012			2011			2010			2009			2008
Net asset value, beginning of year		$	12.05		$	10.73		$	11.28		$	9.89		$	7.12		$	11.70
Income (loss) from investment operations:
Net investment income (loss)			(0.03	)		(0.01	)		(0.04	)		(0.01	)		(0.02	)		(0.05	)
Net realized and unrealized gain (loss) on investments			1.42			1.69			(0.19	)		1.40			2.79			(4.35	)
Total from investment operations			1.39			1.68			(0.23	)		1.39			2.77			(4.40	)
Less distributions from:
Net investment income			—			0.00	^		—			—			—			—
Net realized gain			—			0.36			0.32			—			—			0.18
Total distributions			—			0.36			0.32			—			—			0.18
Net asset value, end of year		$	13.44		$	12.05		$	10.73		$	11.28		$	9.89		$	7.12
Total Return (%)*			11.54			15.67			(1.93	)		14.05			38.90			(37.61	)
Ratios to average daily net assets (%):**
Expenses			1.17			1.20			1.21			1.16			1.23			1.17
Net investment income (loss)			(0.49	)		(0.06	)		(0.37	)		(0.13	)		(0.20	)		(0.54	)
Net assets at end of year (in thousands)		$	263,854		$	248,121		$	204,476		$	198,622		$	153,987		$	85,142
Portfolio turnover rate (%)*			25			73			59			66			67			60

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012		2011			2010			2009			2008
Net asset value, beginning of year		$	12.58		$	11.18	$	11.71		$	10.24		$	7.35		$	12.02
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		0.04		0.00	^		0.02			0.01			(0.02	)
Net realized and unrealized gain (loss) on investments			1.49			1.75		(0.20	)		1.45			2.88			(4.47	)
Total from investment operations			1.48			1.79		(0.20	)		1.47			2.89			(4.49	)
Less distributions from:
Net investment income			—			0.03		0.01			0.00	^		0.00	^		—
Net realized gain			—			0.36		0.32			—			—			0.18
Total distributions			—			0.39		0.33			0.00	^		0.00	^		0.18
Net asset value, end of year		$	14.06		$	12.58	$	11.18		$	11.71		$	10.24		$	7.35
Total Return (%)*			11.76			16.03		(1.60	)		14.36			39.34			(37.35	)
Ratios to average daily net assets (%):**
Expenses			0.86			0.89		0.86			0.84			0.89			0.85
Net investment income (loss)			(0.17	)		0.30		(0.03	)		0.20			0.14			(0.22	)
Net assets at end of year (in thousands)		$	531,713		$	468,124	$	362,266		$	376,991		$	265,533		$	153,444
Portfolio turnover rate (%)*			25			73		59			66			67			60

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

See accompanying Notes to Financial Statements.

June 30, 2013

William Blair Funds

153

Financial Highlights

Large Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012			2011			2010			2009			2008
Net asset value, beginning of year		$	8.14		$	6.88		$	7.14		$	6.16		$	4.68		$	7.52
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		(0.02	)		(0.01	)		(0.00	)^		(0.01	)		(0.02	)
Net realized and unrealized gain (loss) on investments			0.77			1.28			(0.25	)		0.98			1.49			(2.82	)
Total from investment operations			0.76			1.26			(0.26	)		0.98			1.48			(2.84	)
Less distributions from:
Net investment income			—			—			—			—			—			0.00	^
Net realized gain			—			—			—			—			—			—
Total distributions			—			—			—			—			—			0.00	^
Net asset value, end of year		$	8.90		$	8.14		$	6.88		$	7.14		$	6.16		$	4.68
Total Return (%)*			9.34			18.31			(3.64	)		15.91			31.62			(37.76	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.20			1.20			1.20			1.21			1.23			1.23
Expenses, before waivers and reimbursements			1.50			1.57			1.51			1.53			2.28			1.85
Net investment income (loss), net of waivers and reimbursements			(0.31	)		(0.21	)		(0.13	)		(0.08	)		(0.13	)		(0.29	)
Net investment income (loss), before waivers and reimbursements			(0.61	)		(0.58	)		(0.44	)		(0.40	)		(1.18	)		(0.91	)
Net assets at end of year (in thousands)		$	5,046		$	4,238		$	3,387		$	7,135		$	5,952		$	4,842
Portfolio turnover rate (%)*			23			50			67			54			88			85

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013					2012			2011			2010			2009			2008
Net asset value, beginning of year		$	8.35			$	7.03		$	7.30		$	6.30		$	4.77		$	7.64
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)^			0.00	^		0.01			0.01			0.01			0.00	^
Net realized and unrealized gain (loss) on investments			0.79				1.32			(0.27	)		1.00			1.52			(2.87	)
Total from investment operations			0.79				1.32			(0.26	)		1.01			1.53			(2.87	)
Less distributions from:
Net investment income			—				—			0.01			0.01			0.00	^		0.00	^
Net realized gain			—				—			—			—			—			—
Total distributions			—				—			0.01			0.01			0.00	^		0.00	^
Net asset value, end of year		$	9.14			$	8.35		$	7.03		$	7.30		$	6.30		$	4.77
Total Return (%)*			9.46				18.78			(3.54	)		16.03			32.17			(37.56	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.95				0.95			0.95			0.96			0.98			0.98
Expenses, before waivers and reimbursements			1.17				1.23			1.16			1.16			1.26			1.21
Net investment income (loss), net of waivers and reimbursements			(0.05	)			0.03			0.11			0.16			0.12			(0.04	)
Net investment income (loss), before waivers and reimbursements			(0.27	)			(0.25	)		(0.10	)		(0.04	)		(0.16	)		(0.27	)
Net assets at end of year (in thousands)		$	27,097			$	24,175		$	21,562		$	24,900		$	24,359		$	18,437
Portfolio turnover rate (%)*			23				50			67			54			88			85

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

154

Semi-Annual Report

June 30, 2013

Financial Highlights

Mid Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012			2011			2010			2009			2008
Net asset value, beginning of year		$	12.65		$	11.66		$	12.50		$	10.08		$	7.41		$	11.35
Income (loss) from investment operations:
Net investment income (loss)			(0.06	)		(0.02	)		(0.08	)		(0.05	)		(0.04	)		(0.07	)
Net realized and unrealized gain (loss) on investments			1.64			1.29			0.25			2.47			2.71			(3.87	)
Total from investment operations			1.58			1.27			0.17			2.42			2.67			(3.94	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			0.28			1.01			—			—			0.00	^
Total distributions			—			0.28			1.01			—			—			0.00	^
Net asset value, end of year		$	14.23		$	12.65		$	11.66		$	12.50		$	10.08		$	7.41
Total Return (%)*			12.49			10.90			1.65			24.01			36.03			(34.71	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.35			1.35			1.35			1.35			1.36			1.36
Expenses, before waivers and reimbursements			1.39			1.42			1.43			1.42			2.13			2.03
Net investment income (loss), net of waivers and reimbursements			(0.93	)		(0.15	)		(0.65	)		(0.42	)		(0.51	)		(0.76	)
Net investment income (loss), before waivers and reimbursements			(0.97	)		(0.22	)		(0.73	)		(0.49	)		(1.28	)		(1.43	)
Net assets at end of year (in thousands)		$	46,346		$	40,940		$	30,093		$	13,802		$	10,379		$	4,803
Portfolio turnover rate (%)*			37			62			70			73			87			76

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012		2011			2010			2009			2008
Net asset value, beginning of year		$	12.91		$	11.87	$	12.68		$	10.20		$	7.48		$	11.42
Income (loss) from investment operations:
Net investment income (loss)			(0.05	)		0.03		(0.05	)		(0.02	)		(0.02	)		(0.05	)
Net realized and unrealized gain (loss) on investments			1.68			1.31		0.25			2.50			2.74			(3.89	)
Total from investment operations			1.63			1.34		0.20			2.48			2.72			(3.94	)
Less distributions from:
Net investment income			—			0.02		—			—			—			—
Net realized gain			—			0.28		1.01			—			—			0.00	^
Total distributions			—			0.30		1.01			—			—			0.00	^
Net asset value, end of year		$	14.54		$	12.91	$	11.87		$	12.68		$	10.20		$	7.48
Total Return (%)*			12.63			11.30		1.86			24.31			36.36			(34.50	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10			1.07		1.10			1.10			1.11			1.11
Expenses, before waivers and reimbursements			1.10			1.07		1.13			1.15			1.28			1.23
Net investment income (loss), net of waivers and reimbursements			(0.67	)		0.19		(0.42	)		(0.14	)		(0.26	)		(0.51	)
Net investment income (loss), before waivers and reimbursements			(0.67	)		0.19		(0.45	)		(0.19	)		(0.43	)		(0.63	)
Net assets at end of year (in thousands)		$	419,543		$	329,295	$	115,661		$	87,446		$	60,455		$	35,723
Portfolio turnover rate (%)*			37			62		70			73			87			76

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

155

Financial Highlights

Small-Mid Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012		2011			2010			2009			2008
Net asset value, beginning of year		$	14.21		$	13.00	$	14.40		$	11.73		$	8.16		$	13.10
Income (loss) from investment operations:
Net investment income (loss)			(0.08	)		0.02		(0.11	)		(0.09	)		(0.06	)		(0.03	)
Net realized and unrealized gain (loss) on investments			2.79			1.57		0.03			2.76			3.63			(4.91	)
Total from investment operations			2.71			1.59		(0.08	)		2.67			3.57			(4.94	)
Less distributions from:
Net investment income			—			0.02		—			—			—			—
Net realized gain			—			0.36		1.32			—			—			0.00	^
Total distributions			—			0.38		1.32			—			—			0.00	^
Net asset value, end of year		$	16.92		$	14.21	$	13.00		$	14.40		$	11.73		$	8.16
Total Return (%)*			19.07			12.20		(0.27	)		22.76			43.75			(37.71	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.35			1.35		1.35			1.35			1.36			1.36
Expenses, before waivers and reimbursements			1.43			1.47		1.46			1.46			1.49			1.41
Net investment income (loss), net of waivers and reimbursements			(1.00	)		0.16		(0.77	)		(0.76	)		(0.60	)		(0.26	)
Net investment income (loss), before waivers and reimbursements			(1.08	)		0.04		(0.88	)		(0.87	)		(0.73	)		(0.31	)
Net assets at end of year (in thousands)		$	59,354		$	42,015	$	34,123		$	26,876		$	23,576		$	7,954
Portfolio turnover rate (%)*			20			82		76			93			112			77

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012		2011			2010			2009			2008
Net asset value, beginning of year		$	14.55		$	13.32	$	14.68		$	11.93		$	8.27		$	13.24
Income (loss) from investment operations:
Net investment income (loss)			(0.06	)		0.07		(0.08	)		(0.06	)		(0.03	)		0.00	^
Net realized and unrealized gain (loss) on investments			2.86			1.58		0.04			2.81			3.69			(4.97	)
Total from investment operations			2.80			1.65		(0.04	)		2.75			3.66			(4.97	)
Less distributions from:
Net investment income			—			0.06		—			—			0.00	^		—
Net realized gain			—			0.36		1.32			—			—			0.00	^
Total distributions			—			0.42		1.32			—			0.00	^		0.00	^
Net asset value, end of year		$	17.35		$	14.55	$	13.32		$	14.68		$	11.93		$	8.27
Total Return (%)*			19.24			12.36		0.01			23.05			44.26			(37.54	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.09			1.10		1.10			1.10			1.11			1.11
Expenses, before waivers and reimbursements			1.09			1.20		1.12			1.11			1.18			1.17
Net investment income (loss), net of waivers and reimbursements			(0.73	)		0.48		(0.54	)		(0.50	)		(0.33	)		0.03
Net investment income (loss), before waivers and reimbursements			(0.73	)		0.38		(0.56	)		(0.51	)		(0.40	)		(0.03	)
Net assets at end of year (in thousands)		$	440,510		$	349,345	$	219,474		$	181,189		$	123,252		$	75,525
Portfolio turnover rate (%)*			20			82		76			93			112			77

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

156

Semi-Annual Report

June 30, 2013

Financial Highlights

Small Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012			2011			2010			2009			2008
Net asset value, beginning of year		$	23.68		$	20.13		$	23.22		$	19.99		$	11.79		$	23.30
Income (loss) from investment operations:
Net investment income (loss)			(0.14	)		(0.22	)		(0.28	)		(0.21	)		(0.15	)		(0.19	)
Net realized and unrealized gain (loss) on investments			5.74			3.87			(2.81	)		3.44			8.35			(10.73	)
Total from investment operations			5.60			3.65			(3.09	)		3.23			8.20			(10.92	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			0.10			—			—			—			0.59
Total distributions			—			0.10			—			—			—			0.59
Net asset value, end of year		$	29.28		$	23.68		$	20.13		$	23.22		$	19.99		$	11.79
Total Return (%)*			23.65			18.15			(13.31	)		16.16			69.55			(46.85	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.50			1.50			1.50			1.50			1.50			1.50
Expenses, before waivers and reimbursements			1.59			1.59			1.59			1.52			1.55			1.50
Net investment income (loss), net of waivers and reimbursements			(1.06	)		(0.96	)		(1.25	)		(1.03	)		(0.93	)		(1.05	)
Net investment income (loss), before waivers and reimbursements			(1.15	)		(1.05	)		(1.34	)		(1.05	)		(0.98	)		(1.05	)
Net assets at end of year (in thousands)		$	154,734		$	130,382		$	202,341		$	396,767		$	469,746		$	224,612
Portfolio turnover rate (%)*			44			89			97			117			122			135

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
	2013				2012			2011			2010			2009			2008
Net asset value, beginning of year		$	24.66		$	20.91		$	24.07		$	20.64		$	12.14		$	23.89
Income (loss) from investment operations:
Net investment income (loss)			(0.11	)		(0.16	)		(0.23	)		(0.16	)		(0.11	)		(0.14	)
Net realized and unrealized gain (loss) on investments			5.99			4.01			(2.93	)		3.59			8.61			(11.02	)
Total from investment operations			5.88			3.85			(3.16	)		3.43			8.50			(11.16	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			0.10			—			—			—			0.59
Total distributions			—			0.10			—			—			—			0.59
Net asset value, end of year		$	30.54		$	24.66		$	20.91		$	24.07		$	20.64		$	12.14
Total Return (%)*			23.84			18.43			(13.13	)		16.62			70.02			(46.70	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25			1.25			1.25			1.25			1.20			1.20
Expenses, before waivers and reimbursements			1.34			1.35			1.35			1.25			1.20			1.20
Net investment income (loss), net of waivers and reimbursements			(0.80	)		(0.71	)		(1.00	)		(0.76	)		(0.63	)		(0.75	)
Net investment income (loss), before waivers and reimbursements			(0.89	)		(0.81	)		(1.10	)		(0.76	)		(0.63	)		(0.75	)
Net assets at end of year (in thousands)		$	333,686		$	266,431		$	352,397		$	494,822		$	293,052		$	177,015
Portfolio turnover rate (%)*			44			89			97			117			122			135

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

157

Financial Highlights

Global Leaders Fund

	Class N
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
	2013			2012			2011			2010			2009			2008
Net asset value, beginning of year		$	9.47	$	8.10		$	8.40		$	6.97		$	4.96		$	9.89
Income (loss) from investment operations:
Net investment income (loss) (a)			0.04		0.03			0.02			(0.01	)		(0.01	)		0.08
Net realized and unrealized gain (loss) on investments			0.40		1.37			(0.31	)		1.44			2.02			(4.98	)
Total from investment operations			0.44		1.40			(0.29	)		1.43			2.01			(4.90	)
Less distributions from:
Net investment income			—		0.03			0.01			—			—			0.03
Net realized gain			—		—			—			—			—			—
Total distributions			—		0.03			0.01			—			—			0.03
Net asset value, end of year		$	9.91	$	9.47		$	8.10		$	8.40		$	6.97		$	4.96
Total Return (%)*			4.65		17.25			(3.47	)		20.52			40.52			(49.52	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.50		1.50			1.50			1.52			1.55			1.55
Expenses, before waivers and reimbursements			1.67		1.84			1.82			1.93			2.61			2.17
Net investment income (loss), net of waivers and reimbursements			0.80		0.29			0.29			(0.09	)		(0.17	)		0.98
Net investment income (loss), before waivers and reimbursements			0.63		(0.05	)		(0.03	)		(0.50	)		(1.23	)		0.36
Net assets at end of year (in thousands)		$	5,557	$	5,215		$	3,740		$	5,101		$	4,721		$	3,652
Portfolio turnover rate (%)*			27		73			75			96			133			124

	Class I
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
	2013			2012		2011			2010			2009			2008
Net asset value, beginning of year		$	9.47	$	8.09	$	8.40		$	6.96		$	4.94		$	9.91
Income (loss) from investment operations:
Net investment income (loss) (a)			0.05		0.05		0.04			0.01			0.00	^		0.08
Net realized and unrealized gain (loss) on investments			0.39		1.38		(0.31	)		1.43			2.02			(4.98	)
Total from investment operations			0.44		1.43		(0.27	)		1.44			2.02			(4.90	)
Less distributions from:
Net investment income			—		0.05		0.04			0.00	^		0.00	^		0.07
Net realized gain			—		—		—			—			—			—
Total distributions			—		0.05		0.04			0.00	^		0.00	^		0.07
Net asset value, end of year		$	9.91	$	9.47	$	8.09		$	8.40		$	6.96		$	4.94
Total Return (%)*			4.65		17.64		(3.26	)		20.73			40.90			(49.41	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25		1.25		1.25			1.27			1.30			1.30
Expenses, before waivers and reimbursements			1.39		1.56		1.55			1.62			1.62			1.74
Net investment income (loss), net of waivers and reimbursements			1.04		0.54		0.52			0.16			0.05			1.05
Net investment income (loss), before waivers and reimbursements			0.90		0.23		0.22			(0.19	)		(0.27	)		0.61
Net assets at end of year (in thousands)		$	48,384	$	45,757	$	38,834		$	39,776		$	33,566		$	24,353
Portfolio turnover rate (%)*			27		73		75			96			133			124

(a)	Excludes $0.00, $0.00, $0.00, $0.00 $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

158

Semi-Annual Report

June 30, 2013

Financial Highlights

Global Leaders Fund

	Institutional Class Shares
	(unaudited)
	Period Ended			Period Ended
	June, 30			December 31,
	2013			2012(a)
Net asset value, beginning of year		$	9.47		$	9.50
Income (loss) from investment operations:
Net investment income (loss) (b)			0.06			0.00	^
Net realized and unrealized gain (loss) on investments			0.39			(0.03	)
Total from investment operations			0.45			(0.03	)
Less distributions from:
Net investment income			—			—
Net realized gain			—			—
Total distributions			—			—
Net asset value, end of year		$	9.92		$	9.47
Total Return (%)*			4.75			(0.32	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10			1.10
Expenses, before waivers and reimbursements			1.19			1.26
Net investment income (loss), net of waivers and reimbursements			1.23			(0.91	)
Net investment income (loss), before waivers and reimbursements			1.14			(1.07	)
Net assets at end of year (in thousands)		$	71,671		$	16,022
Portfolio turnover rate (%)*			27			73

(a)	For the period from December 9, 2012 (Commencement of Operations) to December 31, 2012.
(b)	Excludes $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the periods 2013 and 2012 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

159

Financial Highlights

Global Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,
	2013(a)
Net asset value, beginning of year		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)			(0.04	)
Net realized and unrealized gain (loss) on investments			0.34
Total from investment operations			0.30
Less distributions from:
Net investment income			—
Net realized gain			—
Total distributions			—
Net asset value, end of year		$	10.30
Total Return (%)*			3.00
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.65
Expenses, before waivers and reimbursements			2.78
Net investment income (loss), net of waivers and reimbursements			(1.77	)
Net investment income (loss), before waivers and reimbursements			(2.90	)
Net assets at end of year (in thousands)		$	291
Portfolio turnover rate (%)*			21


	Class I
	(unaudited) Period Ended June 30,
	2013(a)
Net asset value, beginning of year		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)			0.02
Net realized and unrealized gain (loss) on investments			0.29
Total from investment operations			0.31
Less distributions from:
Net investment income			—
Net realized gain.			—
Total distributions			—
Net asset value, end of year		$	10.31
Total Return (%)*			3.10
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.40
Expenses, before waivers and reimbursements			2.50
Net investment income (loss), net of waivers and reimbursements			0.94
Net investment income (loss), before waivers and reimbursements			(0.16	)
Net assets at end of year (in thousands)		$	11,063
Portfolio turnover rate (%)*			21

(a)	For the period from April 10, 2013 (Commencement of Operations) to June 30, 2013.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

160

Semi-Annual Report

June 30, 2013

Financial Highlights

International Growth Fund

	Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	22.43		$	18.68	$	21.85		$	18.55	$	13.12	$	29.12
Income (loss) from investment operations:
Net investment income (loss) (a)			0.24			0.26		0.26			0.14		0.07		0.29
Net realized and unrealized gain (loss) on investments			0.20			4.16		(3.43	)		3.58		5.47		(15.54	)
Total from investment operations			0.44			4.42		(3.17	)		3.72		5.54		(15.25	)
Less distributions from:
Net investment income			—			0.67		—			0.42		0.11		—
Net realized gain			—			—		—			—		—		0.75
Total distributions			—			0.67		—			0.42		0.11		0.75
Net asset value, end of year		$	22.87		$	22.43	$	18.68		$	21.85	$	18.55	$	13.12
Total Return (%)*			1.96			23.67		(14.51	)		20.09		42.27		(52.33	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.42			1.44		1.45			1.43		1.45		1.39
Expenses, before waivers and reimbursements.			1.42			1.44		1.46			1.43		1.46		1.39
Net investment income (loss), net of waivers and reimbursements			2.07			1.25		1.22			0.73		0.48		1.29
Net investment income (loss), before waivers and reimbursements			2.07			1.25		1.21			0.73		0.47		1.29
Net assets at end of year (in thousands)		$	1,291,137		$	1,269,736	$	1,277,534		$	2,689,417	$	2,539,596	$	1,980,750
Portfolio turnover rate (%)*			54			81		103			99		121		91

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
			2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	22.94		$	19.10	$	22.34		$	18.95	$	13.40	$	29.61
Income (loss) from investment operations:
Net investment income (loss) (a)			0.28			0.32		0.30			0.20		0.12		0.37
Net realized and unrealized gain (loss) on investments			0.21			4.25		(3.48	)		3.67		5.59		(15.83	)
Total from investment operations			0.49			4.57		(3.18	)		3.87		5.71		(15.46	)
Less distributions from:
Net investment income			—			0.73		0.06			0.48		0.16		—
Net realized gain			—			—		—			—		—		0.75
Total distributions			—			0.73		0.06			0.48		0.16		0.75
Net asset value, end of year		$	23.43		$	22.94	$	19.10		$	22.34	$	18.95	$	13.40
Total Return (%)*			2.14			23.96		(14.23	)		20.47		42.63		(52.17	)
Ratios to average daily net assets (%):**
Expenses			1.13			1.15		1.15			1.14		1.17		1.08
Net investment income (loss)			2.36			1.51		1.40			0.99		0.74		1.58
Net assets at end of year (in thousands)		$	2,548,741		$	2,402,897	$	1,951,368		$	2,392,762	$	1,933,812	$	1,150,188
Portfolio turnover rate (%)*			54			81		103			99		121		91

(a)	Excludes $0.00, $0.10, $0.00, $0.13, $0.08 and $(0.18) of PFIC mark to market, which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009 and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

161

Financial Highlights

Institutional International Growth Fund

	Institutional Class Shares
	(unaudited) Period Ended June, 30			Years Ended December 31,
		2013			2012		2011			��	2010		2009		2008
Net asset value, beginning of year		$	14.89		$	12.39	$	14.37			$	12.20	$	8.66	$	19.20
Income (loss) from investment operations:
Net investment income (loss) (a)			0.19			0.23		0.21				0.14		0.10		0.25
Net realized and unrealized gain (loss) on investments			0.14			2.76		(2.17	)			2.31		3.61		(10.24	)
Total from investment operations			0.33			2.99		(1.96	)			2.45		3.71		(9.99	)
Less distributions from:
Net investment income			—			0.49		0.02				0.28		0.17		—
Net realized gain			—			—		—				—		—		0.55
Total distributions			—			0.49		0.02				0.28		0.17		0.55
Net asset value, end of year		$	15.22		$	14.89	$	12.39			$	14.37	$	12.20	$	8.66
Total Return (%)*			2.22			24.11		(13.66	)			20.10		42.83		(51.99	)
Ratios to average daily net assets (%):**
Expenses			0.97			0.98		0.99				0.99		1.01		0.98
Net investment income (loss)			2.51			1.64		1.51				1.12		0.95		1.68
Net assets at end of year (in thousands)		$	2,076,576		$	1,974,130	$	1,542,594			$	1,886,217	$	1,375,848	$	998,266
Portfolio turnover rate (%)*			55			83		111				99		125		86

(a)	Excludes $0.00, $0.00, $0.09, $0.05, $(0.10), and $0.06 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

162

Semi-Annual Report

June 30, 2013

Financial Highlights

International Equity Fund

	Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
			2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	12.05			$	10.56	$	12.12		$	11.07	$	8.35	$	16.53
Income (loss) from investment operations:
Net investment income (loss) (a)			0.08				0.11		0.13			0.06		0.09		0.10
Net realized and unrealized gain (loss) on investments			0.27				1.75		(1.69	)		1.15		2.64		(8.16	)
Total from investment operations			0.35				1.86		(1.56	)		1.21		2.73		(8.06	)
Less distributions from:
Net investment income			—				0.37		—			0.16		0.01		—
Net realized gain			—				—		—			—		—		0.12
Total distributions			—				0.37		—			0.16		0.01		0.12
Net asset value, end of year		$	12.40			$	12.05	$	10.56		$	12.12	$	11.07	$	8.35
Total Return (%)*			2.90				17.57		(12.87	)		10.92		32.69		(48.75	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.45				1.45		1.45			1.45		1.45		1.45
Expenses, before waivers and reimbursements			1.69				1.71		1.60			1.66		1.59		1.45
Net investment income (loss), net of waivers and reimbursements			1.36				0.95		1.09			0.55		1.03		0.80
Net investment income (loss), before waivers and reimbursements			1.12				0.69		0.94			0.34		0.89		0.80
Net assets at end of year (in thousands)		$	3,844			$	5,648	$	6,773		$	13,733	$	15,436	$	42,824
Portfolio turnover rate (%)*			42				80		99			71		88		92


	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2013				2012		2011			2010		2009		2008
Net asset value, beginning of year		$	12.18			$	10.67	$	12.22		$	11.16	$	8.44	$	16.66
Income (loss) from investment operations:
Net investment income (loss) (a)			0.12				0.14		0.17			0.10		0.08		0.15
Net realized and unrealized gain (loss) on investments			0.26				1.77		(1.72	)		1.15		2.70		(8.25	)
Total from investment operations			0.38				1.91		(1.55	)		1.25		2.78		(8.10	)
Less distributions from:
Net investment income			—				0.40		—			0.19		0.06		—
Net realized gain			—				—		—			—		—		0.12
Total distributions			—				0.40		—			0.19		0.06		0.12
Net asset value, end of year		$	12.56			$	12.18	$	10.67		$	12.22	$	11.16	$	8.44
Total Return (%)*			3.12				17.89		(12.68	)		11.19		32.93		(48.61	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.20				1.20		1.20			1.20		1.20		1.20
Expenses, before waivers and reimbursements			1.41				1.44		1.33			1.28		1.39		1.22
Net investment income (loss), net of waivers and reimbursements			1.94				1.17		1.43			0.88		0.86		1.12
Net investment income (loss), before waivers and reimbursements			1.73				0.93		1.30			0.80		0.67		1.10
Net assets at end of year (in thousands)		$	67,020			$	64,536	$	68,884		$	164,322	$	282,732	$	185,662
Portfolio turnover rate (%)*			42				80		99			71		88		92

(a)	Excludes $0.00, $0.01, $0.00, $0.04, $0.00, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

163

Financial Highlights

Institutional International Equity Fund

	Institutional Class Shares
	(unaudited) Period Ended June, 30			Years Ended December 31,
		2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	10.82		$	9.27	$	10.78		$	9.84	$	7.44	$	15.03
Income (loss) from investment operations:
Net investment income (loss) (a)			0.11			0.13		0.16			0.10		0.09		0.15
Net realized and unrealized gain (loss) on investments			0.23			1.57		(1.47	)		0.99		2.38		(7.60	)
Total from investment operations			0.34			1.70		(1.31	)		1.09		2.47		(7.45	)
Less distributions from:
Net investment income			—			0.15		0.20			0.15		0.07		—
Net realized gain			—			—		—			—		—		0.14
Total distributions			—			0.15		0.20			0.15		0.07		0.14
Net asset value, end of year		$	11.16		$	10.82	$	9.27		$	10.78	$	9.84	$	7.44
Total Return (%)*			3.14			18.31		(12.12	)		11.12		33.27		(49.57	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10			1.10		1.10			1.07		1.09		1.05
Expenses, before waivers and reimbursements.			1.15			1.16		1.10			1.07		1.09		1.05
Net investment income (loss), net of waivers and reimbursements			1.90			1.28		1.48			0.97		1.04		1.26
Net investment income (loss), before waivers and reimbursements			1.85			1.22		1.48			0.97		1.04		1.26
Net assets at end of year (in thousands)		$	90,196		$	109,690	$	111,474		$	291,468	$	365,271	$	360,451
Portfolio turnover rate (%)*			40			86		91			73		78		91

(a)	Excludes $0.00, $0.00, $0.04, $0.00, $0.00, and $(0.07) of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

164

Semi-Annual Report

June 30, 2013

Financial Highlights

International Leaders Fund

				Class N
	(unaudited) Period Ended June 30,			Period Ended December 31,
		2013		2012(a)
Net asset value, beginning of year		$	10.81		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)			0.03			0.00	^
Net realized and unrealized gain (loss) on investments			0.24			0.82
Total from investment operations			0.27			0.82
Less distributions from:
Net investment income			—			0.01
Net realized gain			—			—
Total distributions			—			0.01
Net asset value, end of year		$	11.08		$	10.81
Total Return (%)*			2.50			8.16
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.45			1.45
Expenses, before waivers and reimbursements			1.76			4.98
Net investment income (loss), net of waivers and reimbursements			0.54			—
Net investment income (loss), before waivers and reimbursements			0.23			(3.53	)
Net assets at end of year (in thousands)		$	101		$	542
Portfolio turnover rate (%)*			36			16

				Class I
	(unaudited)
	Period Ended			Period Ended
	June 30,			December 31,
		2013		2012(a)
Net asset value, beginning of year		$	10.81		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)			0.12			0.01
Net realized and unrealized gain (loss) on investments			0.17			0.82
Total from investment operations			0.29			0.83
Less distributions from:
Net investment income			—			0.02
Net realized gain			—			—
Total distributions			—			0.02
Net asset value, end of year		$	11.10		$	10.81
Total Return (%)*			2.68			8.26
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.20			1.20
Expenses, before waivers and reimbursements.			1.45			4.56
Net investment income (loss), net of waivers and reimbursements			2.21			0.22
Net investment income (loss), before waivers and reimbursements			1.96			(3.14	)
Net assets at end of year (in thousands)		$	11,555		$	4,336
Portfolio turnover rate (%)*			36			16

(a)	For the period from August 16, 2012 (Comencement of Operations) to December 31, 2012.
(b)	Excludes $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the year 2013 and 2012.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

165

Financial Highlights

International Leaders Fund

				Institutional Class Shares
	(unaudited) Period Ended June, 30			Period Ended December 31,
		2013		2012(a)
Net asset value, beginning of year		$	10.80		$	10.24
Income (loss) from investment operations:
Net investment income (loss) (b)			0.16			0.00	^
Net realized and unrealized gain (loss) on investments			0.14			0.58
Total from investment operations			0.30			0.58
Less distributions from:
Net investment income			—			0.02
Net realized gain			—			—
Total distributions			—			0.02
Net asset value, end of year		$	11.10		$	10.80
Total Return (%)*			2.78			5.67
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.05
Expenses, before waivers and reimbursements.			1.29			1.84
Net investment income (loss), net of waivers and reimbursements			2.78			0.01
Net investment income (loss), before waivers and reimbursements			2.54			(0.78	)
Net assets at end of year (in thousands)		$	50,157		$	5,286
Portfolio turnover rate (%)*			36			16

(a)	For the period from August 16, 2012 (Comencement of Operations) to December 31, 2012.
(b)	Excludes $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the year 2012 and 2013 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

166

Semi-Annual Report

June 30, 2013

Financial Highlights

International Small Cap Growth Fund

											Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2013		2012		2011			2010			2009				2008
Net asset value, beginning of year		$	13.46	$	11.36	$	13.07		$	10.40		$	6.62			$	13.98
Income (loss) from investment operations:
Net investment income (loss) (a)			0.09		0.08		0.07			0.03			(0.01	)			(0.02	)
Net realized and unrealized gain (loss) on investments			0.84		2.27		(1.66	)		2.66			3.79				(7.22	)
Total from investment operations			0.93		2.35		(1.59	)		2.69			3.78				(7.24	)
Less distributions from:
Net investment income			—		0.25		0.12			0.02			—				—
Net realized gain			—		—		—			—			—				0.12
Total distributions			—		0.25		0.12			0.02			—				0.12
Net asset value, end of year		$	14.39	$	13.46	$	11.36		$	13.07		$	10.40			$	6.62
Total Return (%)*			6.91		20.73		(12.16	)		25.88			57.10				(51.82	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.59		1.61		1.64			1.55			1.65				1.65
Expenses, before waivers and reimbursements			1.59		1.61		1.64			1.55			1.83				1.62
Net investment income (loss), net of waivers and reimbursements			1.30		0.65		0.55			0.30			(0.16	)			(0.20	)
Net investment income (loss), before waivers and reimbursements			1.30		0.65		0.55			0.30			(0.34	)			(0.17	)
Net assets at end of year (in thousands)		$	15,339	$	14,771	$	18,991		$	21,916		$	14,854			$	11,363
Portfolio turnover rate (%)*			62		76		85			85			136				78

															Class I
	(unaudited) Period Ended June 30,			Years Ended December 31,
			2013		2012		2011			2010			2009				2008
Net asset value, beginning of year		$	13.58	$	11.46	$	13.19		$	10.49		$	6.67			$	14.01
Income (loss) from investment operations:
Net investment income (loss) (a)			0.12		0.12		0.12			0.07			0.01				0.01
Net realized and unrealized gain (loss) on investments			0.84		2.30		(1.69	)		2.68			3.83				(7.23	)
Total from investment operations			0.96		2.42		(1.57	)		2.75			3.84				(7.22	)
Less distributions from:
Net investment income			—		0.30		0.16			0.05			0.02				—
Net realized gain			—		—		—			—			—				0.12
Total distributions			—		0.30		0.16			0.05			0.02				0.12
Net asset value, end of year		$	14.54	$	13.58	$	11.46		$	13.19		$	10.49			$	6.67
Total Return (%)*			7.07		21.10		(11.84	)		26.24			57.51				(51.56	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.29		1.30		1.28			1.25			1.31				1.31
Expenses, before waivers and reimbursements			1.29		1.30		1.28			1.25			1.31				1.28
Net investment income (loss), net of waivers and reimbursements			1.64		0.95		0.92			0.61			0.11				0.11
Net investment income (loss), before waivers and reimbursements			1.64		0.95		0.92			0.61			0.11				0.14
Net assets at end of year (in thousands)		$	399,781	$	359,557	$	364,574		$	349,679		$	210,561			$	89,452
Portfolio turnover rate (%)*			62		76		85			85			136				78

(a)	Excludes $0.00, $0.04, $0.00, $0.15, $0.01 and $(0.02) of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

167

Financial Highlights

International Small Cap Growth Fund

	Institutional Class Shares
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2013		2012		2011			2010		2009		2008
Net asset value, beginning of year		$	13.64	$	11.51	$	13.24		$	10.53	$	6.69	$	14.04
Income (loss) from investment operations:
Net investment income (loss) (a)			0.13		0.15		0.14			0.09		0.04		0.03
Net realized and unrealized gain (loss) on investments			0.85		2.31		(1.68	)		2.69		3.83		(7.26	)
Total from investment operations			0.98		2.46		(1.54	)		2.78		3.87		(7.23	)
Less distributions from:
Net investment income			—		0.33		0.19			0.07		0.03		—
Net realized gain			—		—		—			—		—		0.12
Total distributions			—		0.33		0.19			0.07		0.03		0.12
Net asset value, end of year		$	14.62	$	13.64	$	11.51		$	13.24	$	10.53	$	6.69
Total Return (%)*			7.18		21.36		(11.60	)		26.40		57.84		(51.53	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.06		1.08		1.08			1.08		1.13		1.14
Expenses, before waivers and reimbursements			1.06		1.08		1.08			1.08		1.13		1.11
Net investment income (loss), net of waivers and reimbursements			1.84		1.14		1.10			0.77		0.48		0.28
Net investment income (loss), before waivers and reimbursements			1.84		1.14		1.10			0.77		0.48		0.31
Net assets at end of year (in thousands)		$	352,089	$	345,180	$	334,656		$	275,356	$	165,436	$	191,173
Portfolio turnover rate (%)*			62		76		85			85		136		78

(a)	Excludes $0.00, $0.04, $0.00, $0.13, $0.01 and $(0.02) of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

168

Semi-Annual Report

June 30, 2013

Financial Highlights

Emerging Markets Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
			2013			2012		2011			2010			2009			2008
Net asset value, beginning of year		$	13.40		$	11.16	$	15.76		$	12.87		$	7.46		$	21.92
Income (loss) from investment operations:
Net investment income (loss) (a)			0.05			0.07		0.07			(0.01	)		0.00	^		0.11
Net realized and unrealized gain (loss) on investments			(0.89	)		2.24		(2.84	)		3.02			5.51			(13.63	)
Total from investment operations			(0.84	)		2.31		(2.77	)		3.01			5.51			(13.52	)
Less distributions from:
Net investment income			—			0.07		—			0.12			0.10			—
Net realized gain			—			—		1.83			—			—			0.94
Total distributions			—			0.07		1.83			0.12			0.10			0.94
Net asset value, end of year		$	12.56		$	13.40	$	11.16		$	15.76		$	12.87		$	7.46
Total Return (%)*			(6.27	)		20.70		(17.29	)		23.44			73.85			(61.71	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.68			1.69		1.68			1.63			1.70			1.67
Expenses, before waivers and reimbursements			1.68			1.69		1.68			1.63			1.81			1.65
Net investment income (loss), net of waivers and reimbursements			0.81			0.59		0.48			(0.05	)		0.04			0.65
Net investment income (loss), before waivers and reimbursements			0.81			0.59		0.48			(0.05	)		(0.07	)		0.67
Net assets at end of year (in thousands)		$	13,912		$	16,724	$	17,474		$	34,324		$	27,271		$	16,486
Portfolio turnover rate (%)*			62			90		104			121			113			118

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	13.50		$	11.25	$	15.87		$	12.95	$	7.51	$	21.99
Income (loss) from investment operations:
Net investment income (loss) (a)			0.08			0.11		0.11			0.04		0.03		0.15
Net realized and unrealized gain (loss) on investments			(0.90	)		2.25		(2.85	)		3.03		5.54		(13.69	)
Total from investment operations			(0.82	)		2.36		(2.74	)		3.07		5.57		(13.54	)
Less distributions from:
Net investment income			—			0.11		0.05			0.15		0.13		—
Net realized gain			—			—		1.83			—		—		0.94
Total distributions			—			0.11		1.88			0.15		0.13		0.94
Net asset value, end of year		$	12.68		$	13.50	$	11.25		$	15.87	$	12.95	$	7.51
Total Return (%)*			(6.07	)		21.01		(17.00	)		23.77		74.18		(61.60	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.40			1.41		1.38			1.36		1.41		1.41
Expenses, before waivers and reimbursements			1.40			1.41		1.38			1.36		1.41		1.39
Net investment income (loss), net of waivers and reimbursements			1.12			0.86		0.77			0.26		0.31		0.91
Net investment income (loss), before waivers and reimbursements			1.12			0.86		0.77			0.26		0.31		0.93
Net assets at end of year (in thousands)		$	143,033		$	144,942	$	124,739		$	194,763	$	180,329	$	69,363
Portfolio turnover rate (%)*			62			90		104			121		113		118

(a)	Excludes $0.00, $0.00, $0.01, $0.11, $0.15 and $(0.09) of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

169

Financial Highlights

Emerging Markets Growth Fund

	Institutional Class Shares
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2013			2012		2011			2010		2009		2008
Net asset value, beginning of year		$	13.59		$	11.32	$	15.96	$		13.03	$	7.56	$	22.07
Income (loss) from investment operations:
Net investment income (loss) (a)			0.09			0.14		0.14			0.06		0.06		0.17
Net realized and unrealized gain (loss) on investments			(0.91	)		2.27		(2.87	)		3.05		5.55		(13.74	)
Total from investment operations			(0.82	)		2.41		(2.73	)		3.11		5.61		(13.57	)
Less distributions from:
Net investment income			—			0.14		0.08			0.18		0.14		—
Net realized gain			—			—		1.83			—		—		0.94
Total distributions			—			0.14		1.91			0.18		0.14		0.94
Net asset value, end of year		$	12.77		$	13.59	$	11.32	$		15.96	$	13.03	$	7.56
Total Return (%)*			(6.03	)		21.28		(16.82	)		23.91		74.33		(61.51	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.19			1.20		1.19			1.17		1.22		1.22
Expenses, before waivers and reimbursements			1.19			1.20		1.19			1.17		1.22		1.20
Net investment income (loss), net of waivers and reimbursements			1.35			1.12		0.93			0.43		0.54		1.08
Net investment income (loss), before waivers and reimbursements			1.35			1.12		0.93			0.43		0.54		1.10
Net assets at end of year (in thousands)		$	733,936		$	802,571	$	675,633		$	1,021,456	$	830,660	$	299,739
Portfolio turnover rate (%)*			62			90		104			121		113		118

(a)	Excludes $0.00, $0.00, $0.01, $0.11, $0.15 and $(0.09) of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

170

Semi-Annual Report

June 30, 2013

Financial Highlights

Emerging Markets Leaders Fund

	Class N
	(unaudited) Period Ended June 30,				Periods Ended December 31,
		2013			2012			2011			2010(a)
Net asset value, beginning of year		$	9.20		$	7.68		$	10.34		$	8.80
Income (loss) from investment operations:
Net investment income (loss) (c)			0.04			0.02			0.04			(0.02	)
Net realized and unrealized gain (loss) on investments			(0.74	)		1.54			(2.08	)		1.64
Total from investment operations			(0.70	)		1.56			(2.04	)		1.62
Less distributions from:
Net investment income			—			0.04			—			0.02
Net realized gain			—			—			0.62			0.06
Total distributions			—			0.04			0.62			0.08
Net asset value, end of year		$	8.50		$	9.20		$	7.68		$	10.34
Total Return (%)*			(7.50	)		20.37			(19.55	)		18.43
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.65			1.65			1.65			1.65
Expenses, before waivers and reimbursements			2.01			2.10			1.83			1.71
Net investment income (loss), net of waivers and reimbursements			0.83			0.26			0.44			(0.38	)
Net investment income (loss), before waivers and reimbursements			0.47			(0.19	)		0.26			(0.44	)
Net assets at end of year (in thousands)		$	199		$	249		$	46		$	53
Portfolio turnover rate (%)*			66			94			142			176

	Class I
	(unaudited) Period Ended June 30,				Periods Ended December 31,
		2013			2012		2011			2010		2009		2008(b)
Net asset value, beginning of year		$	9.18		$	7.66	$	10.35		$	8.43	$	4.79	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (c)			0.05			0.07		0.06			0.02		0.02		0.04
Net realized and unrealized gain (loss) on investments			(0.73	)		1.51		(2.08	)		1.98		3.73		(5.25	)
Total from investment operations			(0.68	)		1.58		(2.02	)		2.00		3.75		(5.21	)
Less distributions from:
Net investment income			—			0.06		0.05			0.02		0.11		0.00	^
Net realized gain			—			—		0.62			0.06		—		—
Return of capital			—			—		0.00	^		—		—		—
Total distributions			—			0.06		0.67			0.08		0.11		0.00	^
Net asset value, end of year		$	8.50		$	9.18	$	7.66		$	10.35	$	8.43	$	4.79
Total Return (%)*			(7.41	)		20.64		(19.34	)		23.70		78.38		(52.09	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.40			1.40		1.40			1.40		1.40		1.40
Expenses, before waivers and reimbursements			1.60			1.75		1.58			1.52		1.54		1.56
Net investment income (loss), net of waivers and reimbursements			1.13			0.83		0.69			0.25		0.37		0.70
Net investment income (loss), before waivers and reimbursements			0.93			0.48		0.51			0.13		0.23		0.54
Net assets at end of year (in thousands)		$	31,061		$	25,628	$	21,610		$	16,332	$	8,823	$	2,914
Portfolio turnover rate (%)*			66			94		142			176		176		151

(a)	For the period from May 3, 2010 (Commencement of Operations) to Decmeber 31, 2010.
(b)	For the period from March 26, 2008 (Commencement of Operations) to December 31, 2008.
(c)	Excludes $0.00, $0.00, $0.00, $0.96, $1.29, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

171

Financial Highlights

Emerging Markets Leaders Fund

	Institutional Class Shares
	(unaudited) Period Ended June 30,				Periods Ended December 31,
		2013			2012		2011			2010		2009		2008(a)
Net asset value, beginning of year		$	9.18		$	7.65	$	10.35		$	8.43	$	4.78	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)			0.06			0.08		0.09			0.04		0.04		0.04
Net realized and unrealized gain (loss) on investments			(0.73	)		1.52		(2.10	)		1.97		3.73		(5.26	)
Total from investment operations			(0.67	)		1.60		(2.01	)		2.01		3.77		(5.22	)
Less distributions from:
Net investment income			—			0.07		0.06			0.03		0.12		0.00	^
Net realized gain			—			—		0.63			0.06		—		—
Return of capital			—			—		0.00	^		—		—		—
Total distributions			—			0.07		0.69			0.09		0.12		0.00	^
Net asset value, end of year		$	8.51		$	9.18	$	7.65		$	10.35	$	8.43	$	4.78
Total Return (%)*			(7.41	)		20.97		(19.30	)		23.84		78.93		(52.11	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25			1.25		1.25			1.26		1.25		1.25
Expenses, before waivers and reimbursements			1.45			1.59		1.41			1.35		1.36		1.41
Net investment income (loss), net of waivers and reimbursements			1.24			0.90		0.90			0.50		0.58		0.70
Net investment income (loss), before waivers and reimbursements			1.04			0.56		0.74			0.41		0.47		0.54
Net assets at end of year (in thousands)		$	29,910		$	43,102	$	26,166		$	78,516	$	106,313	$	43,762
Portfolio turnover rate (%)*			66			94		142			176		176		151

(a)	For the period from March 26, 2008 (Commencement of Operations) to Decmeber 31, 2008.
(b)	Excludes $0.00, $0.00, $0.00, $0.96, $1.29, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, 2011, 2010, 2009, and 2008 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

172

Semi-Annual Report

June 30, 2013

Financial Highlights

Emerging Markets Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,			Periods Ended December 31,
		2013		2012			2011(a)
Net asset value, beginning of year		$	12.99	$	9.73		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(b)			0.06		0.06			0.00	^
Net realized and unrealized gain (loss) on investments			0.79		3.27			(0.27	)
Total from investment operations			0.85		3.33			(0.27	)
Less distributions from:
Net investment income			—		0.07			—
Net realized gain			—		—			—
Total distributions			—		0.07			—
Net asset value, end of year		$	13.84	$	12.99		$	9.73
Total Return (%)*			6.54		34.23			(2.70	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.65		1.65			1.65
Expenses, before waivers and reimbursements			2.07		4.76			9.53
Net investment income (loss), net of waivers and reimbursements			0.76		0.56			0.08
Net investment income (loss), before waivers and reimbursements			0.34		(2.54	)		(7.80	)
Net assets at end of year (in thousands)		$	10,194	$	3,016		$	1,012
Portfolio turnover rate (%)*			69		78			17

	Class I
	(unaudited) Period Ended June 30,			Periods Ended December 31,
		2013		2012			2011(a)
Net asset value, beginning of year		$	12.99	$	9.73		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(b)			0.07		0.08			0.01
Net realized and unrealized gain (loss) on investments			0.79		3.29			(0.28	)
Total from investment operations			0.86		3.37			(0.27	)
Less distributions from:
Net investment income			—		0.11			—
Net realized gain			—		—			—
Total distributions			—		0.11			—
Net asset value, end of year		$	13.85	$	12.99		$	9.73
Total Return (%)*			6.62		34.62			(2.70	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.40		1.40			1.40
Expenses, before waivers and reimbursements			1.80		4.40			9.28
Net investment income (loss), net of waivers and reimbursements			1.01		0.70			0.33
Net investment income (loss), before waivers and reimbursements			0.61		(2.30	)		(7.55	)
Net assets at end of year (in thousands)		$	32,301	$	8,763		$	2,260
Portfolio turnover rate (%)*			69		78			17

(a)	For the period from October 24, 2011 (Comencement of Operations) to December 31, 2011.
(b)	Excludes $0.00, $0.05 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013, 2012, and 2011 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

173

Financial Highlights

Emerging Markets Small Cap Growth Fund

	Institutional Class Shares
	(unaudited) Period Ended June 30,			Period Ended December 31,
			2013		2012(a)
Net asset value, beginning of year		$	13.00		$	12.79
Income (loss) from investment operations:
Net investment income (loss)(b)			0.09			0.00	^
Net realized and unrealized gain (loss) on investments			0.77			0.21
Total from investment operations			0.86			0.21
Less distributions from:
Net investment income			—			—
Net realized gain			—			—
Total distributions			—			—
Net asset value, end of year		$	13.86		$	13.00
Total Return (%)*			6.62			1.64
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25			1.25
Expenses, before waivers and reimbursements			1.64			2.32
Net investment income (loss), net of waivers and reimbursements			1.21			(0.87	)
Net investment income (loss), before waivers and reimbursements			0.82			(1.93	)
Net assets at end of year (in thousands)		$	39,484		$	15,242
Portfolio turnover rate (%)*			69			78

(a)	For the period from December 20, 2012 (Comencement of Operations) to December 31, 2012.
(b)	Excludes $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2013 and 2012 respectively.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

174

Semi-Annual Report

June 30, 2013

Financial Highlights

Large Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012		2011(a)
Net asset value, beginning of year		$	11.54			$	9.95		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.05				0.11			0.03
Net realized and unrealized gain (loss) on investments			1.69				1.57			(0.05	)
Total from investment operations			1.74				1.68			(0.02	)
Less distributions from:
Net investment income			—				0.09			0.03
Net realized gain			—				—			0.00	^
Total distributions			—				0.09			0.03
Net asset value, end of year		$	13.28			$	11.54		$	9.95
Total Return (%)*			15.08				16.92			(0.19	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.20				1.20			1.20
Expenses, before waivers and reimbursements			4.01				4.25			7.83
Net investment income (loss), net of waivers and reimbursements			0.76				0.96			1.41
Net investment income (loss), before waivers and reimbursements			(2.05	)			(2.09	)		(5.22	)
Net assets at end of year (in thousands)		$	1,236			$	1,416		$	998
Portfolio turnover rate (%)*			67				20			5

	Class I
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012		2011(a)
Net asset value, beginning of year		$	11.55			$	9.95		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.07				0.14			0.03
Net realized and unrealized gain (loss) on investments			1.68				1.58			(0.05	)
Total from investment operations			1.75				1.72			(0.02	)
Less distributions from:
Net investment income			—				0.12			0.03
Net realized gain			—				—			0.00	^
Total distributions			—				0.12			0.03
Net asset value, end of year		$	13.30			$	11.55		$	9.95
Total Return (%)*			15.15				17.28			(0.19	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.95				0.95			0.95
Expenses, before waivers and reimbursements			3.74				4.06			7.58
Net investment income (loss), net of waivers and reimbursements			1.03				1.22			1.66
Net investment income (loss), before waivers and reimbursements			(1.76	)			(1.89	)		(4.97	)
Net assets at end of year (in thousands)		$	2,654			$	2,429		$	1,455
Portfolio turnover rate (%)*			67				20			5

(a)	For the period from October 24, 2011 (Comencement of Operations) to December 31, 2011.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

175

Financial Highlights

Mid Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012			2011		2010(a)
Net asset value, beginning of year		$	11.39			$	10.48		$	10.75		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.04				0.08			0.12			0.09
Net realized and unrealized gain (loss) on investments			1.70				1.34			(0.17	)		0.74
Total from investment operations			1.74				1.42			(0.05	)		0.83
Less distributions from:
Net investment income			—				0.08			0.09			0.06
Net realized gain			—				0.43			0.13			0.02
Total distributions			—				0.51			0.22			0.08
Net asset value, end of year		$	13.13			$	11.39		$	10.48		$	10.75
Total Return (%)*			15.28				13.54			(0.34	)		8.36
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.35				1.35			1.35			1.35
Expenses, before waivers and reimbursements			3.53				3.40			3.85			5.09
Net investment income (loss), net of waivers and reimbursements			0.64				0.70			1.15			0.92
Net investment income (loss), before waivers and reimbursements			(1.54	)			(1.35	)		(1.35	)		(2.82	)
Net assets at end of year (in thousands)		$	179			$	79		$	58		$	4
Portfolio turnover rate (%)*			24				63			69			35

	Class I
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012			2011		2010(a)
Net asset value, beginning of year		$	11.39			$	10.48		$	10.76		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.05				0.10			0.13			0.11
Net realized and unrealized gain (loss) on investments			1.71				1.35			(0.17	)		0.75
Total from investment operations			1.76				1.45			(0.04	)		0.86
Less distributions from:
Net investment income			—				0.11			0.11			0.08
Net realized gain			—				0.43			0.13			0.02
Total distributions			—				0.54			0.24			0.10
Net asset value, end of year		$	13.15			$	11.39		$	10.48		$	10.76
Total Return (%)*			15.45				13.77			(0.25	)		8.66
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10				1.10			1.10			1.10
Expenses, before waivers and reimbursements			3.24				3.13			3.60			4.92
Net investment income (loss), net of waivers and reimbursements			0.82				0.92			1.20			1.10
Net investment income (loss), before waivers and reimbursements			(1.32	)			(1.11	)		(1.30	)		(2.72	)
Net assets at end of year (in thousands)		$	3,978			$	4,058		$	4,515		$	3,389
Portfolio turnover rate (%)*			24				63			69			35

(a)	For the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

176

Semi-Annual Report

June 30, 2013

Financial Highlights

Small-Mid Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012		2011(a)
Net asset value, beginning of year		$	11.29			$	10.45		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.01				0.10			0.00	^
Net realized and unrealized gain (loss) on investments			1.88				1.15			0.45
Total from investment operations			1.89				1.25			0.45
Less distributions from:
Net investment income			—				0.09			—
Net realized gain			—				0.32			—
Total distributions			—				0.41			—
Net asset value, end of year		$	13.18			$	11.29		$	10.45
Total Return (%)*			16.74				11.95			4.50
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.40				1.40			1.40
Expenses, before waivers and reimbursements			5.09				6.34			18.68
Net investment income (loss), net of waivers and reimbursements			0.17				0.87			0.53
Net investment income (loss), before waivers and reimbursements			(3.52	)			(4.07	)		(16.75	)
Net assets at end of year (in thousands)		$	1,034			$	950		$	860
Portfolio turnover rate (%)*			35				56			1

	Class I
	(unaudited) Period Ended June 30,				Periods Ended December 31,
			2013				2012		2011(a)
Net asset value, beginning of year		$	11.29			$	10.45		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.03				0.13			0.00	^
Net realized and unrealized gain (loss) on investments			1.88				1.15			0.45
Total from investment operations			1.91				1.28			0.45
Less distributions from:
Net investment income			—				0.12			—
Net realized gain			—				0.32			—
Total distributions			—				0.44			—
Net asset value, end of year		$	13.20			$	11.29		$	10.45
Total Return (%)*			16.92				12.22			4.50
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.15				1.15			1.15
Expenses, before waivers and reimbursements			4.82				5.88			18.43
Net investment income (loss), net of waivers and reimbursements			0.42				1.12			0.79
Net investment income (loss), before waivers and reimbursements			(3.25	)			(3.61	)		(16.49	)
Net assets at end of year (in thousands)		$	1,779			$	1,442		$	1,296
Portfolio turnover rate (%)*			35				56			1

(a)	For the period from December 15, 2011 (Comencement of Operations) to December 31, 2011.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

177

Financial Highlights

Small Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2013			2012			2011			2010		2009		2008
Net asset value, beginning of year		$	13.65			$	12.26	$	13.71		$	10.49	$	8.33	$	11.31
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)			0.10		0.00	^		0.03		0.06		0.09
Net realized and unrealized gain (loss) on investments			2.41				1.43		(0.97	)		3.22		2.13		(3.02	)
Total from investment operations			2.40				1.53		(0.97	)		3.25		2.19		(2.93	)
Less distributions from:
Net investment income			—				0.08		0.02			0.03		0.03		0.05
Net realized gain			—				0.06		0.46			—		—		—
Return of capital			—				—		0.00	^		—		—		—
Total distributions			—				0.14		0.48			0.03		0.03		0.05
Net asset value, end of year		$	16.05			$	13.65	$	12.26		$	13.71	$	10.49	$	8.33
Total Return (%)*			17.58				12.49		(6.95	)		30.94		26.24		(25.85	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.47				1.43		1.38			1.33		1.29		1.29
Expenses, before waivers and reimbursements			1.56				1.60		1.60			1.57		1.78		1.82
Net investment income (loss), net of waivers and reimbursements			(0.19	)			0.78		(0.01	)		0.25		0.68		0.84
Net investment income (loss), before waivers and reimbursements			(0.28	)			0.61		(0.23	)		0.01		0.19		0.31
Net assets at end of year (in thousands)		$	41,272			$	39,084	$	40,712		$	34,285	$	7,745	$	7,061
Portfolio turnover rate (%)*			33				51		65			71		62		87

	Class I
	(unaudited) Period Ended June 30,			Years Ended December 31,
	2013			2012			2011			2010		2009		2008
Net asset value, beginning of year		$	13.88		$	12.47	$	13.93		$	10.65	$	8.45	$	11.50
Income (loss) from investment operations:
Net investment income (loss)			0.01			0.14		0.03			0.05		0.08		0.11
Net realized and unrealized gain (loss) on investments			2.46			1.45		(0.98	)		3.27		2.16		(3.08	)
Total from investment operations			2.47			1.59		(0.95	)		3.32		2.24		(2.97	)
Less distributions from:
Net investment income			—			0.12		0.03			0.04		0.04		0.08
Net realized gain			—			0.06		0.46			—		—		—
Return of capital			—			—		0.02			—		—		—
Total distributions			—			0.18		0.51			0.04		0.04		0.08
Net asset value, end of year		$	16.35		$	13.88	$	12.47		$	13.93	$	10.65	$	8.45
Total Return (%)*			17.80			12.73		(6.68	)		31.16		26.56		(25.77	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.22			1.18		1.14			1.10		1.09		1.09
Expenses, before waivers and reimbursements			1.25			1.29		1.30			1.29		1.50		1.57
Net investment income (loss), net of waivers and reimbursements			0.07			1.02		0.26			0.43		0.86		1.06
Net investment income (loss), before waivers and reimbursements			0.04			0.91		0.10			0.24		0.45		0.58
Net assets at end of year (in thousands)		$	267,595		$	196,184	$	190,686		$	130,214	$	47,114	$	29,188
Portfolio turnover rate (%)*			33			51		65			71		62		87

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

178

Semi-Annual Report

June 30, 2013

Financial Highlights

Bond Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012			2011		2010		2009		2008
Net asset value, beginning of year		$	11.28			$	10.91	$	10.70	$	10.40	$	9.82	$	10.07
Income (loss) from investment operations:
Net investment income (loss)			0.16				0.36		0.43		0.46		0.48		0.47
Net realized and unrealized gain (loss) on investments			(0.53	)			0.53		0.34		0.35		0.59		(0.31	)
Total from investment operations			(0.37	)			0.89		0.77		0.81		1.07		0.16
Less distributions from:
Net investment income			0.21				0.45		0.47		0.48		0.49		0.41
Net realized gain			—				0.07		0.09		0.03		—		—
Total distributions			0.21				0.52		0.56		0.51		0.49		0.41
Net asset value, end of year		$	10.70			$	11.28	$	10.91	$	10.70	$	10.40	$	9.82
Total Return (%)*			(3.37	)			8.33		7.41		7.86		11.11		1.64
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.65				0.65		0.65		0.65		0.65		0.65
Expenses, before waivers and reimbursements			0.79				0.81		0.76		0.70		1.40		2.47
Net investment income (loss), net of waivers and reimbursements			2.88				3.25		3.97		4.25		4.76		4.69
Net investment income (loss), before waivers and reimbursements			2.74				3.09		3.86		4.20		4.01		2.87
Net assets at end of year (in thousands)		$	21,558			$	32,867	$	8,345	$	4,479	$	3,580	$	407
Portfolio turnover rate (%)*			29				25		28		25		29		52

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012			2011		2010		2009		2008
Net asset value, beginning of year		$	11.17			$	10.80	$	10.59	$	10.31	$	9.72	$	10.04
Income (loss) from investment operations:
Net investment income (loss)			0.17				0.38		0.45		0.47		0.49		0.48
Net realized and unrealized gain (loss) on investments			(0.52	)			0.52		0.33		0.33		0.59		(0.31	)
Total from investment operations			(0.35	)			0.90		0.78		0.80		1.08		0.17
Less distributions from:
Net investment income			0.22				0.46		0.48		0.49		0.49		0.49
Net realized gain			—				0.07		0.09		0.03		—		—
Total distributions			0.22				0.53		0.57		0.52		0.49		0.49
Net asset value, end of year		$	10.60			$	11.17	$	10.80	$	10.59	$	10.31	$	9.72
Total Return (%)*			(3.26	)			8.54		7.62		7.89		11.40		1.72
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.50				0.50		0.50		0.50		0.50		0.50
Expenses, before waivers and reimbursements			0.56				0.56		0.55		0.55		0.58		0.71
Net investment income (loss), net of waivers and reimbursements			3.03				3.45		4.17		4.41		4.92		4.90
Net investment income (loss), before waivers and reimbursements			2.97				3.39		4.12		4.36		4.84		4.69
Net assets at end of year (in thousands)		$	160,098			$	172,836	$	154,224	$	147,807	$	127,538	$	63,763
Portfolio turnover rate (%)*			29				25		28		25		29		52

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

179

Financial Highlights

Bond Fund

	Institutional Class Shares
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012			2011		2010		2009		2008
Net asset value, beginning of year		$	11.16			$	10.80	$	10.58	$	10.30	$	9.72	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.17				0.40		0.45		0.48		0.51		0.50
Net realized and unrealized gain (loss) on investments			(0.51	)			0.51		0.36		0.34		0.58		(0.31	)
Total from investment operations			(0.34	)			0.91		0.81		0.82		1.09		0.19
Less distributions from:
Net investment income			0.23				0.48		0.50		0.51		0.51		0.47
Net realized gain			—				0.07		0.09		0.03		—		—
Total distributions			0.23				0.55		0.59		0.54		0.51		0.47
Net asset value, end of year		$	10.59			$	11.16	$	10.80	$	10.58	$	10.30	$	9.72
Total Return (%)*			(3.19	)			8.61		7.88		8.06		11.47		1.95
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.35				0.35		0.35		0.35		0.34		0.35
Expenses, before waivers and reimbursements			0.38				0.38		0.39		0.40		0.43		0.56
Net investment income (loss), net of waivers and reimbursements			3.18				3.60		4.24		4.54		5.07		5.04
Net investment income (loss), before waivers and reimbursements			3.15				3.57		4.20		4.49		4.98		4.83
Net assets at end of year (in thousands)		$	79,676			$	91,039	$	69,447	$	40,490	$	16,226	$	10,443
Portfolio turnover rate (%)*			29				25		28		25		29		52

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

180

Semi-Annual Report

June 30, 2013

Financial Highlights

Income Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012			2011		2010		2009		2008
Net asset value, beginning of year		$	9.55			$	9.32	$	9.22	$	9.07	$	8.69	$	9.29
Income (loss) from investment operations:
Net investment income (loss)			0.10				0.24		0.32		0.35		0.40		0.37
Net realized and unrealized gain (loss) on investments			(0.33	)			0.31		0.15		0.19		0.44		(0.59	)
Total from investment operations			(0.23	)			0.55		0.47		0.54		0.84		(0.22	)
Less distributions from:
Net investment income			0.14				0.32		0.37		0.39		0.46		0.38
Net realized gain			—				—		—		—		—		—
Total distributions			0.14				0.32		0.37		0.39		0.46		0.38
Net asset value, end of year		$	9.18			$	9.55	$	9.32	$	9.22	$	9.07	$	8.69
Total Return (%)*			(2.45	)			6.00		5.21		6.04		9.88		(2.46	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.82				0.83		0.85		0.85		0.85		0.90
Expenses, before waivers and reimbursements			0.82				0.83		0.91		0.85		0.93		0.93
Net investment income (loss), net of waivers and reimbursements			2.06				2.49		3.40		3.79		4.48		4.38
Net investment income (loss), before waivers and reimbursements			2.06				2.49		3.34		3.79		4.41		4.35
Net assets at end of year (in thousands)		$	59,339			$	68,947	$	44,802	$	35,755	$	37,567	$	47,009
Portfolio turnover rate (%)*			28				33		39		29		40		38

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012			2011		2010		2009		2008
Net asset value, beginning of year		$	9.48			$	9.25	$	9.15	$	9.00	$	8.64	$	9.30
Income (loss) from investment operations:
Net investment income (loss)			0.11				0.26		0.34		0.37		0.41		0.39
Net realized and unrealized gain (loss) on investments			(0.33	)			0.31		0.15		0.19		0.43		(0.59	)
Total from investment operations			(0.22	)			0.57		0.49		0.56		0.84		(0.20	)
Less distributions from:
Net investment income			0.15				0.34		0.39		0.41		0.48		0.46
Net realized gain			—				—		—		—		—		—
Total distributions			0.15				0.34		0.39		0.41		0.48		0.46
Net asset value, end of year		$	9.11			$	9.48	$	9.25	$	9.15	$	9.00	$	8.64
Total Return (%)*			(2.36	)			6.28		5.46		6.33		9.89		(2.26	)
Ratios to average daily net assets (%):**
Expenses			0.57				0.58		0.64		0.63		0.66		0.72
Net investment income			2.31				2.78		3.66		4.01		4.67		4.57
Net assets at end of year (in thousands)		$	72,510			$	72,830	$	67,183	$	77,522	$	80,041	$	93,426
Portfolio turnover rate (%)*			28				33		39		29		40		38

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

181

Financial Highlights

Low Duration Fund

	Class N
	(unaudited) Period Ended June, 30				Years Ended December 31,
	2013				2012			2011		2010		2009(a)
Net asset value, beginning of year		$	9.83			$	9.82	$	9.90	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.05				0.13		0.15		0.13		0.01
Net realized and unrealized gain (loss) on investments			(0.17	)			0.14		0.02		0.05		(0.07	)
Total from investment operations			(0.12	)			0.27		0.17		0.18		(0.06	)
Less distributions from:
Net investment income			0.12				0.26		0.25		0.21		0.01
Net realized gain			—				—		—		—		—
Total distributions			0.12				0.26		0.25		0.21		0.01
Net asset value, end of year		$	9.59			$	9.83	$	9.82	$	9.90	$	9.93
Total Return (%)*			(1.27	)			2.80		1.73		1.86		(0.60	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.69				0.70		0.70		0.70		0.70
Expenses, before waivers and reimbursements			0.69				0.74		0.73		0.78		0.94
Net investment income (loss), net of waivers and reimbursements			1.02				1.37		1.52		1.33		1.27
Net investment income (loss), before waivers and reimbursements			1.02				1.33		1.49		1.25		1.03
Net assets at end of year (in thousands)		$	10,127			$	11,216	$	6,260	$	6,937	$	1,861
Portfolio turnover rate (%)*			24				20		43		51		—

	Class I
	(unaudited) Period Ended June, 30				Years Ended December 31,
	2013				2012			2011		2010		2009(a)
Net asset value, beginning of year		$	9.83			$	9.82	$	9.89	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.06				0.15		0.17		0.15		0.01
Net realized and unrealized gain (loss) on investments			(0.17	)			0.14		0.02		0.04		(0.07	)
Total from investment operations			(0.11	)			0.29		0.19		0.19		(0.06	)
Less distributions from:
Net investment income			0.13				0.28		0.26		0.23		0.01
Net realized gain			—				—		—		—		—
Total distributions			0.13				0.28		0.26		0.23		0.01
Net asset value, end of year		$	9.59			$	9.83	$	9.82	$	9.89	$	9.93
Total Return (%)*			(1.20	)			2.96		1.99		1.89		(0.59	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.53				0.55		0.55		0.55		0.55
Expenses, before waivers and reimbursements			0.53				0.57		0.58		0.63		0.79
Net investment income (loss), net of waivers and reimbursements			1.18				1.52		1.67		1.46		1.39
Net investment income (loss), before waivers and reimbursements			1.18				1.50		1.64		1.38		1.15
Net assets at end of year (in thousands)		$	173,829			$	157,213	$	82,828	$	88,568	$	79,773
Portfolio turnover rate (%)*			24				20		43		51		—

(a)	For the period from December 1, 2009 (Commencement of Operations) to December 31, 2009.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

182

Semi-Annual Report

June 30, 2013

Financial Highlights

Low Duration Fund

	Institutional Class Shares
	(unaudited) Period Ended June, 30				Years Ended December 31,
	2013				2012			2011		2010		2009(a)
Net asset value, beginning of year		$	9.83			$	9.83	$	9.90	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.06				0.17		0.18		0.16		0.01
Net realized and unrealized gain (loss) on investments			(0.15	)			0.12		0.03		0.05		(0.07	)
Total from investment operations			(0.09	)			0.29		0.21		0.21		(0.06	)
Less distributions from:
Net investment income			0.14				0.29		0.28		0.24		0.01
Net realized gain			—				—		—		—		—
Total distributions			0.14				0.29		0.28		0.24		0.01
Net asset value, end of year		$	9.60			$	9.83	$	9.83	$	9.90	$	9.93
Total Return (%)*			(1.01	)			3.01		2.14		2.15		(0.58	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.38				0.40		0.40		0.40		0.40
Expenses, before waivers and reimbursements			0.38				0.41		0.42		0.48		0.64
Net investment income (loss), net of waivers and reimbursements			1.33				1.68		1.81		1.61		1.54
Net investment income (loss), before waivers and reimbursements			1.33				1.67		1.79		1.53		1.30
Net assets at end of year (in thousands)		$	107,359			$	118,401	$	68,059	$	47,965	$	13,500
Portfolio turnover rate (%)*			24				20		43		51		—

(a)	For the period December 1, 2009 (Commencement of Operations) to December 31, 2009.
*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2013

William Blair Funds

183

Financial Highlights

Ready Reserves Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
	2013				2012				2011			2010			2009			2008
Net asset value, beginning of year		$	1.00			$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income (loss) from investment operations:
Net investment income (loss)			0.00				0.00	^		0.00	^		0.00	^		0.00	^		0.02
Net realized and unrealized gain (loss) on investments			—				—			—			—			—			—
Total from investment operations			0.00				0.00	^		0.00	^		0.00	^		0.00	^		0.02
Less distributions from:
Net investment income			0.00	^			0.00	^		0.00	^		0.00	^		0.00	^		0.02
Net realized gain			—				—			—			—			—			—
Total distributions			0.00	^			0.00	^		0.00	^		0.00	^		0.00	^		0.02
Net asset value, end of year		$	1.00			$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Return (%)*			0.00				0.01			0.01			0.01			0.10			2.20
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.11				0.14			0.14			0.24			0.46			0.60
Expenses, before waivers and reimbursements			0.62				0.62			0.62			0.61			0.66			0.60
Net investment income (loss), net of waivers and reimbursements			0.01				0.01			0.01			0.01			0.11			2.12
Net investment income (loss), before waivers and reimbursements			(0.50	)			(0.47	)		(0.47	)		(0.36	)		(0.09	)		2.12
Net assets at end of year (in thousands)		$	1,227,886			$	1,515,330		$	1,271,746		$	1,216,543		$	1,352,901		$	1,841,189

*	Rates not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

184

Semi-Annual Report

June 30, 2013

Trustees and Officers (Unaudited). The trustees and officers of the William Blair Funds, their year of birth, their principal occupations during the last five years, their affiliations, if any, with William Blair & Company, L.L.C., and other significant affiliations are set forth below. The address of each trustee and officer is 222 West Adams Street, Chicago, Illinois 60606.

Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer

Interested Trustees
Michelle R. Seitz, 1965*	Chairman of the Board of Trustees and President	Trustee since 2002; Chairman since 2010 Since 2007	Partner, William Blair & Company, L.L.C.; Limited Partner, WBC Holdings, L.P. (since 2008); Member, WBC GP, L.L.P. (since 2008); Director, William Blair International, Ltd. (U.K.) (since 2012)	26	Chairman, William Blair SICAV; Director, William Blair CLS Ltd.; Director, William Blair MAS Ltd.; Financial Accounting Foundation (FAF)

Richard W. Smirl, 1967*	Trustee and Senior Vice President	Trustee since 2010 and Senior Vice President Since 2008	Partner, William Blair & Company, L.L.C.; Limited Partner, WBC Holdings, L.P. (since 2008); Director, William Blair International, Ltd. (U.K.) (since 2012)	26	Director, William Blair SICAV; Director, William Blair CLS Ltd.; Director, William Blair MAS Ltd.

Non-Interested Trustees
Vann A. Avedisian, 1964	Trustee	Since 2012	Principal, Highgate Holdings (hotel investments) since 2009; formerly, co-founder and Managing Director, Oxford Capital Partners, Inc. from 1994 to 2006	26	Potbelly Sandwich Works, LLC

Kathleen T. Barr, 1955	Trustee	Since 2013	President, Productive Capital Management, Inc. (registered investment adviser to public entities) since 2010; Owner, KT Barr Consulting, LLC (mutual fund and investment management consulting) since 2010; formerly, Chief Administrative Officer, Senior Vice President and Senior Managing Director of Allegiant Asset Management Company (merged with PNC Capital Advisors, LLC in 2009) from 2004 to 2010; formerly, Chief Administrative Officer, Chief Compliance Officer and Senior Vice President of PNC Funds and PNC Advantage Funds (f/k/a Allegiant Funds) from 2003 to 2010	26	AmericaFirst Quantitative Funds (4 portfolios)

Phillip O. Peterson, 1944	Trustee	Since 2007	Retired; formerly, President, Strong Mutual Funds, 2004 to 2005; formerly, Partner, KPMG LLP	26	The Hartford Group of Mutual Funds (88 portfolios); Symetra Mutual Funds Trust (variable annuity funds) (3 portfolios)

Donald J. Reaves, 1946	Trustee	Since 2004	Chancellor, Winston-Salem State University since 2007; formerly, Vice President for Administration and Chief Financial Officer, University of Chicago 2002 to 2007	26	American Student Assistance Corp., guarantor of student loans; Amica Mutual Insurance Company

June 30, 2013

William Blair Funds

185

Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer

Donald L. Seeley, 1944	Trustee	Since 2003	Retired; formerly, Director, Applied Investment Management Program, University of Arizona Department of Finance, prior thereto, Vice Chairman and Chief Financial Officer, True North Communications, Inc., (marketing communications and advertising firm)	26	Center for Furniture Craftsmanship (not-for-profit)

Thomas J. Skelly, 1951	Trustee	Since 2007	Advisory Board Member for various U.S. Companies; Director and Investment Committee Chairman of the US Accenture Foundation, Inc.; prior to 2005, Managing Partner of various divisions at Accenture	26	Mutual Trust Financial Group, provider of insurance and investment products; First MetLife Investors Insurance Company, NY Chartered Company for Metropolitan Life Insurance

Officers

Michael P. Balkin, 1959	Senior Vice President	Since 2009	Partner, William Blair & Company, L.L.C.		N/A

	Vice President	2008-2009	Associate, William Blair & Company, L.L.C.; former Partner, Magnetar Capital (2005-2009)

Karl W. Brewer, 1966	Senior Vice President	Since 2000	Partner, William Blair & Company, L.L.C.		N/A

Andrew G. Flynn, 1961	Senior Vice President	Since 2013	Partner, William Blair & Company, L.L.C. (since 2009); prior thereto, Associate, William Blair & Company, L.L.C. (2006-2009)		N/A

David C. Fording, 1967	Senior Vice President	Since 2009	Partner, William Blair & Company, L.L.C.		N/A

	Vice President	2006-2009	Associate, William Blair & Company, L.L.C.

James S. Golan, 1961	Senior Vice President	Since 2005	Partner, William Blair & Company, L.L.C.		N/A

W. George Greig, 1952	Senior Vice President	Since 1996	Partner, William Blair & Company, L.L.C.		N/A

Michael A. Jancosek, 1959	Senior Vice President	Since 2004	Partner, William Blair & Company, L.L.C.		N/A

John F. Jostrand, 1954	Senior Vice President	Since 1999	Partner, William Blair & Company, L.L.C.		N/A

Chad M. Kilmer, 1975	Senior Vice President	Since 2011	Partner, William Blair & Company, L.L.C.		N/A

	Vice President	2006-2011	Associate, William Blair & Company, L.L.C.

Robert C. Lanphier, IV, 1956	Senior Vice President	Since 2003	Partner, William Blair & Company, L.L.C.		Chairman, AG. Med, Inc.

186

Semi-Annual Report

June 30, 2013

Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of9 Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Other Directorships Held by Trustee/Officer

Mark T. Leslie, 1967	Senior Vice President	Since 2008	Partner, William Blair & Company, L.L.C.	N/A

	Vice President	2005-2008	Associate, William Blair & Company, L.L.C.

Matthew A. Litfin, 1972	Senior Vice President	Since 2008	Partner, William Blair & Company, L.L.C.	N/A

Kenneth J. McAtamney 1966	Senior Vice President	Since 2008	Partner, William Blair & Company, L.L.C. (since 2008); prior thereto, Associate, William Blair & Company, L.L.C., (2005-2008)	N/A

Todd M. McClone, 1968	Senior Vice President	Since 2006	Partner, William Blair & Company, L.L.C.	N/A

David Merjan, 1960	Senior Vice President	Since 2008	Partner, William Blair & Company, L.L.C.	N/A

David S. Mitchell, 1960	Senior Vice President	Since 2004	Partner, William Blair & Company, L.L.C.	N/A

David P. Ricci, 1958	Senior Vice President	Since 2006	Partner, William Blair & Company, L.L.C.	N/A

Brian D. Singer, 1960	Senior Vice President	Since 2012	Partner, William Blair & Company, L.L.C.	N/A

	Vice President	2011-2012	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Managing Partner, Singer Partners, LLC (2009-2011); prior thereto, UBS Global Asset Management (Americas) Inc. (2003-2007)

Paul J. Sularz, 1967	Senior Vice President	Since 2012	Partner, William Blair & Company, L.L.C.	N/A

	Vice President	2009-2012	Associate, William Blair & Company, L.L.C., Vice President, J.P. Morgan Securities, Inc.

Jeffrey A. Urbina, 1955	Senior Vice President	Since 1998	Partner, William Blair & Company, L.L.C.	N/A

Christopher T. Vincent, 1956	Senior Vice President	Since 2004	Partner, William Blair & Company, L.L.C.	N/A

Kathleen M. Lynch, 1971	Vice President	Since 2010	Associate, William Blair & Company, L.L.C.	N/A

Jason Moede, 1971	Vice President	Since 2013	Associate, William Blair & Company L.L.C. (since 2011); prior thereto, TradeLink, LLC (2008-2011)	N/A

David F. Hone, 1967	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Portfolio Manager Large Cap Value, Deutsche Asset Management (2002-2010)	N/A

June 30, 2013

William Blair Funds

187

Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Other Directorships Held by Trustee/Officer

John Abunassar, 1967	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Principal, Guidance Capital LLC (2009- 2011); prior thereto, President and CEO of Allegiant Asset Management (2004-2009)	N/A

Peter Carl, 1967	Vice President	Since 2011	Associate, William Blair & Company L.L.C. (since 2011); prior thereto, Portfolio Manager, Guidance Capital LLC (2006-2011)	N/A

D. Trowbridge Elliman III, 1957	Vice President	Since 2011	Associate, William Blair & Company L.L.C. (since 2011); prior thereto, Principal, Guidance Capital LLC (2001-2011)	N/A

Christopher Walvoord, 1966	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Principal, Guidance Capital LLC (2002-2011)	N/A

Brian Ziv, 1957	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Principal, Guidance Capital LLC (2001- 2011)	N/A

Edwin Denson, 1967	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Managing Partner, Singer Partners, LLC (2009-2011); prior thereto, UBS Global Asset Management (Americas) Inc. (2001-2009)	N/A

Thomas Clarke, 1968	Vice President	Since 2011	Associate, William Blair & Company, L.L.C. (since 2011); prior thereto, Managing Partner, Singer Partners, LLC (2009- 2011); prior thereto, UBS Global Asset Management (Americas) Inc. (2000-2009)	N/A

Walter R. Randall, Jr., 1960	Chief Compliance Officer and Assistant Secretary	Since 2009	Associate, William Blair & Company, L.L.C. (since 2008); prior thereto, Associate Counsel and Chief Compliance Officer, Calamos Investments (2006- 2008)	N/A

Colette M. Garavalia, 1961	Treasurer	Since 2009	Associate, William Blair & Company, L.L.C.	N/A

	Secretary	2000-2009	Associate, William Blair & Company, L.L.C.	N/A

188

Semi-Annual Report

June 30, 2013

Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Other Directorships Held by Trustee/Officer

Andrew T. Pfau, 1970	Secretary	Since 2009	Associate, William Blair & Company, L.L.C. (since 2008); prior thereto, Associate, Bell, Boyd & Lloyd, LLP (2006- 2008)	N/A

John M. Raczek, 1970	Assistant Treasurer	Since 2010	Associate, William Blair & Company, L.L.C. (since 2009); prior thereto, Manager, Calamos Investments (2003-2009)	N/A

*	Ms. Seitz and Mr. Smirl are interested persons of the Trust because they are partners of William Blair & Company, L.L.C., the Fund’s investment advisor and principal underwriter.
(1)	Each Trustee serves until the election and qualification of a successor, or until death, resignation or retirement or removal as provided in the Fund’s Declaration of Trust. Retirement for non-interested Trustees occurs no later than at the conclusion of the first regularly scheduled Board meeting of the Fund’s fiscal year that occurs after the earlier of (a) the non-interested Trustee’s 72nd birthday or (b) the 15th anniversary of the date that the non-interested Trustee was first elected or appointed as a member of the Board of Trustees. The Fund’s officers, except the Chief Compliance Officer, are elected annually by the Trustees. The Fund’s Chief Compliance Officer is designated by the Board of Trustees and may only be removed by action of the Board of Trustees, including a majority of the non-interested Trustees.
(2)	In November 2008, all partners of William Blair & Company, L.L.C. also became limited partners in WBC Holdings, L.P.

The Statement of Additional Information for the William Blair Funds includes additional information about the trustees and is available without charge by calling 1-800-635-2886 (in Massachusetts 1-800-635-2840) or by writing the Fund.

June 30, 2013

William Blair Funds

189

Approval of the Management Agreement for the William Blair Global Small Cap Growth Fund

On February 20, 2013, the Board of Trustees (the “Board”) of William Blair Funds (the “Trust”), including the Trustees who are not interested persons of the Trust as defined by the Investment Company Act of 1940, as amended (the “Independent Trustees”), approved the Management Agreement between the Trust, on behalf of the William Blair Global Small Cap Growth Fund (the “Fund”), and William Blair & Company, L.L.C. (the “Advisor”). On February 20, 2013, the Board met to consider the approval of the Management Agreement. On February 19, 2013, the Independent Trustees also met independently of Trust management and the interested Trustees of the Trust to consider the approval of the Management Agreement. The Independent Trustees reviewed materials provided by the Advisor for the approval of the Management Agreement and were assisted by independent legal counsel in making their determination. The Board considered the following factors in making its determination, but did not identify any single factor or group of factors as all important or controlling and considered all factors together.

Nature, Quality and Extent of Services. In evaluating the nature, quality and extent of services expected to be provided by the Advisor to the Fund, the Board noted that the Advisor is a quality firm with a reputation for integrity and honesty that employs high quality people. The Board considered biographical information about the Fund’s portfolio managers and senior advisors, financial information regarding the Advisor, the compliance regime created by the Advisor and the proposed financial support of the Fund. The Board considered the proposed portfolio management team members’ experience in managing other series of the Trust. The Board also considered the Advisor’s experience in managing new funds. Based upon all relevant factors, the Board concluded that the nature, quality and extent of the services to be provided by the Advisor to the Fund were expected to be satisfactory.

Fees and Expenses. The Board reviewed the proposed advisory fee for the Fund and reviewed information comparing the advisory fee to a peer group of funds for Class N and Class I shares and a peer group of institutional funds for Institutional Class shares provided by Lipper Inc. The Lipper peer groups consisted of other no-load retail global small-/mid-cap funds. In considering the information, the Board noted that the proposed advisory fee for the Fund was below the median contractual management fee and above the actual management fees of the Lipper peer group for Class N and Class I and at the median of the Lipper peer group for Institutional Class shares. The Board also considered that the Advisor had proposed to limit total operating expenses, including waiving advisory fees, if necessary, for each share class of the Fund until April 30, 2014. On the basis of the information provided, the Board concluded that the proposed advisory fee was reasonable in light of the nature, quality and extent of services expected to be provided by the Advisor.

Profitability. With respect to the estimated profitability of the Management Agreement to the Advisor, the Board considered the proposed advisory fee, that the Fund was newly organized and had no assets and the Advisor’s agreement to limit total expenses until April 30, 2014. The Board concluded that the expected profits to be realized by the Advisor were not expected to be unreasonable.

Economies of Scale. The Board considered the extent to which economies of scale would be realized as the Fund grows and whether fee levels reflect these economies of scale. In considering whether fee levels reflect economies of scale for the benefit of Fund investors, the Board reviewed the Fund’s advisory fee compared to peer funds and the Fund’s estimated expense ratios giving effect to the Advisor’s agreement to limit total expenses until April 30, 2014, and concluded that the advisory fee was reasonable.

Other Benefits to the Advisor. The Board considered benefits to be derived by the Advisor from its relationship with the Fund. The Board concluded that, after taking into account these benefits, the proposed advisory fee was reasonable.

Conclusion. Based upon all of the information considered and the conclusions reached, the Board determined that the terms of the Management Agreement are fair and reasonable and that the approval of the Management Agreement is in the best interests of the Fund.

190

Semi-Annual Report

June 30, 2013

Renewal of the Management Agreement

On April 23, 2013, the Board of Trustees (the “Board”) of the William Blair Funds (the “Trust”), including the Trustees who are not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), approved the renewal for an additional one-year term of the Trust’s Management Agreement with William Blair & Company, L.L.C. (the “Advisor”) on behalf of each of the William Blair Growth Fund, the William Blair Large Cap Growth Fund, the William Blair Mid Cap Growth Fund, the William Blair Small-Mid Cap Growth Fund, the William Blair Small Cap Growth Fund, the William Blair Large Cap Value Fund, the William Blair Mid Cap Value Fund, the William Blair Small-Mid Cap Value Fund, the William Blair Small Cap Value Fund, the William Blair Global Leaders Fund, the William Blair International Growth Fund, the William Blair Institutional International Growth Fund, the William Blair International Equity Fund, the William Blair Institutional International Equity Fund, the William Blair International Small Cap Growth Fund, the William Blair Emerging Markets Growth Fund, the William Blair Emerging Markets Leaders Fund, the William Blair Emerging Markets Small Cap Growth Fund, the William Blair Bond Fund, the William Blair Income Fund, the William Blair Low Duration Fund and the William Blair Ready Reserves Fund (each, a “Fund” and collectively, the “Funds”). In deciding to approve the renewal of the Management Agreement, the Board did not identify any single factor or group of factors as all important or controlling and considered all factors together.

The information in this summary outlines the Board’s considerations associated with its renewal of the Management Agreement. In connection with its deliberations regarding the continuation of the Management Agreement, the Board considered such information and factors as it believed to be relevant. As described below, the Board considered the nature, quality and extent of the services performed by the Advisor under the Management Agreement; comparative management fees and expense ratios as prepared by an independent provider (Lipper Inc.); the estimated profits realized by the Advisor; the extent to which the Advisor realizes economies of scale as a Fund grows; and whether any fall-out benefits are being realized by the Advisor. In addition, the Independent Trustees discussed the renewal of the Management Agreement with Fund management and in private sessions with independent legal counsel at which no representatives of the Advisor were present.

The Board, including the Independent Trustees, considered the renewal of the Management Agreement pursuant to a process that concluded at the Board’s April 23, 2013 meeting. In preparation for the review process, the Independent Trustees met with independent legal counsel and discussed the type and nature of information to be requested and independent legal counsel sent a formal request for information to Trust management. The Advisor provided extensive information in response to the request. After reviewing the information received, the Independent Trustees requested supplemental information, which the Advisor provided. The Independent Trustees considered: (i) the nature, quality and extent of services provided by the Advisor; (ii) information comparing the performance of each Fund to one or more relevant securities indexes; (iii) information comparing advisory fees of each Fund to fees charged by the Advisor to other funds and client accounts with similar investment strategies; (iv) the estimated allocated direct or indirect costs of services provided and estimated profits realized by the Advisor for both the Trust as a whole and each Fund individually; and (v) information describing other benefits to the Advisor resulting from its relationship with the Funds. The Independent Trustees reviewed comparative performance for a performance peer universe of funds and comparative advisory fees and expense ratios for an expense peer group and an expense peer universe of funds provided by Lipper for each Fund. The Independent Trustees noted that they receive information from the Advisor regarding the Funds throughout the year in connection with regular Board meetings, including presentations from portfolio managers. The Independent Trustees received a memorandum from independent legal counsel advising them of their duties and responsibilities in connection with the review of the Management Agreement. Finally, the Advisor made an in-person presentation to the Independent Trustees regarding the contract review information, including addressing the supplemental information requests, and answered questions from the Independent Trustees.

On April 9, 22 and 23, 2013, the Independent Trustees met independently of Trust management and of the interested Trustees to review and discuss with independent legal counsel the information provided by the Advisor, Lipper and independent legal counsel. The Independent Trustees noted that in evaluating the Management Agreement, they were taking into account their accumulated experience as Board members in working with the Advisor on matters relating to the Funds. Based on their review, the Independent Trustees concluded that it was in the best interest of each Fund to renew the Management Agreement for each Fund and recommended to the Board the renewal of the Management Agreement. The Board considered the recommendation of the Independent Trustees along with the other factors that the Board deemed relevant.

Nature, Quality and Extent of Services. In evaluating the nature, quality and extent of the services provided by the Advisor to the Funds, the Board noted that the Advisor is a quality firm with a reputation for integrity and honesty that employs high quality people and has a long association with the Funds, in each case other than the Growth Fund, since the inception of the Funds. The Trustees believe that a long-term relationship with a capable, conscientious advisor is in the best interests of shareholders and that shareholders have invested in the Funds knowing that the Advisor managed the Funds and knowing the investment

June 30, 2013

William Blair Funds

191

advisory fee. The Board considered biographical information about the Trust’s officers and the Funds’ portfolio managers, including information on the portfolio managers’ investments in the Funds. The Board also considered the administrative services performed by the Advisor, financial information regarding the Advisor, the Advisor’s execution quality and use of soft dollars, the Advisor’s risk management activities and its compliance program, and the Advisor’s expense limitations in place for the Funds. The Board was also provided with information pertaining to the Advisor’s organizational structure. The Board noted that the Advisor pays the compensation of all of the officers and the interested Trustees of the Trust.

The Board reviewed information on the annualized total returns of each Fund for the one, three, five and ten year periods ended December 31, 2012, as applicable, along with annualized total return information for a performance peer universe of funds provided by Lipper and one or more benchmark securities indexes. The Lipper performance peer universe for each Fund included all funds with a similar investment style as classified by Lipper regardless of asset size or primary channel of distribution. With respect to the comparative performance information, the Board considered the Advisor’s statement that it is committed to managing each Fund consistently with the Fund’s stated investment strategies through all market environments and that, as a result, the Funds’ relative performance compared to the Lipper performance peer universe and relevant securities indexes from year to year will be affected by whether the market environment favors or disfavors certain of the Advisor’s investment strategies, but that the Advisor seeks to provide superior performance over the long term. The Trustees reviewed each Fund’s ranking in its Lipper performance peer universe during the applicable periods, and based on that review, requested and discussed with the Advisor additional information regarding the performance of the Small Cap Growth Fund, the International Equity Fund and the Low Duration Fund. With respect to the Small Cap Growth Fund, the Board noted the Fund’s underperformance relative to its Lipper performance peer universe over the three and five year periods and discussed the Fund’s performance with the Advisor. The Board considered the Fund’s short-term performance, noting that the Fund’s total return over the one year period ended December 31, 2012 was in the top decile of its Lipper performance peer universe. With respect to the International Equity Fund, the Board considered the Advisor’s view that the Fund’s lower allocations to emerging markets and small cap securities relative to many of its peer funds had contributed to relative underperformance and that the Fund invested in high quality growth companies. With respect to the Low Duration Fund, the Board considered information presented by the Advisor comparing the Fund’s performance to the performance of a peer group of funds provided by Morningstar, Inc. that the Advisor believed to be more representative of the Fund’s investment style and portfolio characteristics, including the Fund’s average duration. The Board noted that the Fund’s performance was in the top quartile of the Morningstar peer group over the one and three year periods ended December 31, 2012. The Board considered the Advisor’s statement that the Fund’s lower average duration as compared to the funds in its Lipper performance peer universe negatively impacted its comparative performance versus the Lipper performance peer universe. Based upon all relevant factors, the Board concluded that the nature, quality and extent of the services provided by the Advisor to each Fund were satisfactory.

Fees and Expenses. Class N and Class I shares. The Board reviewed each Fund’s advisory fee and expense ratios for Class N and Class I shares and reviewed information comparing the advisory fee and expense ratios to those of an expense peer group and an expense peer universe of funds provided by Lipper for Class N and Class I shares of each Fund. The Lipper expense peer group for Class N and Class I shares of each Fund (“Class N and Class I Lipper Expense Group”) consisted of a group of retail no-load funds with a similar investment style as classified by Lipper and asset size as the Fund. The Lipper expense peer universe for Class N and Class I shares of each Fund consisted of the Fund’s Class N and Class I Lipper Expense Group and all other retail no-load funds (excluding outliers) with a similar investment style as classified by Lipper as the Fund. In considering the Lipper information, the Board noted that the contractual advisory fees for the Growth Fund, the Large Cap Growth Fund, the Large Cap Value Fund, the Mid Cap Value Fund, the Global Leaders Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Bond Fund, the Income Fund, the Low Duration Fund and the Ready Reserves Fund were below the average contractual advisory fee of their Class N and Class I Lipper Expense Group. The Board also noted that the contractual advisory fees for the Mid Cap Growth Fund, the Small-Mid Cap Growth Fund, the Small Cap Growth Fund, the Small-Mid Cap Value Fund, the Small Cap Value Fund, the International Growth Fund, the International Equity Fund, the Emerging Markets Leaders Fund and the Emerging Markets Small Cap Growth Fund were above the average contractual advisory fee of their Class N and Class I Lipper Expense Group.

Institutional shares. The Board reviewed each Fund’s advisory fee and expense ratio for institutional shares and reviewed information comparing the advisory fee and expense ratio to those of an expense peer group and an expense peer universe of funds provided by Lipper for institutional shares of each Fund. The Lipper expense peer group for institutional shares of each Fund (“Institutional Lipper Expense Group”) consisted of a group of institutional funds with a similar investment style as classified by Lipper and asset size as the Fund. The Lipper expense peer universe for institutional shares of each Fund consisted of the Fund’s Institutional Lipper Expense Group and all other institutional funds (excluding outliers) with a similar investment style as classified by Lipper as the Fund. In considering the Lipper information, the Board noted that the contractual advisory fees for the Emerging Markets Growth Fund, the Emerging Markets Small Cap Growth Fund, the Bond Fund and the Low Duration Fund were below the average contractual advisory fee of their Institutional Lipper Expense Group. The Board also

192

Semi-Annual Report

June 30, 2013

noted that the contractual advisory fees for the Global Leaders Fund, the Institutional International Growth Fund, the Institutional International Equity Fund, the International Small Cap Growth Fund and the Emerging Markets Leaders Fund were above the average contractual advisory fee of their Institutional Lipper Expense Group.

The Board noted the contractual expense limitations in place for all of the Funds, except the Growth Fund, the Institutional International Growth Fund and the Ready Reserves Fund, and considered the advisory fees waived and other expenses reimbursed by the Advisor on behalf of the Funds in 2012, noting that for the Large Cap Value Fund, the Mid Cap Value Fund, the Small-Mid Cap Value Fund and the Emerging Markets Small Cap Growth Fund the Advisor waived its entire advisory fee. The Board also considered that the Advisor had proposed to continue to contractually limit operating expenses until April 30, 2014 for the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small-Mid Cap Growth Fund, the Small Cap Growth Fund, Large Cap Value Fund, the Mid Cap Value Fund, the Small-Mid Cap Value Fund, the Small Cap Value Fund, the Global Leaders Fund, the International Growth Fund, the International Equity Fund, the Institutional International Equity Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Small Cap Growth Fund, the Bond Fund, the Income Fund and the Low Duration Fund. The Board also considered that the Advisor intended to continue to voluntarily waive or reimburse certain operating expenses of the Ready Reserves Fund to maintain a positive yield for the Fund.

For each Fund, the Board also reviewed amounts charged by the Advisor to other pooled investment vehicles, including other registered funds for which the Advisor acts as a subadvisor, and the Advisor’s fee schedule for institutional separate accounts. With respect to other pooled investment vehicles and institutional separate accounts, the Board considered the Advisor’s statement that both the mix of services provided to the Funds and the additional regulatory responsibilities associated with sponsoring registered investment companies were greater as compared to the work involved for other pooled investment vehicles and separate accounts. In addition, the Board considered the Advisor’s statement that institutional separate accounts are distributed differently, operate under different investment and regulatory structures and have different business risks as compared to the Funds.

On the basis of all the information provided, the Board concluded that each Fund’s advisory fee, coupled with applicable expense limitations, was reasonable.

Profitability. With respect to the profitability of the Management Agreement to the Advisor, the Board considered the overall fees paid under the Management Agreement, including the estimated allocated costs of the services provided and profits realized by the Advisor from its relationship with the Trust as a whole and each Fund individually. The Board concluded that the estimated profits realized by the Advisor were not unreasonable.

Economies of Scale. The Board considered the extent to which economies of scale would be realized as the Funds grow and whether fee levels reflect these economies of scale for the benefit of investors. The Board noted the Advisor’s statement that certain Fund expenses are relatively fixed and unrelated to asset size and that because the Advisor emphasizes fundamental research, the Advisor’s strategies (other than for the Large Cap Growth Fund and Large Cap Value Fund) are subject to capacity constraints which limit economies of scale. In considering whether fee levels reflect economies of scale for the benefit of Fund investors, the Board reviewed each Fund’s asset size, breakpoints for those Funds with breakpoints in the advisory fee schedule, the Fund’s total and net expense ratios and the expense limitations in place for all but two of the Funds, and concluded that in the aggregate they reasonably reflect appropriate recognition of any economies of scale.

Other Benefits to the Advisor. The Board considered benefits derived by the Advisor from its relationship with the Funds, including (i) non-advisory fee revenue from the Funds in the form of shareholder administration fees, service fees and/or distribution fees and the payment of some or all of those revenues to affiliates or third parties, (ii) soft dollars, which pertain primarily to the Funds investing in equity securities, and (iii) favorable media coverage. The Board concluded that, taking into account these benefits, each Fund’s advisory fee was reasonable.

Conclusion. Based upon all of the information considered and the conclusions reached, the Board determined that the terms of the Management Agreement continue to be fair and reasonable and that the continuation of the Management Agreement is in the best interests of each Fund.

June 30, 2013

William Blair Funds

193

(unaudited)

Proxy Voting

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling 1-800-635-2886 (in Massachusetts 1-800-635-2840), at www.williamblairfunds.com and on the SEC’s website at http://www.sec.gov.

Quarterly Portfolio Schedules

Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended January 31 and July 31) on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s Forms N-Q are also available on the Fund’s website at www.williamblairfunds.com.

Additional Federal Income Tax Information: (unaudited)

Under Section 852(b)(3)(C) of the Code, the Funds hereby designate the following amounts as capital gain dividends for the fiscal year ended December 31, 2012:

Growth Fund	Small Cap Growth	Mid Cap Growth	Small-Mid Cap Growth
20,221,469	1,671,239	7,948,197	9,118,849

Small Cap Value	Mid Cap Value	Small-Mid Cap Value	Bond Fund
946,031	145,618	123	1,934,272

194

Semi-Annual Report

June 30, 2013

The following table provides the percentage of the 2012 year-end distributions that qualify for the dividend received deduction, and the qualified dividend income percentage:

Fund	Dividend Received Deduction%			Qualified Dividend Income%
Growth		100.00	%		100.00	%
Large Cap Growth		0.00	%		0.00	%
Small Cap Growth		0.00	%		0.00	%
Mid Cap Growth		100.00	%		100.00	%
Small-Mid Cap Growth		99.13	%		100.00	%
Global Leaders		100.00	%		100.00	%
International Growth		0.00	%		72.82	%
Institutional International Growth		0.00	%		65.16	%
International Equity		0.00	%		70.29	%
Institutional International Equity		0.00	%		100.00	%
International Leaders		0.42	%		92.76	%
International Small Cap Growth		0.00	%		78.98	%
Emerging Markets Growth		0.27	%		100.00	%
Emerging Markets Leaders		0.00	%		100.00	%
Emerging Markets Small Cap Growth		0.21	%		100.00	%
Large Cap Value		100.00	%		100.00	%
Small Cap Value		100.00	%		100.00	%
Mid Cap Value		89.10	%		100.00	%
Small-Mid Cap Value		38.86	%		47.73	%
Bond		0.00	%		0.00	%
Income		0.00	%		0.00	%
Low Duration		0.00	%		0.00	%
Ready Reserves		0.00	%		0.00	%

In January 2013, investors were notified on IRS Form 1099-Div or substitute 1099 DIV as to the Federal tax status of the distributions received by investors in the calendar year 2012.

June 30, 2013

William Blair Funds

195

	Useful Information About Your Report (unaudited)

	Please refer to this information when reviewing the Expense Example for each Fund.

	Expense Example

	As a shareholder of a Fund, you incur two types of costs: (1) transaction costs such as redemption fees and (2) ongoing costs, including management fees, distribution (12b-1) fees (for Class N shares except for the Institutional International Growth Fund, the Institutional International Equity Fund, and the Ready Reserves Fund), service fees (for Class N shares of the Ready Reserves Fund), shareholder administration fees (for Class N and Class I shares of the Global Leaders Fund, the Global Small Cap Growth Fund, the International Leaders Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Small Cap Growth Fund, the Bond Fund and the Low Duration Fund) and other Fund expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare the Fund’s 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from January 1, 2013 to June 30, 2013.

	Actual Expenses

	In each example, the first line for each share class in the table provides information about the actual account values and actual expenses. These expenses reflect the effect of any expense cap applicable to the share class during the period. Without this expense cap, the costs shown in the table would have been higher. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during the period.

	Hypothetical Example for Comparison Purposes

	In each example, the second line for each share class in the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses. This is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

	Please note that the expenses shown in both examples are meant to highlight your ongoing costs only and do not reflect any transactional costs or account type fees, such as redemption fees and IRA Fiduciary Administration fees, respectively. These fees are fully described in the prospectus. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs or account fees were included, your costs would have been higher.

196

Semi-Annual Report

June 30, 2013

Fund Expenses (unaudited)

The example below shows you the ongoing costs (in dollars) of investing in your fund and allows you to compare these costs with those of other mutual funds. Please refer to the previous page for a detailed explanation of the information presented in these charts.

Expense Example	Beginning Account Value 1/1/2013		Ending Account Value 6/30/2013		Expenses Paid During the Period (a)		Annualized Expense Ratio
Growth Fund
Class N-actual return	$	1,000.00	$	1,115.40	$	6.15		1.17	%
Class N-hypothetical 5% return		1,000.00		1,044.18		5.95		1.17
Class I-actual return		1,000.00		1,117.60		4.49		0.86
Class I-hypothetical 5% return		1,000.00		1,045.76		4.34		0.86
Large Cap Growth Fund
Class N-actual return		1,000.00		1,093.40		6.23		1.20
Class N-hypothetical 5% return		1,000.00		1,044.05		6.08		1.20
Class I-actual return		1,000.00		1,094.60		4.93		0.95
Class I-hypothetical 5% return		1,000.00		1,045.29		4.82		0.95
Mid Cap Growth Fund
Class N-actual return		1,000.00		1,124.90		7.11		1.35
Class N-hypothetical 5% return		1,000.00		1,043.31		6.84		1.35
Class I-actual return		1,000.00		1,126.30		5.80		1.10
Class I-hypothetical 5% return		1,000.00		1,044.55		5.58		1.10
Small-Mid Cap Growth Fund
Class N-actual return		1,000.00		1,190.70		7.33		1.35
Class N-hypothetical 5% return		1,000.00		1,043.31		6.84		1.35
Class I-actual return		1,000.00		1,192.40		5.93		1.09
Class I-hypothetical 5% return		1,000.00		1,044.59		5.53		1.09
Small Cap Growth Fund
Class N-actual return		1,000.00		1,236.50		8.32		1.50
Class N-hypothetical 5% return		1,000.00		1,042.56		7.60		1.50
Class I-actual return		1,000.00		1,238.40		6.94		1.25
Class I-hypothetical 5% return		1,000.00		1,043.80		6.33		1.25
Global Leaders Fund
Institutional Class-actual return		1,000.00		1,047.50		1.71		1.10
Institutional Class-hypothetical 5% return		1,000.00		1,044.55		5.58		1.10
Class N-actual return		1,000.00		1,046.50		7.61		1.50
Class N-hypothetical 5% return		1,000.00		1,042.56		7.60		1.50
Class I-actual return		1,000.00		1,046.50		6.34		1.25
Class I-hypothetical 5% return		1,000.00		1,043.80		6.33		1.25
Global Small Cap Growth Fund
Class N-actual return (b)		1,000.00		1,031.00		8.31		1.65
Class N-hypothetical 5% return (6 month period)		1,000.00		1,041.82		8.35		1.65
Class I-actual return (b)		1,000.00		1,030.00		7.05		1.40
Class I-hypothetical 5% return (6 month period)		1,000.00		1,043.06		7.09		1.40
International Growth Fund
Class N-actual return		1,000.00		1,019.60		7.11		1.42
Class N-hypothetical 5% return		1,000.00		1,042.96		7.19		1.42
Class I-actual return		1,000.00		1,021.40		5.68		1.13
Class I-hypothetical 5% return		1,000.00		1,044.38		5.74		1.13
Institutional International Growth Fund
Institutional Class-actual return		1,000.00		1,022.20		4.87		0.97
Institutional Class-hypothetical 5% return		1,000.00		1,045.18		4.92		0.97
International Equity Fund
Class N-actual return		1,000.00		1,029.00		7.29		1.45
Class N-hypothetical 5% return		1,000.00		1,042.81		7.34		1.45
Class I-actual return		1,000.00		1,031.20		6.04		1.20
Class I-hypothetical 5% return		1,000.00		1,044.05		6.08		1.20
Institutional International Equity Fund
Institutional Class-actual return		1,000.00		1,031.40		5.54		1.10
Institutional Class-hypothetical 5% return		1,000.00		1,044.55		5.58		1.10

June 30, 2013

William Blair Funds

197

Expense Example	Beginning Account Value 1/1/2013		Ending Account Value 6/30/2013		Expenses Paid During the Period (a)		Annualized Expense Ratio
International Leaders Fund
Class N-actual return	$	1,000.00	$	1,025.00	$	7.28		1.45	%
Class N-hypothetical 5% return		1,000.00		1,042.81		7.34		1.45
Class I-actual return		1,000.00		1,026.80		6.03		1.20
Class I-hypothetical 5% return		1,000.00		1,044.05		6.08		1.20
Institutional Class-actual return		1,000.00		1,027.80		5.28		1.05
Institutional Class-hypothetical 5% return		1,000.00		1,044.79		5.32		1.05
International Small Cap Growth Fund
Class N-actual return		1,000.00		1,069.10		8.14		1.59
Class N-hypothetical 5% return		1,000.00		1,042.13		8.04		1.59
Class I-actual return		1,000.00		1,070.70		6.64		1.29
Class I-hypothetical 5% return		1,000.00		1,043.59		6.55		1.29
Institutional Class-actual return		1,000.00		1,071.80		5.45		1.06
Institutional Class-hypothetical 5% return		1,000.00		1,044.74		5.38		1.06
Emerging Markets Growth Fund
Class N-actual return		1,000.00		937.30		8.06		1.68
Class N-hypothetical 5% return		1,000.00		1,041.67		8.50		1.68
Class I-actual return		1,000.00		939.30		6.72		1.40
Class I-hypothetical 5% return		1,000.00		1,043.07		7.08		1.40
Institutional Class-actual return		1,000.00		939.70		0.00		1.19
Institutional Class-hypothetical 5% return		1,000.00		1,044.09		6.04		1.19
Emerging Markets Leaders Fund
Class N-actual return		1,000.00		925.00		7.88		1.65
Class N-hypothetical 5% return		1,000.00		1,041.82		8.35		1.65
Class I-actual return		1,000.00		925.90		6.69		1.40
Class I-hypothetical 5% return		1,000.00		1,043.06		7.09		1.40
Institutional Class-actual return		1,000.00		925.90		5.97		1.25
Institutional Class-hypothetical 5% return		1,000.00		1,043.80		6.33		1.25
Emerging Markets Small Cap Growth Fund
Class N-actual return		1,000.00		1,065.40		8.45		1.65
Class N-hypothetical 5% return		1,000.00		1,041.82		8.35		1.65
Class I-actual return		1,000.00		1,066.20		7.17		1.40
Class I-hypothetical 5% return		1,000.00		1,043.06		7.09		1.40
Institutional Class-actual return		1,000.00		1,066.20		6.40		1.25
Institutional Class-hypothetical 5% return		1,000.00		1,043.80		6.33		1.25
Large Cap Value Fund
Class N-actual return		1,000.00		1,150.80		6.40		1.20
Class N-hypothetical 5% return		1,000.00		1,044.05		6.08		1.20
Class I-actual return		1,000.00		1,151.50		5.07		0.95
Class I-hypothetical 5% return		1,000.00		1,045.29		4.82		0.95
Mid Cap Value Fund
Class N-actual return		1,000.00		1,152.80		7.21		1.35
Class N-hypothetical 5% return		1,000.00		1,043.31		6.84		1.35
Class I-actual return		1,000.00		1,154.50		5.88		1.10
Class I-hypothetical 5% return		1,000.00		1,044.55		5.58		1.10
Small-Mid Cap Value Fund
Class N-actual return		1,000.00		1,167.40		7.52		1.40
Class N-hypothetical 5% return		1,000.00		1,043.06		7.09		1.40
Class I-actual return		1,000.00		1,169.20		6.19		1.15
Class I-hypothetical 5% return		1,000.00		1,044.30		5.83		1.15
Small Cap Value Fund
Class N-actual return		1,000.00		1,175.80		7.82		1.45
Class N-hypothetical 5% return		1,000.00		1,042.81		7.34		1.45
Class I-actual return		1,000.00		1,178.00		6.48		1.20
Class I-hypothetical 5% return		1,000.00		1,044.05		6.08		1.20

198

Semi-Annual Report

June 30, 2013

Expense Example	Beginning Account Value 1/1/2013		Ending Account Value 6/30/2013		Expenses Paid During the Period (a)		Annualized Expense Ratio
Bond Fund
Class N-actual return	$	1,000.00	$	966.30	$	3.17		0.65	%
Class N-hypothetical 5% return		1,000.00		1,046.78		3.30		0.65
Class I-actual return		1,000.00		967.40		2.44		0.50
Class I-hypothetical 5% return		1,000.00		1,047.52		2.54		0.50
Institutional Class-actual return		1,000.00		968.10		1.71		0.35
Institutional Class-hypothetical 5% return		1,000.00		1,048.26		1.78		0.35
Income Fund
Class N-actual return		1,000.00		975.50		4.01		0.82
Class N-hypothetical 5% return		1,000.00		1,045.94		4.15		0.82
Class I-actual return		1,000.00		976.40		2.81		0.57
Class I-hypothetical 5% return		1,000.00		1,047.15		2.91		0.57
Low Duration Fund
Class N-actual return		1,000.00		987.30		3.40		0.69
Class N-hypothetical 5%		1,000.00		1,046.58		3.50		0.69
Class I-actual return		1,000.00		988.00		2.63		0.53
Class I-hypothetical 5%		1,000.00		1,047.36		2.71		0.53
Institutional Class-actual return		1,000.00		989.90		1.86		0.38
Institutional Class-hypothetical 5% return		1,000.00		1,048.13		1.91		0.38
Ready Reserve Fund
Class N-actual return		1,000.00		1,000.00		0.50		0.10
Class N-hypothetical 5% return		1,000.00		1,049.50		0.51		0.10

(a)	Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period 181, and divided by 365 (to reflect the one-half year period).
(b)	For the period April 10, 2013 (Commencement of Operations) to June 30, 2013.

June 30, 2013

William Blair Funds

199

BOARD OF TRUSTEES

Vann A. Avedisian

Principal, Highgate Holdings

Kathleen T. Barr

President, Productive Capital Management, Inc.

Phillip O. Peterson

Retired Partner, KPMG LLP

Donald J. Reaves

Chancellor, Winston-Salem State University

Donald L. Seeley

Retired Adjunct Lecturer and Director, University of Arizona Department of Finance

Michelle R. Seitz, Chairman and President

Partner, William Blair & Company, L.L.C.

Thomas J. Skelly

Retired Managing Partner, Accenture U.S.

Richard W. Smirl, Senior Vice President

Partner, William Blair & Company L.L.C.

Officers

Michael P. Balkin, Senior Vice President

Karl W. Brewer, Senior Vice President

Andrew G. Flynn, Senior Vice President

David C. Fording, Senior Vice President

James S. Golan, Senior Vice President

W. George Greig, Senior Vice President

Michael A. Jancosek, Senior Vice President

John F. Jostrand, Senior Vice President

Chad M. Kilmer, Senior Vice President

Robert C. Lanphier, IV, Senior Vice President

Mark T. Leslie, Senior Vice President

Matthew A. Litfin, Senior Vice President

Kenneth J. McAtamney, Senior Vice President

Todd M. McClone, Senior Vice President

David Merjan, Senior Vice President

David S. Mitchell, Senior Vice President

David P. Ricci, Senior Vice President

Brian D. Singer, Senior Vice President

Paul J. Sularz, Senior Vice President

Jeffrey A. Urbina, Senior Vice President

Christopher T. Vincent, Senior Vice President

Kathleen M. Lynch, Vice President

David F. Hone, Vice President

John Abunassar, Vice President

Peter Carl, Vice President
Jason Moede, Vice President

D. Trowbridge Elliman III, Vice President

Christopher Walvoord, Vice President

Brian Ziv, Vice President

Edwin Denson, Vice President

Thomas Clarke, Vice President

Walter R. Randall, Jr., Chief Compliance Officer and Assistant Secretary

Colette M. Garavalia, Treasurer

Andrew T. Pfau, Secretary

John M. Raczek, Assistant Treasurer

Investment Advisor

William Blair & Company, L.L.C.

Independent Registered Public Accounting Firm

Ernst & Young LLP

Legal Counsel

Vedder Price P.C.

Transfer Agent

Boston Financial Data Services, Inc.
P.O. Box 8506
Boston, MA 02266-8506
For customer assistance, call 1-800-635-2886
(Massachusetts 1-800-635-2840)

200

Semi-Annual Report

June 30, 2013

William Blair Funds

DOMESTIC EQUITY	GLOBAL EQUITY	FIXED-INCOME
Growth Fund	Global Growth Fund	Bond Fund
Large Cap Growth Fund	Global Small Cap Growth Fund	Income Fund
Small Cap Growth Fund		Low Duration Fund
Mid Cap Growth Fund	INTERNATIONAL EQUITY
Small-Mid Cap Growth Fund	International Growth Fund	MONEY MARKET
	Institutional International Growth Fund
Large Cap Value Fund	International Equity Fund	Ready Reserves Fund
Small Cap Value Fund	Institutional International Equity Fund
Mid Cap Value Fund	International Leaders Fund
Small-Mid Cap Value Fund	International Small Cap Growth Fund
	Emerging Markets Growth Fund
	Emerging Markets Leaders Fund
	Emerging Markets Small Cap Growth Fund

	^©William Blair & Company, L.L.C., distributor
+1 800 742 7272	222 West Adams Street
williamblairfunds.com	Chicago, Illinois 60606	00103188

Item 2.	Code of Ethics

Not applicable to this filing.

Item 3.	Audit Committee Financial Expert

Not applicable to this filing.

Item 4.	Principal Accountant Fees and Services

Not applicable to this filing.

Item 5.	Audit Committee of Listed Registrants

Not Applicable to this Registrant, insofar as the Registrant is not a listed company.

Item 6.	Schedule of Investments

See Schedule of Investments in Item 1

Item 7.	Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 8.	Portfolio Managers of Closed Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 9.	Purchase of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 10.	Submission of Matters to a Vote of Security Holders

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

Item 11.

Controls and Procedures

(a) The Registrant’s principal executive and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s Disclosure Controls and Procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3 (b) under the 1940 Act (17 CFR 270.30a-3(b) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the final quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12.	Exhibits

12. (a) (1) Code of Ethics

Not applicable because it is posted on Registrant’s website.

12. (a) (2) (1)

Certification of Principal Executive Officer Required by Rule 30a-2(a) of the Investment Company Act

12. (a) (2) (2)

Certification of Principal Financial Officer Required by Rule 30a-2(a) of the Investment Company Act.

12. (a) (3)

Not applicable to this Registrant.

12. (b)

Certification of Chief Executive Officer and Certification of Chief Financial Officer Required by Rule 30a-2(b) of the Investment Company Act

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.

	William Blair Funds

	/s/ Michelle R. Seitz
By:	Michelle R. Seitz
	President
	(Chief Executive Officer)

Date: August 27, 2013

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 dates indicated

	/s/ Michelle R. Seitz
By:	Michelle R. Seitz
	President
	(Chief Executive Officer)

Date: August 27, 2013

	/s/ Colette M. Garavalia
By:	Colette M. Garavalia
	Treasurer
	(Chief Financial Officer)

Date: August 27, 2013

William Blair Growth N (WBGSX) N-CSRSCertified semi-annual shareholder report (management investment company)