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, 2016

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, 2016 Semi Annual Reports transmitted to shareholders.






	June 30, 2016
William Blair Funds Semiannual Report

Table of Contents

U.S. Growth Market Review and Outlook	6

U.S. Value Market Review and Outlook	7

Growth Fund
An Overview from the Portfolio Managers	8
Portfolio of Investments	10

Large Cap Growth Fund
An Overview from the Portfolio Managers	11
Portfolio of Investments	13

Mid Cap Growth Fund
An Overview from the Portfolio Managers	14
Portfolio of Investments	16

Mid Cap Value Fund
An Overview from the Portfolio Managers	17
Portfolio of Investments	19

Small-Mid Cap Growth Fund
An Overview from the Portfolio Managers	21
Portfolio of Investments	23

Small-Mid Cap Value Fund
An Overview from the Portfolio Managers	24
Portfolio of Investments	26

Small Cap Growth Fund
An Overview from the Portfolio Managers	28
Portfolio of Investments	30

Small Cap Value Fund
An Overview from the Portfolio Managers	32
Portfolio of Investments	34

Global Markets Review and Outlook	36

Global Leaders Fund
An Overview from the Portfolio Managers	37
Portfolio of Investments	39

International Leaders Fund
An Overview from the Portfolio Managers	41
Portfolio of Investments	43

International Equity Fund
An Overview from the Portfolio Managers	45
Portfolio of Investments	47

Institutional International Equity Fund
An Overview from the Portfolio Managers	49
Portfolio of Investments	51

International Growth Fund
An Overview from the Portfolio Managers	53
Portfolio of Investments	55

Institutional International Growth Fund
An Overview from the Portfolio Managers	60
Portfolio of Investments	62

June 30, 2016

William Blair Funds

International Small Cap Growth Fund
An Overview from the Portfolio Managers	67
Portfolio of Investments	69

Emerging Markets Leaders Fund
An Overview from the Portfolio Managers	73
Portfolio of Investments	75

Emerging Markets Growth Fund
An Overview from the Portfolio Managers	78
Portfolio of Investments	80

Emerging Markets Small Cap Growth Fund
An Overview from the Portfolio Managers	84
Portfolio of Investments	86

Fixed Income Market Review and Outlook	90

Bond Fund
An Overview from the Portfolio Managers	91
Portfolio of Investments	93

Income Fund
An Overview from the Portfolio Manager	97
Portfolio of Investments	99

Low Duration Fund
An Overview from the Portfolio Managers	101
Portfolio of Investments	103

Macro Allocation Fund
An Overview from the Portfolio Managers	106
Portfolio of Investments	108

Financial Statements	112

Notes to Financial Statements	130

Financial Highlights	154

Renewal of the Management Agreement	185

Board of Trustees and Officers	190

Fund Expenses	195

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 William Blair Funds. It is not authorized for distribution to prospective investors unless accompanied or preceded by a prospectus of 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.

Semiannual Report

June 30, 2016

Performance as of June 30, 2016—Class N Shares (Unaudited)

							10 yr		Overall
	Year						(or since	Inception	Morningstar
	To Date		1 yr		3 yr	5 yr	inception)	Date	Rating
Growth Fund
Class N	(1.92	)	0.26		10.04	9.79	7.55	3/20/1946	***
Morningstar Large Growth	(1.93	)	(2.33	)	10.58	9.98	7.20		Among 1,483
Russell 3000^®Growth Index	1.14		1.88		12.65	12.04	8.65		Large Growth Funds
S&P 500^®Index	3.84		3.99		11.66	12.10	7.42

Large Cap Growth Fund
Class N	(0.39	)	0.84		14.02	12.26	7.48	12/27/1999	****
Morningstar Large Growth	(1.93	)	(2.33	)	10.58	9.98	7.20		Among 1,483
Russell 1000^®Growth Index	1.36		3.02		13.07	12.35	8.78		Large Growth Funds

Mid Cap Growth Fund
Class N	(0.71	)	(5.31	)	6.85	6.67	7.43	2/1/2006	****
Morningstar Mid-Cap Growth	0.04		(6.43	)	8.21	7.93	6.79		Among 650
Russell Midcap^®Growth Index	2.15		(2.14	)	10.52	9.98	8.12		Mid-Cap Growth Funds

Mid Cap Value Fund
Class N	6.15		1.52		9.50	10.10	10.55	5/3/2010	****
Morningstar Mid-Cap Value	4.89		(2.16	)	7.85	8.77	—		Among 408
Russell Midcap^®Value Index	8.87		3.25		11.00	11.70	11.79		Mid-Cap Value Funds

Small-Mid Cap Growth Fund
Class N	0.97		(3.15	)	10.74	10.16	8.84	12/29/2003	****
Morningstar Mid-Cap Growth	0.04		(6.43	)	8.21	7.93	6.79		Among 650
Russell 2500^TMGrowth Index	(0.03	)	(7.69	)	9.06	9.27	7.96		Mid-Cap Growth Funds

Small-Mid Cap Value Fund
Class N	6.14		0.89		7.90	—	12.61	12/15/2011	****
Morningstar Small Blend	2.98		(5.78	)	6.37	—	—		Among 654
Russell 2500^®Value Index	7.84		0.22		8.14	—	13.92		Small Blend Funds

Small Cap Growth Fund
Class N	3.92		(3.86	)	7.98	9.48	5.82	12/27/1999	***
Morningstar Small Growth	(0.66	)	(9.86	)	6.46	7.26	6.55		Among 655
Russell 2000^®Growth Index	(1.59	)	(10.75	)	7.74	8.51	7.14		Small Growth Funds

Small Cap Value Fund
Class N	6.83		(0.06	)	7.51	8.40	7.10	12/23/1996	***
Morningstar Small Blend	2.98		(5.78	)	6.37	7.62	5.87		Among 654
Russell 2000^®Value Index	6.08		(2.58	)	6.36	8.15	5.15		Small Blend Funds

June 30, 2016

William Blair Funds

Performance as of June 30, 2016—Class N Shares (Unaudited)—continued

									10 yr			Overall
	Year								(or since		Inception	Morningstar
	To Date		1 yr		3 yr		5 yr		inception)		Date	Rating
Global Leaders Fund
Class N	(1.64	)	(3.82	)	6.50		6.14		2.21		10/15/2007	***
Morningstar World Stock	0.40		(4.17	)	5.63		5.33		—			Among 940
MSCI ACW IMI (net)	1.36		(3.87	)	6.13		5.43		1.84			World Stock Funds

International Leaders Fund
Class N	(1.40	)	(2.92	)	5.64		—		7.15		8/16/2012	****
Morningstar Foreign Large Growth	(2.29	)	(7.50	)	3.19		—		—			Among 320
MSCI ACW Ex-U.S. IMI (net)	(0.91	)	(9.61	)	1.65		—		3.54			Foreign Large Growth Funds

International Equity Fund
Class N	(1.88	)	(6.29	)	3.88		2.74		1.86		5/24/2004	***
Morningstar Foreign Large Growth	(2.29	)	(7.50	)	3.19		2.54		2.92			Among 320
MSCI World Ex-U.S. Index (net)	(2.98	)	(9.84	)	1.88		1.23		1.63			Foreign Large Growth Funds

International Growth Fund
Class N	(3.81	)	(9.52	)	2.60		2.69		2.67		10/1/1992	***
Morningstar Foreign Large Growth	(2.29	)	(7.50	)	3.19		2.54		2.92			Among 320
MSCI ACW Ex-U.S. IMI (net)	(0.91	)	(9.61	)	1.65		0.39		2.16			Foreign Large Growth Funds

International Small Cap Growth Fund
Class N	(4.22	)	(1.77	)	4.22		4.01		4.36		11/1/2005	***
Morningstar Foreign Small/Mid Growth	(3.01	)	(4.98	)	5.17		4.77		4.67			Among 122
MSCI ACW Ex-U.S. Small Cap Index (net)	(0.20	)	(5.46	)	4.93		2.28		4.09			Foreign Small/Mid Growth Funds

Emerging Markets Leaders Fund
Class N	4.40		(11.68	)	(0.74	)	(2.14	)	0.60		5/3/2010	****
Morningstar Diversified Emerging Markets	6.22		(9.89	)	(1.30	)	(3.19	)	—			Among 590
MSCI Emerging Markets Index (net)	6.41		(12.05	)	(1.56	)	(3.78	)	(0.58	)		Diversified Emerging Markets Funds

Emerging Markets Growth Fund
Class N	5.07		(12.81	)	(0.16	)	(1.28	)	3.22		6/6/2005	****
Morningstar Diversified Emerging Markets	6.22		(9.89	)	(1.30	)	(3.19	)	3.21			Among 590
MSCI Emerging Markets IMI (net)	5.69		(12.16	)	(1.36	)	(3.59	)	3.87			Diversified Emerging Markets Funds

Emerging Markets Small Cap Growth Fund
Class N	0.88		(10.56	)	5.68		—		11.17		10/24/2011	*****
Morningstar Diversified Emerging Markets	6.22		(9.89	)	(1.30	)	—		—			Among 590
MSCI Emerging Markets Small Cap Index (net)	1.38		(12.76	)	(0.01	)	—		2.12			Diversified Emerging Markets Funds

Semiannual Report

June 30, 2016

Performance as of June 30, 2016—Class N Shares (Unaudited)—continued

						10 yr		Overall
	Year					(or since	Inception	Morningstar
	To Date	1 yr		3 yr	5 yr	inception)	Date	Rating
Bond Fund
Class N	5.37	4.76		4.09	4.27	5.24	5/1/2007	****
Morningstar Intermediate-Term Bond	4.92	4.63		3.59	3.64	—		Among 953
Barclays U.S. Aggregate Bond Index	5.31	6.00		4.06	3.76	4.81		Intermediate-Term Bond Funds

Income Fund
Class N	2.94	2.70		2.42	2.67	3.40	10/1/1990	*****
Morningstar Short-Term Bond	2.04	1.49		1.42	1.54	2.97		Among 493
Barclays Intermediate Government/Credit Bond Index	4.07	4.33		2.95	2.90	4.48		Short-Term Bond Funds

Low Duration Fund
Class N	1.13	1.08		1.00	1.02	1.13	12/1/2009	****
Morningstar Ultra Short Bond	0.67	0.54		0.56	0.73	—		Among 123
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index	0.65	0.59		0.38	0.34	0.41		Ultrashort Bond Funds

Macro Allocation Fund
Class N	0.27	(9.64	)	1.63	—	5.50	11/29/2011	***
Morningstar Multialternative	0.30	(2.55	)	1.45	—	—		Among 251
Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index	0.15	0.19		0.09	—	0.09		Multialternative Funds
Long-Term Comparative Index	2.67	1.56		3.61	—	4.06

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 adviser 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 typically 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 06/30/2016 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 1,483/1,289/931 large growth funds; Mid Cap Growth Fund ***/***/**** and Small-Mid Cap Growth Fund ****/****/**** out of 650/573/429 mid-cap growth funds; Mid Cap Value Fund ****/****/NA, out of 408/348/NA mid-cap value funds; Small Cap Growth Fund ****/****/**, out of 655/591/431 small growth funds; Small-Mid Cap Value Fund ****/NA/NA and Small Cap Value Fund ***/***/**** out of 654/559/381 small blend funds; Global Leaders Fund ***/***/NA out of 940/731/NA world stock funds; International Equity Fund ****/***/**, International Growth Fund ***/***/**, and International Leaders Fund ****/NA/NA out of 320/275/189 foreign large growth funds; International Small Cap Growth Fund ***/***/*** out of 122/105/63 foreign small/mid growth funds; Emerging Markets Leaders Fund ***/**** /NA, Emerging Markets Growth Fund ****/****/***, and Emerging Markets Small Cap Growth *****/NA/NA out of 590/416/186 diversified emerging markets funds; Bond Fund ****/****/NA out of 953/836/NA intermediate-term bond funds; Income Fund *****/*****/**** out of 493/405/284 short-term bond funds; Low Duration Fund ****/****/NA out of 123/88/NA ultrashort bond funds; and Macro Allocation Fund ***/NA/NA out of 251/NA/NA multialternative 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, 2016

William Blair Funds

U.S. Growth Market Review and Outlook

U.S. equities ended the first half of 2016 mostly positive after a dismal first six weeks of the year. Broad-based selling early in the year was driven by investor concern that the U.S. could be headed into a recession after several economic indicators, such as retail sales and durable goods orders, showed weakness. The risk-off trade then gave way to optimism beginning in mid-February as the price of oil rebounded from its low point of the year and investor concern about growth outside of the U.S. eased. Market drivers shifted significantly as the rebound began. Cyclical companies rallied starting in late January and led the rebound through the end of the first quarter.

Optimism continued into the second quarter as several economic indicators in the U.S. showed positive signals in April and May. First-quarter U.S. GDP was revised upward, the ISM Manufacturing Index rose in three straight months from March to May and oil rallied to nearly $50 per barrel. Globally, central banks in Europe and Japan continued their accommodative monetary policies which helped their domestic economies and aided the rally in U.S. stocks. These factors all helped ease fears of a U.S. economic slowdown until early June when a lackluster jobs report called into question the sustainability of the recent positive economic momentum. Following the weak jobs report, uncertainty rose as investors waited until later in the month for the outcome of the U.S. Federal Reserve Board’s Federal Open Market Committee (FOMC) meeting and the vote by citizens of the United Kingdom to stay in or leave the European Union, known as the “Brexit” vote. While the outcome of the FOMC meeting was positive for stocks – interest rates were left unchanged – the result of the Brexit vote initially sent U.S. stocks into a sharp, three day decline as U.K. citizens voted to leave the European Union. Following the initial sell-off, U.S. stocks rallied during the final three days of the second quarter thereby recouping most, if not all, of their post-Brexit losses.

After implementing its first interest rate hike in late 2015, the Fed has yet to raise rates so far in 2016 as there have been mixed signals as to which direction the U.S. economy is heading. U.S. first quarter GDP growth was better than originally feared, after being revised upward in April and June, but job growth and business spending showed signs of a slowdown late in the second quarter. We believe these mixed signals will continue as the rebound in the U.S. economy, which began over seven years ago, continues to proceed in a slow fashion with lingering concerns about its stability. It is likely the Fed will be cautious when deciding the appropriate time to raise interest rates in 2016, if at all. Adding to the uncertainty in the U.S. is the looming U.S. presidential election. Following the primaries, it is clear that anti-establishment sentiment is present in the minds of voters. How this sentiment plays out in the election and the impact on financial markets is unknown.

Globally, risks have been heightened by the results of the Brexit vote and uncertainty regarding how it could affect the economy of the United Kingdom, the fifth largest in the world by GDP, and more importantly the broader European economy. The increased volatility during the last two weeks of the second quarter caused by the Brexit vote is likely to persist as Europe navigates through an unfamiliar process. Similar to the nationalistic sentiment which propelled the “Leave” campaign to victory in the Brexit vote, populism and anti-establishment political candidates have garnered increased support across many European countries that will hold elections in 2016 or 2017. Many of these candidates are running on economic nationalism and anti-globalism policies which will not be conducive for global growth if they are put into practice. In China, investor fears of a further slowdown in growth have subsided after GDP growth was reported in-line with expectations in the second quarter and the portion of growth coming from consumption grew significantly when compared with the prior year. Looking forward, the risk of growth slowing remains as the transformation from an infrastructure-build-based economy to a consumer-based economy continues.

With uncertainty present around the world, we believe corporate earnings growth will be more challenging. In the aggregate, companies are near peak profit margin levels and many are returning capital to shareholders in the form of dividends and share buybacks. We believe companies that can create value for shareholders by allocating capital in an efficient manner will be increasingly rewarded by the market. As investors seek companies with long-term growth opportunities with an emphasis on sustainability, we believe we are well positioned. Companies that can control their own destiny by being less dependent on the macroeconomic environment should be rewarded over time.

Semiannual Report

June 30, 2016

U.S. Value Market Review and Outlook

During the first quarter of 2016, investor concern about slowing global growth, continued declines in commodity prices, and extreme recession fears prompted one of the worst starts to a new year for the domestic equity markets. The tide seemed to turn in mid-February as solid domestic economic data improved slightly and a rebound in commodity prices helped alleviate near-term recessionary fears. In addition, dovish comments by the Federal Reserve helped fuel a market rally that was led by some of the smaller capitalization, lower quality, more beaten down stocks.

A disappointing employment report during the middle of the second quarter that shocked investors and the pending vote by citizens of the United Kingdom to stay in or leave the European Union (Brexit) that was scheduled for late in the quarter encouraged the Federal Reserve to stay on the sidelines and postpone a potential interest rate hike. Late in the second quarter, the Brexit vote in favor of the United Kingdom leaving the European Union seemed to catch investors off guard, even as most polls indicated the vote could go either way. In the face of additional uncertainty, domestic equity volatility spiked and investors gravitated to the higher quality, more defensive segments of the market. Outside of equities, the U.S. dollar and the 10-year Treasury Note rallied following the Brexit vote, adding to investor concerns about potential slowing global growth. Equity markets rallied during the last few days of the second quarter, recuperating most of the losses subsequent to the Brexit vote, as investors seemed to have resolved their concerns about Europe while the credit and currency markets hinted at a much slower global growth trajectory.

We remain cautiously optimistic on the domestic equity markets in the near-term as the bull market continues its seven-plus year run, fueled by historically low interest rates and volatility. The current cycle seems to be getting extended and we remain mindful that the probability of a recession in the not-to-distant future is higher than it has been. However, recent inflation and wage data seem to be in-check and global headwinds may encourage continued accommodative monetary policy by global central banks; potentially extending the current bull market.

With the recent Brexit vote results still fresh in investor psyche, it will take time to fully ascertain what the ultimate outcome will be and what the implications will be on currencies, global growth expectations, and financial markets. We anticipate higher volatility going forward given the uncertainty of the implications of Brexit and the outcome of the U.S. Presidential election, concerns over a slowdown in China’s economic growth, geopolitical tensions, and a more challenging backdrop for corporate earnings growth. Historically, there has been a strong correlation between volatility and outperformance of high quality stocks, thus higher volatility should provide a tailwind for our value oriented strategies given our portfolios’ higher quality bias.

While we are cognizant of these macroeconomic variables, our focus remains on identifying attractive risk reward opportunities based on individual company fundamentals. From our bottom up perspective, we remain constructive on corporate earnings, albeit against a backdrop of lower revenue growth and increasing margin pressure from higher wages. As always, our focus remains on identifying quality companies at discount prices and corporate transformation opportunities, and we continue to find good ideas across sectors. Given our investment approach, we believe the funds are well-suited to withstand a variety of market scenarios and add value over the long-term.

June 30, 2016

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 a 1.92% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 3000^®Growth Index (the “Index”), increased 1.14%. For the six month period ended June 30, 2016, the Fund underperformed the Index. The most significant factor contributing to the Fund’s underperformance was the Fund’s higher growth bias, as high dividend-yielding stocks outperformed low dividend-yielding stocks. Companies that pay large dividends are typically mature companies with relatively modest growth profiles that pay out a majority of earnings in the form of a dividend. The Fund tends to be significantly underweight such companies, instead seeking companies which have significant reinvestment opportunities that enable superior, durable long-term growth. As such, the Fund’s underweight in the Consumer Staples sector and select high dividend-yielding stocks held in the Index, such as Verizon, negatively impacted the Fund’s relative returns. BorgWarner and Perrigo were the top individual stock detractors from the Fund’s performance for the six month period ended June 30, 2016. BorgWarner, a global supplier of highly engineered automotive systems and components for engine and drivetrain applications, underperformed due to slowing growth and concern about its European business following the Brexit vote. Drug and nutritional product manufacturer Perrigo underperformed following turnover at its CEO post and lower forward-earnings guidance. Other top detractors were Biogen (Health Care), MasterCard (Information Technology) and Kroger (Consumer Staples). Conversely, top contributors to Fund performance for the period were Dollar General and Vantiv. Discount retailer Dollar General reported better-than-expected results in both the first and second quarters, making the stock the top contributor to the Fund’s relative performance. Payment processor Vantiv outperformed after reporting strong fundamentals in both the first and second quarter, which was driven by management execution and strength in areas such as e-commerce and integrated payments. Other top contributors were Texas Instruments (Information Technology), Union Pacific (Industrials) and TransDigm (Industrials). Also, the Fund did not hold Apple, the largest position in the Index, which provided a positive contribution to the Fund’s relative performance given the stock’s weakness in the second quarter. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6.

Semiannual Report

June 30, 2016

Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		(1.92	)%		0.26	%		10.04	%		9.79	%		7.55	%
Class I		(1.78	)		0.60			10.40			10.15			7.90
Russell 3000^® Growth Index		1.14			1.88			12.65			12.04			8.65
S&P 500^®Index		3.84			3.99			11.66			12.10			7.42

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, 2016. 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, 2016

William Blair Funds

Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Information Technology—30.8%
*	Adobe Systems, Inc.		112,700	$	10,796
*	Akamai Technologies, Inc.		241,987		13,534
*	Alphabet, Inc. Class “A”		42,780		30,097
*	Alphabet, Inc. Class “C”		29,638		20,513
	Booz Allen Hamilton Holding Corporation		214,522		6,358
*	CoStar Group, Inc.		39,257		8,584
	CSRA, Inc.		352,900		8,268
*	Facebook, Inc.		216,500		24,742
*	Guidewire Software, Inc.		109,400		6,757
	j2 Global, Inc.		104,400		6,595
	Mastercard, Inc.		276,200		24,322
	Microsoft Corporation		641,900		32,846
*	NeuStar, Inc.		287,078		6,749
*	Red Hat, Inc.		120,006		8,712
	Texas Instruments, Inc.		333,200		20,875
*	Vantiv, Inc.		261,001		14,773
					244,521
	Consumer Discretionary—19.8%
*	Amazon.com, Inc.		44,400		31,774
	Dollar General Corporation		375,700		35,316
	Lowe’s Cos., Inc.		427,700		33,861
	Newell Brands, Inc.		275,900		13,400
*	Sally Beauty Holdings, Inc.		338,500		9,955
	Starbucks Corporation		248,000		14,166
*	Steven Madden, Ltd.		232,800		7,957
	VF Corporation		169,000		10,392
					156,821
	Health Care—16.2%
*	Align Technology, Inc.		86,500		6,968
*	Biogen, Inc.		51,100		12,357
*	BioMarin Pharmaceutical, Inc.		80,200		6,240
	Bristol-Myers Squibb Co.		361,400		26,581
*	Cerner Corporation		363,700		21,313
	Gilead Sciences, Inc.		219,870		18,341
*	Mednax, Inc.		219,500		15,898
	Shire plc—ADR		47,100		8,670
	Zoetis, Inc.		257,900		12,240
					128,608
	Industrials—13.7%
	Danaher Corporation		212,500		21,462
	Equifax, Inc.		80,804		10,375
	Fastenal Co.		196,300		8,714
	Rockwell Collins, Inc.		92,700		7,892
	The Dun & Bradstreet Corporation		79,200		9,650
*	TransDigm Group, Inc.		66,280		17,477
	Union Pacific Corporation		261,600		22,825
*	Verisk Analytics, Inc.		124,920		10,129
					108,524

		Shares or
		Principal
Issuer		Amount		Value

	Common Stocks—(continued)

	Financials—6.7%
*	Affiliated Managers Group, Inc.		43,000	$	6,053
	Intercontinental Exchange, Inc.		88,800		22,729
*	Signature Bank		66,300		8,282
	Willis Towers Watson plc†		131,300		16,322
					53,386
	Consumer Staples—6.0%
	Costco Wholesale Corporation		126,300		19,834
	The Kroger Co.		542,800		19,970
	Tyson Foods, Inc.		118,700		7,928
					47,732
	Materials—1.5%
	PPG Industries, Inc.		114,900		11,967

	Energy—1.4%
	Schlumberger, Ltd.†		145,300		11,490

	Total Common Stocks—96.1% (cost $607,644)				763,049

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $40,582, collateralized by U.S. Treasury Note, 2.000%, due 8/15/25		$40,582		40,582

	Total Repurchase Agreement—5.1% (cost $40,582)				40,582

	Total Investments—101.2% (cost $648,226)				803,631

	Liabilities, plus cash and other assets—(1.2)%				(9,184	)
	Net assets—100.0%			$	794,447

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	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 0.39% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 1000^®Growth Index (the “Index”), increased 1.36%. For the six month period ended June 30, 2016, the Fund underperformed the Index. From a style perspective, a significant headwind to performance was the Fund’s higher growth bias, as high dividend-yielding stocks outperformed low dividend-yielding stocks. Companies that pay large dividends are typically mature companies with relatively modest growth profiles that pay out a majority of earnings in the form of a dividend. The Fund tends to be significantly underweight such companies, instead seeking companies which have significant reinvestment opportunities that enable superior, durable long-term growth. The top individual stock detractor from the Fund’s relative returns was biotechnology company Biogen. The company, which has a strong focus in neurological disease treatment and is a dominant player in the multiple sclerosis (MS) market, underperformed after an unsuccessful trial of a next-generation MS drug and investor concerns surrounding drug pricing, which put pressure on biotechnology stocks overall. Grocery retailer Kroger was also a top detractor during the period as concern about the lack of inflation in the US economy, which hurts Kroger’s ability to raise prices and offset increased labor costs, weighed on the stock. Other top detractors during the period were BorgWarner (Consumer Discretionary), Chipotle Mexican Grill (Consumer Discretionary) and Red Hat (Information Technology). Conversely, the top contributor to the Fund’s relative performance was discount retailer Dollar General. The company reported better-than-expected results in both the first and second quarters which caused the stock to outperform. Dollar General benefitted from a combination of increased sales of consumable items (grocery, health & beauty, etc.) and various merchandising and labor initiatives that management put in place last year. UnitedHealth Group, which provides health care coverage, software and data consultancy services, outperformed after reporting strong revenue growth in back-to-back quarters. Other top contributors to Fund performance for the period were Texas Instruments (Information Technology), IDEXX Laboratories (Health Care) and Union Pacific (Industrials). Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6.

June 30, 2016

William Blair Funds

Large Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		(0.39	)%		0.84	%		14.02	%		12.26	%		7.78	%
Class I		(0.28	)		0.99			14.28			12.51			7.74
Russell 1000^® Growth Index		1.36			3.02			13.07			12.35			8.78

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.

Semiannual Report

June 30, 2016

Large Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Information Technology—30.5%
	Accenture plc†		12,790	$	1,449
*	Adobe Systems, Inc.		24,650		2,361
*	Alphabet, Inc. Class “A”		4,990		3,511
*	Alphabet, Inc. Class “C”		3,206		2,219
	Apple, Inc.		33,325		3,186
*	Facebook, Inc.		25,230		2,883
	Mastercard, Inc.		26,020		2,291
	Microsoft Corporation		66,860		3,421
*	Red Hat, Inc.		25,400		1,844
	Texas Instruments, Inc.		47,360		2,967
					26,132
	Consumer Discretionary—22.7%
*	Amazon.com, Inc.		6,180		4,423
*	Chipotle Mexican Grill, Inc.		3,620		1,458
	Dollar General Corporation		39,960		3,756
*	O’Reilly Automotive, Inc.		8,200		2,223
	Starbucks Corporation		26,450		1,511
	The Home Depot, Inc.		34,080		4,352
	VF Corporation		28,010		1,722
					19,445
	Health Care—17.3%
*	Biogen, Inc.		8,390		2,029
	Bristol-Myers Squibb Co.		38,980		2,867
*	Cerner Corporation		44,650		2,616
*	IDEXX Laboratories, Inc.		16,140		1,499
	UnitedHealth Group, Inc.		22,520		3,180
	Zoetis, Inc.		55,180		2,619
					14,810
	Consumer Staples—9.6%
	Mead Johnson Nutrition Co.		15,250		1,384
*	Monster Beverage Corporation		8,680		1,395
	The Estee Lauder Cos., Inc.		20,960		1,908
	The Kroger Co.		95,690		3,520
					8,207
	Industrials—9.4%
	Danaher Corporation		11,690		1,180
*	TransDigm Group, Inc.		8,460		2,231
	Union Pacific Corporation		40,410		3,526
*	Verisk Analytics, Inc.		13,680		1,109
					8,046
	Financials—3.9%
*	Affiliated Managers Group, Inc.		11,740		1,653
	Moody’s Corporation		17,640		1,653
					3,306
	Energy—2.0%
	Schlumberger, Ltd.†		22,010		1,741

		Shares or
		Principal
Issuer		Amount		Value

	Common Stocks—(continued)

	Materials—1.9%
	PPG Industries, Inc.		15,450	$	1,609

	Telecommunication Services—1.4%
*	SBA Communications Corporation		11,250		1,214
	Total Common Stocks—98.7% (cost $70,483)				84,510

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $922, collateralized by FFCB, 3.090%, due 8/19/25		$922		922

	Total Repurchase Agreement—1.1% (cost $922)				922

	Total Investments—99.8% (cost $71,405)				85,432
	Cash and other assets, less liabilities—0.2%				141
	Net assets—100.0%			$	85,573



† = U.S. listed foreign security
* = Non-income producing security

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

	Mid Cap Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Daniel Crowe Robert C. Lanphier, IV David P. Ricci	The William Blair Mid Cap Growth Fund (Class N shares) posted a 0.71% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell Midcap^®Growth Index (the “Index”), increased 2.15%. For the six month period ended June 30, 2016, the Fund underperformed the Index from a combination of style and stock-specific factors. Style factors had an overall negative impact on the Fund’s relative performance. While our typical bias toward companies with less volatile fundamentals was a benefit during the sell-off in the first six weeks of the year, this was more than offset during that time period by the negative impact from our higher growth bias and the resulting lower exposure to high dividend yielding stocks, as high dividend-yielding stocks outperformed low dividend-yielding stocks. The Fund tends to be significantly underweight such companies, instead seeking companies which have significant reinvestment opportunities that enable superior, durable long-term growth. Another style-related dynamic was the Fund’s underweight in Consumer Staples and overweight in Health Care. This exposure is driven by our bottom-up analysis which has found better growth prospects and more attractive valuations in Health Care stocks with similar levels of economic sensitivity as stocks within the Consumer Staples sector. Unfortunately, while we believe these Health Care stocks are better long-term investments, the Fund’s overweight in Health Care and underweight in Consumer Staples detracted from relative performance. From a stock specific standpoint, the top detractors from Fund performance were BorgWarner and Perrigo. BorgWarner, a global supplier of highly engineered automotive systems and components for engine and drivetrain applications, underperformed due to slowing growth and concern about its European business following the Brexit vote. Drug and nutritional product manufacturer Perrigo underperformed following turnover at its CEO post and lower forward-earnings guidance. Other top detractors from Fund performance were Signature Bank (Financials), CSRA (Information Technology) and Hanesbrands (Consumer Discretionary). Conversely, top contributors to Fund performance in the period were Dollar General and Vulcan Materials. Discount retailer Dollar General reported better-than-expected results in both the first and second quarters causing the stock to outperform. Aggregates producer Vulcan Materials outperformed after volume and pricing growth accelerated due to pent-up demand for its products. Other top contributors were Vantiv (Information Technology), Newell Brands (Consumer Discretionary) and Align Technology (Health Care). Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6.

Semiannual Report

June 30, 2016

Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016

	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		(0.71	)%		(5.31	)%		6.85	%		6.67	%		7.43	%
Class I		(0.60	)		(5.06	)		7.10			6.96			7.73
Russell Midcap^®Growth Index		2.15			(2.14	)		10.52			9.98			8.12

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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, 2016

William Blair Funds

Mid Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	*Common Stocks*

	Consumer Discretionary—21.2%
	BorgWarner, Inc.		67,143	$	1,982
	Brunswick Corporation		28,400		1,287
*	Chipotle Mexican Grill, Inc.		3,390		1,366
	Dollar General Corporation		52,865		4,969
	Hanesbrands, Inc.		125,900		3,164
	Newell Brands, Inc.		110,000		5,343
*	O’Reilly Automotive, Inc.		11,784		3,195
	Ross Stores, Inc.		79,700		4,518
*	Sally Beauty Holdings, Inc.		58,901		1,732
	Six Flags Entertainment Corporation		42,180		2,444
	Tractor Supply Co.		24,400		2,225
					32,225
	Information Technology—19.8%
*	Akamai Technologies, Inc.		64,579		3,612
	Booz Allen Hamilton Holding Corporation		86,100		2,552
*	CoStar Group, Inc.		19,677		4,303
	CSRA, Inc.		99,100		2,322
*	Genpact, Ltd.†		127,052		3,410
*	Guidewire Software, Inc.		57,220		3,534
	MAXIMUS, Inc.		43,686		2,419
*	Red Hat, Inc.		47,030		3,414
*	Vantiv, Inc. Class “A”		79,824		4,518
					30,084
	Health Care—19.2%
*	Align Technology, Inc.		24,780		1,996
*	BioMarin Pharmaceutical, Inc.		28,731		2,235
*	Centene Corporation		57,000		4,068
*	Cerner Corporation		69,100		4,049
	DENTSPLY SIRONA, Inc.		46,459		2,882
*	IDEXX Laboratories, Inc.		21,340		1,982
*	Mednax, Inc.		75,060		5,437
*	Mettler-Toledo International, Inc.		7,520		2,744
	Perrigo Co. plc†		16,300		1,478
	Zoetis, Inc.		49,300		2,340
					29,211
	Industrials—14.0%
*	Copart, Inc.		31,300		1,534
	Equifax, Inc.		14,700		1,887
*	Old Dominion Freight Line, Inc.		76,586		4,619
	Rockwell Collins, Inc.		34,370		2,926
	The Dun & Bradstreet Corporation		12,300		1,499
*	The Middleby Corporation		19,670		2,267
*	TransDigm Group, Inc.		10,400		2,742
*	Verisk Analytics, Inc.		47,480		3,850
					21,324

		Shares or
		Principal
Issuer		Amount		Value

	*Common Stocks—(continued)*

	Financials—8.5%
*	Affiliated Managers Group, Inc.		15,355	$	2,162
	Intercontinental Exchange, Inc.		14,515		3,715
*	Signature Bank		29,656		3,705
	Willis Towers Watson plc†		26,590		3,305
					12,887
	Materials—5.7%
*	Axalta Coating Systems, Ltd.†		67,000		1,777
	Ball Corporation		48,400		3,499
	Vulcan Materials Co.		28,300		3,406
					8,682
	Consumer Staples—5.5%
*	Herbalife, Ltd.†		20,000		1,170
	Mead Johnson Nutrition Co.		38,300		3,476
	Tyson Foods, Inc.		56,100		3,747
					8,393
	Telecommunication Services—2.2%
*	SBA Communications Corporation		31,350		3,384

	Energy—0.8%
*	Concho Resources, Inc.		10,720		1,279

	Total Common Stocks—96.9% (cost $132,050)				147,469

	*Repurchase Agreement*
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $5,673, collateralized by FFCB, 3.090%, due 8/19/25	$	5,673		5,673

	Total Repurchase Agreement—3.7% (cost $5,673)				5,673

	Total Investments—100.6% (cost $137,723)				153,142

	Liabilities, plus cash and other assets—(0.6)%				(956	)
	Net assets-100.0%			$	152,186

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	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 6.15% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell Midcap^®Value Index (the “Index”), increased 8.87%. The Fund’s underperformance relative to the Index during the first half of 2016 was due to a combination of style headwinds and stock selection. Broadly speaking, from a style perspective, the Fund’s higher growth profile relative to the index was a headwind during the period as higher growth stocks underperformed slower growth stocks. In addition, investor appetite for yield drove the outperformance of high dividend-yielding stocks, which was a headwind given the Fund’s underweight to this segment relative to the Index. The Fund’s largest sector detractor from relative performance during the period was in Financials and was driven by stock selection within Real Estate Services, Property REITs, and Regional Banks. Bank stocks, such as East West Bancorp, were generally weaker after a surprisingly disappointing jobs report confirmed that the Fed would hold off on raising interest rates in the near-term. After the Brexit vote late in the second quarter, bank stocks further sold off as they further pushed out expectations for any increase in interest rates. The Materials sector was a meaningful detractor from relative performance given the Fund’s lack of exposure to Gold and Diversified Metals & Mining relative to the Index. This lack of exposure offset positive stock selection within Fertilizers & Agricultural Chemicals. The largest contributor to relative performance at the sector level was Industrials. The Fund’s outperformance within Industrials was the result of broad-based positive stock selection throughout most of the industries within the sector. Information Technology was another significant contributor to relative performance during the period, driven by strong stock selection within Application Software and Electronic Components. Looking specifically at stock selection, the Fund’s largest detractors from relative performance were Jones Lang LaSalle (Financials), H&R Block (Consumer Discretionary), and Kroger (Consumer Staples). The largest contributors to relative performance were the Fund’s investments in Ingredion (Consumer Staples), Steel Dynamics (Materials), and American Water Works (Utilities). Please refer to the U.S. Value Market Review and Outlook relating to the Fund on page 7.

June 30, 2016

William Blair Funds

Mid Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016

	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception(a)
Class N		6.15	%		1.52	%		9.50	%		10.10	%		10.55	%
Class I		6.24			1.79			9.79			10.38			10.82
Russell Midcap^® Value Index		8.87			3.25			11.00			11.70			11.79

(a)	For the period from May 3, 2010 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Semiannual Report

June 30, 2016

Mid Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Financials—31.8%
	Allied World Assurance Co.Holdings, Ltd.†		1,018	$	36
	American Campus Communities, Inc.		1,148		61
	Ameriprise Financial, Inc.		289		26
*	Arch Capital Group, Ltd.†		574		41
	Assured Guaranty, Ltd.†		1,148		29
	Camden Property Trust		459		41
	DDR Corporation		2,133		39
	Douglas Emmett, Inc.		1,302		46
*	E*TRADE Financial Corporation		1,154		27
	East West Bancorp, Inc.		1,197		41
*	Equity Commonwealth		875		26
	Essex Property Trust, Inc.		229		52
	FNF Group		999		37
	General Growth Properties, Inc.		1,475		44
	Hanover Insurance Group, Inc.		548		46
	Hartford Financial Services Group, Inc.		1,108		49
	Jones Lang LaSalle, Inc.		330		32
	National Retail Properties, Inc.		758		39
	Northern Trust Corporation		761		50
	PacWest Bancorp		1,006		40
	Pebblebrook Hotel Trust		680		18
	Principal Financial Group, Inc.		857		35
	Prologis, Inc.		805		40
*	Signature Bank		202		25
	SL Green Realty Corporation		344		37
	SunTrust Banks, Inc.		870		36
*	SVB Financial Group		288		27
	Taubman Centers, Inc.		387		29
	Ventas, Inc.		644		47
	Zions Bancorporation		1,235		31
					1,127
	Utilities—11.9%
	American Water Works Co., Inc.		657		55
	Aqua America, Inc.		1,266		45
	Atmos Energy Corporation		577		47
	CMS Energy Corporation		1,127		52
	Eversource Energy		858		51
	Pinnacle West Capital Corporation		581		47
	WEC Energy Group, Inc.		934		61
	Xcel Energy, Inc.		1,419		64
					422
	Industrials—10.3%
	Carlisle Cos., Inc.		385		41
	Flowserve Corporation		724		33
	Fortune Brands Home & Security, Inc.		648		37
	Hubbell, Inc.		366		38
	Ingersoll-Rand plc†		694		44
	Kansas City Southern		463		42
	KAR Auction Services, Inc.		862		36
	The Toro Co.		386		34
	Valmont Industries, Inc.		221		30
	Wabtec Corporation		425		30
					365



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	Energy—10.2%
	Baker Hughes, Inc.		378	$	17
	Cimarex Energy Co.		316		38
*	Gulfport Energy Corporation		1,096		34
	Hess Corporation		806		49
*	Memorial Resource Development Corporation		2,274		36
	Noble Energy, Inc.		1,367		49
	Patterson-UTI Energy, Inc.		1,470		31
	Pioneer Natural Resources Co.		357		54
*	Rice Energy, Inc.		1,164		26
	Rowan Cos. plc†		1,006		18
*	Whiting Petroleum Corporation		1,018		9
					361
	Information Technology—9.2%
*	Akamai Technologies, Inc.		509		29
	Belden, Inc.		676		41
*	Cadence Design Systems, Inc.		2,194		53
*	CommScope Holding Co., Inc.		1,124		35
*	Genpact, Ltd.†		991		27
	Juniper Networks, Inc.		1,144		26
*	NXP Semiconductors N.V.†		500		39
	TE Connectivity, Ltd.†		672		38
*	Trimble Navigation, Ltd.		1,659		40
					328
	Consumer Discretionary—7.9%
	Autoliv, Inc.		297		32
	Darden Restaurants, Inc.		526		33
	L Brands, Inc.		515		35
	Lennar Corporation		806		37
	Newell Brands, Inc.		730		36
*	The Michaels Cos., Inc.		1,205		34
	Vail Resorts, Inc.		263		36
	VF Corporation		614		38
					281
	Health Care—5.9%
	CIGNA Corporation		216		27
*	Hologic, Inc.		1,095		38
*	Mednax, Inc.		617		45
*	Mettler-Toledo International, Inc.		126		46
	Zimmer Biomet Holdings, Inc.		439		53
					209
	Materials—5.7%
	Carpenter Technology Corporation		1,335		44
	Eastman Chemical Co.		780		53
	FMC Corporation		980		45
	Steel Dynamics, Inc.		2,397		59
					201
	Consumer Staples—4.2%
	ConAgra Foods, Inc.		947		45
	Ingredion, Inc.		422		55
	The Kroger Co.		1,380		51
					151
	Total Common Stocks—97.1% (cost $2,926)				3,445

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Mid Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $104, collateralized by FHLB, 5.500%, due 7/15/36		$104	$	104

Total Repurchase Agreement—2.9% (cost $104)				104

Total Investments—100.0% (cost $3,030)				3,549
Net assets—100.0%			$	3,549

† = U.S. listed foreign security

* = Non-income producing security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	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 Daniel Crowe Robert C. Lanphier, IV	The William Blair Small-Mid Cap Growth Fund (Class N shares) posted a 0.97% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 2500™ Growth Index (the “Index”), decreased 0.03%. Against this backdrop, the Fund outperformed the Index in the first six months of 2016. Style factors had an overall positive impact on the Fund’s relative performance. Our typical bias toward companies with less volatile fundamentals benefited the Fund’s relative performance as the market sold off in the first six weeks of the year and again in June. Stock selection in Health Care and an underweight to Biotechnology and Pharmaceutical companies were particularly beneficial to the Fund’s relative performance. Independent medical exam provider ExamWorks was the Fund’s strongest performing stock within Health Care for the year-to-date period. The stock was a top contributor to the Fund’s relative performance after a private equity firm acquired ExamWorks in the second quarter. Oil and natural gas company Diamondback Energy (Energy) was also a top relative contributor to the Fund’s performance due to positive results from its operations in the Permian Basin and the price of oil rebounding to nearly $50 per barrel. Other top contributors for the period were Ulta Salon, Cosmetics & Fragrances (Consumer Discretionary), First Cash Financial Services (Financials) and Vantiv (Information Technology). Detracting from the Fund’s relative performance for the period was stock selection in Information Technology (IT). Two top detractors both within the sector and for the Fund overall were j2 Global and Cvent. j2 Global, which provides communication services and manages online media properties, underperformed following a negative report released by a well-known short seller in March that criticized the company and put pressure on the stock price. Cloud-based enterprise event management platform company Cvent underperformed due to concerns surrounding a decrease in business travel and general negative sentiment towards cloud-related stocks early in the year. Other top detractors for the period were Jones Lang LaSalle (Financials), CSRA (IT) and Tyler Technologies (IT). Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6.

June 30, 2016

William Blair Funds

Small-Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		0.97	%		(3.15	)%		10.74	%		10.16	%		8.84	%
Class I		1.09			(2.90	)		11.02			10.42			9.12
Russell 2500^TM Growth Index		(0.03	)		(7.69	)		9.06			9.27			7.96

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Semiannual Report

June 30, 2016

Small-Mid Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Health Care—21.0%
*	ABIOMED, Inc.		169,758	$	18,553
*	Akorn, Inc.		356,300		10,149
*	Align Technology, Inc.		232,153		18,700
*	Amedisys, Inc.		145,600		7,350
*	Cambrex Corporation		408,850		21,150
*	Centene Corporation		367,850		26,253
	DENTSPLY SIRONA, Inc.		24,847		1,541
*	Exact Sciences Corporation		996,300		12,205
	HealthSouth Corporation		546,454		21,213
*	IDEXX Laboratories, Inc.		208,512		19,362
*	Ligand Pharmaceuticals, Inc.		259,889		30,997
*	Mednax, Inc.		397,428		28,786
*	Mettler-Toledo International, Inc.		84,040		30,668
*	Repligen Corporation		103,435		2,830
*	Veeva Systems, Inc.		457,900		15,624
					265,381
	Information Technology—20.7%
*	2U, Inc.		503,995		14,823
*	Akamai Technologies, Inc.		307,300		17,187
	Booz Allen Hamilton Holding Corporation		781,548		23,165
*	CoStar Group, Inc.		151,420		33,110
	CSRA, Inc.		693,140		16,240
*	Gartner, Inc.		189,020		18,413
*	Guidewire Software, Inc.		604,014		37,304
	j2 Global, Inc.		367,725		23,229
	MAXIMUS, Inc.		494,930		27,404
*	NeuStar, Inc.		372,791		8,764
*	Pandora Media, Inc.		644,273		8,021
*	Vantiv, Inc. Class “A”		394,920		22,353
*	WNS Holdings, Ltd.—ADR		420,120		11,343
					261,356
	Industrials—15.6%
	CEB, Inc.		297,798		18,368
*	Copart, Inc.		262,500		12,865
	Healthcare Services Group, Inc.		463,675		19,187
	HEICO Corporation		230,600		12,372
	Hexcel Corporation		364,350		15,172
	Manpowergroup, Inc.		194,130		12,490
*	Old Dominion Freight Line, Inc.		430,081		25,938
*	Stericycle, Inc.		103,880		10,816
	The Dun & Bradstreet Corporation		114,600		13,963
*	The Middleby Corporation		170,752		19,679
	The Toro Co.		148,963		13,139
*	TransDigm Group, Inc.		87,755		23,140
					197,129
	Consumer Discretionary—13.7%
	Cable One, Inc.		12,500		6,393
	DeVry Education Group, Inc.		34,937		623
*	Fiesta Restaurant Group, Inc.		309,300		6,746
*	IMAX Corporation†		523,223		15,425
*	Sally Beauty Holdings, Inc.		598,490		17,602
	ServiceMaster Global Holdings, Inc.		394,228		15,690
	Six Flags Entertainment Corporation		574,696		33,304
*	Steven Madden, Ltd.		282,665		9,661
	Tractor Supply Co.		307,230		28,013

		Shares/
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Consumer Discretionary—(continued)
**	Ulta Salon Cosmetics & Fragrance, Inc.		123,110	$	29,994
*	Universal Electronics, Inc.		126,534		9,146
					172,597
	Financials—13.1%
*	Affiliated Managers Group, Inc.		158,251		22,277
	CBOE Holdings, Inc.		389,800		25,968
*	Colliers International Group, Inc.†		226,064		7,718
*	Encore Capital Group, Inc.		407,541		9,589
	FactSet Research Systems, Inc.		96,654		15,602
	First Cash Financial Services, Inc.		310,023		15,914
*	FirstService Corporation†		493,682		22,625
	Jones Lang LaSalle, Inc.		114,511		11,159
	OM Asset Management plc†		653,928		8,730
*	Signature Bank		138,630		17,318
	Virtu Financial, Inc.		428,122		7,706
					164,606
	Materials—4.7%
*	Axalta Coating Systems, Ltd.†		551,000		14,618
	Ball Corporation		233,730		16,896
	Celanese Corporation		244,170		15,981
	Martin Marietta Materials, Inc.		62,600		12,019
					59,514
	Consumer Staples—4.5%
*	Herbalife, Ltd.†		214,200		12,537
	Nu Skin Enterprises, Inc.		324,264		14,978
*	Sprouts Farmers Market, Inc.		499,200		11,432
	WD-40 Co.		148,090		17,393
					56,340
	Energy—2.2%
*	Carrizo Oil & Gas, Inc.		259,250		9,294
*	Diamondback Energy, Inc.		198,210		18,079
					27,373
	Telecommunication Services—1.9%
*	SBA Communications Corporation		227,200		24,524

	Total Common Stocks—97.4% (cost $1,073,248)				1,228,820

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $26,223, collateralized by U.S. Treasury Note, 2.000%, due 8/15/25		$26,223	$	26,223

	Total Repurchase Agreement—2.1% (cost $26,223)				26,223

	Total Investments—99.5% (cost $1,099,471)				1,255,043

	Cash and other assets, less liabilities—0.5%				5,826
	Net assets—100.0%			$	1,260,869

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2016

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 6.14% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 2500™ Value Index (the “Index”), increased 7.84%. The Fund’s underperformance relative to the Index during the first half of 2016 was due to a combination of style headwinds and stock selection. Broadly speaking, from a style perspective, the Fund’s higher growth profile was a headwind during the period as higher growth stocks underperformed slower growth stocks. In addition, investor appetite for yield drove the outperformance of high dividend-yielding stocks, which was a headwind given the Fund’s underweight to this segment relative to the Index. The Fund’s largest sector detractor from performance during the period was within Financials and was driven by stock selection within REITs, Regional Banks, and Real Estate Management & Development. Bank stocks, such as Bank of the Ozarks, were generally weaker after a surprisingly disappointing jobs report confirmed that the Fed would hold off on raising interest rates in the near-term. After the Brexit vote late in the second quarter bank stocks further sold off as they further pushed out expectations for any increase in interest rates. The Materials sector was a meaningful detractor from the Fund’s relative performance given the Fund’s lack of exposure to Gold and Diversified Metals & Mining relative to the Index. This lack of exposure offset positive stock selection within Fertilizers & Agricultural Chemicals. Notable stock level detractors from relative performance included Integer (Health Care) and J2 Global (Information Technology). The largest contributor to relative performance at the sector level was Information Technology. The Fund’s outperformance within Information Technology was the result of broad-based positive stock selection throughout most of the industries within the sector. The Consumer Discretionary sector was another significant contributor to the Fund’s relative performance during the period. Strong stock selection within Apparel Retail and Restaurants, helped by the announced acquisition of portfolio holding Krispy Kreme Doughnuts in the second quarter, drove the Fund’s relative outperformance within the sector. Other notable positive contributors to the Fund’s relative performance included Children’s Place (Consumer Discretionary) and Southwest Gas (Utilities). Please refer to the U.S. Value Market Review and Outlook relating to the Fund on page 7.

Semiannual Report

June 30, 2016

Small-Mid Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			Since Inception(a)
Class N		6.14	%		0.89	%		7.90	%		12.61	%
Class I		6.30			1.19			8.21			12.92
Russell 2500^TM Value Index		7.84			0.22			8.14			13.92

(a)	For the period from December 15, 2011 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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, 2016

William Blair Funds

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Financials—35.8%
	Acadia Realty Trust		1,054	$	38
	Allied World Assurance Co. Holdings, Ltd.† .		1,195		42
	American Assets Trust, Inc.		992		42
	American Campus Communities, Inc.		921		49
*	Arch Capital Group, Ltd.†		775		56
	Assured Guaranty, Ltd.†		1,430		36
	Bank of the Ozarks, Inc.		821		31
	Boston Private Financial Holdings, Inc.		1,320		16
	Camden Property Trust		680		60
	Care Capital Properties, Inc.		1,199		31
	CNO Financial Group, Inc.		2,352		41
	CVB Financial Corporation		1,039		17
	DDR Corporation		1,939		35
	Douglas Emmett, Inc.		1,553		55
*	E*TRADE Financial Corporation		1,839		43
	East West Bancorp, Inc.		1,264		43
	Education Realty Trust, Inc.		919		42
	EPR Properties		548		44
*	Equity Commonwealth		1,068		31
	Equity One, Inc.		1,018		33
	First American Financial Corporation		1,125		45
	Glacier Bancorp, Inc.		1,536		41
	Hanover Insurance Group, Inc.		614		52
	Highwoods Properties, Inc.		694		37
	Home BancShares, Inc.		1,480		29
	Iberiabank Corporation		600		36
	Jones Lang LaSalle, Inc.		333		33
	National Retail Properties, Inc.		722		37
	PacWest Bancorp		1,029		41
	Pebblebrook Hotel Trust		1,008		27
	Prosperity Bancshares, Inc.		733		37
	Radian Group, Inc.		3,215		34
	Renasant Corporation		860		28
	Selective Insurance Group, Inc.		1,223		47
*	Signature Bank		267		33
	Sunstone Hotel Investors, Inc.		2,297		28
*	SVB Financial Group		270		26
	Taubman Centers, Inc.		535		40
	Umpqua Holdings Corporation		1,991		31
*	Western Alliance Bancorp		894		29
	WSFS Financial Corporation		1,287		41
	Yadkin Financial Corporation		1,007		25
	Zions Bancorporation		1,569		39
					1,601
	Industrials—13.0%
	Carlisle Cos., Inc.		425		45
	CIRCOR International, Inc.		459		26
	Curtiss-Wright Corporation		455		38
	EMCOR Group, Inc.		800		40
	Flowserve Corporation		582		26
	Fortune Brands Home & Security, Inc.		641		37
*	FTI Consulting, Inc.		668		27
	G&K Services, Inc.		436		34



	Issuer	Shares		Value

	Common Stocks—(continued)

	Industrials—(continued)
	Hubbell, Inc.		400	$	42
	Interface, Inc.		1,913		29
	KAR Auction Services, Inc.		1,134		47
*	Lydall, Inc.		696		27
	Matson, Inc.		869		28
	Standex International Corporation		319		27
	The Toro Co.		468		41
	Valmont Industries, Inc.		223		30
	Wabtec Corporation		509		36
					580

	Information Technology—10.5%
*	Acxiom Corporation		2,830		62
	ADTRAN, Inc.		1,050		20
	Belden, Inc.		875		53
	Booz Allen Hamilton Holding Corporation		1,443		43
*	Cadence Design Systems, Inc.		2,796		68
*	CommScope Holding Co., Inc.		1,107		34
*	Genpact, Ltd.†		1,475		40
*	Inphi Corporation		1,685		54
	Intersil Corporation		1,841		25
	j2 Global, Inc.		779		49
	Littelfuse, Inc.		174		20
					468
	Consumer Discretionary—9.8%
	Autoliv, Inc.		268		29
	Children’s Place, Inc.		503		40
	Churchill Downs, Inc.		141		18
	Dana Holding Corporation		1,965		21
	Darden Restaurants, Inc.		456		29
*	Dave & Buster’s Entertainment, Inc.		604		28
	Ethan Allen Interiors, Inc.		690		23
*	Express, Inc.		1,961		28
*	Genesco, Inc.		413		27
*	Krispy Kreme Doughnuts, Inc.		1,461		31
	Lennar Corporation		787		36
	Meredith Corporation		697		36
*	The Michaels Cos., Inc.		1,018		29
	Vail Resorts, Inc.		257		35
	Wolverine World Wide, Inc.		1,379		28
					438

	Utilities—9.4%
	American Water Works Co., Inc.		527		45
	Aqua America, Inc.		1,397		50
	Atmos Energy Corporation		664		54
	CMS Energy Corporation		952		44
	IDACORP, Inc.		550		45
	Pinnacle West Capital Corporation		566		46
	PNM Resources, Inc.		918		32
	Portland General Electric Co.		739		33
	Southwest Gas Corporation		450		35
	Spire, Inc.		515		36
					420

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Energy—7.3%
*	Exterran Corporation		575	$	7
*	Gulfport Energy Corporation		1,768		55
*	Helix Energy Solutions Group, Inc.		2,851		19
*	Memorial Resource Development Corporation		2,446		39
*	Parsley Energy, Inc.		1,992		54
	Patterson-UTI Energy, Inc.		1,055		23
*	PDC Energy, Inc.		892		51
*	Rice Energy, Inc.		1,474		33
*	TETRA Technologies, Inc.		4,167		27
*	Whiting Petroleum Corporation		2,286		21
					329
	Health Care—5.1%
	CONMED Corporation		525		25
	HealthSouth Corporation		967		37
*	Hologic, Inc.		664		23
*	Integer Holdings Corporation		655		20
*	Magellan Health, Inc.		361		24
*	Mednax, Inc.		673		49
*	Mettler-Toledo International, Inc.		137		50
					228
	Materials—5.1%
	Carpenter Technology Corporation		673		22
	FMC Corporation		528		24
	Minerals Technologies, Inc.		642		36
	PolyOne Corporation		1,328		47
	Sensient Technologies Corporation		518		37
	Silgan Holdings, Inc.		452		23
	Steel Dynamics, Inc.		1,530		38
					227
	Consumer Staples—2.9%
*	Darling Ingredients, Inc.		1,331		20
	Ingredion, Inc.		576		75
	J&J Snack Foods Corporation		295		35
					130
	Total Common Stocks—98.9% (cost $3,818)				4,421


	Principal
Issuer	Amount		Value

Repurchase Agreement
State Street Bank and Trust Company, 0.030% dated 6/30/16, due 7/1/16, repurchase price $112, collateralized by U.S. Treasury Note, 2.125%, due 9/30/21		$112	$	112

Total Repurchase Agreement—2.5% (cost $112)				112

Total Investments—101.4% (cost $3,930)				4,533

Liabilities, plus cash and other assets—(1.4)%				(61	)
Net assets—100.0%			$	4,472

† = U.S. listed foreign security

* = Non-income producing security

See accompanying Notes to Financial Statements.

June 30, 2016

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 William Blair Small Cap Growth Fund (Class N shares) posted a 3.92% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 2000^®Growth Index (the “Index”), decreased 1.59%. Against this backdrop, the Fund significantly outperformed the Index in the first six months of 2016. The most notable contribution to the Fund’s relative performance came in the Health Care sector. Within Health Care, the Fund’s style-driven underweight to Biotechnology and Pharmaceuticals added significant value – mostly during the first two months of the year – as the industry group corrected after a multi-year period of outperformance. From a stock selection perspective, independent medical exam provider ExamWorks was the largest contributor to the Fund’s relative performance within the Health Care sector after a private equity firm acquired ExamWorks in the second quarter. Universal Electronics, a developer and manufacturer of remote control devices and software, was the top individual stock contributor to the Fund’s relative performance during the period. The stock outperformed after the company announced an agreement with Comcast that implied a meaningful expansion of the business relationship between the two companies, including Comcast’s use of Universal’s voice-enabled remote. Other top relative contributors were Xactly (Information Technology), ORBCOMM (Telecommunication Services) and First Cash Financial Services (Financials). Conversely, the top relative detracting stocks during the period were Information Technology companies Hortonworks and j2 Global. Data management platform provider Hortonworks underperformed due to a dilutive secondary offering and signs that the company’s Hadoop platform could see pricing pressure in the near future. j2 Global, which provides communication services and manages online media properties, underperformed following a negative report released by a well-known short seller in March that criticized the company and put pressure on the stock price. Other top detractors were AtriCure (Health Care), Akorn (Health Care) and Fiesta Restaurant Group (Consumer Discretionary). Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6.

Semiannual Report

June 30, 2016

Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		3.92	%		(3.86	)%		7.98	%		9.48	%		5.82	%
Class I		4.05			(3.60	)		8.23			9.75			6.11
Russell 2000^®Growth Index		(1.59	)		(10.75	)		7.74			8.51			7.14

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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, 2016

William Blair Funds

Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—23.8%
*	2U, Inc.		157,520	$	4,633
*	Acxiom Corporation		257,850		5,670
*	Callidus Software, Inc.		237,467		4,745
	CSRA, Inc.		140,600		3,294
*	Envestnet, Inc.		96,290		3,207
*	Guidewire Software, Inc.		89,626		5,535
*	Inphi Corporation		124,410		3,985
	j2 Global, Inc.		134,691		8,509
	MAXIMUS, Inc.		60,890		3,372
*	MaxLinear, Inc.		280,641		5,046
*	NeuStar, Inc.		158,958		3,737
*	OSI Systems, Inc.		70,590		4,103
*	Pandora Media, Inc.		347,150		4,322
*	Q2 Holdings, Inc.		192,230		5,386
*	RealPage, Inc.		159,390		3,559
*	Ultimate Software Group, Inc.		24,302		5,111
*	USA Technologies, Inc.		1,283,150		5,479
*	WNS Holdings, Ltd.—ADR		173,234		4,677
*	Xactly Corporation		207,180		2,654
					87,024
	Health Care—18.0%
*	ABIOMED, Inc.		35,360		3,864
*	Accelerate Diagnostics, Inc.		258,889		3,725
*	Air Methods Corporation		146,820		5,261
*	Akorn, Inc.		122,750		3,496
*	Amedisys, Inc.		53,745		2,713
*	AtriCure, Inc.		226,483		3,200
*	Cambrex Corporation		101,615		5,257
*	Exact Sciences Corporation		373,520		4,576
*	Glaukos Corporation		76,379		2,227
	HealthSouth Corporation		124,745		4,843
	LeMaitre Vascular, Inc.		245,425		3,502
*	Ligand Pharmaceuticals, Inc.		64,030		7,637
*	NxStage Medical, Inc.		306,056		6,635
*	Repligen Corporation		191,070		5,228
*	Veeva Systems, Inc.		105,180		3,589
					65,753
	Industrials—16.1%
	Albany International Corporation		44,820		1,790
	CEB, Inc.		42,100		2,597
	ESCO Technologies, Inc.		121,230		4,842
*	Franklin Covey Co.		307,079		4,707
*	GP Strategies Corporation		190,258		4,127
	Healthcare Services Group, Inc.		166,620		6,895
	HEICO Corporation		105,580		5,664
*	Hudson Technologies, Inc.		1,854,894		6,678
*	ICF International, Inc.		110,381		4,514
	John Bean Technologies Corporation		87,125		5,334
*	Mercury Systems, Inc.		255,680		6,356
*	NV5 Global, Inc.		82,062		2,334
	The Dun & Bradstreet Corporation		25,070		3,054
					58,892



	Issuer	Shares		Value

	Common Stocks—(continued)

	Consumer Discretionary—15.0%
	Cable One, Inc.		7,910	$	4,045
	Collectors Universe, Inc.		174,586		3,448
	DeVry Education Group, Inc.		12,018		214
*	Fiesta Restaurant Group, Inc.		115,210		2,513
*	Gentherm, Inc.		155,880		5,339
*	IMAX Corporation†		173,877		5,126
	Lithia Motors, Inc.		40,970		2,912
*	Mattress Firm Holding Corporation		36,450		1,223
	Nutrisystem, Inc.		220,730		5,598
	Six Flags Entertainment Corporation		147,522		8,549
*	Steven Madden, Ltd.		115,550		3,949
*	U.S. Auto Parts Network, Inc.		1,288,211		5,088
*	Universal Electronics, Inc.		92,972		6,720
					54,724
	Financials—9.3%
	B. Riley Financial, Inc.		271,254		2,599
*	BofI Holding, Inc.		89,800		1,590
*	Colliers International Group, Inc. †		70,723		2,415
*	Cowen Group, Inc.		903,164		2,673
*	Encore Capital Group, Inc.		77,436		1,822
	First Cash Financial Services, Inc.		149,576		7,678
*	FirstService Corporation†		98,979		4,536
	OM Asset Management plc†		369,557		4,934
	Virtu Financial, Inc.		318,962		5,741
					33,988
	Consumer Staples—4.2%
*	Amplify Snack Brands, Inc.		143,458		2,116
*	Herbalife, Ltd.†		26,300		1,539
	Nu Skin Enterprises, Inc.		107,785		4,979
*	Sprouts Farmers Market, Inc.		142,610		3,266
	WD-40 Co.		28,961		3,401
					15,301
	Materials—3.0%
*	Codexis, Inc.		371,180		1,496
*	Headwaters, Inc.		227,422		4,080
*	Stillwater Mining Co.		461,237		5,470
					11,046
	Energy—2.2%
*	Carrizo Oil & Gas, Inc.		73,763		2,644
*	Gulfport Energy Corporation		61,507		1,923
*	Hornbeck Offshore Services, Inc.		109,710		915
*	Parsley Energy, Inc.		90,630		2,453
					7,935
	Telecommunication Services—1.8%
*	ORBCOMM, Inc.		638,922		6,357

	Total Common Stocks—93.4% (cost $286,745)				341,020

	Exchange-Traded Fund
	iShares Russell 2000 Growth Index Fund		55,210		7,574

	Total Exchange-Traded Fund—2.1% (cost $6,665)				7,574

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $10,008, collateralized by FFCB, 3.020%, due 1/12/26		$10,008	$	10,008

Total Repurchase Agreement—2.7% (cost $10,008)				10,008

Total Investments—98.2% (cost $303,418)				358,602
Cash and other assets, less liabilities—-1.8%				6,585
Net assets—100.0%			$	365,187

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

If a 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, as amended. The Fund had the following transactions during the period ended June 30, 2016 with companies deemed affiliated during the period or at June 30, 2016.

		Share Activity								Period Ended June 30, 2016
	Security Name	Balance 12/31/2015		Purchases		Sales		Balance 6/30/2016		Value			Dividend Income			Net realized gain (loss)			Change in net unrealized appreciation (depreciation)
ᴫ	Hudson Technologies, Inc.		1,681,784		173,110		—		1,854,894		$	6,678		$	—		$	—		$	1,079
											$	6,678		$	—		$	—		$	1,079

ᴫ = Affiliated company at June 30, 2016. The Fund’s total value in companies deemed to be affiliated at June 30, 2016 was $6,678.

See accompanying Notes to Financial Statements.

June 30, 2016

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 6.83% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the Russell 2000^®Value Index (the “Index”), increased 6.08%. The Fund’s outperformance relative to the Index during the first half of 2016 was primarily driven by strong stock selection across most sectors. Broadly speaking, from a style perspective, the Fund’s larger market cap bias relative to the Index provided a tailwind during the period as larger cap stocks outperformed smaller caps in the first six months of the year. At the sector level, Consumer Discretionary was the most significant contributor to the Fund’s relative performance. Strong stock selection within the Consumer Discretionary sector, specifically Apparel Retail and Restaurants, helped by the announced acquisition of portfolio holding Krispy Kreme Doughnuts in the second quarter, drove the Fund’s relative outperformance within the sector. The combination of higher oil prices and strong stock selection within the Energy sector drove the Fund’s relative outperformance within the sector during the period. Other notable contributors to relative performance at the stock level included Children’s Place (Consumer Discretionary) and Southwest Gas (Utilities). Materials, the best performing sector of the market, was the largest detractor from relative performance due to the Fund’s lack of exposure to the more commodity exposed companies. Specifically, the strong performance of companies exposed to silver was a notable detractor to the Fund’s performance within the Materials sector and more than offset the Fund’s positive stock selection within Specialty Chemicals. The Fund’s relative underperformance within Financials was driven by stock selection within Regional Banks. Banking stocks, such as Bank of the Ozarks, were generally weaker after a surprisingly disappointing jobs report confirmed that the Fed would hold off on raising interest rates in the near-term. These stocks further declined after the Brexit vote late in the second quarter further pushed out expectations for any increase in interest rates. Other notable detractors from relative performance at the stock level included Integer (Health Care) and J2 Global (Information Technology). Please refer to the U.S. Value Market Review and Outlook relating to the Fund on page 7.

Semiannual Report

June 30, 2016

Small Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2015

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		6.83	%		(0.06	)%		7.51	%		8.40	%		7.10	%
Class I		6.97			0.23			7.79			8.68			7.35
Russell 2000^® Value Index		6.08			(2.58	)		6.36			8.15			5.15

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

June 30, 2016

William Blair Funds

Small Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Financials—36.7%
	Acadia Realty Trust		192,016	$	6,820
	American Assets Trust, Inc.		177,757		7,544
	American Campus Communities, Inc.		180,851		9,562
	Bank of the Ozarks, Inc.		154,210		5,786
	Banner Corporation		69,445		2,954
	Berkshire Hills Bancorp, Inc.		208,927		5,624
	Boston Private Financial Holdings, Inc.		309,193		3,642
	Care Capital Properties, Inc.		158,821		4,163
*	Cascade Bancorp		672,334		3,725
	CNO Financial Group, Inc.		483,926		8,449
	CoBiz Financial, Inc.		538,476		6,300
	CVB Financial Corporation		203,735		3,339
	Education Realty Trust, Inc.		199,489		9,205
	EPR Properties		108,114		8,723
*	Equity Commonwealth		146,581		4,270
	Equity One, Inc.		143,820		4,628
	First American Financial Corporation		181,402		7,296
	Glacier Bancorp, Inc.		289,514		7,695
	Hanover Insurance Group, Inc.		92,083		7,792
	Highwoods Properties, Inc.		121,992		6,441
	Home BancShares, Inc.		307,088		6,077
	Iberiabank Corporation		135,086		8,069
	National Bank Holdings Corporation		201,632		4,105
	PacWest Bancorp		181,601		7,224
	Pebblebrook Hotel Trust		204,952		5,380
	Prosperity Bancshares, Inc.		137,405		7,006
	Radian Group, Inc.		599,800		6,250
	Renasant Corporation		211,582		6,841
*	Safeguard Scientifics, Inc.		276,584		3,455
	Selective Insurance Group, Inc.		210,368		8,038
	Sunstone Hotel Investors, Inc.		405,984		4,900
	Umpqua Holdings Corporation		450,913		6,976
*	Western Alliance Bancorp		224,959		7,345
	WSFS Financial Corporation		218,549		7,035
	Yadkin Financial Corporation		255,359		6,407
					219,066
	Industrials—13.0%
	CIRCOR International, Inc.		115,300		6,571
	Curtiss-Wright Corporation		96,372		8,120
	EMCOR Group, Inc.		147,885		7,285
*	FTI Consulting, Inc.		137,740		5,603
	G&K Services, Inc.		104,404		7,994
	Interface, Inc.		362,127		5,523
	Kadant, Inc.		119,477		6,154
*	Lydall, Inc.		124,850		4,814
	Matson, Inc.		154,763		4,997
*	Northwest Pipe Co.		235,082		2,534
	Standex International Corporation		68,269		5,641
	The Toro Co.		84,338		7,439
	Valmont Industries, Inc.		35,915		4,858
					77,533



	Issuer	Shares		Value

	Common Stocks—(continued)

	Consumer Discretionary—10.7%
*	Cavco Industries, Inc.		48,750	$	4,568
	Children’s Place, Inc.		91,832		7,363
	Churchill Downs, Inc.		33,605		4,246
	Dana Holding Corporation		376,208		3,973
*	Dave & Buster’s Entertainment, Inc.		94,750		4,433
	Ethan Allen Interiors, Inc.		136,721		4,517
*	Express, Inc.		331,500		4,810
*	Genesco, Inc.		88,443		5,688
*	Krispy Kreme Doughnuts, Inc.		287,414		6,024
	Meredith Corporation		111,317		5,779
	Vail Resorts, Inc.		52,221		7,219
	Wolverine World Wide, Inc.		255,614		5,194
					63,814
	Information Technology—10.6%
*	Acxiom Corporation		437,547		9,622
	ADTRAN, Inc.		219,432		4,092
	Belden, Inc.		118,392		7,147
	Booz Allen Hamilton Holding Corporation		234,596		6,953
*	Cadence Design Systems, Inc.		254,509		6,185
*	CommScope Holding Co., Inc.		150,349		4,665
*	Inphi Corporation		227,708		7,294
	Intersil Corporation		243,445		3,296
*	Intralinks Holdings, Inc.		474,059		3,081
	j2 Global, Inc.		108,002		6,823
	Littelfuse, Inc.		36,860		4,357
					63,515
	Utilities—7.6%
	Chesapeake Utilities Corporation		81,465		5,391
	IDACORP, Inc.		101,702		8,274
	PNM Resources, Inc.		228,386		8,094
	Portland General Electric Co.		176,318		7,779
	Southwest Gas Corporation		106,165		8,356
	Spire, Inc.		102,013		7,227
					45,121
	Energy—5.7%
	Archrock, Inc.		401,058		3,778
*	Exterran Corporation		182,400		2,344
*	Helix Energy Solutions Group, Inc.		479,655		3,242
*	Memorial Resource Development Corporation		215,276		3,418
*	Parsley Energy, Inc.		266,875		7,222
*	PDC Energy, Inc.		103,973		5,990
*	Rice Energy, Inc.		194,655		4,290
*	TETRA Technologies, Inc.		570,188		3,632
					33,916
	Materials—4.3%
	Minerals Technologies, Inc.		105,571		5,996
	PolyOne Corporation		200,527		7,067
	Sensient Technologies Corporation		99,268		7,052
	Silgan Holdings, Inc.		109,043		5,611
					25,726

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Small Cap Value Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

		Shares or
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Health Care—4.1%
	CONMED Corporation		167,915	$	8,015
	HealthSouth Corporation		163,605		6,351
*	Integer Holdings Corporation		177,644		5,494
*	Magellan Health, Inc.		69,753		4,588
					24,448
	Consumer Staples-3.7%
*	Darling Ingredients, Inc.		456,330		6,799
	J&J Snack Foods Corporation		69,424		8,280
	SpartanNash Co.		237,538		7,264
					22,343
	Total Common Stocks—96.4% (cost $477,863)				575,482

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $16,816, collateralized by FFCB, 3.090%, due 8/19/25		$16,816		16,816

	Total Repurchase Agreement—2.8% (cost $16,816)				16,816

	Total Investments—99.2% (cost $494,679)				592,298
	Cash and other assets, less liabilities—0.8%				4,910
	Net assets—100.0%			$	597,208

* = Non-income producing security

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Global Markets Review and Outlook

Equity markets were highly volatile throughout the first half of 2016, buffeted by the continued fragile global growth environment and tremendous sentiment swings around the United Kingdom’s historic vote on June 23 to secede from the European Union (“Brexit”). The MSCI ACWI IMI (net) advanced 1.36% in U.S. Dollar (“USD”) terms during the six-month period, benefiting from expectations that central banks around the world would maintain or increase stimulus measures to combat weaker growth prospects. After suffering major equity market declines in the initial trading days following the Brexit vote, investor hopes of expanded quantitative easing by the European Central Bank, interest rate cuts by the Bank of England, and delayed tightening of monetary policy by the Federal Reserve Board’s Federal Open Market Committee (FOMC) together ignited a broad equity rally during the final week of June.

Although recovering most of their initial Brexit losses in a matter of days, the environment for equities remained tenuous heading into the second half of 2016 as investors were left grappling with the short and longer term ramifications for U.K. and European economic activity. U.S. equities were a relative safe haven against this backdrop. In the wake of a poor U.S. jobs report and political turbulence across the Atlantic, the growing consensus of “lower for longer” for FOMC interest rate policy significantly bolstered investor sentiment. Although similarly underpinned by central bank policy hopes, U.K. and European equity markets ended the first six months of the year in negative territory. U.K. equities were actually positive for the six-month period in local currency terms, as measured by the MSCI UK IMI (net), but pound sterling’s 9% decline versus the USD was a significant offset. Concerns about the U.K.’s worsening twins deficit (i.e. fiscal deficit and current account deficit) was further exacerbated by Brexit and the ensuing political upheaval - sending the British Pound down to levels not seen since 1985.

Among other primary economies, Japanese equities endured their worst six-month decline since the global financial crisis. Yen strength was a persistent headwind to performance for Japanese equities as investors became increasingly worried about the detrimental impact of the stronger Yen on corporate profits for export-oriented companies. Reflecting these concerns, Daiwa Securities estimated that pretax profits for Japan’s biggest companies would decline approximately 10% for the upcoming financial quarter, a view which was widely expressed by sell side analysts via negative earnings revisions that stood out on a global basis.Yen strength has complicated the reflation efforts of Japanese policymakers by lowering the cost of imports. Further weighing on investor sentiment has been recent economic data showing weaker industrial output and consumer spending.

Emerging market equities outperformed during the six-month period, benefiting from relatively attractive valuations coming into 2016, stabilizing domestic currencies and fund flows, and the FOMC’s delayed interest rate hike timeline. Improved perceptions of China’s growth and stimulus prospects also supported emerging market equities broadly. The MSCI EM IMI (net) advanced 5.69% during the period in USD terms. Among the major EM regions, Latin America was the strongest performer over the six-month period, driven by sharp rebounds in Brazilian equities and Brazilian currency (the Real), firmer commodity prices, and the movement to impeach Dilma Rousseff from the presidency. Within Europe, the Middle East and Africa, Russia was a standout performer for the period, benefiting from the oil price recovery and related currency strength. Country performance was mixed across the Emerging Asia region, with strength in Thailand, Indonesia and the Philippines offset by China’s negative return.

From a global sector perspective, Energy was the standout performer for the six-month period. In the environment of weaker global growth and falling bond yields, there was a renewed preference for defensive, yield-oriented sectors, which supported Utilities, Consumer Staples, Healthcare and Telecom to varying degrees. In contrast, the more cyclically-oriented Consumer Discretionary, Financials and Information Technology sectors experienced negative returns. From a market cap perspective, small cap stocks outpaced their mid/large cap counterparts on a global basis, driven primarily by the strong performance of U.S. small cap stocks. The reverse was true in emerging markets, however, as larger cap, more liquid companies led the rally during the first half of the year, after lagging their small cap counterparts in recent years.

Semiannual Report

June 30, 2016

	Global Leaders Fund

	The Global Leaders Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Andrew G. Flynn Kenneth J. McAtamney	The William Blair Global Leaders Fund (Class N shares) posted a 1.64% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI All Country World IMI Index (net) (the “Index”), increased 1.36%. The Fund underperformed the Index for the six-month period. Style headwinds during the first quarter adversely impacted six-month performance, as higher growth companies with relatively strong earnings trends which the Fund focuses on, significantly lagged lower valuation companies with weaker earnings trends. This effect was most pronounced during the month of February and persisted to a smaller degree through April, before reversing in May. The Fund’s relative performance also suffered from a combination of negative sector allocation and stock selection effects. The Fund’s Consumer Discretionary, Healthcare, and Information Technology (IT) sector overweightings, combined with underweightings to the market-leading Consumer Staples, Energy, Materials, Telecommunication Services, and Utilities sectors, were the largest detractors from the Fund’s relative performance. Stock selection in the Consumer Staples sector also detracted from Fund performance, hampered by the Fund’s lack of exposure to Tobacco and Food Products companies, in addition to share price weakness for Costco Wholesale (U.S.) and Alimentation Couche-Tard (Canada). Costco suffered from lower monthly sales trends due to food deflation and the company’s ongoing credit card transition. Alimentation Couche-Tard was impacted by a weaker average road transportation fuel selling price in its U.S. business. These negative effects were partially mitigated by IT stock selection, as Keyence (Japan) and Taiwan Semiconductor Manufacturing (TSM) posted strong six-month gains. Keyence’s share price benefited from solid financial results that stood out relative to its industrial automation peers, and TSM was supported by expectations of continued incremental market share gains for its microchips at Apple. From a geographic perspective, U.S. stock selection was the primary detractor from six-month performance, weighed down by Financials, Consumer Staples, and IT stock selection. This more than offset positive stock selection in Japan, China, and Taiwan. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

Global Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			5 Year			Since Inception
Class N(a)		(1.64	)%		(3.82	)%		6.50	%		6.14	%		2.21	%
Class I(a)		(1.47	)		(3.46	)		6.83			6.44			2.49
MSCI ACW IMI (net)(a)		1.36			(3.87	)		6.13			5.43			1.84
Institutional Class(b)		(1.47	)		(3.47	)		6.93			—			7.16
MSCI ACW IMI (net)(b)		1.36			(3.87	)		6.13			—			6.94


(a)	Since inception is for the period from October 15, 2007 (Commencement of Operations) to June 30, 2016.
(b)	Since inception is for the period from December 19, 2012 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Semiannual Report

June 30, 2016

Global Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Western Hemisphere—54.8%
	Canada—5.1%
	Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		41,531	$	1,783
	Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		69,418		2,296
	Intact Financial Corporation (Insurance)		30,460		2,176
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		100,208		2,780
					9,035
	United States—49.7%
*	Affiliated Managers Group, Inc. (Capital markets)		12,024		1,693
*	Align Technology, Inc. (Health care equipment & supplies)		24,109		1,942
*	Alphabet, Inc. Class “A” (Internet software & services)		5,524		3,886
*	Amazon.com, Inc. (Internet & catalog retail)		6,968		4,986
*	ANSYS, Inc. (Software)		20,541		1,864
	Apogee Enterprises, Inc. (Building products)		33,405		1,548
	BlackRock, Inc. (Capital markets)		9,114		3,122
	Bristol-Myers Squibb Co. (Pharmaceuticals)		49,338		3,629
*	Centene Corporation (Health care providers & services)		47,577		3,396
*	CoStar Group, Inc. (Internet software & services)		5,629		1,231
	Costco Wholesale Corporation (Food & staples retailing)		5,990		941
	Danaher Corporation (Industrial conglomerates)		27,472		2,775
*	Edwards Lifesciences Corporation (Health care equipment & supplies)		20,858		2,080
	EOG Resources, Inc. (Oil, gas & consumable fuels)		19,109		1,594
	Equifax, Inc. (Professional services)		19,515		2,506
*	Facebook, Inc. Class “A” (Internet software & services)		22,649		2,588
	General Electric Co. (Industrial conglomerates)		109,190		3,437
	Intercontinental Exchange, Inc. (Diversified financial services)		9,421		2,411
	Jones Lang LaSalle, Inc. (Real estate management & development)		5,083		495
	Mastercard, Inc. Class “A” (IT services)		28,157		2,480
	Moody’s Corporation (Diversified financial services)		18,605		1,743
	NIKE, Inc. Class “B” (Textiles, apparel & luxury goods)		41,684		2,301
*	O’Reilly Automotive, Inc. (Specialty retail)		6,604		1,790
	Pioneer Natural Resources Co. (Oil, gas & consumable fuels)		7,761		1,174
	PPG Industries, Inc. (Chemicals)		29,474		3,070



	Issuer	Shares		Value

	Common Stocks—(continued)

	Western Hemisphere—(continued)
	United States—(continued)
	Raytheon Co. (Aerospace & defense)		19,732	$	2,683
*	Red Hat, Inc. (Software)		24,684		1,792
*	salesforce.com, Inc. (Software)		10,997		873
	Schlumberger, Ltd. (Energy equipment & services)†		27,754		2,195
	Simon Property Group, Inc. (Real estate investment trusts (REITs))		11,970		2,596
	The Home Depot, Inc. (Specialty retail)		42,161		5,384
	The Sherwin-Williams Co. (Chemicals)		8,578		2,519
	Thermo Fisher Scientific, Inc. (Life sciences tools & services)		15,432		2,280
*	Ulta Salon Cosmetics & Fragrance, Inc. (Specialty retail)		9,409		2,292
	Vail Resorts, Inc. (Hotels, restaurants & leisure)		12,663		1,750
*	Vantiv, Inc. Class “A” (IT services)		22,538		1,276
*	VCA Antech, Inc. (Health care providers & services)		35,351		2,390
	Watsco, Inc. (Trading companies & distributors)		15,847		2,230
					88,942

	Europe, Mid-East—16.3%
	Denmark—1.7%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		57,447		3,094

	France—3.7%
	Cap Gemini S.A. (IT services)		48,669		4,200
	Valeo S.A. (Auto components)		54,822		2,434
					6,634
	Germany—1.0%
	Continental AG (Auto components)		9,712		1,838

	Ireland—1.0%
	Paddy Power Betfair PLC (Hotels, restaurants & leisure)		16,306		1,714

	Israel—1.4%
	Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		49,059		2,464

	Netherlands—3.3%
*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		36,233		2,838
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		114,097		3,130
					5,968
	Spain—1.5%
	Industria de Diseno Textil S.A. (Specialty retail)		81,037		2,722

	Sweden—1.1%
	Assa Abloy AB Class “B” (Building products)		93,851		1,931

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Global Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Switzerland—1.6%
	Partners Group Holding AG (Capital markets)		6,590	$	2,824

	Japan—8.1%
	Daikin Industries, Ltd. (Building products)		34,900		2,933
	Fuji Heavy Industries, Ltd. (Automobiles)		52,200		1,795
	Kao Corporation (Personal products)		50,700		2,953
	Keyence Corporation (Electronic equipment, instruments & components)		3,500		2,388
	ORIX Corporation (Diversified financial services)		206,400		2,671
	Shimano, Inc. (Leisure products)		11,100		1,697
					14,437

	Emerging Asia—8.0%
	China—3.8%
*	Baidu, Inc.—ADR (Internet software & services)		13,387		2,211
	China Overseas Land & Investment, Ltd. (Real estate management & development)		566,000		1,804
	Tencent Holdings, Ltd. (Internet software & services)		119,300		2,740
					6,755
	India—1.7%
	HDFC Bank, Ltd.—ADR (Banks)		45,295		3,005

	Taiwan—2.5%
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		169,888		4,456

	United Kingdom—5.3%
	ARM Holdings plc (Semiconductors & semiconductor equipment)		57,022		866
	Compass Group plc (Hotels, restaurants & leisure)		187,404		3,565
	Reckitt Benckiser Group plc (Household products)		30,667		3,075
	WPP plc (Media)		98,595		2,055
					9,561

	Asia—4.4%
	Australia—1.3%
	Macquarie Group, Ltd. (Capital markets)		42,698		2,223

	Hong Kong—1.5%
	AIA Group, Ltd. (Insurance)		459,600		2,758

	Singapore—1.6%
	Broadcom, Ltd. (Semiconductors & semiconductor equipment)†		18,777		2,918

		Shares or
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—1.5%
	South Africa-1.5%
*	Bid Corporation, Ltd. (Food & staples retailing)		37,340	$	700
	Steinhoff International Holdings N.V. (Household durables)		358,470		2,056
					2,756
	Total Common Stocks—98.4% (cost $158,318)				176,035

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $3,535, collateralized by FNMA, 7.125%, due 1/15/30		$3,535		3,535

	Total Repurchase Agreement—2.0% (cost $3,535)				3,535

	Total Investments—100.4% (cost $161,853)				179,570
	Liabilities, plus cash and other assets—(0.4)%				(729	)
	Net assets—100.0%			$	178,841

ADR = American Depository Receipt

† = U.S. listed foreign security

* = Non-income producing security

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, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Consumer Discretionary	21.8	%
Information Technology	21.8	%
Financials	18.1	%
Health Care	12.1	%
Industrials	11.4	%
Energy	6.2	%
Consumer Staples	5.4	%
Materials	3.2	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

U.S. Dollar	62.0	%
Euro	9.1	%
Japanese Yen	8.2	%
British Pound Sterling	5.4	%
Hong Kong Dollar	4.1	%
Canadian Dollar	3.8	%
Danish Krone	1.8	%
Swiss Franc	1.6	%
South African Rand	1.6	%
Australian Dollar	1.3	%
Swedish Krona	1.1	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	International Leaders Fund

	The International Leaders Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Simon Fennell Kenneth J. McAtamney	The William Blair International Leaders Fund (Class N shares) posted a 1.40% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 0.91%. The Fund underperformed the Index for the first half of 2016. Style headwinds during the first quarter adversely impacted six-month performance, as higher growth companies with relatively strong earnings trends, which the Fund focuses on, significantly lagged lower valuation companies with weaker earnings trends. From a sector perspective, the Fund’s six-month relative performance suffered primarily from a negative allocation effect: the Consumer Discretionary overweighting combined with underweightings to the market-leading Consumer Staples, Energy, Materials, Telecommunication Services and Utilities sectors. Consumer Staples stock selection also detracted from the Fund’s relative performance, hampered by the lack of exposure to Tobacco and Food Products companies, in addition to share price weakness for Alimentation Couche-Tard (Canada), which was impacted by a weaker average road transportation fuel selling price in the U.S. business. Within Materials, the Fund’s relative weakness during the six-month period was driven by its lack of exposure to Metals & Mining companies, which led the Index. Automobile catalysts chemical maker Johnson Matthey (U.K.) also detracted from the Fund’s relative performance, as the shares were hit by concerns surrounding the outcome and impact of the U.K. Brexit vote and the impact of weaker platinum prices on the company’s metals refining business. These negative effects were partially mitigated by good stock selection in the Consumer Discretionary, Financials and Information Technology (IT) sectors. Within Consumer Discretionary, Tata Motors (India) benefited from positive sales trends in key Jaguar models. The Fund’s IT stock selection effect was bolstered by Keyence (Japan) and Taiwan Semiconductor Manufacturing (TSM). Keyence’s share price benefited from solid financial results that stood out relative to its industrial automation peers, and TSM was supported by expectations of continued incremental share gains for its chips at Apple. From a geographic perspective, Canada and Developed Asia ex-Japan stock selection were the primary detractors from six-month performance, offsetting positive stock selection in Japan, the U.K., India, Korea and Taiwan. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

International Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			Since Inception
Class N(a)		(1.40	)%		(2.92	)%		5.64	%		7.15	%
Class I(a)		(1.32	)		(2.76	)		5.84			7.39
MSCI ACW Ex-U.S. IMI (net)(a)		(0.91	)		(9.61	)		1.65			3.54
Institutional Class(b)		(1.32	)		(2.70	)		5.98			7.27
MSCI ACW Ex-U.S. IMI (net)(b)		(0.91	)		(9.61	)		1.65			2.69

(a)	Since inception is for the period from August 16, 2012 (Commencement of Operations) to June 30, 2016.
(b)	Since inception is for the period from November 2, 2012 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

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.

Semiannual Report

June 30, 2016

International Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Issuer	Shares		Value

	*Common Stocks*

	*Europe, Mid-East—36.1%*
	Denmark—2.2%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		72,638	$	3,912
	Vestas Wind Systems A/S (Electrical equipment)		7,075		477
					4,389
	Finland—2.7%
	Kone Oyj Class “B” (Machinery)		54,991		2,538
	Sampo Oyj Class “A” (Insurance)		71,435		2,921
					5,459
	France—9.7%
	Cap Gemini S.A. (IT services)		53,263		4,596
	JCDecaux S.A. (Media)		68,752		2,318
	Safran S.A. (Aerospace & defense)		39,302		2,647
	Total S.A. (Oil, gas & consumable fuels)		67,436		3,234
	Valeo S.A. (Auto components)		76,189		3,382
	Vinci S.A. (Construction & engineering)		47,068		3,322
					19,499
	Germany—1.5%
	Continental AG (Auto components)		9,876		1,869
	Rational AG (Machinery)		2,681		1,241
					3,110
	Ireland—3.0%
	Paddy Power Betfair PLC (Hotels, restaurants & leisure)		22,877		2,404
	Ryanair Holdings plc—ADR (Airlines)		51,003		3,547
					5,951
	Israel—1.1%
	Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		43,323		2,176

	Netherlands—3.3%
^*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		47,355		3,710
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		109,259		2,997
					6,707
	Spain—3.1%
	Amadeus IT Holding S.A. Class “A” (IT services)		54,333		2,394
	Industria de Diseno Textil S.A. (Specialty retail)		112,360		3,775
					6,169
	Sweden—2.5%
	Atlas Copco AB Class “A” (Machinery)		94,113		2,444
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		69,437		2,541
					4,985
	Switzerland—7.0%
	Actelion, Ltd. (Biotechnology)		29,836		5,024
	Geberit AG (Building products)		5,527		2,093


	Issuer	Shares		Value

	*Common Stocks—(continued)*

	Europe, Mid-East—(continued)
	Switzerland—(continued)
	Partners Group Holding AG (Capital markets)		9,680	$	4,149
	SGS S.A. (Professional services)		1,230		2,818
					14,084

	*United Kingdom—17.1%*
	ARM Holdings plc (Semiconductors & semiconductor equipment)		86,300		1,311
	Compass Group plc (Hotels, restaurants & leisure)		289,532		5,509
	Experian plc (Professional services)		204,456		3,879
	IG Group Holdings plc (Diversified financial services)		200,676		2,173
	Johnson Matthey plc (Chemicals)		77,955		2,924
	Micro Focus International plc (Software)		86,549		1,867
	Reckitt Benckiser Group plc (Household products)		38,257		3,836
	RELX plc (Media)		228,025		4,199
	St James’s Place plc (Insurance)		174,675		1,842
	Wolseley plc (Trading companies & distributors)		66,765		3,457
	WPP plc (Media)		159,223		3,318
					34,315

	*Japan—15.7%*
	Daikin Industries, Ltd. (Building products)		44,700		3,757
	Fuji Heavy Industries, Ltd. (Automobiles)		73,559		2,528
	Kao Corporation (Personal products)		64,300		3,745
	Keyence Corporation (Electronic equipment, instruments & components)		5,500		3,753
	Makita Corporation (Machinery)		43,400		2,881
	Murata Manufacturing Co., Ltd. (Electronic equipment, instruments & components)		19,900		2,231
	Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		1,029		2,514
	Nitori Holdings Co., Ltd. (Specialty retail)		25,900		3,141
	ORIX Corporation (Diversified financial services)		243,100		3,146
	Shimano, Inc. (Leisure products)		16,100		2,462
	SMC Corporation (Machinery)		6,100		1,501
					31,659

	*Emerging Asia—15.3%*
	China—6.9%
*	Baidu, Inc.—ADR (Internet software & services)		19,664		3,247
	China Overseas Land & Investment, Ltd. (Real estate management & development)		1,134,000		3,615
	NetEase, Inc.—ADR (Internet software & services)		19,153		3,701
	Tencent Holdings, Ltd. (Internet software & services)		138,900		3,190
					13,753

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*
	India—4.3%
	Hero MotoCorp, Ltd. (Automobiles)		70,083	$	3,287
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		128,990		2,401
*	Tata Motors, Ltd.—ADR (Automobiles)		85,049		2,949
					8,637
	South Korea—1.5%
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		2,454		3,056

	Taiwan—2.6%
	Taiwan Semiconductor Manufacturing Co., Ltd. (Semiconductors & semiconductor equipment)		1,049,000		5,287

	*Canada—4.9%*
	Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		70,112		3,011
	Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		135,957		4,496
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		86,527		2,400
					9,907

	*Asia—3.5%*
	Australia—1.4%
	Macquarie Group, Ltd. (Capital markets)		55,575		2,893

	Hong Kong—2.1%
	AIA Group, Ltd. (Insurance)		698,000		4,188

	*Emerging Europe, Mid-East, Africa—1.8%*
	South Africa—1.8%
	*Bid Corporation, Ltd. (Food & staples retailing)		91,282		1,711
	Bidvest Group, Ltd. (Industrial conglomerates)		91,282		861
	Discovery, Ltd. (Insurance)		117,060		978
					3,550

	*Emerging Latin America—1.7%*
	Mexico—1.7%
	Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		1,398,000		3,363

	Total Common Stocks—96.1%
	(cost $181,387)				193,137

	Principal
Issuer	Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $3,735, collateralized by FFCB, 3.020%, due 1/12/26	$	3,735	$	3,735

Total Repurchase Agreement—1.9%
(cost $3,735)				3,735

Total Investments—98.0%
(cost $185,122)				196,872
Cash and other assets, less liabilities—2.0%				4,073
Net assets—100.0%			$	200,945

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Consumer Discretionary	21.2	%
Information Technology	21.2	%
Industrials	19.4	%
Financials	18.3	%
Consumer Staples	8.1	%
Health Care	5.8	%
Energy	4.5	%
Materials	1.5	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	20.5	%
British Pound Sterling	17.8	%
Japanese Yen	16.4	%
U.S. Dollar	12.3	%
Swiss Franc	7.3	%
Hong Kong Dollar	5.7	%
Indian Rupee	3.0	%
Canadian Dollar	2.8	%
New Taiwan Dollar	2.7	%
Swedish Krona	2.6	%
Danish Krone	2.3	%
South African Rand	1.8	%
Mexican Peso	1.7	%
South Korean Won	1.6	%
Australian Dollar	1.5	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	International Equity Fund

	The International Equity Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

David Merjan John C. Murphy	The William Blair International Equity Fund (Class N shares) posted a 1.88% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI World ex-U.S. Index (net) (the “Index”), decreased 2.98%. The Fund outpaced the Index for the first six months of 2016, benefiting from positive stock selection effects across most sectors. Stock selection in the Financials sector was the key driver of outperformance during the period, as the Fund’s Capital Markets and Real Estate Investment Trust (REIT) holdings achieved positive returns and its Bank holdings held up better than Index peers amid the low interest rate environment. Peruvian banking leader Credicorp was a notable contributor to the Fund’s relative performance, supported by solid earnings results that were highlighted by core net income growth of 25% year-over-year and Return on Equity of 20%. Another notable contributor was Japan’s Nihon M&A Center, which provides advisory services to small and medium enterprises (SMEs) facing succession-oriented challenges. The share price was bolstered by good underlying growth in transactions and a healthy deal pipeline. In addition to outperformance in the Financials sector, the Fund benefited from good stock selection in the Consumer Discretionary and Energy sectors. Partially offsetting these positive effects was the Fund’s overweighting to Industrials and weak stock selection in U.K. and European Industrials. Concerns surrounding the outcome and impact of the U.K. Brexit vote weighed on U.K. building merchant Travis Perkins’s share price during the period, although the company citied improving conditions in the repairs, maintenance and improvements markets as part of its quarterly trading (sales) update. Low cost airline Ryanair (Ireland) was another key detractor from the Fund’s performance due to a combination of softer yields post the Paris and Belgium terrorist attacks, and the negative ripple effect of rival EasyJet’s profit warning following the Brexit outcome. Utilities stock selection also weighed on the Fund’s relative performance, as Veolia Environnement (France) reported weaker revenues due to lower energy prices and reduced construction activity in its water technologies division. From a geographic perspective, the biggest contributors to relative performance during the period was stock selection in Japan and Canada, and exposure to non-Index holdings in Emerging Asia (India, Taiwan and Thailand). Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

International Equity Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		(1.88	)%		(6.29	)%		3.88	%		2.74	%		1.86	%
Class I		(1.79	)		(6.10	)		4.11			2.99			2.10
MSCI World Ex-U.S. Index (net)		(2.98	)		(9.84	)		1.88			1.23			1.63

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Semiannual Report

June 30, 2016

International Equity Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Issuer	Shares		Value

	*Common Stocks*

	*Europe—32.5%*
	Belgium—3.6%
	Anheuser-Busch InBev N.V. (Beverages)		11,251	$	1,488
	UCB S.A. (Pharmaceuticals)		13,929		1,046
					2,534
	Denmark—1.9%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		14,183		764
	Vestas Wind Systems A/S (Electrical equipment)		8,150		554
					1,318
	Finland—1.1%
	Kone Oyj Class “B” (Machinery)		17,223		795

	France—7.9%
	AXA S.A. (Insurance)		45,230		894
	Cap Gemini S.A. (IT services)		10,687		922
	Essilor International S.A. (Health care equipment & supplies)		5,527		727
	Thales S.A. (Aerospace & defense)		10,642		884
	Total S.A. (Oil, gas & consumable fuels)		25,621		1,229
	Veolia Environnement S.A. (Multi-utilities)		44,377		958
					5,614
	Germany—4.8%
	Continental AG (Auto components)		4,339		821
	Fresenius Medical Care AG & Co. KGaA (Health care providers & services)		10,020		873
	Fresenius SE & Co. KGaA (Health care providers & services)		12,070		887
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		56,352		815
					3,396
	Ireland—1.1%
	Ryanair Holdings plc—ADR (Airlines)		11,637		809

	Italy—0.7%
	Intesa Sanpaolo SpA (Banks)		255,441		486

	Netherlands—4.3%
*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		10,879		852
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		55,708		1,528
*	Sensata Technologies Holding N.V. (Electrical equipment)†		18,362		641
					3,021
	Spain—1.3%
	Industria de Diseno Textil S.A. (Specialty retail)		27,562		926

	Sweden—3.8%
	Assa Abloy AB Class “B” (Building products)		42,286		870
	Boliden AB (Metals & mining)		39,100		764
	Swedbank AB Class “A” (Banks)		50,194		1,054
					2,688


Issuer	Shares		Value

*Common Stocks—(continued)*

*Europe—(continued)*
Switzerland—2.0%
Roche Holding AG (Pharmaceuticals)		5,449	$	1,438

*United Kingdom—24.3%*
Babcock International Group plc (Commercial services & supplies)		75,425		912
Compass Group plc (Hotels, restaurants & leisure)		91,453		1,740
Diageo plc (Beverages)		51,800		1,447
Experian plc (Professional services)		60,585		1,149
Johnson Matthey plc (Chemicals)		25,145		943
Prudential plc (Insurance)		46,791		794
Reckitt Benckiser Group plc (Household products)		14,336		1,437
RELX plc (Media)		74,758		1,377
Rio Tinto plc (Metals & mining)		52,916		1,644
Travis Perkins plc (Trading companies & distributors)		33,999		671
UBM plc (Media)		56,579		485
Unilever N.V. (Personal products)		45,358		2,118
Whitbread plc (Hotels, restaurants & leisure)		9,681		453
Wolseley plc (Trading companies & distributors)		20,502		1,062
WPP plc (Media)		48,215		1,005
				17,237
*Japan—16.7%*
Astellas Pharma, Inc. (Pharmaceuticals)		29,300		460
Daikin Industries, Ltd. (Building products)		7,318		615
Fuji Heavy Industries, Ltd. (Automobiles)		25,072		862
GLP J-Reit (Real estate investment trusts (REITs))		694		876
Hitachi Capital Corporation (Consumer finance)		32,100		637
Japan Exchange Group, Inc. (Diversified financial services)		49,800		573
Kao Corporation (Personal products)		23,589		1,374
Keyence Corporation (Electronic equipment, instruments & components)		1,305		890
Mitsubishi UFJ Financial Group, Inc. (Banks)		88,700		398
Nihon M&A Center, Inc. (Capital markets)		9,570		622
Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		511		1,248
Nitori Holdings Co., Ltd. (Specialty retail)		5,000		606
ORIX Corporation (Diversified financial services)		65,729		851
SCSK Corporation (IT services)		23,763		890
Suruga Bank, Ltd. (Banks)		42,600		963
				11,865
*Canada—11.8%*
Agrium, Inc. (Chemicals)†		9,202		832
Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		11,341		487

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Equity Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


Issuer		Shares		Value

*Common Stocks—(continued)*

*Canada—(continued)*
Canadian National Railway Co. (Road & rail)†			16,673	$	985
Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)			44,090		1,360
Enerplus Corporation (Oil, gas & consumable fuels)			123,059		811
Intact Financial Corporation (Insurance)			7,911		565
Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)			23,708		636
Silver Wheaton Corporation (Metals & mining)†			48,017		1,130
The Toronto-Dominion Bank (Banks)†			36,002		1,546
					8,352
Emerging Asia—7.2%
China—0.8%
China Everbright International, Ltd. (Commercial services & supplies)			531,765		595

India—1.3%
HDFC Bank, Ltd.—ADR (Banks)			14,140		938

Taiwan—3.9%
Largan Precision Co., Ltd. (Electronic equipment, instruments & components)			11,000		1,017
Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)			143,000		536
Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)			46,962		1,232
					2,785
Thailand—1.2%
CP ALL PCL (Food & staples retailing)			578,900		830

Emerging Latin America—3.9%
Mexico—2.8%
Grupo Aeroportuario del Pacifico S.A.B. de C.V. Class “B” (Transportation infrastructure)			47,600		489
Grupo Financiero Santander Mexico S.A.B. de C.V. Class “B” (Banks)			386,400		701
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)			343,300		826
					2,016
Peru—1.1%
Credicorp, Ltd. (Banks)†			5,279		815

Asia—2.8%
Australia—1.0%
Macquarie Group, Ltd. (Capital markets)			13,380		697

Hong Kong—1.8%
AIA Group, Ltd. (Insurance)			208,386		1,250

Total Common Stocks—99.2%	��
(cost $65,024)					70,405

	Principal
Issuer	Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $320, collateralized by FFCB, 3.020%, due 1/12/2016		$320	$	320

Total Repurchase Agreement—0.5%
(cost $320)				320

Total Investments—99.7%
(cost $65,344)				70,725
Cash and other assets, less liabilities—0.3%				219
Net assets—100.0%			$	70,944

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	22.5	%
Industrials	15.7	%
Consumer Staples	14.2	%
Consumer Discretionary	11.8	%
Information Technology	10.2	%
Health Care	8.8	%
Energy	7.9	%
Materials	7.5	%
Utilities	1.4	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	24.7	%
British Pound Sterling	21.5	%
Japanese Yen	16.8	%
U.S. Dollar	13.9	%
Canadian Dollar	5.5	%
Swedish Krona	3.8	%
Mexican Peso	2.9	%
Hong Kong Dollar	2.6	%
New Taiwan Dollar	2.2	%
Swiss Franc	2.0	%
Danish Krone	1.9	%
Thai Baht	1.2	%
All Other Currencies	1.0	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	Institutional International Equity Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

David Merjan John C. Murphy	The William Blair Institutional International Equity Fund (Institutional Class shares) posted a 1.73% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI World ex-U.S. Index (net) (the “Index”), decreased 2.98%. The Fund outpaced the Index for the first six months of 2016, benefiting from positive stock selection effects across most sectors. Stock selection in the Financials sector was the key driver of outperformance during the period, as the Fund’s Capital Markets and Real Estate Investment Trust (REIT) holdings achieved positive returns and its Bank holdings held up better than Index peers amid the low interest rate environment. Peruvian banking leader Credicorp was a notable contributor to the Fund’s relative performance, supported by solid earnings results that were highlighted by core net income growth of 25% year-over-year and Return on Equity of 20%. Another notable contributor was Japan’s Nihon M&A Center, which provides advisory services to small and medium enterprises (SMEs) facing succession-oriented challenges. The share price was bolstered by good underlying growth in transactions and a healthy deal pipeline. In addition to outperformance in the Financials sector, the Fund benefited from good stock selection in the Consumer Discretionary and Energy sectors. Partially offsetting these positive effects was the Fund’s overweighting to Industrials and weak stock selection in U.K. and European Industrials. Concerns surrounding the outcome and impact of the U.K. Brexit vote weighed on U.K. building merchant Travis Perkins’s share price during the period, although the company citied improving conditions in the repairs, maintenance and improvements markets as part of its quarterly trading (sales) update. Low cost airline Ryanair (Ireland) was another key detractor from the Fund’s performance due to a combination of softer yields post the Paris and Belgium terrorist attacks, and the negative ripple effect of rival EasyJet’s profit warning following the Brexit outcome. Utilities stock selection also weighed on the Fund’s relative performance, as Veolia Environnement (France) reported weaker revenues due to lower energy prices and reduced construction activity in its water technologies division. From a geographic perspective, the biggest contributors to relative performance during the period was stock selection in Japan and Canada, and exposure to non-Index holdings in Emerging Asia (India, Taiwan and Thailand). Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

Institutional International Equity Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Institutional Class		(1.73	)%		(6.03	)%		3.92	%		3.04	%		2.03	%
MSCI World Ex-U.S. Index (net)		(2.98	)		(9.84	)		1.88			1.23			1.63

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.

Semiannual Report

June 30, 2016

Institutional International Equity Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Europe—32.4%
	Belgium—3.6%
	Anheuser-Busch InBev N.V. (Beverages)		2,503	$	331
	UCB S.A. (Pharmaceuticals)		3,098		233
					564
	Denmark—1.8%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		3,155		170
	Vestas Wind Systems A/S (Electrical equipment)		1,800		122
					292
	Finland—1.1%
	Kone Oyj Class “B” (Machinery)		3,831		177

	France—7.9%
	AXA S.A. (Insurance)		10,061		199
	Cap Gemini S.A. (IT services)		2,377		205
	Essilor International S.A. (Health care equipment & supplies)		1,230		162
	Thales S.A. (Aerospace & defense)		2,378		198
	Total S.A. (Oil, gas & consumable fuels)		5,700		273
	Veolia Environnement S.A. (Multi-utilities)		9,871		213
					1,250
	Germany—4.8%
	Continental AG (Auto components)		965		183
	Fresenius Medical Care AG & Co. KGaA (Health care providers & services)		2,229		194
	Fresenius SE & Co. KGaA (Health care providers & services)		2,685		197
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		12,535		182
					756
	Ireland—1.1%
	Ryanair Holdings plc—ADR (Airlines)		2,585		180

	Italy—0.7%
	Intesa Sanpaolo SpA (Banks)		56,891		108

	Netherlands—4.3%
*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		2,426		190
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		12,391		340
*	Sensata Technologies Holding N.V. (Electrical equipment)†		4,085		142
					672
	Spain—1.3%
	Industria de Diseno Textil S.A. (Specialty retail)		6,131		206

	Sweden—3.8%
	Assa Abloy AB Class “B” (Building products)		9,406		193
	Boliden AB (Metals & mining)		8,698		170
	Swedbank AB Class “A” (Banks)		11,180		235
					598



Issuer		Shares		Value

	Common Stocks—(continued)

	Europe—(continued)
	Switzerland—2.0%
	Roche Holding AG (Pharmaceuticals)		1,212	$	320

	United Kingdom—24.3%
	Babcock International Group plc (Commercial services & supplies)		16,810		203
	Compass Group plc (Hotels, restaurants & leisure)		20,382		388
	Diageo plc (Beverages)		11,596		324
	Experian plc (Professional services)		13,477		256
	Johnson Matthey plc (Chemicals)		5,594		210
	Prudential plc (Insurance)		10,408		177
	Reckitt Benckiser Group plc (Household products)		3,189		320
	RELX plc (Media)		16,630		306
	Rio Tinto plc (Metals & mining)		11,771		366
	Travis Perkins plc (Trading companies & distributors)		7,582		150
	UBM plc (Media)		12,586		108
	Unilever N.V. (Personal products)		10,090		471
	Whitbread plc (Hotels, restaurants & leisure)		2,166		101
	Wolseley plc (Trading companies & distributors)		4,561		236
	WPP plc (Media)		10,725		223
					3,839
	Japan—16.7%
	Astellas Pharma, Inc. (Pharmaceuticals)		6,538		102
	Daikin Industries, Ltd. (Building products)		1,606		135
	Fuji Heavy Industries, Ltd. (Automobiles)		5,600		192
	GLP J-Reit (Real estate investment trusts (REITs))		154		194
	Hitachi Capital Corporation (Consumer finance)		7,100		141
	Japan Exchange Group, Inc. (Diversified financial services)		11,100		128
	Kao Corporation (Personal products)		5,200		303
	Keyence Corporation (Electronic equipment, instruments & components)		300		205
	Mitsubishi UFJ Financial Group, Inc. (Banks)		19,800		89
	Nihon M&A Center, Inc. (Capital markets)		2,100		136
	Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		114		278
	Nitori Holdings Co., Ltd. (Specialty retail)		1,200		146
	ORIX Corporation (Diversified financial services)		14,612		189
	SCSK Corporation (IT services)		5,283		198
	Suruga Bank, Ltd. (Banks)		9,500		215
					2,651
	Canada—11.9%
	Agrium, Inc. (Chemicals)†		2,047		185
	Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		3,097		133

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Institutional International Equity Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks—(continued)

	Canada—(continued)
	Canadian National Railway Co. (Road & rail)†		3,709	$	219
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)		9,808		303
	Enerplus Corporation (Oil, gas & consumable fuels)		27,374		180
	Intact Financial Corporation (Insurance)		1,760		126
	Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		5,267		141
	Silver Wheaton Corporation (Metals & mining)†		10,681		251
	The Toronto-Dominion Bank (Banks)†		8,009		344
					1,882
	Emerging Asia—7.0%
	China—0.8%
	China Everbright International, Ltd. (Commercial services & supplies)		118,037		132

	India—1.3%
	HDFC Bank, Ltd.—ADR (Banks)		3,145		209

	Taiwan—3.7%
	Largan Precision Co., Ltd. (Electronic equipment, instruments & components)		2,000		185
	Novatek Microelectronics Corporation (Semiconductors & semiconductor equipment)		32,000		120
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		10,471		275
					580
	Thailand—1.2%
	CP ALL PCL (Food & staples retailing)		128,600		184

	Emerging Latin America—4.0%
	Mexico—2.8%
	Grupo Aeroportuario del Pacifico S.A.B. de C.V. Class “B” (Transportation infrastructure)		10,500		108
	Grupo Financiero Santander Mexico S.A.B. de C.V. Class “B” (Banks)		86,500		157
	Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		76,800		185
					450
	Peru—1.2%
	Credicorp, Ltd. (Banks)†		1,177		181

	Asia—2.7%
	Australia—1.0%
	Macquarie Group, Ltd. (Capital markets)		2,976		155

	Hong Kong—1.7%
	AIA Group, Ltd. (Insurance)		46,271		278
	Total Common Stocks—99.0% (cost $14,731)				15,664


		Principal
Issuer		Amount		Value

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $117, collateralized by FNMA, 7.125%, due 1/15/30	$	117	$	117

	Total Repurchase Agreement—0.8% (cost $117)				117

	Total Investments—99.8% (cost $14,848)				15,781
	Cash and other assets, less liabilities—0.2%				37
	Net assets—100.0%			$	15,818

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	22.6%
Industrials	15.6%
Consumer Staples	14.4%
Consumer Discretionary	11.8%
Information Technology	10.0%
Health Care	8.8%
Energy	7.9%
Materials	7.5%
Utilities	1.4%
Total	100.0%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	24.7%
British Pound Sterling	21.5%
Japanese Yen	16.9%
U.S. Dollar	13.9%
Canadian Dollar	5.6%
Swedish Krona	3.8%
Mexican Peso	2.9%
Hong Kong Dollar	2.6%
Swiss Franc	2.0%
New Taiwan Dollar	2.0%
Danish Krone	1.9%
Thai Baht	1.2%
All Other Currencies	1.0%
Total	100.0%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	International Growth Fund

	The International Growth Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Stephanie G. Braming Simon Fennell Jeffrey A. Urbina	The William Blair International Growth Fund (Class N shares) posted a 3.81% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 0.91%. Style headwinds during the February-April timeframe were a broad detractor from the Fund’s relative performance during the six-month period, as higher growth, higher valuation companies with stronger earnings trends, which the Fund focuses on, significantly underperformed lower valuation companies with relatively weak earnings trends. From a sector perspective, Materials stock selection was the largest detractor from the Fund’s relative performance year to date. The Fund’s Chemicals holdings lagged the Index, as Korea-based LG Chem was adversely impacted by weaker sales trends in its LCD/smartphone business. The lack of exposure to Metals & Mining companies also detracted from the Fund’s overall Materials sector performance. Among other sectors, stock selection in Financials, Consumer Finance, and Real Estate, combined with the Fund’s Insurance industry overweighting, detracted from the Fund’s relative performance during the six-month period. These effects were partially mitigated by good stock selection in Consumer Staples, Healthcare, Industrials and Telecommunication Services. Within Consumer Staples, Japanese cosmetics/personal care company Kao was a leading contributor to the Fund’s performance, supported by improved domestic cosmetic and household sales trends, continued strong growth in China (+48% revenue growth for 1Q versus the prior year) and lower costs. From a geographic perspective, the Fund’s overweightings to Europe and the U.K., combined with the underweighting to Emerging Markets compared to the Index, detracted from the Fund’s relative performance. Stock selection in the U.K. also detracted from the Fund’s performance, principally in the Financials and Materials sectors, offsetting the positive impacts of the Fund’s Japanese and Latin American stock selection. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(3.81	)%		(9.52	)%		2.60	%		2.69	%		2.67	%
Class I		(3.65	)		(9.26	)		2.91			2.99			2.97
MSCI ACW Ex-U.S. IMI (net)		(0.91	)		(9.61	)		1.65			0.39			2.16

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Sector Diversification (Unaudited)

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

Semiannual Report

June 30, 2016

International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Europe, Mid-East—39.2%
	Belgium—0.6%
	Colruyt S.A. (Food & staples retailing)		138,177	$	7,647
*	Telenet Group Holding N.V. (Media)		262,155		11,987
					19,634
	Denmark—3.2%
	Coloplast A/S Class “B” (Health care equipment & supplies)		165,033		12,353
	DSV A/S (Road & rail)		325,618		13,692
	ISS A/S (Commercial services & supplies)		344,389		12,953
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		518,471		27,921
	Pandora A/S (Textiles, apparel & luxury goods)		154,549		21,049
	Vestas Wind Systems A/S (Electrical equipment)		235,253		15,990
					103,958
	Finland—1.5%
	Elisa Oyj (Diversified telecommunication services)		181,589		6,977
	Huhtamaki Oyj (Containers & packaging)		153,103		6,354
	Kone Oyj Class “B” (Machinery)		753,795		34,788
					48,119
	France—11.1%
	Atos SE (IT services)		186,865		15,407
	Cap Gemini S.A. (IT services)		276,225		23,836
	Christian Dior SE (Textiles, apparel & luxury goods)		86,204		13,809
	Essilor International S.A. (Health care equipment & supplies)		106,759		14,031
	Hermes International (Textiles, apparel & luxury goods)		28,781		10,729
	Ipsen S.A. (Pharmaceuticals)		80,761		4,948
	Nexity S.A. (Real estate management & development)		93,526		4,731
	Orpea (Health care providers & services)		65,154		5,342
	Plastic Omnium S.A. (Auto components)		254,103		7,104
	Rubis SCA (Gas utilities)		64,596		4,938
	Safran S.A. (Aerospace & defense)		469,869		31,642
	SEB S.A. (Household durables)		48,214		5,814
	Sodexo S.A. (Hotels, restaurants & leisure)		147,170		15,766
	Technicolor S.A. (Media)		628,955		3,895
	Thales S.A. (Aerospace & defense)		228,287		18,958
	Total S.A. (Oil, gas & consumable fuels)		1,329,389		63,752
	Unibail-Rodamco SE (Real estate investment trusts (REITs))		74,560		19,288
	Valeo S.A. (Auto components)		669,450		29,720
	Veolia Environnement S.A. (Multi-utilities)		832,400		17,975
	Vinci S.A. (Construction & engineering)		658,706		46,483
					358,168
	Germany—3.7%
	Continental AG (Auto components)		138,043		26,121
	Deutsche Wohnen AG (Real estate management & development)		263,854		8,984



Issuer		Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Germany—(continued)
	Evonik Industries AG (Chemicals)		209,692	$	6,251
	Gerresheimer AG (Life sciences tools & services)		64,340		4,956
	KION Group AG (Machinery)		85,064		4,123
	ProSiebenSat.1 Media SE (Media)		527,360		23,068
	SAP SE (Software)		369,214		27,730
	TUI AG (Hotels, restaurants & leisure)		956,812		10,868
	Vonovia SE (Real estate management & development)		236,788		8,646
					120,747
	Ireland—3.0%
	CRH plc (Construction materials)		909,130		26,492
	Greencore Group plc (Food products)		927,738		3,818
*	ICON plc (Life sciences tools & services)†		238,273		16,682
	Kingspan Group plc (Building products)		276,423		5,989
	Shire plc (Biotechnology)		738,304		45,629
					98,610
	Israel—1.5%
*	Check Point Software Technologies, Ltd. (Software)†		379,124		30,209
	Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		392,681		19,724
					49,933
	Italy—0.9%
	Azimut Holding SpA (Capital markets)		400,615		6,536
	Banca Generali SpA (Capital markets)		425,523		8,529
	Brembo SpA (Auto components)		83,166		4,581
	Interpump Group SpA (Machinery)		137,569		2,156
	Recordati SpA (Pharmaceuticals)		185,967		5,594
*	Yoox Net-A-Porter Group SpA (Internet & catalog retail)		58,042		1,347
					28,743
	Luxembourg—0.4%
	Eurofins Scientific SE (Life sciences tools & services)		27,385		10,145
*	RTL Group (Media)		54,610		4,460
					14,605
	Netherlands—3.6%
	GrandVision N.V.—144A (Specialty retail)		157,281		4,068
*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		350,343		27,446
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		2,002,254		54,923
	Wolters Kluwer N.V. (Media)		756,189		30,619
					117,056
	Norway—0.4%
	Gjensidige Forsikring ASA (Insurance)		684,861		11,410

	Portugal—0.4%
	Jeronimo Martins SGPS S.A. (Food & staples retailing)		738,057		11,641

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Spain—1.9%
	Amadeus IT Holding S.A. Class “A” (IT services)		530,621	$	23,378
	Bankinter S.A. (Banks)		1,998,809		12,903
	Industria de Diseno Textil S.A. (Specialty retail)		765,203		25,706
					61,987
	Sweden—2.7%
	Assa Abloy AB Class “B” (Building products)		714,484		14,699
	BillerudKorsnas AB (Containers & packaging)		277,607		4,143
	Boliden AB (Metals & mining)		271,408		5,304
	Fabege AB (Real estate management & development)		136,488		2,321
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		423,596		15,502
	Hexpol AB (Chemicals)		531,578		5,459
	Intrum Justitia AB (Commercial services & supplies)		227,981		7,150
	Swedbank AB Class “A” (Banks)		1,540,402		32,353
					86,931
	Switzerland—4.3%
	Actelion, Ltd. (Biotechnology)		203,534		34,275
*	Cembra Money Bank AG (Consumer finance)		53,791		3,762
*	Clariant AG (Chemicals)		824,083		13,926
	dorma+kaba Holding AG (Commercial services & supplies)		6,843		4,781
	Logitech International S.A. (Technology hardware, storage & peripherals)		502,947		8,177
*	Lonza Group AG (Life sciences tools & services)		133,508		22,177
*	Luxoft Holding, Inc. (IT services)†		72,194		3,756
	Partners Group Holding AG (Capital markets)		92,978		39,847
	Straumann Holding AG (Health care equipment & supplies)		17,713		6,988
					137,689
	Japan—14.2%
	Ain Pharmaciez, Inc. (Food & staples retailing)		68,600		5,321
	Alps Electric Co., Ltd. (Electronic equipment, instruments & components)		275,800		5,240
	Asahi Intecc Co., Ltd. (Health care equipment & supplies)		98,800		4,828
	Daicel Corporation (Chemicals)		438,700		4,546
	Daifuku Co., Ltd. (Machinery)		323,426		5,792
	Daikin Industries, Ltd. (Building products)		416,000		34,963
	Daito Trust Construction Co., Ltd. (Real estate management & development)		56,900		9,238
	Daiwa House Industry Co., Ltd. (Real estate management & development)		1,033,900		30,363



Issuer		Shares		Value

	Common Stocks—(continued)

	Japan—(continued)
	Fuji Heavy Industries, Ltd. (Automobiles)		729,900	$	25,089
	Haseko Corporation (Household durables)		411,600		4,144
	IT Holdings Corporation (IT services)		218,900		5,041
	Kao Corporation (Personal products)		646,500		37,654
	KDDI Corporation (Wireless telecommunication services)		1,534,000		46,649
	Keyence Corporation (Electronic equipment, instruments & components)		57,400		39,166
	Lawson, Inc. (Food & staples retailing)		95,300		7,608
	M3, Inc. (Health care technology)		346,900		12,107
	Makita Corporation (Machinery)		163,400		10,849
	Nihon M&A Center, Inc. (Capital markets)		76,400		4,962
	Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		2,400		5,863
	Nissan Chemical Industries, Ltd. (Chemicals)		255,000		7,440
	Nitori Holdings Co., Ltd. (Specialty retail)		142,500		17,283
	ORIX Corporation (Diversified financial services)		3,023,500		39,126
	Park24 Co., Ltd. (Commercial services & supplies)		143,300		4,924
	Pola Orbis Holdings, Inc. (Personal products)		97,000		9,129
	Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		74,900		5,806
	SCSK Corporation (IT services)		181,100		6,784
	Shionogi & Co., Ltd. (Pharmaceuticals)		541,000		29,574
	Taisei Corporation (Construction & engineering)		2,404,000		19,753
	Temp Holdings Co., Ltd. (Professional services)		341,500		5,917
	Tsuruha Holdings, Inc. (Food & staples retailing)		96,700		11,709
	Zenkoku Hosho Co., Ltd. (Diversified financial services)		119,000		4,346
					461,214
	United Kingdom—14.1%
	Admiral Group plc (Insurance)		403,908		10,982
	Babcock International Group plc (Commercial services & supplies)		589,137		7,123
	Berkeley Group Holdings plc (Household durables)		273,696		9,242
	Bunzl plc (Trading companies & distributors)		564,999		17,384
	Cineworld Group plc (Media)		618,632		4,513
	Compass Group plc (Hotels, restaurants & leisure)		2,086,333		39,693
	Croda International plc (Chemicals)		174,984		7,346
	Derwent London plc (Real estate investment trusts (REITs))		161,618		5,639
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		1,079,922		4,798
	Essentra plc (Chemicals)		542,840		3,725
	Experian plc (Professional services)		1,702,137		32,293

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks—(continued)

	United Kingdom—(continued)
	Halma plc (Electronic equipment, instruments & components)		654,978	$	8,908
	Hiscox, Ltd. (Insurance)		678,448		9,368
	Intermediate Capital Group plc (Capital markets)		469,811		3,078
	Intertek Group plc (Professional services)		326,502		15,213
	Johnson Matthey plc (Chemicals)		432,593		16,225
	Jupiter Fund Management plc (Capital markets)		785,068		3,855
	Micro Focus International plc (Software)		410,298		8,852
	Moneysupermarket.com Group plc (Internet software & services)		1,015,858		3,681
	Provident Financial plc (Consumer finance)		248,102		7,650
	Prudential plc (Insurance)		1,212,927		20,582
	Reckitt Benckiser Group plc (Household products)		471,204		47,248
	Rio Tinto, Ltd. (Metals & mining)		837,534		28,971
	Spirax-Sarco Engineering plc (Machinery)		164,383		8,231
	The Sage Group plc (Software)		1,662,192		14,367
	UBM plc (Media)		1,014,817		8,703
	Unilever plc (Personal products)		1,027,799		49,247
	WH Smith plc (Specialty retail)		194,117		4,078
	Wolseley plc (Trading companies & distributors)		485,795		25,156
	WPP plc (Media)		1,401,011		29,199
					455,350
	Emerging Asia—12.0%
	China—3.0%
	China Overseas Land & Investment, Ltd. (Real estate management & development)		4,964,000		15,824
	ENN Energy Holdings, Ltd. (Gas utilities)		1,744,000		8,661
	NetEase, Inc.—ADR (Internet software & services)		126,396		24,422
	PICC Property & Casualty Co., Ltd. Class “H” (Insurance)		7,428,000		11,731
	Tencent Holdings, Ltd. (Internet software & services)		1,644,300		37,763
					98,401
	India—3.0%
	Axis Bank, Ltd. (Banks)		1,635,464		12,996
	Bharat Petroleum Corporation, Ltd. (Oil, gas & consumable fuels)		395,557		6,322
	Eicher Motors, Ltd. (Machinery)		16,637		4,735
	HDFC Bank, Ltd. (Banks)		874,234		15,249
	IndusInd Bank, Ltd. (Banks)		609,309		10,058
	Maruti Suzuki India, Ltd. (Automobiles)		140,188		8,741
	Tata Consultancy Services, Ltd. (IT services)		670,401		25,357
	Yes Bank, Ltd. (Banks)		760,720		12,476
					95,934
	Indonesia—0.5%
	PT Bank Central Asia Tbk (Banks)		15,762,200		15,960



Issuer		Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	South Korea—3.6%
	Amorepacific Corporation (Personal products)		35,787	$	13,491
	KT&G Corporation (Tobacco)		107,019		12,675
	LG Chem, Ltd. (Chemicals)		58,280		13,309
	NAVER Corporation (Internet software & services)		13,307		8,244
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		45,391		56,528
	SK Hynix, Inc. (Semiconductors & semiconductor equipment)		470,060		13,376
					117,623
	Taiwan—1.9%
	Largan Precision Co., Ltd. (Electronic equipment, instruments & components)		184,000		17,017
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		1,632,476		42,820
					59,837
	Canada—6.9%
	Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		248,500		10,671
	Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		865,392		28,619
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)		824,022		25,423
	Constellation Software, Inc. (Software)		14,656		5,672
	Dollarama, Inc. (Multiline retail)		260,076		18,158
	Enbridge, Inc. (Oil, gas & consumable fuels)		940,406		39,838
	Intact Financial Corporation (Insurance)		149,812		10,702
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		1,157,540		32,111
	The Toronto-Dominion Bank (Banks)		1,210,101		51,965
					223,159
	Asia—5.1%
	Australia—2.2%
	Domino’s Pizza Enterprises, Ltd. (Hotels, restaurants & leisure)		64,986		3,344
	James Hardie Industries plc (Construction materials)		584,159		9,047
	JB Hi-Fi, Ltd. (Specialty retail)		277,580		5,030
	LendLease Group (Real estate management & development)		1,089,322		10,348
	Macquarie Group, Ltd. (Capital markets)		737,897		38,411
	Vicinity Centres (Real estate investment trusts (REITs))		2,104,755		5,251
					71,431

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)




Issuer		Shares		Value

	Common Stocks—(continued)

	Asia—(continued)
	Hong Kong—1.7%
	AIA Group, Ltd. (Insurance)		6,486,200	$	38,922
*	China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		6,597,000		—
	Techtronic Industries Co., Ltd. (Household durables)		4,083,500		17,053
					55,975
	New Zealand—0.2%
	Fisher & Paykel Healthcare Corp., Ltd. (Health care equipment & supplies)		665,851		4,784

	Singapore—1.0%
	Singapore Telecommunications, Ltd. (Diversified telecommunication services)		10,691,100		33,020

	Emerging Latin America—3.2%
	Brazil—1.9%
	AMBEV S.A.—ADR (Beverages)		7,647,822		45,199
	BB Seguridade Participacoes S.A. (Insurance)		1,670,600		14,619
					59,818
	Mexico—0.6%
	Arca Continental S.A.B. de C.V. (Beverages)		1,656,982		11,892
	Fomento Economico Mexicano S.A.B.de C.V.—ADR (Beverages)		75,919		7,021
					18,913
	Peru—0.7%
	Credicorp, Ltd. (Banks)†		153,291		23,657

	Emerging Europe, Mid-East, Africa—2.6%
	South Africa—1.9%
*	Bid Corporation, Ltd. (Food & staples retailing)		317,313		5,946
	Bidvest Group, Ltd. (Industrial conglomerates)		317,313		2,994
	Naspers, Ltd. (Media)		163,940		25,033
	Sanlam, Ltd. (Insurance)		1,686,936		6,969
	Steinhoff International Holdings N.V. (Household durables)		2,701,602		15,498
	The Spar Group, Ltd. (Food & staples retailing)		510,000		7,003
					63,443
	Turkey—0.4%
	Turkiye Garanti Bankasi A.S. (Banks)		4,572,452		12,078

	United Arab Emirates—0.3%
	Dubai Islamic Bank PJSC (Banks)		6,892,499		9,632

	Total Common Stocks—97.3% (cost $2,919,142)				3,149,460


		Shares or
		Principal
Issuer		Amount		Value

	Affiliated Fund
	China—0.0%
	William Blair China A-Share Fund, LLC§		10,158	$	174
	Total Affiliated Fund—0.0% (cost $102)				174

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $84,835, collateralized by FFCB, 3.020%, due 1/12/26, and FNMA, 6.250%-7.125%, due 5/15/29-1/15/30.		$84,835		84,835

	Total Repurchase Agreement—2.6% (cost $84,835)				84,835

	Total Investments—99.9% (cost $3,004,079)				3,234,469
	Cash and other assets, less liabilities—0.1%				1,871
	Net assets—100.0%			$	3,236,340

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures approved by the Board of Trustees. This holding represents 0.00% of the Fund’s net assets at June 30, 2016.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.01% of the Fund’s net assets at June 30, 2016.

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	20.9	%
Information Technology	15.8	%
Consumer Discretionary	15.6	%
Industrials	13.0	%
Consumer Staples	9.7	%
Health Care	9.1	%
Energy	7.1	%
Materials	5.0	%
Telecommunication Services	2.8	%
Utilities	1.0	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	24.9	%
British Pound Sterling	15.1	%
Japanese Yen	14.6	%
U.S. Dollar	8.6	%
Canadian Dollar	6.2	%
Swiss Franc	4.3	%
Hong Kong Dollar	4.1	%
South Korean Won	3.7	%
Danish Krone	3.3	%
Australian Dollar	3.2	%
Indian Rupee	3.0	%
Swedish Krona	2.8	%
South African Rand	2.0	%
Singapore Dollar	1.1	%
All Other Currencies	3.1	%
Total	100.0	%

As of June 30, 2016, the Fund invested in William Blair China A-Share Fund, LLC, an affiliated fund. There are no unfunded commitments to the affiliated fund. The Fund may redeem its investment weekly, but is subject to monthly repatriation and other redemption restrictions imposed on the William Blair China A-Share Fund, LLC by the Chinese government.

Share Activity

Period ended June 30, 2016

Change in net

unrealized

Balance

Dividend

Net realized

appreciation

Security Name

12/31/2015

Purchases

Sales

6/30/2016

Value

Income

gain (loss)

(depreciation)

William Blair China A-Share Fund, LLC

223,614

—

213,456

10,158

$174

$—

$1,574

$(1,620)

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

	Institutional International Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Stephanie G. Braming Simon Fennell Jeffrey A. Urbina	The William Blair Institutional International Growth Fund (Institutional Class shares) posted a 3.58% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 0.91%. Style headwinds during the February-April timeframe were a broad detractor from the Fund’s relative performance during the six-month period, as higher growth, higher valuation companies with stronger earnings trends, which the Fund focuses on, significantly underperformed lower valuation companies with relatively weak earnings trends. From a sector perspective, Materials stock selection was the largest detractor from the Fund’s relative performance year to date. The Fund’s Chemicals holdings lagged the Index, as Korea-based LG Chem was adversely impacted by weaker sales trends in its LCD/smartphone business. The lack of exposure to Metals & Mining companies also detracted from the Fund’s overall Materials sector performance. Among other sectors, stock selection in Financials, Consumer Finance, and Real Estate, combined with the Fund’s Insurance industry overweighting, detracted from the Fund’s relative performance during the six-month period. These effects were partially mitigated by good stock selection in Consumer Staples, Healthcare, Industrials and Telecommunication Services. Within Consumer Staples, Japanese cosmetics/personal care company Kao was a leading contributor to the Fund’s performance, supported by improved domestic cosmetic and household sales trends, continued strong growth in China (+48% revenue growth for 1Q versus the prior year) and lower costs. From a geographic perspective, the Fund’s overweightings to Europe and the U.K., combined with the underweighting to Emerging Markets compared to the Index, detracted from the Fund’s relative performance. Stock selection in the U.K. also detracted from the Fund’s performance, principally in the Financials and Materials sectors, offsetting the positive impacts of the Fund’s Japanese and Latin American stock selection. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

Semiannual Report

June 30, 2016

Institutional International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016

	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Institutional Class		(3.58	)%		(9.09	)%		3.00	%		3.22	%		3.12	%
MSCI ACW Ex-U.S. IMI (net)		(0.91	)		(9.61	)		1.65			0.39			2.16

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, 2016

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	*Common Stocks*

	*Europe, Mid-East—38.9%*
	Belgium—0.6%
	Colruyt S.A. (Food & staples retailing)		85,829	$	4,750
*	Telenet Group Holding N.V. (Media)		163,394		7,471
					12,221
	Denmark—3.2%
	Coloplast A/S Class “B” (Health care equipment & supplies)		103,020		7,712
	DSV A/S (Road & rail)		202,524		8,516
	ISS A/S (Commercial services & supplies)		216,326		8,136
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		323,148		17,402
	Pandora A/S (Textiles, apparel & luxury goods)		95,012		12,941
	Vestas Wind Systems A/S (Electrical equipment)		146,616		9,965
					64,672
	Finland—1.5%
	Elisa Oyj (Diversified telecommunication services)		113,179		4,349
	Huhtamaki Oyj (Containers & packaging)		95,155		3,949
	Kone Oyj Class “B” (Machinery)		469,813		21,682
					29,980
	France—11.0%
	Atos SE (IT services)		116,232		9,583
	Cap Gemini S.A. (IT services)		172,525		14,888
	Christian Dior SE (Textiles, apparel & luxury goods)		53,728		8,607
	Essilor International S.A. (Health care equipment & supplies)		66,531		8,744
	Hermes International (Textiles, apparel & luxury goods)		17,938		6,687
	Ipsen S.A. (Pharmaceuticals)		50,240		3,078
	Nexity S.A. (Real estate management & development)		58,181		2,943
	Orpea (Health care providers & services)		40,609		3,330
	Plastic Omnium S.A. (Auto components)		158,066		4,419
	Rubis SCA (Gas utilities)		40,261		3,078
	Safran S.A. (Aerospace & defense)		293,391		19,757
	SEB S.A. (Household durables)		30,038		3,622
	Sodexo S.A. (Hotels, restaurants & leisure)		91,727		9,827
	Technicolor S.A. (Media)		392,010		2,427
	Thales S.A. (Aerospace & defense)		142,571		11,840
	Total S.A. (Oil, gas & consumable fuels)		830,553		39,830
	Unibail-Rodamco SE (Real estate investment trusts (REITs))		46,471		12,022
	Valeo S.A. (Auto components)		417,249		18,523
	Veolia Environnement S.A. (Multi-utilities)		518,931		11,206
	Vinci S.A. (Construction & engineering)		410,648		28,978
					223,389
	Germany—3.7%
	Continental AG (Auto components)		85,874		16,250
	Deutsche Wohnen AG (Real estate management & development)		164,452		5,599



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*Europe, Mid-East—(continued)*
	Germany—(continued)
	Evonik Industries AG (Chemicals)		130,695	$	3,896
	Gerresheimer AG (Life sciences tools & services)		40,102		3,089
	KION Group AG (Machinery)		52,458		2,543
*	ProSiebenSat.1 Media SE (Media)		328,688		14,377
	SAP SE (Software)		230,174		17,287
	TUI AG (Hotels, restaurants & leisure)		596,354		6,774
	Vonovia SE (Real estate management & development)		147,583		5,389
					75,204
	Ireland—3.0%
	CRH plc (Construction materials)		564,689		16,455
	Greencore Group plc (Food products)		577,127		2,375
*	ICON plc (Life sciences tools & services)†		148,509		10,397
	Kingspan Group plc (Building products)		172,286		3,733
	Shire plc (Biotechnology)		461,151		28,500
					61,460
	Israel—1.5%
*	Check Point Software Technologies, Ltd. (Software)†		236,352		18,833
	Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		244,803		12,296
					31,129
	Italy—0.9%
	Azimut Holding SpA (Capital markets)		249,698		4,074
	Banca Generali SpA (Capital markets)		265,217		5,316
	Brembo SpA (Auto components)		51,162		2,818
	Interpump Group SpA (Machinery)		85,885		1,346
	Recordati SpA (Pharmaceuticals)		115,686		3,480
*	Yoox Net-A-Porter Group SpA (Internet & catalog retail)		36,176		839
					17,873
	Luxembourg—0.4%
	Eurofins Scientific SE (Life sciences tools & services)		17,068		6,323
*	RTL Group (Media)		34,094		2,785
					9,108
	Netherlands—3.6%
	GrandVision N.V.—144A (Specialty retail)		98,029		2,536
*	NXP Semiconductors N.V. (Semiconductors & semiconductor equipment)†		218,359		17,106
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		1,247,949		34,232
	Wolters Kluwer N.V. (Media)		471,311		19,084
					72,958
	Norway—0.3%
	Gjensidige Forsikring ASA (Insurance)		425,378		7,087

	Portugal—0.4%
	Jeronimo Martins SGPS S.A. (Food & staples retailing)		460,010		7,255

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Institutional International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*Europe, Mid-East—(continued)*
	Spain—1.9%
	Amadeus IT Holding S.A. Class “A” (IT services)		330,797	$	14,574
	Bankinter S.A. (Banks)		1,245,801		8,042
	Industria de Diseno Textil S.A. (Specialty retail)		475,788		15,984
					38,600
	Sweden—2.7%
	Assa Abloy AB Class “B” (Building products)		445,318		9,161
	BillerudKorsnas AB (Containers & packaging)		173,025		2,582
	Boliden AB (Metals & mining)		168,587		3,295
	Fabege AB (Real estate management & development)		84,780		1,442
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		264,077		9,664
	Hexpol AB (Chemicals)		331,318		3,402
	Intrum Justitia AB (Commercial services & supplies)		142,099		4,457
	Swedbank AB Class “A” (Banks)		958,204		20,125
					54,128
	Switzerland—4.2%
	Actelion, Ltd. (Biotechnology)		126,857		21,362
	Cembra Money Bank AG (Consumer finance)		33,411		2,337
	Clariant AG (Chemicals)		513,628		8,680
	dorma+kaba Holding AG (Commercial services & supplies)		4,258		2,975
	Logitech International S.A. (Technology hardware, storage & peripherals)		313,479		5,096
	Lonza Group AG (Life sciences tools & services)		83,338		13,844
*	Luxoft Holding, Inc. (IT services)†		44,997		2,341
	Partners Group Holding AG (Capital markets)		58,057		24,881
	Straumann Holding AG (Health care equipment & supplies)		11,040		4,355
					85,871
	Japan—14.1%
	Ain Pharmaciez, Inc. (Food & staples retailing)		42,500		3,297
	Alps Electric Co., Ltd. (Electronic equipment, instruments & components)		71,900		3,266
	Asahi Intecc Co., Ltd. (Health care equipment & supplies)		61,400		3,000
	Daicel Corporation (Chemicals)		272,500		2,824
	Daifuku Co., Ltd. (Machinery)		201,600		3,611
	Daikin Industries, Ltd. (Building products)		259,300		21,793
	Daito Trust Construction Co., Ltd. (Real estate management & development)		35,400		5,748
	Daiwa House Industry Co., Ltd. (Real estate management & development)		644,000		18,912



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*Japan—(continued)*
	Fuji Heavy Industries, Ltd. (Automobiles)		454,000	$	15,605
	Haseko Corporation (Household durables)		256,500		2,582
	IT Holdings Corporation (IT services)		136,400		3,141
	Kao Corporation (Personal products)		402,100		23,419
	KDDI Corporation (Wireless telecommunication services)		956,100		29,075
	Keyence Corporation (Electronic equipment, instruments & components)		35,600		24,291
	Lawson, Inc. (Food & staples retailing)		59,400		4,742
	M3, Inc. (Health care technology)		216,200		7,545
	Makita Corporation (Machinery)		101,800		6,759
	Nihon M&A Center, Inc. (Capital markets)		47,500		3,085
	Nippon Prologis REIT, Inc. (Real estate investment trusts (REITs))		1,496		3,655
	Nissan Chemical Industries, Ltd. (Chemicals)		158,900		4,636
	Nitori Holdings Co., Ltd. (Specialty retail)		88,500		10,734
	ORIX Corporation (Diversified financial services)		1,884,400		24,385
	Park24 Co., Ltd. (Commercial services & supplies)		89,400		3,072
	Pola Orbis Holdings, Inc. (Personal products)		60,300		5,675
	Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		46,700		3,620
	SCSK Corporation (IT services)		112,900		4,229
	Shionogi & Co., Ltd. (Pharmaceuticals)		336,400		18,390
	Taisei Corporation (Construction & engineering)		1,498,000		12,309
	Temp Holdings Co., Ltd. (Professional services)		212,800		3,687
	Tsuruha Holdings, Inc. (Food & staples retailing)		60,300		7,302
	Zenkoku Hosho Co., Ltd. (Diversified financial services)		73,900		2,699
					287,088
	United Kingdom—13.9%
	Admiral Group plc (Insurance)		251,745		6,845
	Babcock International Group plc (Commercial services & supplies)		367,063		4,438
	Berkeley Group Holdings plc (Household durables)		170,587		5,760
	Bunzl plc (Trading companies & distributors)		352,148		10,835
	Cineworld Group plc (Media)		384,266		2,803
	Compass Group plc (Hotels, restaurants & leisure)		1,300,353		24,740
	Croda International plc (Chemicals)		109,063		4,578
	Derwent London plc (Real estate investment trusts (REITs))		100,732		3,514
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		673,928		2,994
	Essentra plc (Chemicals)		337,673		2,317
	Experian plc (Professional services)		1,058,613		20,084

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*United Kingdom—(continued)*
	Halma plc (Electronic equipment, instruments & components)		408,229	$	5,552
	Hiscox, Ltd. (Insurance)		422,892		5,839
	Intermediate Capital Group plc (Capital markets)		292,191		1,914
	Intertek Group plc (Professional services)		203,872		9,499
	Johnson Matthey plc (Chemicals)		268,710		10,079
	Jupiter Fund Management plc (Capital markets)		488,377		2,398
	Micro Focus International plc (Software)		255,727		5,517
	Moneysupermarket.com Group plc (Internet software & services)		633,156		2,294
	Provident Financial plc (Consumer finance)		154,634		4,768
	Prudential plc (Insurance)		755,983		12,828
	Reckitt Benckiser Group plc (Household products)		294,318		29,512
	Rio Tinto, Ltd. (Metals & mining)		520,991		18,021
	Spirax-Sarco Engineering plc (Machinery)		102,236		5,120
	The Sage Group plc (Software)		1,037,606		8,969
	UBM plc (Media)		632,520		5,425
	Unilever plc (Personal products)		641,972		30,760
	WH Smith plc (Specialty retail)		120,988		2,542
	Wolseley plc (Trading companies & distributors)		302,521		15,666
	WPP plc (Media)		873,413		18,203
					283,814
	Emerging Asia—11.9%
	China—3.0%
	China Overseas Land & Investment, Ltd. (Real estate management & development)		3,092,000		9,857
	ENN Energy Holdings, Ltd. (Gas utilities)		1,086,000		5,393
	NetEase, Inc.—ADR (Internet software & services)		78,779		15,222
	PICC Property & Casualty Co., Ltd. Class “H” (Insurance)		4,626,000		7,305
	Tencent Holdings, Ltd. (Internet software & services)		1,023,100		23,496
					61,273
	India—3.0%
	Axis Bank, Ltd. (Banks)		1,017,344		8,084
	Bharat Petroleum Corporation, Ltd. (Oil, gas & consumable fuels)		246,540		3,941
	Eicher Motors, Ltd. (Machinery)		10,371		2,951
	HDFC Bank, Ltd. (Banks)		544,885		9,504
	IndusInd Bank, Ltd. (Banks)		378,474		6,248
	Maruti Suzuki India, Ltd. (Automobiles)		87,375		5,448
	Tata Consultancy Services, Ltd. (IT services)		418,738		15,838
	Yes Bank, Ltd. (Banks)		474,244		7,778
					59,792



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*
	Indonesia—0.5%
	PT Bank Central Asia Tbk (Banks)		9,824,100	$	9,947

	South Korea—3.6%
	Amorepacific Corporation (Personal products)		22,257		8,391
	KT&G Corporation (Tobacco)		66,477		7,873
	LG Chem, Ltd. (Chemicals)		36,329		8,296
	NAVER Corporation (Internet software & services)		8,308		5,147
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		28,298		35,241
	SK Hynix, Inc. (Semiconductors & semiconductor equipment)		293,480		8,352
					73,300
	Taiwan—1.8%
	Largan Precision Co., Ltd. (Electronic equipment, instruments & components)		115,000		10,636
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		1,014,011		26,597
					37,233
	Canada—6.8%
	Alimentation Couche Tard, Inc. Class “B” (Food & staples retailing)		154,883		6,651
	Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		539,375		17,837
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)		513,642		15,847
	Constellation Software, Inc. (Software)		9,135		3,536
	Dollarama, Inc. (Multiline retail)		161,292		11,261
	Enbridge, Inc. (Oil, gas & consumable fuels)		586,262		24,836
	Intact Financial Corporation (Insurance)		93,374		6,670
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		721,542		20,016
	The Toronto-Dominion Bank (Banks)		754,397		32,396
					139,050
	Asia—5.0%
	Australia—2.2%
	Domino’s Pizza Enterprises, Ltd. (Hotels, restaurants & leisure)		40,367		2,077
	James Hardie Industries plc (Construction materials)		364,090		5,639
	JB Hi-Fi, Ltd. (Specialty retail)		172,573		3,127
	LendLease Group (Real estate management & development)		645,212		6,129
	Macquarie Group, Ltd. (Capital markets)		458,363		23,860
	Vicinity Centres (Real estate investment trusts (REITs))		1,311,834		3,273
					44,105

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Institutional International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	*Common Stocks—(continued)*

	*Asia—(continued)*
	Hong Kong—1.7%
	AIA Group, Ltd. (Insurance)		4,034,663	$	24,211
*	China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		3,373,000		—
	Techtronic Industries Co., Ltd. (Household durables)		2,545,000		10,628
					34,839
	New Zealand—0.1%
	Fisher & Paykel Healthcare Corp., Ltd. (Health care equipment & supplies)		413,597		2,971

	Singapore—1.0%
	Singapore Telecommunications, Ltd. (Diversified telecommunication services)		6,675,100		20,617

	Emerging Latin America—3.1%
	Brazil—1.8%
	AMBEV S.A.—ADR (Beverages)		4,776,893		28,232
	BB Seguridade Participacoes S.A. (Insurance)		1,041,200		9,111
					37,343
	Mexico—0.6%
	Arca Continental S.A.B. de C.V. (Beverages)		1,029,030		7,385
	Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		47,318		4,377
					11,762
	Peru—0.7%
	Credicorp, Ltd. (Banks)†		95,563		14,748

	*Emerging Europe, Mid-East, Africa—2.6%*
	South Africa—1.9%
*	Bid Corporation, Ltd. (Food & staples retailing)		197,772		3,706
	Bidvest Group, Ltd. (Industrial conglomerates)		197,772		1,866
	Naspers, Ltd. (Media)		102,179		15,602
	Sanlam, Ltd. (Insurance)		1,051,444		4,344
	Steinhoff International Holdings N.V. (Household durables)		1,683,833		9,660
	The Spar Group, Ltd. (Food & staples retailing)		317,200		4,355
					39,533
	Turkey—0.4%
	Turkiye Garanti Bankasi A.S. (Banks)		2,850,538		7,529

	United Arab Emirates—0.3%
	Dubai Islamic Bank PJSC (Banks)		4,283,256		5,986

	Total Common Stocks—96.3% (cost $1,833,013)				1,961,865

		Shares or
		Principal
Issuer		Amount		Value

	*Affiliated Fund*
	China—0.0%
	William Blair China A-Share Fund, LLC§		6,312	$	108
	Total Affiliated Fund—0.0% (cost $63)				108

	*Repurchase Agreement*
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $64,947, collateralized by U.S. Treasury Note, 2.000%, due 8/15/25	$	64,947		64,947

	Total Repurchase Agreement—3.2% (cost $64,947)				64,947

	Total Investments—99.5% (cost $1,898,023)				2,026,920
	Cash and other assets, less liabilities—0.5%				9,447
	Net assets—100.0%			$	2,036,367

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures approved by the Board of Trustees. This holding represents 0.00% of the Fund’s net assets at June 30, 2016.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. These holdings represent 0.01% of the Fund’s net assets at June 30, 2016.

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	20.9	%
Information Technology	15.8	%
Consumer Discretionary	15.6	%
Industrials	13.0	%
Consumer Staples	9.7	%
Health Care	9.1	%
Energy	7.1	%
Materials	5.0	%
Telecommunication Services	2.8	%
Utilities	1.0	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	25.0	%
British Pound Sterling	15.1	%
Japanese Yen	14.6	%
U.S. Dollar	8.6	%
Canadian Dollar	6.2	%
Swiss Franc	4.3	%
Hong Kong Dollar	4.1	%
South Korean Won	3.7	%
Danish Krone	3.3	%
Australian Dollar	3.2	%
Indian Rupee	3.0	%
Swedish Krona	2.8	%
South African Rand	2.0	%
Singapore Dollar	1.0	%
All Other Currencies	3.1	%
Total	100.0	%

Share Activity

Period ended June 30, 2016

Change in net

unrealized

Balance

Dividend

Net realized

appreciation

Security Name

12/31/2015

Purchases

Sales

6/30/2016

Value

Income

gain (loss)

(depreciation)

William Blair China A-Share Fund, LLC

138,952

—

132,640

6,312

$108

$—

$978

$(1,006)

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	International Small Cap Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Stephanie G. Braming

Andrew G. Flynn

The William Blair International Small Cap Growth Fund (Class N shares) posted a 4.22% decrease, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. Small Cap Index (net) (the “Index”), decreased 0.20%.

The Fund’s exposure to higher growth companies broadly detracted from six-month performance, as lower growth, lower valuation companies led the market. From a sector perspective, stock selection in Consumer Discretionary, Financials, Information Technology (IT) and Materials weighed significantly on the Fund’s relative performance, offsetting relative strength in Energy, Healthcare and Industrials. The Fund’s Consumer Discretionary stock selection was hampered by Casio Computer (Japan), which posted disappointing earnings results driven by foreign currency headwinds in Emerging Markets countries, lower sales to inbound tourists and higher-than-expected costs associated with a recently launched outdoor watch. Within Financials, U.K. Real Estate Investment Trust (REIT) Workspace Group was adversely affected by uncertainty and negative sentiment surrounding the United Kingdom’s Brexit vote and the potentially detrimental impact to U.K. real estate activity. Within the IT sector, U.K. Internet Software & Services holdings failed to meet expectations, while the Fund’s performance within the Materials sector was hampered by its lack of exposure to the Metals & Mining industry, which performed well amid the commodity price rally. These negative effects were partially mitigated by good stock selection in the Energy, Healthcare and Industrials sectors. Canadian oil & gas exploration holdings were key contributors to the Fund’s performance within the Energy sector. Within Healthcare, Japanese medical information services provider M3 and Swiss-based dental implant provider Straumann exceeded expectations and provided a positive contribution to Fund performance. Bolstering the Fund’s performance in the Industrials sector were Hoshizaki Corp, Japan’s leading ice machine and commercial refrigeration manufacturer, and Grupo Aeroportuario Del Centro Norte, Mexico’s fourth largest airport operator. All of these holdings benefited from strong fundamental business trends and solid financial results during the period.

Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

International Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(4.22	)%		(1.77	)%		4.22	%		4.01	%		4.36	%
Class I		(4.10	)		(1.42	)		4.52			4.31			4.69
Institutional Class		(4.08	)		(1.41	)		4.68			4.50			4.87
MSCI ACW Ex-U.S. Small Cap Index (net)		(0.20	)		(5.46	)		4.93			2.28			4.09

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, performance would be lower. Smaller 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. 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 Investment Management, LLC and 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.

Semiannual Report

June 30, 2016

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Europe, Mid-East—33.7%
	Denmark—1.4%
	Royal Unibrew A/S (Beverages)		165,675	$	7,411

	Finland—1.6%
	Huhtamaki Oyj (Containers & packaging)		115,523		4,794
	Tieto Oyj (IT services)		143,362		3,927
					8,721
	France—7.5%
	Alten S.A. (IT services)		94,238		5,532
	Ipsen S.A. (Pharmaceuticals)		109,745		6,724
	Metropole Television S.A. (Media)		280,168		4,658
	Orpea (Health care providers & services)		60,529		4,963
	Rubis SCA (Gas utilities)		68,081		5,204
	SEB S.A. (Household durables)		35,535		4,285
	Technicolor S.A. (Media)		571,754		3,541
	Teleperformance (Professional services)		66,257		5,644
					40,551
	Germany—5.0%
	Aareal Bank AG (Thrifts & mortgage finance)		36,241		1,144
	Aurelius SE & Co KGaA (Capital markets)		143,229		8,418
	CTS Eventim AG & Co KGaA (Media)		126,815		3,877
	Gerresheimer AG (Life sciences tools & services)		75,723		5,833
	KION Group AG (Machinery)		58,339		2,827
	Norma Group SE (Machinery)		104,009		4,928
					27,027
	Ireland—2.0%
*	ICON plc (Life sciences tools & services)†		98,887		6,923
	Irish Continental Group plc (Marine)		278,380		1,300
	Kingspan Group plc (Building products)		131,072		2,840
					11,063
	Israel—1.7%
	Elbit Systems, Ltd. (Aerospace & defense)		73,584		6,664
	Frutarom Industries, Ltd. (Chemicals)		54,442		2,513
					9,177
	Italy—5.4%
	Banca IFIS SpA (Diversified financial services)		130,445		2,643
	Brembo SpA (Auto components)		122,780		6,763
	Cerved Information Solutions SpA (Diversified financial services)		707,710		5,576
	DiaSorin SpA (Health care equipment & supplies)		53,888		3,295
	Industria Macchine Automatiche SpA (Machinery)		78,118		4,702
	Recordati SpA (Pharmaceuticals)		179,125		5,388
*	Yoox Net-A-Porter Group SpA (Internet & catalog retail)		43,485		1,009
					29,376



Issuer		Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Luxembourg—0.6%
	Grand City Properties S.A. (Real estate management & development)		162,121	$	3,336

	Netherlands—0.4%
	GrandVision N.V.—144A (Specialty retail)		89,274		2,309

	Spain—0.7%
	Cia de Distribucion Integral Logista Holdings S.A. (Air freight & logistics)		181,150		3,828

	Sweden—5.7%
	Bilia AB Class “A” (Specialty retail)		94,467		2,336
	BillerudKorsnas AB (Containers & packaging)		249,728		3,726
	Boliden AB (Metals & mining)		282,677		5,525
	Hexpol AB (Chemicals)		325,068		3,338
	Indutrade AB (Trading companies & distributors)		168,752		3,337
	Intrum Justitia AB (Commercial services & supplies)		184,232		5,778
	Loomis AB Class “B” (Commercial services & supplies)		111,487		2,726
*	NetEnt AB (Internet software & services)		438,891		4,346
					31,112
	Switzerland—1.7%
*	Cembra Money Bank AG (Consumer finance)		57,469		4,019
*	Luxoft Holding, Inc. (IT services)†		40,058		2,084
	Straumann Holding AG (Health care equipment & supplies)		7,832		3,090
					9,193
	Japan—17.3%
	ABC-Mart, Inc. (Specialty retail)		75,300		5,053
	Daicel Corporation (Chemicals)		294,900		3,056
	Daifuku Co., Ltd. (Machinery)		233,300		4,178
	Daiichikosho Co., Ltd. (Media)		109,300		4,582
	GLP J-Reit (Real estate investment trusts (REITs))		7,173		9,054
	Haseko Corporation (Household durables)		481,200		4,845
	Hoshizaki Electric Co., Ltd. (Machinery)		38,500		3,769
	IT Holdings Corporation (IT services)		215,100		4,954
	M3, Inc. (Health care technology)		112,200		3,916
	Meitec Corporation (Professional services)		158,500		5,388
	Nihon M&A Center, Inc. (Capital markets)		59,900		3,891
	Nissan Chemical Industries, Ltd. (Chemicals)		301,100		8,785
	Pola Orbis Holdings, Inc. (Personal products)		29,100		2,739
	Relo Holdings, Inc. (Real estate management & development)		28,200		4,991
	Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		79,400		6,155
	Skylark Co., Ltd. (Hotels, restaurants & leisure)		296,300		3,755

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks—(continued)

	Japan—(continued)
	Suruga Bank, Ltd. (Banks)		193,200	$	4,366
	Temp Holdings Co., Ltd. (Professional services)		395,000		6,844
	Zenkoku Hosho Co., Ltd. (Diversified financial services)		102,400		3,740
					94,061
	United Kingdom—15.3%
	Abcam plc (Biotechnology)		162,551		1,675
	Beazley plc (Insurance)		1,282,473		6,235
	Berendsen plc (Commercial services & supplies)		334,897		5,441
	Big Yellow Group plc (Real estate investment trusts (REITs))		297,059		3,093
	Close Brothers Group plc (Capital markets)		105,618		1,601
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		904,689		4,019
	Halfords Group plc (Specialty retail)		544,142		2,340
	Halma plc (Electronic equipment, instruments & components)		478,989		6,515
	IG Group Holdings plc (Diversified financial services)		333,823		3,615
	Inchcape plc (Distributors)		467,581		3,932
	Intermediate Capital Group plc (Capital markets)		293,227		1,921
	Jupiter Fund Management plc (Capital markets)		702,727		3,451
	Micro Focus International plc (Software)		405,729		8,753
	Moneysupermarket.com Group plc (Internet software & services)		961,820		3,485
	OneSavings Bank plc (Thrifts & mortgage finance)		231,828		655
	Provident Financial plc (Consumer finance)		28,082		866
	Rentokil Initial plc (Commercial services & supplies)		2,292,235		5,919
	Rightmove plc (Internet software & services)		50,044		2,444
	Senior plc (Aerospace & defense)		273,470		752
	Spirax-Sarco Engineering plc (Machinery)		21,207		1,062
	SSP Group plc (Hotels, restaurants & leisure)		1,110,290		4,167
	Ted Baker plc (Textiles, apparel & luxury goods)		67,129		2,182
	The UNITE Group plc (Real estate management & development)		440,518		3,644
	Ultra Electronics Holdings plc (Aerospace & defense)		162,756		3,787
	Workspace Group plc (Real estate investment trusts (REITs))		154,244		1,423
					82,977



Issuer		Shares		Value

	Common Stocks—(continued)

	Asia—10.6%
	Australia—6.8%
	Challenger, Ltd. (Diversified financial services)		545,804	$	3,566
	Domino’s Pizza Enterprises, Ltd. (Hotels, restaurants & leisure)		55,474		2,855
	DuluxGroup, Ltd. (Chemicals)		1,213,828		5,777
	JB Hi-Fi, Ltd. (Specialty retail)		251,596		4,559
	Magellan Financial Group, Ltd. (Capital markets)		264,299		4,455
	Orora, Ltd. (Containers & packaging)		3,667,817		7,616
	The Star Entertainment Group, Ltd. (Hotels, restaurants & leisure)		1,977,481		8,058
					36,886
	Hong Kong—0.8%
	Man Wah Holdings, Ltd. (Household durables)		2,942,000		4,237

	New Zealand—0.6%
	Fisher & Paykel Healthcare Corp., Ltd. (Health care equipment & supplies)		437,237		3,141

	Singapore—2.4%
	ComfortDelGro Corporation, Ltd. (Road & rail)		3,095,000		6,356
	SATS, Ltd. (Transportation infrastructure)		2,283,000		6,980
					13,336
	Emerging Asia—7.0%
	China—2.1%
	ANTA Sports Products, Ltd. (Textiles, apparel & luxury goods)		1,258,000		2,538
	Beijing Capital International Airport Co., Ltd. Class “H” (Transportation infrastructure)		2,630,000		2,861
	China Lodging Group, Ltd.—ADR (Hotels, restaurants & leisure)		78,886		2,874
^*	Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		190,426		3,308
					11,581
	India—2.0%
	Indiabulls Housing Finance, Ltd. (Thrifts & mortgage finance)		376,856		3,773
	Yes Bank, Ltd. (Banks)		421,062		6,905
					10,678
	Indonesia—0.5%
	PT Bank Negara Indonesia Persero Tbk (Banks)		7,452,900		2,953

	South Korea—0.7%
	Kangwon Land, Inc. (Hotels, restaurants & leisure)		98,710		3,582

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)




Issuer		Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Taiwan—1.0%
	Advantech Co., Ltd. (Technology hardware, storage & peripherals)		322,000	$	2,455
	E.Sun Financial Holding Co., Ltd. (Banks)		5,073,769		3,006
					5,461
	Thailand—0.7%
	Minor International PCL (Hotels, restaurants & leisure)		3,105,800		3,570

	Emerging Latin America—5.6%
	Brazil—0.8%
	Localiza Rent a Car S.A. (Road & rail)		425,300		4,568

	Mexico—4.7%
	Alsea S.A.B. de C.V. (Hotels, restaurants & leisure)		881,830		3,357
	Gentera S.A.B. de C.V. (Consumer finance)		3,817,900		6,839
	Gruma S.A.B. de C.V. Class “B” (Food products)		192,500		2,769
	Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Transportation infrastructure)		895,900		5,339
	Grupo Aeroportuario del Sureste S.A.B. de C.V.—ADR (Transportation infrastructure)		27,562		4,397
	Promotora y Operadora de Infraestructura S.A.B. de C.V. (Transportation infrastructure)		231,800		2,853
					25,554
	Panama—0.1%
	Copa Holdings S.A. Class “A” (Airlines)†		8,263		432

	Emerging Europe, Mid-East, Africa—4.0%
	Hungary—0.5%
	Richter Gedeon Nyrt (Pharmaceuticals)		133,434		2,654

	South Africa—2.0%
	AVI, Ltd. (Food products)		465,334		2,626
	Clicks Group, Ltd. (Food & staples retailing)		704,886		5,860
	Rand Merchant Investment Holdings, Ltd. (Insurance)		812,435		2,278
					10,764
	Turkey—1.5%
	Arcelik A.S. (Household durables)		418,418		2,755
	Ford Otomotiv Sanayi A.S. (Automobiles)		266,903		2,840
	Turkiye Sinai Kalkinma Bankasi A.S. (Banks)		5,549,339		2,567
					8,162


Issuer		Shares or Principal Amount		Value

	Common Stocks—(continued)

	Canada—3.3%
	Canadian Energy Services & Technology Corporation (Energy equipment & services)		619,396	$	1,951
	Linamar Corporation (Auto components)		71,281		2,539
	Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		196,738		5,281
*	Raging River Exploration, Inc. (Oil, gas & consumable fuels)		548,413		4,364
	Whitecap Resources, Inc. (Oil, gas & consumable fuels)		452,371		3,460
					17,595
	Total Common Stocks—96.8% (cost $476,372)				525,296

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $19,794, collateralized by FNMA, 7.125%, due 1/15/30		$19,794		19,794

	Total Repurchase Agreement—3.6% (cost $19,794)				19,794

	Total Investments—100.4% (cost $496,166)				545,090
	Liabilities, plus cash and other assets—(0.4)%				(2,293	)
	Net assets—100.0%			$	542,797

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Industrials	22.0	%
Financials	21.7	%
Consumer Discretionary	20.4	%
Health Care	10.2	%
Information Technology	9.1	%
Materials	8.6	%
Consumer Staples	4.1	%
Energy	2.9	%
Utilities	1.0	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	22.7	%
Japanese Yen	17.9	%
British Pound Sterling	15.8	%
Australian Dollar	7.0	%
Swedish Krona	5.9	%
Mexican Peso	4.0	%
U.S. Dollar	3.8	%
Canadian Dollar	3.4	%
Singapore Dollar	2.5	%
South African Rand	2.1	%
Indian Rupee	2.0	%
Hong Kong Dollar	1.8	%
Israeli Shekel	1.8	%
Turkish Lira	1.6	%
Danish Krone	1.4	%
Swiss Franc	1.4	%
New Taiwan Dollar	1.0	%
All Other Currencies	3.9	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

	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 4.40% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Index (net) (the “Index”) increased 6.41%. The Fund underperformed Index for the six-month period. Style headwinds during the first quarter were a significant detractor from the Fund’s relative performance, as lower valuation companies with weaker earnings trends strongly outperformed higher growth, higher valuation companies with stronger earnings trends, which the Fund focuses on. Sector positioning was the biggest detractor from the Fund’s relative performance in this environment—primarily due to the Fund’s underweighting to Energy and the overweighting to Consumer Discretionary. Additionally, within the Materials sector, the Fund’s exclusion of Metals & Mining stocks significantly hampered relative performance amid the commodity price rally. The Fund’s position in LG Chem (Korea) also weighed on sector performance as the stock price languished on concerns about decelerating trends in its LCD/smartphone business. These negative effects were mitigated by positive stock selection in Industrials, Consumer Discretionary, and Energy. Within Industrials, Bidvest Corp (South Africa) was a leading contributor to the Fund’s relative performance, as the share price rallied after the spinoff of its food service businesses. From a geographic perspective, disappointing stock selection in Russia, South Africa, and Brazil was mitigated by positive stock selection in China and Taiwan, in addition to the favorable impact of the Fund’s underweighting of Chinese stocks. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

June 30, 2016

William Blair Funds

Emerging Markets Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year to Date			1 Year			3 Year			5 Year			Since Inception
Class N(b)		4.40	%		(11.68	)%		(0.74	)%		(2.14	)%		0.60	%
MSCI Emerging Markets Index – (net)(b)		6.41			(12.05	)		(1.56	)		(3.78	)		(0.58	)
Class I(a)		4.65			(11.36	)		(0.43	)		(1.84	)		(0.74	)
Institutional Class(a)		4.65			(11.23	)		(0.31	)		(1.72	)		(0.61	)
MSCI Emerging Markets Index (net)(a)		6.41			(12.05	)		(1.56	)		(3.78	)		(0.96	)


(a)	Since inception is for the period from March 26, 2008 (Commencement of Operations) to June 30, 2016.

(b)	Since inception is for the period from May 3, 2010 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

Sector Diversification (Unaudited)

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

Semiannual Report

June 30, 2016

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



Issuer		Shares		Value

	Common Stocks

	Emerging Asia—67.7%
	China—18.8%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		37,377	$	2,973
	China Mobile, Ltd. (Wireless telecommunication services)		313,500		3,626
	China Overseas Land & Investment, Ltd. (Real estate management & development)		452,000		1,441
	CNOOC, Ltd. (Oil, gas & consumable fuels)		3,560,000		4,448
	Dali Foods Group Co., Ltd.—144A (Food products)		2,822,000		1,619
	NetEase, Inc.—ADR (Internet software & services)		14,987		2,896
	New Oriental Education & Technology Group, Inc.—ADR (Diversified consumer services)		17,020		713
	PICC Property & Casualty Co., Ltd. Class “H” (Insurance)		1,236,000		1,952
*	TAL Education Group—ADR (Diversified consumer services)		12,858		798
	Tencent Holdings, Ltd. (Internet software & services)		305,200		7,009
	Zhuzhou CSR Times Electric Co., Ltd. Class “H” (Electrical equipment)		169,500		939
					28,414
	India—17.7%
	Asian Paints, Ltd. (Chemicals)		144,550		2,140
	Bharat Petroleum Corporation, Ltd. (Oil, gas & consumable fuels)		146,943		2,349
	HDFC Bank, Ltd.—ADR (Banks)		12,630		838
	HDFC Bank, Ltd. (Banks)		194,392		3,391
	Hero MotoCorp, Ltd. (Automobiles)		61,953		2,905
	Hindustan Unilever, Ltd. (Household products)		220,220		2,935
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		81,178		1,511
	Infosys, Ltd. (IT services)		230,506		4,004
	Maruti Suzuki India, Ltd. (Automobiles)		23,054		1,437
*	Tata Motors, Ltd. (Automobiles)		437,190		2,988
	Zee Entertainment Enterprises, Ltd. (Media)		322,367		2,185
					26,683
	Indonesia—3.7%
	PT Bank Rakyat Indonesia Persero Tbk (Banks)		1,871,900		1,540
	PT Kalbe Farma Tbk (Pharmaceuticals)		8,622,500		1,003
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		5,248,000		1,597
	PT Unilever Indonesia Tbk (Household products)		411,000		1,405
					5,545
	Malaysia—1.5%
	Public Bank Bhd (Banks)		470,400		2,267



Issuer		Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Philippines—1.1%
	SM Prime Holdings, Inc. (Real estate management & development)		1,527,000	$	892
	Universal Robina Corporation (Food products)		162,890		723
					1,615
	South Korea—13.7%
	Amorepacific Corporation (Personal products)		4,093		1,543
	Coway Co., Ltd. (Household durables)		18,069		1,645
	Hankook Tire Co., Ltd. (Auto components)		31,498		1,401
	KT&G Corporation (Tobacco)		20,470		2,425
	LG Chem, Ltd. (Chemicals)		8,183		1,869
	LG Household & Health Care, Ltd. (Personal products)		2,462		2,404
	NAVER Corporation (Internet software & services)		4,741		2,937
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		5,172		6,441
					20,665
	Taiwan—9.1%
	Chunghwa Telecom Co., Ltd. (Diversified telecommunication services)		849,000		3,071
	Largan Precision Co., Ltd. (Electronic equipment, instruments & components)		21,000		1,942
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		228,764		6,000
	Uni-President Enterprises Corporation (Food products)		1,432,000		2,828
					13,841
	Thailand—2.1%
	Airports of Thailand PCL (Transportation infrastructure)		118,300		1,315
	Bangkok Dusit Medical Services PCL Class “F” (Health care providers & services)		1,584,200		1,080
	CP ALL PCL (Food & staples retailing)		517,900		743
					3,138
	Emerging Europe, Mid-East, Africa—16.0%
	Czech Republic—0.6%
	Komercni banka A.S. (Banks)		23,837		894

	Hungary—0.4%
	OTP Bank plc (Banks)		27,550		616

	Russia—2.8%
	Magnit PJSC—GDR (Food & staples retailing)		41,054		1,368
*	Mail.Ru Group, Ltd.—GDR (Internet software & services)		71,529		1,302
*	Yandex N.V. Class “A” (Internet software & services)†		73,000		1,595
					4,265

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)




Issuer		Shares		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—(continued)
	South Africa—9.3%
*	Bid Corporation, Ltd. (Food & staples retailing)		63,521	$	1,190
	Bidvest Group, Ltd. (Industrial conglomerates)		62,815		593
	FirstRand, Ltd. (Diversified financial services)		660,746		2,017
	Naspers, Ltd. (Media)		32,243		4,923
	Sasol, Ltd. (Oil, gas & consumable fuels)		47,352		1,281
	Steinhoff International Holdings N.V. (Household durables)		446,402		2,561
	Vodacom Group, Ltd. (Wireless telecommunication services)		130,931		1,492
					14,057
	Turkey—2.9%
	BIM Birlesik Magazalar A.S. (Food & staples retailing)		70,162		1,368
	KOC Holding A.S. (Industrial conglomerates)		327,041		1,496
	Turkiye Garanti Bankasi A.S. (Banks)		573,131		1,514
					4,378
	Emerging Latin America—12.6%
	Brazil—4.9%
	AMBEV S.A.—ADR (Beverages)		574,127		3,393
	BB Seguridade Participacoes S.A. (Insurance)		92,200		807
	Cielo S.A. (IT services)		92,640		977
	Lojas Renner S.A. (Multiline retail)		132,800		979
	Ultrapar Participacoes S.A. (Oil, gas & consumable fuels)		58,000		1,284
					7,440
	Mexico—5.6%
	Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		16,352		1,512
	Grupo Financiero Banorte S.A.B. de C.V. Class “O” (Banks)		407,100		2,275
	Kimberly-Clark de Mexico S.A.B. de C.V. Class “A” (Household products)		765,612		1,809
	Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		1,210,200		2,911
					8,507
	Peru—2.1%
	Credicorp, Ltd. (Banks)†		19,975		3,083
	Total Common Stocks—96.3% (cost $134,784)				145,408


		Shares or
		Principal
Issuer		Amount		Value

	Preferred Stock
	Brazil—1.0%
	Itau Unibanco Holding S.A. (Banks)		166,000	$	1,566

	Total Preferred Stock—1.0% (cost $1,425)				1,566

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $3,835, collateralized by FHLMC, 4.125%, due 10/11/33		$3,835		3,835

	Total Repurchase Agreement—2.6% (cost $3,835)				3,835

	Total Investments—99.9% (cost $140,044)				150,809
	Cash and other assets, less liabilities—0.1%				158
	Net assets—100.0%			$	150,967

ADR = American Depository Receipt

GDR = Global Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	25.9%
Consumer Staples	20.5%
Financials	18.1%
Consumer Discretionary	15.3%
Telecommunication Services	6.7%
Energy	6.4%
Industrials	3.0%
Materials	2.7%
Health Care	1.4%
Total	100.0%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

U.S. Dollar	18.0%
Indian Rupee	17.6%
Hong Kong Dollar	14.3%
South Korean Won	14.1%
South African Rand	9.6%
New Taiwan Dollar	5.3%
Mexican Peso	4.8%
Brazilian Real	3.8%
Indonesian Rupiah	3.8%
Turkish Lira	3.0%
Thai Baht	2.1%
Malaysian Ringgit	1.5%
Philippine Peso	1.1%
All Other Currencies	1.0%
Total	100.0%

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

	Emerging Markets Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Todd M. McClone Casey K. Preyss Jeffrey A. Urbina	The William Blair Emerging Markets Growth Fund (Class N shares) posted a 5.07% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets IMI (net) (the “Index”), increased 5.69%. The Fund underperformed the Index for the six-month period. Style headwinds during the first quarter were a significant detractor from performance, as higher growth, higher valuation companies with stronger earnings trends substantially underperformed lower valuation companies with weaker earnings trends, which the Fund focuses on. Sector positioning was the biggest detractor from the Fund’s relative performance in this environment primarily due to the Fund’s underweightings in the Energy, Telecommunication Services, and Utilities sectors, and its overweighting in Information Technology (IT). Additionally, within the Materials sector, the Fund’s exclusion of Metals & Mining stocks significantly hampered relative performance amid the commodity price rally. The Fund’s position in LG Chem (Korea) also weighed on sector performance as the stock price languished on concerns about decelerating trends in its LCD/smartphone business. These negative effects were mitigated by positive stock selection in Consumer Discretionary, Energy, Financials, Industrials, and IT. Within Industrials, Bidvest Corp (South Africa) was a leading contributor to the Fund’s relative performance, as the share price rallied after the spinoff of its food service business. From a geographic perspective, disappointing stock selection in Russia, South Africa, and Brazil was mostly offset by positive stock selection in India, Taiwan and Thailand, in addition to the Fund’s underweighting of Chinese stocks. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

Semiannual Report

June 30, 2016

Emerging Markets Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		5.07	%		(12.81	)%		(0.16	)%		(1.28	)%		3.22	%
Class I		5.20			(12.56	)		0.07			(1.01	)		3.48
Institutional Class		5.16			(12.54	)		0.22			(0.85	)		3.65
MSCI Emerging Markets IMI (net)		5.69			(12.16	)		(1.36	)		(3.59	)		3.87

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

June 30, 2016

William Blair Funds

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—63.6%
	China—16.1%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		258,156	$	20,531
*	Baidu, Inc.—ADR (Internet software & services)		85,520		14,124
	China Mobile, Ltd. (Wireless telecommunication services)		846,000		9,786
	China Overseas Land & Investment, Ltd. (Real estate management & development)		1,526,000		4,865
	CNOOC, Ltd. (Oil, gas & consumable fuels)		23,549,000		29,425
*	Ctrip.com International, Ltd.—ADR (Internet & catalog retail)		150,589		6,204
	Dali Foods Group Co., Ltd.—144A (Food products)		4,624,000		2,653
	Huaneng Renewables Corporation, Ltd. Class “H” (Independent power & renewable electricity producers)		10,487,932		3,496
	NetEase, Inc.—ADR (Internet software & services)		49,195		9,505
	New Oriental Education & Technology Group, Inc.—ADR (Diversified consumer services)		58,491		2,450
	PICC Property & Casualty Co., Ltd. Class “H” (Insurance)		5,530,000		8,733
	Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		2,228,500		9,874
*	TAL Education Group—ADR (Diversified consumer services)		46,788		2,904
	Tencent Holdings, Ltd. (Internet software & services)		1,606,460		36,893
	Zhuzhou CSR Times Electric Co., Ltd. Class “H” (Electrical equipment)		393,500		2,180
					163,623
	India—17.0%
	Apollo Hospitals Enterprise, Ltd. (Health care providers & services)		130,496		2,549
	Asian Paints, Ltd. (Chemicals)		322,010		4,766
	Bajaj Finance, Ltd. (Consumer finance)		21,428		2,539
	Bharat Petroleum Corporation, Ltd. (Oil, gas & consumable fuels)		355,760		5,686
	Bharti Infratel, Ltd. (Wireless telecommunication services)		517,766		2,662
	Britannia Industries, Ltd. (Food products)		55,726		2,279
	Dabur India, Ltd. (Personal products)		797,444		3,647
	Eicher Motors, Ltd. (Machinery)		14,778		4,206
	Godrej Consumer Products, Ltd. (Personal products)		163,913		3,904
	Havells India, Ltd. (Electrical equipment)		683,323		3,661
	HDFC Bank, Ltd. (Banks)		1,088,325		18,983
	Hero MotoCorp, Ltd. (Automobiles)		162,173		7,606
	Hindustan Unilever, Ltd. (Household products)		743,816		9,914
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		572,085		10,650
	IndusInd Bank, Ltd. (Banks)		796,562		13,149



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	India—(continued)
	Infosys, Ltd. (IT services)		948,581	$	16,477
	Maruti Suzuki India, Ltd. (Automobiles)		117,864		7,349
	Motherson Sumi Systems, Ltd. (Auto components)		803,689		3,482
	Pidilite Industries, Ltd. (Chemicals)		252,292		2,690
*	SKS Microfinance, Ltd. (Consumer finance)		294,409		3,233
*	Tata Motors, Ltd. (Automobiles)		3,437,446		23,494
	UPL, Ltd. (Chemicals)		456,128		3,740
	Yes Bank, Ltd. (Banks)		668,712		10,967
	Zee Entertainment Enterprises, Ltd. (Media)		731,350		4,957
					172,590
	Indonesia—5.1%
	PT Astra International Tbk (Automobiles)		14,367,700		8,100
	PT Bank Rakyat Indonesia Persero Tbk (Banks)		12,036,621		9,904
	PT Gudang Garam Tbk (Tobacco)		960,500		5,026
	PT Indofood CBP Sukses Makmur Tbk (Food products)		1,975,900		2,598
	PT Kalbe Farma Tbk (Pharmaceuticals)		28,532,715		3,320
	PT Matahari Department Store Tbk (Multiline retail)		3,439,500		5,242
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		40,472,100		12,313
	PT Unilever Indonesia Tbk (Household products)		1,537,200		5,254
					51,757
	Malaysia—1.3%
	Public Bank Bhd (Banks)		2,717,200		13,093

	Papua New Guinea—0.5%
	Oil Search, Ltd. (Oil, gas & consumable fuels)		926,391		4,678

	Philippines—3.1%
	Ayala Land, Inc. (Real estate management & development)		9,708,000		8,053
	BDO Unibank, Inc. (Banks)		3,288,260		7,856
	GT Capital Holdings, Inc. (Diversified financial services)		49,830		1,532
	International Container Terminal Services, Inc. (Transportation infrastructure)		1,859,120		2,438
	Jollibee Foods Corporation (Hotels, restaurants & leisure)		671,910		3,465
	SM Investments Corporation (Industrial conglomerates)		234,530		4,849
	Universal Robina Corporation (Food products)		826,360		3,665
					31,858

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	South Korea—8.7%
	Amorepacific Corporation (Personal products)		13,920	$	5,248
	Coway Co., Ltd. (Household durables)		66,213		6,029
	Halla Visteon Climate Control Corporation (Auto components)		350,802		3,210
	Hankook Tire Co., Ltd. (Auto components)		75,199		3,345
	Kangwon Land, Inc. (Hotels, restaurants & leisure)		144,440		5,241
	KT&G Corporation (Tobacco)		68,645		8,130
	LG Household & Health Care, Ltd. (Personal products)		10,916		10,660
*	Loen Entertainment, Inc. (Media)		33,035		2,109
	Medy-Tox, Inc. (Biotechnology)		6,102		2,308
	NAVER Corporation (Internet software & services)		16,112		9,982
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		25,909		32,266
					88,528
	Taiwan—8.4%
	Advantech Co., Ltd. (Technology hardware, storage & peripherals)		488,145		3,722
	Chunghwa Telecom Co., Ltd. (Diversified telecommunication services)		3,551,000		12,843
	Cub Elecparts, Inc. (Auto components)		274,168		3,089
	E.Sun Financial Holding Co., Ltd. (Banks)		9,513,146		5,636
	Ennoconn Corporation (Technology hardware, storage & peripherals)		215,000		2,889
	Hota Industrial Manufacturing Co., Ltd. (Auto components)		501,000		2,351
	Largan Precision Co., Ltd. (Electronic equipment, instruments & components)		72,000		6,659
	St Shine Optical Co., Ltd. (Health care equipment & supplies)		143,000		3,231
	Taiwan Semiconductor Manufacturing Co., Ltd. (Semiconductors & semiconductor equipment)		2,264,000		11,410
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		990,650		25,985
	Uni-President Enterprises Corporation (Food products)		3,694,000		7,296
					85,111
	Thailand—3.4%
	Airports of Thailand PCL (Transportation infrastructure)		402,800		4,479
	Bangkok Dusit Medical Services PCL Class “F” (Health care providers & services)		7,081,300		4,827
	Central Pattana PCL (Real estate management & development)		4,154,400		7,079
	CP ALL PCL (Food & staples retailing)		5,286,600		7,583
	Home Product Center PCL (Specialty retail)		7,113,500		2,011



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Thailand—(continued)
	Minor International PCL (Hotels, restaurants & leisure)		2,195,200	$	2,523
	Thai Beverage PCL (Beverages)		9,224,500		6,255
					34,757
	Emerging Europe, Mid-East, Africa—18.4%
	Czech Republic—0.4%
	Komercni banka A.S. (Banks)		107,972		4,048

	Hungary—0.6%
	OTP Bank plc (Banks)		185,936		4,161
	Richter Gedeon Nyrt (Pharmaceuticals)		111,118		2,210
					6,371
	Poland—0.3%
	Eurocash S.A. (Food & staples retailing)		215,324		2,523

	Qatar—0.5%
	Qatar National Bank S.A.Q. (Banks)		121,367		4,677

	Russia—1.6%
	Magnit PJSC—GDR (Food & staples retailing)		229,721		7,658
*	Yandex N.V. Class “A” (Internet software & services)†		411,843		8,999
					16,657
	South Africa—8.2%
*	Aspen Pharmacare Holdings, Ltd. (Pharmaceuticals)		162,387		4,006
*	Bid Corporation, Ltd. (Food & staples retailing)		390,940		7,326
	Bidvest Group, Ltd. (Industrial conglomerates)		313,214		2,955
	Capitec Bank Holdings, Ltd. (Banks)		89,000		3,610
	Discovery, Ltd. (Insurance)		346,011		2,891
	FirstRand, Ltd. (Diversified financial services)		3,139,176		9,580
	Naspers, Ltd. (Media)		200,714		30,648
	Sasol, Ltd. (Oil, gas & consumable fuels)		227,147		6,145
	Steinhoff International Holdings N.V. (Household durables)		1,662,556		9,538
	Vodacom Group, Ltd. (Wireless telecommunication services)		573,260		6,532
					83,231
	Turkey—3.5%
	Arcelik A.S. (Household durables)		739,668		4,870
	BIM Birlesik Magazalar A.S. (Food & staples retailing)		191,180		3,728
	KOC Holding A.S. (Industrial conglomerates)		2,197,053		10,048
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		588,698		4,841
	Turkiye Garanti Bankasi A.S. (Banks)		3,599,809		9,509
	Ulker Biskuvi Sanayi A.S. (Food products)		367,487		2,685
					35,681

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—(continued)
	United Arab Emirates—3.3%
	DP World, Ltd. (Transportation infrastructure)†		242,282	$	4,027
	Dubai Islamic Bank PJSC (Banks)		3,347,898		4,679
	Emaar Malls Group PJSC (Real estate management & development)		3,113,053		2,397
	Emaar Properties PJSC (Real estate management & development)		5,951,432		10,123
	Emirates Telecommunications Group Co. PJSC (Diversified telecommunication services)		1,261,311		6,516
	First Gulf Bank PJSC (Banks)		1,777,559		6,111
					33,853
	Emerging Latin America—15.8%
	Argentina—1.6%
	Banco Macro S.A.—ADR (Banks)		38,017		2,822
	MercadoLibre, Inc. (Internet software & services)†		28,793		4,050
*	YPF S.A.—ADR (Oil, gas & consumable fuels)		466,211		8,951
					15,823
	Brazil—5.1%
	AMBEV S.A.—ADR (Beverages)		3,870,073		22,872
	BB Seguridade Participacoes S.A. (Insurance)		934,300		8,176
	Cielo S.A. (IT services)		374,720		3,950
	Lojas Renner S.A. (Multiline retail)		967,700		7,137
	Raia Drogasil S.A. (Food & staples retailing)		178,800		3,514
	Ultrapar Participacoes S.A. (Oil, gas & consumable fuels)		271,700		6,014
					51,663
	Chile—1.1%
	Banco Santander Chile—ADR (Banks)		286,829		5,556
	S.A.C.I. Falabella (Multiline retail)		795,680		6,056
					11,612
	Mexico—6.6%
	Fibra Uno Administracion S.A. de C.V. (Real estate investment trusts (REITs))		3,279,669		6,987
	Fomento Economico Mexicano S.A.B. de C.V.—ADR (Beverages)		106,590		9,859
	Gruma S.A.B. de C.V. Class “B” (Food products)		172,500		2,482
	Grupo Aeroportuario del Pacifico S.A.B. de C.V. Class “B” (Transportation infrastructure)		490,200		5,039
	Grupo Aeroportuario del Sureste S.A.B. de C.V.—ADR (Transportation infrastructure)		27,267		4,350
	Grupo Bimbo S.A.B. de C.V. Class “A” (Food products)		1,117,100		3,504
	Grupo Financiero Inbursa S.A.B. de C.V. Class “O” (Banks)		1,718,300		2,922

	Shares or
	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Emerging Latin America—(continued)
Mexico—(continued)
Grupo Financiero Santander Mexico S.A.B. de C.V. Class “B” (Banks)		3,329,300	$	6,042
Grupo Lala S.A.B. de C.V. (Food products)		881,900		1,944
Nemak S.A.B. de C.V.—144A (Auto components)		2,433,500		2,850
Promotora y Operadora de Infraestructura S.A.B. de C.V. (Transportation infrastructure)		299,700		3,689
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		7,214,800		17,356
				67,024
Peru—1.4%
Credicorp, Ltd. (Banks)†		91,788		14,166

Total Common Stocks—97.8% (cost $914,051)				993,324

Preferred Stock
Brazil—0.5%
Itau Unibanco Holding S.A. (Banks)		588,700		5,553

Total Preferred Stock—0.5% (cost $4,120)				5,553

Affiliated Fund

Emerging Asia—0.0%
China—0.0%
William Blair China A-Share Fund, LLC§		12,462		213
Total Affiliated Fund—0.0% (cost $125)				213

Repurchase Agreement
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $6,993, collateralized by FNMA, 6.250%, due 5/15/29		$6,993		6,993
Total Repurchase Agreement—0.7% (cost $6,993)				6,993
Total Investments—99.0% (cost $925,289)				1,006,083
Cash and other assets, less liabilities—1.0%				9,774
Net assets—100.0%			$	1,015,857

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

ADR = American Depository Receipt

GDR = Global Depository Receipt

* = Non-income producing securities

† = U.S. listed foreign security

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.02% of the Fund’s net assets at June 30, 2016.

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	25.1	%
Information Technology	20.8	%
Consumer Discretionary	17.1	%
Consumer Staples	17.0	%
Energy	6.1	%
Industrials	5.2	%
Telecommunication Services	5.1	%
Health Care	2.2	%
Materials	1.1	%
Utilities	0.3	%
Total	100.0	%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

U.S. Dollar	17.5	%
Indian Rupee	17.3	%
Hong Kong Dollar	10.8	%
South Korean Won	8.9	%
South African Rand	8.3	%
New Taiwan Dollar	5.9	%
Mexican Peso	5.3	%
Indonesian Rupiah	5.2	%
Turkish Lira	3.6	%
Brazilian Real	3.4	%
Philippine Peso	3.2	%
UAE Dirham	3.0	%
Thai Baht	2.8	%
Malaysian Ringgit	1.3	%
All Other Currencies	3.5	%
Total	100.0	%

	Share Activity				Period Ended June 30, 2016
Security Name	Balance 12/31/2015	Purchases	Sales	Balance 06/30/2016	Value	Dividend Income	Net realized gain (loss)	Change in net unrealized appreciation (depreciation)
William Blair China A-Share Fund, LLC	274,339	—	261,877	12,462	$213	$—	$1,931	$(1,988)

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

	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 Casey K. Preyss	The William Blair Emerging Markets Small Cap Growth Fund (Class N shares) posted a 0.88% increase, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Small Cap Index (net) (the “Index”), increased 1.38%. From a sector attribution perspective, the Fund’s six-month relative performance was adversely impacted by Healthcare and Materials stock selection, combined with an underweighting to Materials. Within the Healthcare sector, Chinese Biotechnology and Pharmaceutical holdings were significant detractors from the Fund’s relative performance. China Biologic Products reported solid sales growth supported by favorable market dynamics with growth in plasma collection/demand, but concerns about the impact of the weaker Chinese RMB currency and margin pressures weighed on the share price. Sino Biopharmaceutical was another notable detractor from Fund performance, as investors reacted negatively to news that the company had purchased an asset management company and was seeking to expand beyond its core capabilities into hospitals, insurance and medical devices. These negative effects were partially mitigated by positive stock selection in the Consumer Discretionary, Consumer Staples and Information Technology (IT) sectors during the six-month period. Thailand cosmetics retailer Beauty Community’s share price was supported by solid sales growth achieved through good same store sales trends, new store openings and higher sales in 7-Eleven stores. Within Consumer Staples, Raia Drogasil (Brazil drugstore) was the leading contributor to the Fund’s performance in that sector, bolstered by the stabilizing macroeconomic and political backdrop in Brazil, along with solid execution on management’s store expansion strategy. Stock selection effect in the IT sector was driven primarily by the Fund’s position in Yandex, Russia’s leading search engine, on strong revenue growth and EBITDA margin that were ahead of consensus expectations. Investors reacted favorably to management’s decision to start breaking out results for different business categories, which highlighted the company’s growing presence in eCommerce. From a geographic perspective, stock selection in Korea, China and Malaysia were key detractors to the Fund’s relative performance during the six-month period. These effects were mitigated by good stock selection in India and Brazil, and overall country positioning; particularly the underweightings to Korea and China and overweighting to Brazil. Please refer to the Global Markets Review and Outlook relating to the Fund on page 36.

Semiannual Report

June 30, 2016

Emerging Markets Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year									Since
	to Date			1 Year			3 Year			Inception
Class N(a)		0.88	%		(10.56	)%		5.68	%		11.17	%
Class I(a)		0.94			(10.31	)		6.00			11.47
MSCI Emerging Markets Small Cap Index (net)(a)		1.38			(12.76	)		(0.01	)		2.12
Institutional Class(b)		1.01			(10.19	)		6.12			7.60
MSCI Emerging Markets Small Cap Index (net)(b)		1.38			(12.76	)		(0.01	)		(0.64	)

(a)	Since inception is for the period from October 24, 2011 (Commencement of Operations) to June 30, 2016.

(b)	Since inception is for the period from December 20, 2012 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, performance would be lower. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Smaller capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. 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 Investment Management, LLC and 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.

June 30, 2016

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—67.7%
	China—6.8%
	Beijing Capital International Airport Co., Ltd. Class “H” (Transportation infrastructure)		1,704,000	$	1,854
	Beijing Enterprises Water Group, Ltd. (Water utilities)		2,092,000		1,270
	Bloomage BioTechnology Corporation, Ltd. (Chemicals)		92,500		144
*	China Biologic Products, Inc. (Biotechnology)†		1,318		140
	China Lilang, Ltd. (Textiles, apparel & luxury goods)		826,000		525
	China Lodging Group, Ltd.—ADR (Hotels, restaurants & leisure)		79,711		2,904
	CT Environmental Group, Ltd. (Water utilities)		7,830,000		2,288
	Fuyao Glass Industry Group Co. Ltd.—144A Class “H” (Auto components)		678,000		1,578
*	IMAX China Holding, Inc.—144A (Media)		140,900		696
	Minth Group, Ltd. (Auto components)		900,000		2,921
*	Noah Holdings, Ltd.—ADR (Capital markets)		42,585		1,027
	Shenzhen Investment, Ltd. (Real estate management & development)		2,282,000		919
	Silergy Corporation (Semiconductors & semiconductor equipment)		108,000		1,277
*	TAL Education Group—ADR (Diversified consumer services)		20,579		1,277
	Travelsky Technology, Ltd. Class “H” (IT services)		1,065,000		2,050
					20,870
	India—19.7%
	Apollo Hospitals Enterprise, Ltd. (Health care providers & services)		37,164		726
	Bajaj Finance, Ltd. (Consumer finance)		41,572		4,927
	Blue Dart Express, Ltd. (Air freight & logistics)		19,751		1,748
	Cholamandalam Investment and Finance Co., Ltd. (Consumer finance)		100,239		1,404
	Dabur India, Ltd. (Personal products)		465,454		2,129
	Eicher Motors, Ltd. (Machinery)		12,049		3,429
	Finolex Industries, Ltd. (Chemicals)		148,157		939
	Godrej Consumer Products, Ltd. (Personal products)		140,818		3,354
	Gruh Finance, Ltd. (Thrifts & mortgage finance)		657,052		2,805
	Havells India, Ltd. (Electrical equipment)		692,162		3,708
	Indiabulls Housing Finance, Ltd. (Thrifts & mortgage finance)		285,939		2,862
	IndusInd Bank, Ltd. (Banks)		264,950		4,374
	Kajaria Ceramics, Ltd. (Building products)		158,960		2,841
	Marico, Ltd. (Personal products)		311,906		1,224
*	Max India, Ltd. (Health care providers & services)**§		181,994		485
	Page Industries, Ltd. (Textiles, apparel & luxury goods)		5,365		1,115



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	India—(continued)
	PI Industries, Ltd. (Chemicals)		63,735	$	684
	Pidilite Industries, Ltd. (Chemicals)		243,645		2,598
	Repco Home Finance, Ltd. (Consumer finance)		98,297		1,119
	Sadbhav Engineering, Ltd. (Construction & engineering)		68,257		295
*	SKS Microfinance, Ltd. (Consumer finance)		443,597		4,871
	Supreme Industries, Ltd. (Chemicals)		112,282		1,520
	UPL, Ltd. (Chemicals)		259,328		2,127
	Voltas, Ltd. (Construction & engineering)		409,932		1,968
	Yes Bank, Ltd. (Banks)		324,091		5,315
	Zee Entertainment Enterprises, Ltd. (Media)		232,483		1,576
					60,143
	Indonesia—5.6%
	PT Ace Hardware Indonesia Tbk (Specialty retail)		14,559,400		1,023
	PT Bank Tabungan Negara Persero Tbk (Banks)		24,387,600		3,184
	PT Gudang Garam Tbk (Tobacco)		116,500		610
	PT Indofood CBP Sukses Makmur Tbk (Food products)		1,350,300		1,775
	PT Matahari Department Store Tbk (Multiline retail)		2,041,500		3,112
	PT Pakuwon Jati Tbk (Real estate management & development)		78,578,500		3,689
*	PT Summarecon Agung Tbk (Real estate management & development)		18,319,700		2,533
	PT Waskita Karya Persero Tbk (Construction & engineering)		6,074,200		1,179
					17,105
	Pakistan—5.4%
	D.G. Khan Cement Co., Ltd. (Construction materials)		1,908,000		3,487
	Engro Corporation, Ltd. (Chemicals)		1,223,500		3,886
*	Engro Foods, Ltd. (Food products)		1,545,500		2,406
	Lucky Cement, Ltd. (Construction materials)		417,900		2,586
	Maple Leaf Cement Factory, Ltd. (Construction materials)		2,424,621		2,440
	United Bank, Ltd. (Banks)		1,019,500		1,725
					16,530
	Philippines—5.1%
	D&L Industries, Inc. (Chemicals)		7,151,700		1,524
	GT Capital Holdings, Inc. (Diversified financial services)		140,585		4,322
	Jollibee Foods Corporation (Hotels, restaurants & leisure)		516,850		2,666
	Puregold Price Club, Inc. (Food & staples retailing)		213,500		191
	Robinsons Land Corporation (Real estate management & development)		3,843,400		2,419

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Philippines—(continued)
	Security Bank Corporation (Banks)		477,670	$	1,954
	Universal Robina Corporation (Food products)		563,080		2,497
					15,573
	South Korea—5.7%
	BGF retail Co., Ltd. (Food & staples retailing)		14,234		2,650
	Cell Biotech Co., Ltd. (Biotechnology)		13,938		728
	CJ CGV Co., Ltd. (Media)		12,706		1,152
	Halla Climate Control Corporation (Auto components)		149,843		1,371
*	Hugel, Inc. (Biotechnology)		6,080		1,687
	Kangwon Land, Inc. (Hotels, restaurants & leisure)		41,460		1,504
	Korea Kolmar Co., Ltd. (Personal products)		35,024		3,063
*	Loen Entertainment, Inc. (Media)		18,753		1,197
	Mando Corporation (Auto components)		5,695		1,082
	Medy-Tox, Inc. (Biotechnology)		5,119		1,936
	Vieworks Co., Ltd. (Health care equipment & supplies)		24,461		1,065
					17,435
	Taiwan—13.4%
	Actron Technology Corporation (Auto components)		402,000		1,545
	Advantech Co., Ltd. (Technology hardware, storage & peripherals)		191,000		1,456
	ASPEED Technology, Inc. (Semiconductors & semiconductor equipment)		40,000		372
	Bizlink Holding, Inc. (Electrical equipment)		249,000		1,536
	Chin-Poon Industrial Co., Ltd. (Electronic equipment, instruments & components)		559,000		1,210
	Cleanaway Co., Ltd. (Commercial services & supplies)		83,000		447
	Cub Elecparts, Inc. (Auto components)		59,080		666
	E.Sun Financial Holding Co., Ltd. (Banks)		2,605,611		1,544
	Ennoconn Corporation (Technology hardware, storage & peripherals)		249,000		3,346
	Hota Industrial Manufacturing Co., Ltd. (Auto components)		340,000		1,595
	Kung Long Batteries Industrial Co., Ltd. (Electrical equipment)		254,000		1,155
	Macauto Industrial Co., Ltd. (Auto components)		336,000		1,718
*	PharmaEngine, Inc. (Biotechnology)		133,000		918
	Posiflex Technology, Inc. (Electronic equipment, instruments & components) .		264,000		1,276
	Poya Co., Ltd. (Multiline retail)		146,100		1,629
	Shin Zu Shing Co., Ltd. (Machinery)		743,000		2,451
	Silicon Motion Technology Corporation-— ADR (Semiconductors & semiconductor equipment)		63,415		3,031
	Sinbon Electronics Co., Ltd. (Electronic equipment, instruments & components)		1,031,000		2,328



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Taiwan—(continued)
	Sporton International, Inc. (Professional services)		439,757	$	2,279
	St Shine Optical Co., Ltd. (Health care equipment & supplies)		85,000		1,921
	Sunny Friend Environmental Technology Co., Ltd. (Commercial services & supplies)		542,000		2,568
	Tung Thih Electronic Co., Ltd. (Auto components)		108,000		1,739
*	Visual Photonics Epitaxy Co., Ltd. (Semiconductors & semiconductor equipment)		1,109,000		1,695
	Voltronic Power Technology Corporation (Electrical equipment)		78,103		1,092
	Win Semiconductors Corporation (Semiconductors & semiconductor equipment)		751,539		1,538
					41,055
	Thailand—6.0%
	Bangkok Chain Hospital PCL (Health care providers & services)		4,742,900		1,678
	Beauty Community PCL (Specialty retail)		14,719,100		3,465
	Carabao Group PCL Class “F” (Beverages)		821,400		1,234
	Central Plaza Hotel PCL (Hotels, restaurants & leisure)		1,322,400		1,408
	Chularat Hospital PCL Class “F” (Health care providers & services)		15,116,200		1,336
	Home Product Center PCL (Specialty retail)		2,550,500		721
	KCE Electronics PCL (Electronic equipment, instruments & components)		853,900		2,030
	Kiatnakin Bank PCL (Banks)		355,400		441
	Major Cineplex Group PCL (Media)		1,294,200		1,219
	Minor International PCL (Hotels, restaurants & leisure)		2,614,701		3,005
	Srisawad Power 1979 PCL Class “F” (Consumer finance)		1,535,412		1,667
					18,204
	Emerging Europe, Mid-East, Africa—15.3%
	Georgia—0.6%
*	BGEO Group plc (Banks)		50,639		1,773

	Hungary—1.0%
	Magyar Telekom Telecommunications plc (Diversified telecommunication services)		1,161,980		1,823
	Richter Gedeon Nyrt (Pharmaceuticals)		58,586		1,165
					2,988
	Kenya—1.1%
	Safaricom, Ltd. (Wireless telecommunication services)		19,398,500		3,372

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Europe, Mid-East, Africa—(continued)
	Poland—0.9%
	Eurocash S.A. (Food & staples retailing)		45,885	$	538
*	KRUK S.A. (Consumer finance)		41,478		2,124
					2,662
	Romania—0.9%
	Banca Transilvania S.A. (Banks)		5,281,203		2,699

	Russia—1.6%
*	Yandex N.V. Class “A” (Internet software & services)†		225,776		4,933

	South Africa—4.8%
	AVI, Ltd. (Food products)		387,527		2,187
	Capitec Bank Holdings, Ltd. (Banks)		37,708		1,530
	Cashbuild, Ltd. (Specialty retail)		75,399		1,818
	Clicks Group, Ltd. (Food & staples retailing)		344,283		2,862
	JSE, Ltd. (Diversified financial services)		188,317		2,372
	Pioneer Foods Group, Ltd. (Food products)		132,472		1,554
	PSG Group, Ltd. (Diversified financial services)		82,563		1,091
	The Spar Group, Ltd. (Food & staples retailing)		86,000		1,181
					14,595
	Turkey—3.1%
	Arcelik A.S. (Household durables)		379,171		2,496
	Aselsan Elektronik Sanayi Ve Ticaret A.S. (Aerospace & defense)		247,868		812
	Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		519,917		4,275
	Turkiye Sinai Kalkinma Bankasi A.S. (Banks)		1,738,648		804
	Ulker Biskuvi Sanayi A.S. (Food products)		135,757		992
					9,379
	United Arab Emirates—1.3%
	Emaar Malls Group PJSC (Real estate management & development)		2,103,252		1,620
	NMC Health plc (Health care providers & services)		147,984		2,555
					4,175
	Emerging Latin America—15.0%
	Argentina—0.4%
	Banco Macro S.A.—ADR (Banks)		15,583		1,157

	Brazil—6.2%
*	BR Malls Participacoes S.A. (Real estate management & development)		611,590		2,446
	CVC Brasil Operadora e Agencia de Viagens S.A. (Hotels, restaurants & leisure)		246,200		1,754
*	EcoRodovias Infraestrutura e Logistica S.A. (Transportation infrastructure)		578,700		1,510



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Latin America—(continued)
	Brazil—(continued)
	Kroton Educacional S.A. (Diversified consumer services)		618,800	$	2,620
	Localiza Rent a Car S.A. (Road & rail)		161,800		1,738
	Lojas Renner S.A. (Multiline retail)		479,100		3,533
	Raia Drogasil S.A. (Food & staples retailing)		281,200		5,527
					19,128
	Chile—0.3%
	Aguas Andinas S.A. Class “A” (Water utilities)		1,774,672		1,019

	Mexico—8.1%
	Alsea S.A.B. de C.V. (Hotels, restaurants & leisure)		919,400		3,500
	Banregio Grupo Financiero S.A.B. de C.V. (Banks)		703,808		4,061
*	Controladora Vuela Cia de Aviacion S.A.B. de C.V.—ADR (Airlines)		70,340		1,315
	Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Transportation infrastructure)		812,309		4,841
	Grupo Aeroportuario del Pacifico S.A.B. de C.V. Class “B” (Transportation infrastructure)		386,300		3,971
	Grupo Financiero Santander Mexico S.A.B. de C.V. Class “B” (Banks)		559,501		1,015
	Grupo Lala S.A.B. de C.V. (Food products)		318,590		703
	Megacable Holdings S.A.B. de C.V. (Media)		181,400		736
	Nemak S.A.B. de C.V.—144A (Auto components)		1,355,400		1,587
	Promotora y Operadora de Infraestructura S.A.B. de C.V. (Transportation infrastructure)		176,300		2,170
	Unifin Financiera SAPI de C.V. SOFOM E.N.R. (Consumer finance)		299,600		751
					24,650
	Total Common Stocks—98.0% (cost $266,478)				299,445

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $1,579, collateralized by FHLMC, 4.125%, due 10/11/33	$	1,579	$	1,579

Total Repurchase Agreement—0.5% (cost $1,579)				1,579

Total Investments—98.5% (cost $268,057)				301,024

Cash and other assets, less liabilities—1.5%				4,510

Net assets—100.0%			$	305,534

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures approved by the Board of Trustees. This holding represents 0.16% of the Fund’s net assets at June 30, 2016.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.16% of the Fund’s net assets at June 30, 2016.

At June 30, 2016, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	25.6%
Consumer Discretionary	22.3%
Industrials	15.0%
Consumer Staples	12.2%
Information Technology	8.9%
Materials	7.3%
Health Care	5.5%
Telecommunication Services	1.7%
Utilities	1.5%
Total	100.0%

At June 30, 2016, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Indian Rupee	20.1%
New Taiwan Dollar	13.1%
Mexican Peso	7.8%
Brazilian Real	6.4%
Thai Baht	6.1%
South Korean Won	5.8%
Indonesian Rupiah	5.7%
Pakistan Rupee	5.5%
U.S. Dollar	5.3%
Philippine Peso	5.2%
South African Rand	4.9%
Hong Kong Dollar	4.8%
Turkish Lira	3.1%
British Pound Sterling	1.4%
Kenyan Shilling	1.1%
All Other Currencies	3.7%
Total	100.0%

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Fixed Income Market Review and Outlook

The first six months of 2016 were accommodative for fixed income investors, as a combination of factors resulted in strong returns. Longer-term interest rates declined to record-low levels. In addition, corporate bonds produced stronger gains than Treasuries as risk spreads narrowed. Agency mortgage-backed securities underperformed Treasury securities of similar duration, but the underperformance has not been extreme when compared to historical returns.

U.S. Treasuries demonstrated their haven-like feature as longer-term interest rates collapsed as uncertainty over global growth prospects and populist challenges to free-trade institutions emerged. The yield curve flattened to a level not experienced since before the Global Financial Crisis of 2008. In spite of the favorable performance of longer-term Treasuries, the U.S. Federal Reserve appears poised to raise the federal funds rate during 2016, as U.S. employment statistics show signs of strength. However, it is unlikely that the Federal Reserve will raise the federal funds rate four times during the calendar year, as the Eurodollar futures market implied at the beginning of the year.

Corporate bonds of all credit qualities produced gains year-to-date. Corporate bond risk spreads widened at the beginning of the year, but risk spreads began to narrow in March after the European Central Bank announced that U.S. corporate bonds would be eligible instruments for their large-scale asset purchase program. High yield corporate bonds outperformed investment-grade corporate bonds year-to-date. On a sector basis, Industrial corporate bonds performed well while Financials lagged. Financials have been the only major segment of the market to experience widening risk spreads year-to-date. Emerging market corporate bonds have performed well year-to-date. Despite the outperformance of corporate bonds, risk spreads remain at attractive levels relative to their historical averages.

Agency mortgage-backed securities (MBS) have lagged comparable-duration Treasuries year-to-date. However, agency MBS underperformance is largely explained by the relatively weak performance of lower-coupon, 30-year MBS that comprise the majority of the Barclays U.S. MBS Index. One reason these securities performed poorly is that they are most sensitive to concerns over the increase in prepayments resulting from a decline in interest rates to historically low levels. The performance of other 30-year coupon segments was less severely impacted year-to-date.

We believe that the Federal Reserve Board’s Federal Open Market Committee (FOMC) will stick to its plan to raise the federal funds rate gradually throughout 2016. The U.S. economy is growing; estimates indicate that GDP grew by 2.0–2.5% in real terms during 2015, and forecasters predict a similar pace of growth during 2016. In addition, the U.S. labor market is adding jobs at a robust pace. However, wage inflation remains at lower levels than many predicted given the prevailing conditions. Macroeconomic theory predicts that a robust labor market creates wage inflation, which in turn spurs broader inflation. However, inflationary pressures have weakened. Price indexes such as the CPI and PCE showed that inflation is below the FOMC’s stated target range of 2.0%–2.5%, and forward-looking, market-implied inflation expectations decreased below the FOMC’s target range. We believe that the FOMC will pay careful attention to its price stability objective when it decides whether to raise the federal funds rate, as the FOMC will want to ensure that doing so will not spur disinflationary pressures.

We believe that agency mortgage-backed securities and high-quality corporate bonds are poised to generate attractive returns over the longer term. Corporate bond risk premiums are at levels above their longer-term averages, and risk premiums of higher-coupon segments of the agency MBS market remain attractive. In addition, we believe U.S. Treasuries are likely to struggle as the FOMC embarks on a tightening cycle.

We believe that higher-coupon segments (coupon rates of 5.0% and above for 30-year terms) of the agency MBS market offer compelling value. These segments of the agency MBS market offer attractive spreads and a defensive duration profile. The key risk of these securities is that the underlying borrowers have mortgage loan rates well above current rates available for refinancing. We believe this risk can be mitigated by focusing on mortgage pools comprised of borrowers that do not have the economic incentive to refinance their loans, specifically low-loan balance pools.

We believe that the corporate bond market remains attractive. Although fundamentals have deteriorated lately, valuations have also increased. We observed an increase in leverage among industrial companies over the past year as companies secured financing at low nominal yields in the robust new issue market for corporate bonds. Corporate risk spreads have adjusted to reflect these changes, and we find current valuation levels to be appealing. We remain concerned about idiosyncratic risks, including shareholder-friendly activities such as leveraged finance mergers and acquisitions, large share repurchases, and special dividends. Importantly, we do not believe the market will enter a period of excessive LBO activity.

Semiannual Report

June 30, 2016

	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

Paul J. Sularz Christopher T. Vincent	The William Blair Bond Fund (Class N shares) posted a 5.37% return, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark, the Barclays U.S. Aggregate Index (the “Index”), returned 5.31%. A couple of factors contributed to the Fund’s outperformance relative to the Index year-to-date. Sector allocation had a favorable impact on the Fund’s relative performance, as the Fund was underweight in U.S. Treasuries and overweight in corporate bonds. The Fund’s corporate bond holdings additionally contributed to outperformance through positive security selection effect. In particular, the Fund’s position in bonds issued by ConocoPhillips contributed. There were a couple of factors that detracted from the Fund’s relative performance during the period. The Fund’s overweight in mortgage-backed securities (MBS) detracted from performance as comparable-duration U.S. Treasuries outperformed MBS year-to-date. In addition, the Fund’s exposure to 30-year, 5.5% coupon pools also underperformed U.S. Treasuries after controlling for duration. Please refer to the Fixed Income Market Review and Outlook relating to the Fund on page 90.

June 30, 2016

William Blair Funds

Bond Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception(a)
Class N		5.37	%		4.76	%		4.09	%		4.27	%		5.24	%
Class I		5.40			4.98			4.25			4.43			5.41
Institutional Class		5.43			5.05			4.36			4.56			5.55
Barclays U.S. Aggregate Bond Index		5.31			6.00			4.06			3.76			4.81

(a)	For the period from May 1, 2007 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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, 2016. 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.

Semiannual Report

June 30, 2016

Bond Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

U.S. Government and U.S. Government Agency—50.2%

U.S. Treasury Inflation Indexed Notes/Bonds—6.0%
U.S. Treasury Inflation Indexed Note, 1.875%, due 7/15/19 (a)	$	4,930	$	5,337
U.S. Treasury Inflation Indexed Bond, 3.875%, due 4/15/29		20,009		28,861
Total U.S. Treasury Inflation Indexed Notes/Bonds				34,198

U.S. Treasury—0.7%
U.S. Treasury Strip Principal, 0.000%, due 5/15/20		3,925		3,793

Government National Mortgage Association (GNMA)—0.3%
#623162, 6.500%, due 7/15/18		10		10
#589335, 6.500%, due 10/15/22		24		27
#357322, 7.000%, due 9/15/23		9		9
#616250, 6.000%, due 2/15/24		3		3
#509405, 7.500%, due 8/15/29		1		1
GNR 2004-2 M5, 4.891%, due 7/16/34		15		15
#699118, 6.000%, due 9/15/38		1,421		1,643
Total GNMA Mortgage Obligations				1,708

Federal Home Loan Mortgage Corp. (FHLMC)—13.7%
#J04096, 6.500%, due 1/1/17		2		2
#E90398, 7.000%, due 5/1/17		6		6
#G90027, 6.000%, due 11/17/17		2		2
#G30093, 7.000%, due 12/1/17		2		2
#O20005, 6.500%, due 1/1/18		2		2
#E96940, 4.500%, due 6/1/18		16		16
#B13747, 5.000%, due 4/1/19		200		207
#G30254, 6.500%, due 5/1/19		4		4
#G11697, 5.500%, due 4/1/20		359		376
#G12113, 5.500%, due 5/1/21		344		367
#J02986, 6.500%, due 7/1/21		15		16
#G30255, 7.000%, due 7/1/21		3		3
#G30243, 6.000%, due 12/1/21		4		4
#G12720, 5.500%, due 6/1/22		41		44
#D95621, 6.500%, due 7/1/22		28		32
#G14150, 4.500%, due 4/1/26		2,056		2,220
#J16051, 4.500%, due 7/1/26		897		968
#G02183, 6.500%, due 3/1/30		28		32
#G01728, 7.500%, due 7/1/32		125		155
#C01385, 6.500%, due 8/1/32		100		119
#G01551, 6.000%, due 4/1/33		2,265		2,661
#C01623, 5.500%, due 9/1/33		126		142
#A15039, 5.500%, due 10/1/33		2		3
#A17603, 5.500%, due 1/1/34		2,213		2,553
#G01705, 5.500%, due 6/1/34		896		1,035
#G01843, 6.000%, due 6/1/35		23		27
#G02141, 6.000%, due 3/1/36		650		764
#A62179, 6.000%, due 6/1/37		279		327
#G03711, 6.000%, due 6/1/37		861		997
#G04126, 6.000%, due 6/1/37		2,338		2,736
#A63539, 6.000%, due 7/1/37		357		419
#A62858, 6.500%, due 7/1/37		136		160
#G03170, 6.500%, due 8/1/37		291		353


	Principal
Issuer	Amount		Value

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

Federal Home Loan Mortgage Corp. (FHLMC)—(continued)
#A66843, 6.500%, due 10/1/3	$	71,028	$	1,190
#G07837, 6.500%, due 2/1/38		3,345		4,094
#G04053, 5.500%, due 3/1/38		652		744
#A78138, 5.500%, due 6/1/38		392		449
#G04466, 5.500%, due 7/1/38		17,786		20,525
#G04544, 6.000%, due 8/1/38		796		923
#A81799, 6.500%, due 9/1/38		679		834
#G05723, 6.500%, due 11/1/38		1,739		2,127
#A86143, 5.000%, due 5/1/39		61		68
#G05810, 5.000%, due 2/1/40		16,080		18,149
#G05875, 5.500%, due 2/1/40		802		915
#G07300, 6.000%, due 4/1/40		7,058		8,298
#G06017, 5.500%, due 6/1/40		192		218
#C03665, 9.000%, due 4/1/41		819		1,035
#G06583, 5.000%, due 6/1/41		2,070		2,345
Total FHLMC Mortgage Obligations				78,668

Federal National Mortgage Association (FNMA)—29.5%
#679247, 7.000%, due 8/1/17		1		1
#683100, 5.500%, due 2/1/18		60		62
#689612, 5.000%, due 5/1/18		29		29
#695910, 5.000%, due 5/1/18		79		81
#697593, 5.000%, due 5/1/18		69		71
#704049, 5.500%, due 5/1/18		160		163
#735357, 5.500%, due 5/1/18		201		206
#735003, 5.500%, due 7/1/18		208		213
#251960, 6.000%, due 9/1/18		1		1
#745498, 7.000%, due 11/1/18		77		78
#770395, 5.000%, due 4/1/19		2		2
#788424, 5.500%, due 9/1/19		13		13
#835563, 7.000%, due 10/1/20		14		14
#900725, 6.000%, due 8/1/21		35		38
#888555, 5.500%, due 9/1/21		3,803		4,057
#893325, 7.000%, due 9/1/21		12		13
#735104, 7.000%, due 5/1/22		2		2
#949589, 5.500%, due 8/1/22		2,659		2,892
#949592, 6.000%, due 8/1/22		4,271		4,706
#AA2924, 4.500%, due 4/1/24		251		270
#931299, 4.500%, due 6/1/24		588		636
#AC1848, 4.500%, due 9/1/24		376		406
#AC5410, 4.500%, due 10/1/24		293		317
#932095, 4.000%, due 11/1/24		1,376		1,482
#932100, 4.500%, due 11/1/24		246		266
#AC9560, 5.000%, due 1/1/25		1,750		1,883
#AD8164, 4.000%, due 8/1/25		617		665
#AB1459, 4.000%, due 9/1/25		274		295
#255956, 5.500%, due 10/1/25		19		21
#AH2671, 4.000%, due 1/1/26		1,092		1,174
#AI4872, 4.500%, due 6/1/26		398		431
#AL2851, 4.000%, due 8/1/26		1,941		2,091
#AI9811, 4.500%, due 8/1/26		317		342
#AJ3203, 4.000%, due 10/1/26		109		118
#AJ7724, 4.000%, due 12/1/26		824		886
#AJ9402, 4.000%, due 12/1/26		1,183		1,275
#AK7384, 4.000%, due 3/1/27		965		1,034

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#AB4818, 4.000%, due 4/1/27	$	645	$	695
#AL2590, 4.000%, due 7/1/27		4,206		4,523
#AV6413, 4.000%, due 2/1/29		3,303		3,557
#252925, 7.500%, due 12/1/29		1		2
#535977, 6.500%, due 4/1/31		9		10
#253907, 7.000%, due 7/1/31		2		2
#545339, 6.500%, due 11/1/31		49		59
#587849, 6.500%, due 11/1/31		13		15
#618547, 6.500%, due 11/1/31		5,303		6,446
#545437, 7.000%, due 2/1/32		58		72
#545759, 6.500%, due 7/1/32		523		621
#545869, 6.500%, due 7/1/32		1,638		1,925
#678007, 6.000%, due 9/1/32		8		10
#670385, 6.500%, due 9/1/32		829		1,006
#254548, 5.500%, due 12/1/32		54		61
#677290, 6.000%, due 1/1/33		2,329		2,698
#684601, 6.000%, due 3/1/33		552		645
#703391, 5.000%, due 5/1/33		182		205
#708993, 5.000%, due 6/1/33		30		34
#730131, 5.000%, due 8/1/33		61		69
#741850, 5.500%, due 9/1/33		610		701
#739243, 6.000%, due 9/1/33		702		824
#739331, 6.000%, due 9/1/33		383		449
#555800, 5.500%, due 10/1/33		61		69
#555946, 5.500%, due 11/1/33		470		545
#756153, 5.500%, due 11/1/33		622		717
#AL3455, 5.500%, due 11/1/33		7,240		8,392
#725017, 5.500%, due 12/1/33		59		69
#AL3380, 5.500%, due 1/1/34		911		1,055
#763798, 5.500%, due 3/1/34		95		110
#725611, 5.500%, due 6/1/34		127		144
#783786, 5.500%, due 7/1/34		125		144
#786546, 6.000%, due 7/1/34		457		534
#787816, 6.000%, due 7/1/34		370		434
#745563, 5.500%, due 8/1/34		712		820
#794474, 6.000%, due 10/1/34		50		58
#745092, 6.500%, due 7/1/35		402		479
#357944, 6.000%, due 9/1/35		24		28
#829306, 6.000%, due 9/1/35		280		325
#836140, 5.500%, due 10/1/35		61		70
#843487, 6.000%, due 10/1/35		116		136
#849191, 6.000%, due 1/1/36		147		168
#745349, 6.500%, due 2/1/36		364		433
#888305, 7.000%, due 3/1/36		12		14
#895637, 6.500%, due 5/1/36		92		106
#831540, 6.000%, due 6/1/36		33		39
#745802, 6.000%, due 7/1/36		183		216
#886220, 6.000%, due 7/1/36		356		416
#AL3449, 6.000%, due 7/1/36		1,829		2,160
#893318, 6.500%, due 8/1/36		33		38
#310037, 6.500%, due 10/1/36		226		267
#831926, 6.000%, due 12/1/36		11		12
#902974, 6.000%, due 12/1/36		262		303
#909480, 6.000%, due 2/1/37		304		355
#AB0265, 6.000%, due 2/1/37		17,379		20,260
#888418, 5.500%, due 5/1/37		1,404		1,626


	NRSRO	Principal
Issuer	Rating	Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#938440, 6.000%, due 7/1/37		$	116	$	134
#928561, 6.000%, due 8/1/37			250		293
#948689, 6.000%, due 8/1/37			218		252
#888703, 6.500%, due 8/1/37			4,842		5,757
#946646, 6.000%, due 9/1/37			72		83
#888967, 6.000%, due 12/1/37			837		984
#AL0904, 5.500%, due 1/1/38			63		73
#889371, 6.000%, due 1/1/38			4,035		4,727
#889385, 6.000%, due 2/1/38			195		227
#962058, 6.500%, due 3/1/38			1,554		1,881
#889774, 6.000%, due 7/1/38			500		584
#934006, 6.500%, due 9/1/38			459		563
#986856, 6.500%, due 9/1/38			238		292
#AL5817, 6.000%, due 11/1/38			1,753		2,048
#991911, 7.000%, due 11/1/38			282		346
#AL3775, 5.000%, due 1/1/39			2,059		2,335
#AD0752, 7.000%, due 1/1/39			942		1,207
#AA7611, 5.000%, due 5/1/39			946		1,073
#AA8443, 5.000%, due 6/1/39			237		269
#AA8587, 5.500%, due 7/1/39			3,852		4,461
#931492, 6.000%, due 7/1/39			207		242
#AA6898, 6.000%, due 7/1/39			772		903
#931801, 5.000%, due 8/1/39			886		998
#AC1619, 5.500%, due 8/1/39			535		613
#AD0315, 6.500%, due 8/1/39			3,293		3,942
#AC0505, 5.500%, due 9/1/39			423		488
#932279, 5.000%, due 12/1/39			102		115
#AC9569, 5.000%, due 2/1/40			1,767		2,011
#932638, 5.000%, due 3/1/40			187		210
#932751, 5.000%, due 4/1/40			4,443		5,058
#AE0082, 5.000%, due 5/1/40			541		609
#AB1146, 5.000%, due 6/1/40			108		122
#AD7531, 5.500%, due 6/1/40			269		310
#AD8810, 5.500%, due 6/1/40			705		815
#AB1200, 5.500%, due 7/1/40			1,412		1,632
#AD7137, 5.500%, due 7/1/40			4,953		5,736
#AD9169, 5.500%, due 8/1/40			430		496
#AH0955, 5.000%, due 12/1/40			5,583		6,336
#AH5585, 5.000%, due 2/1/41			194		222
#AL0028, 5.000%, due 2/1/41			2,768		3,126
#AL5815, 5.500%, due 4/1/41			3,987		4,624
#AI6071, 5.000%, due 6/1/41			2,121		2,421
#AI4222, 5.000%, due 7/1/41			149		167
#AL0672, 5.000%, due 7/1/41			3,353		3,823
#AL0913, 6.000%, due 7/1/41			2,408		2,774
#AK2733, 5.000%, due 2/1/42			2,166		2,473
Total FNMA Mortgage Obligations					169,260

Asset-Backed Securities—2.4%
Hertz Vehicle Financing LLC—144A, 2013-1A, Tranche B1, 1.860%, 8/25/17	Baa1		1,150		1,149
GE Capital Credit Card Master Note Trust, 2012-6, Tranche B, 1.830%, 8/17/20	AA+		3,000		3,001

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

Bond Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	NRSRO	Principal
Issuer	Rating	Amount		Value

Asset-Backed Securities—(continued)
American Express Credit Account Master Trust, 2008-2, Tranche A, 1.702%, 9/15/20, VRN	AAA	$	4,800	$	4,876
Centre Point Funding LLC—144A, 2012-2A, Tranche 1, 2.610%, 8/20/21	Baa2		2,792		2,765
SLM Private Education Loan Trust—144A, 2011-A, Tranche A3, 2.942%, 1/15/43, VRN	AAA		2,000		2,014
Total Asset-Backed Securities					13,805

Corporate Obligations—44.8%
Penske Truck Leasing Co. L.P.—144A, 3.750%, due 5/11/17	BBB+		3,000		3,057
Toll Brothers Finance Corporation, 8.910%, due 10/15/17	BBB-		1,050		1,145
Morgan Stanley, 6.625%, due 4/1/18	A		3,400		3,686
Bank of America Corporation, 6.875%, due 11/15/18	A		1,100		1,225
Glencore Funding LLC—144A, 1.988%, due 1/15/19, VRN	BBB-		1,500		1,421
Petrobras Global Finance BV, 2.768%, due 1/15/19, VRN	BB		4,000		3,624
Cemex S.A.B. de C.V.—144A, 5.875%, due 3/25/19	BB-		3,000		3,098
Baidu, Inc., 2.750%, due 6/9/19	A		5,250		5,346
Roper Industries, Inc., 6.250%, due 9/1/19	BBB		2,195		2,474
Republic Services, Inc., 5.500%, due 9/15/19	BBB+		1,725		1,928
Boston Properties L.P., 5.875%, due 10/15/19	A-		4,000		4,500
Toll Brothers Finance Corporation, 6.750%, due 11/1/19	BBB-		500		565
Ford Motor Credit Co. LLC, 8.125%, due 1/15/20	BBB		4,000		4,774
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20	A+		4,000		4,535
United Continental Holdings, Inc., 6.000%, due 12/1/20	BB-		2,500		2,625
UBS Group AG, 6.875%, due 3/22/21, VRN	BB+		2,000		1,963
JBS USA LLC / JBS USA Finance, Inc.—144A, 7.250%, due 6/1/21	BB+		3,000		3,120
Discovery Communications LLC, 4.375%, due 6/15/21	BBB-		3,100		3,332
Capital One Financial Corporation, 4.750%, due 7/15/21	A-		3,375		3,761
O’Reilly Automotive, Inc., 4.625%, due 9/15/21	BBB+		2,855		3,156
Fresenius Medical Care US Finance II, Inc.—144A, 5.875%, due 1/31/22	BB+		2,760		3,039
Post Holdings, Inc., 7.375%, due 2/15/22	B		3,000		3,165


	NRSRO	Principal
Issuer	Rating	Amount		Value

Corporate Obligations—(continued)
Ball Corporation, 5.000%, due 3/15/22	BB+	$	2,500	$	2,666
Masco Corporation, 5.950%, due 3/15/22	BBB		3,800		4,258
United Rentals North America, Inc., 7.625%, due 4/15/22	BB-		2,500		2,681
Discover Financial Services, 5.200%, due 4/27/22	BBB+		3,000		3,295
The Goodyear Tire & Rubber Co., 7.000%, due 5/15/22	BB		2,000		2,138
Triumph Group, Inc., 5.250%, due 6/1/22	Ba3		2,000		1,850
Penske Automotive Group, Inc., 5.750%, due 10/1/22	B+		2,000		2,010
American Axle & Manufacturing, Inc., 6.625%, due 10/15/22	BB-		3,000		3,225
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22	BBB+		4,218		4,410
Jaguar Land Rover Automotive plc—144A, 5.625%, due 2/1/23	BB		3,225		3,362
Wyndham Worldwide Corporation, 3.900%, due 3/1/23	BBB-		3,500		3,588
MGM Resorts International, 6.000%, due 3/15/23	BB		3,000		3,173
Avis Budget Car Rental LLC, 5.500%, due 4/1/23	B+		2,500		2,472
Toll Brothers Finance Corporation, 4.375%, due 4/15/23	BBB-		3,375		3,341
Wells Fargo & Co., 4.480%, due 1/16/24	A+		5,000		5,486
Fibria Overseas Finance, Ltd., 5.250%, due 5/12/24	BBB-		4,000		4,100
BRF S.A.—144A, 4.750%, due 5/22/24	BBB		2,500		2,494
Banco Inbursa S.A. Institucion de Banca Multiple—144A, 4.125%, due 6/6/24	BBB+		2,500		2,513
Grupo Bimbo S.A.B. de C.V.—144A, 3.875%, due 6/27/24	BBB		2,500		2,611
Synchrony Financial, 4.250%, due 8/15/24	BBB-		5,000		5,183
HSBC Holdings plc, 6.375%, due 9/17/24, VRN	BBB		3,500		3,312
BNP Paribas S.A., 4.250%, due 10/15/24	A		4,000		4,119
Owens Corning, 4.200%, due 12/1/24	BBB-		3,200		3,354
Credit Suisse Group AG—144A, 6.250%, due 12/18/24, VRN	BB		2,000		1,891
USG Corp.—144A, 5.500%, due 3/1/25	BB+		3,000		3,154
Simon Property Group L.P., 3.300%, due 1/15/26	A		4,500		4,813
Brookfield Finance, Inc., 4.250%, due 6/2/26	A-		4,775		4,890
The Kroger Co., 8.000%, due 9/15/29	Baa1		3,323		4,783

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	NRSRO	Principal
Issuer	Rating	Amount		Value

Corporate Obligations—(continued)
Comcast Corporation, 6.450%, due 3/15/37	A-	$	4,000	$	5,515
Yum! Brands, Inc., 6.875%, due 11/15/37	B+		1,500		1,493
JPMorgan Chase & Co., 6.400%, due 5/15/38	A+		3,500		4,803
Philip Morris International, Inc., 6.375%, due 5/16/38	A		2,175		3,014
ConocoPhillips, 6.500%, due 2/1/39	A-		4,125		5,340
Burlington Northern Santa Fe LLC, 5.750%, due 5/1/40	A		4,000		5,142
Petroleos Mexicanos, 6.500%, due 6/2/41	BBB+		2,500		2,544
Express Scripts Holding Co., 6.125%, due 11/15/41	BBB+		4,700		5,622
Gilead Sciences, Inc., 5.650%, due 12/1/41	A		4,500		5,644
Citigroup, Inc., 5.875%, due 1/30/42	A		4,000		5,082
Bank of America Corporation, 5.875%, due 2/7/42	A		4,000		5,067
Mexichem S.A.B. de C.V.—144A, 5.875%, due 9/17/44	BBB		3,500		3,237
Northrop Grumman Corporation, 3.850%, due 4/15/45	BBB+		4,500		4,705
ERP Operating L.P., 4.500%, due 6/1/45	A-		4,500		4,993
The Goldman Sachs Group, Inc., 4.750%, due 10/21/45	A		3,500		3,874
Anheuser-Busch InBev Finance, Inc., 4.900%, due 2/1/46	A-		5,000		5,883
Apple, Inc., 4.650%, due 2/23/46	AA+		5,000		5,662
Exxon Mobil Corporation, 4.114%, due 3/1/46	Aaa		2,275		2,573
PepsiCo, Inc., 4.450%, due 4/14/46	A1		4,500		5,265
AT&T, Inc., 4.750%, due 5/15/46	A-		5,000		5,145
Microsoft Corporation, 4.750%, due 11/3/55	AAA		4,950		5,617
Total Corporate Obligations					256,931

Total Long-Term Investments—97.4% (cost $537,348)					558,363

	Principal
	Amount/
Issuer	Contracts		Value

Repurchase Agreements
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $5,763, collateralized by FFCB, 3.020%, due 1/12/26	$	5,763	$	5,763

Total Repurchase Agreement—1.0% (cost $5,763)				5,763

U.S. Government and U.S. Government Agency
U.S. Treasury Bill, 0.278%, due 7/14/16 (a)		500		500
Total U.S. Government and U.S. Government Agency—0.1% (cost $500)				500

Commercial Paper
Johnson Controls, 0.550%, due 7/1/16		5,000		5,000

Total Commercial Paper—0.9% (cost $5,000)				5,000

Purchased Option—0.0%
Eurodollar Future, September 2016, Strike $97, Put		300		2

Total Purchased Option—0.0% (cost $95)				2

Total Investments—99.4% (cost $548,706)				569,628

Cash and other assets, less liabilities—0.6%				3,496
Net assets—100.0%			$	573,124

144A = Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

NRSRO = Nationally Recognized Statistical Rating Organization—The credit quality ratings of the securities in the Fund reflect the highest category rating by any of 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

(a) Security, or a portion of security, is segregated as collateral for the centrally cleared credit default swap, aggregating a total of $268.

Centrally Cleared Credit Default Swap

Unrealized

Buy/Sell

Fixed Deal

Maturity

Notional

Appreciation

Reference Entity

Protection

Pay Rate

Date

Cleared Exchange

Amount

(Depreciation)

CDX.IG-26

Buy

1.000%

June 2021

CME

$25,000

$(10)

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2016

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) returned 2.94%, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark, the Barclays Intermediate Government/Credit Bond Index (the “Index”), returned 4.07%.

A couple of factors contributed to the Fund’s underperformance relative to the Index year-to-date. Interest rate positioning detracted from performance as the Fund was structured with a defensive duration posture and interest rates declined. In addition, the Fund’s overweight in mortgage-backed securities (MBS) detracted from performance as comparable-duration U. S. Treasuries outperformed MBS year-to-date.

Security selection provided a positive contribution to the Fund’s relative performance year-to-date. The Fund’s positions in investment-grade corporate bonds domiciled in the developed markets, specifically ConocoPhillips, J.P. Morgan Chase, Simon Property Group, and Masco, were notable performers.

Please refer to the Fixed Income Market Review and Outlook relating to the Fund on page 90.

June 30, 2016

William Blair Funds

Income Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		2.94	%		2.70	%		2.42	%		2.67	%		3.40	%
Class I		3.19			3.08			2.67			2.92			3.62
Barclays Intermediate
Government/Credit
Bond Index		4.07			4.33			2.95			2.90			4.48

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 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.

Semiannual Report

June 30, 2016

Income Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


Issuer			Principal Amount		Value

*U.S. Government and U.S. Government Agency—57.5%*

U.S. Treasury Inflation Indexed Notes/Bonds—5.1%
U.S. Treasury Inflation Indexed Note, 1.875%, due 7/15/19		$	1,120	$	1,213
U.S. Treasury Inflation Indexed Note, 1.125%, due 1/15/21			3,281		3,512
Total U.S. Treasury Inflation Indexed Notes/Bonds					4,725

U.S. Treasury—1.0%
U.S. Treasury Strip Principal, 0.000%, due 5/15/20			1,000		966

Government National Mortgage Association (GNMA)—0.0%
#	780405, 9.500%, due 11/15/17		2		2
#	357322, 7.000%, due 9/15/23		30		33
Total GNMA Mortgage Obligations					35

Federal Home Loan Mortgage Corp. (FHLMC)—10.2%
#	E90398, 7.000%, due 5/1/17		43		43
#	E97112, 4.000%, due 5/1/18		25		26
#	D95621, 6.500%, due 7/1/22		727		825
#	J13022, 4.000%, due 9/1/25		507		535
#	J16051, 4.500%, due 7/1/26		1,028		1,109
#	A17603, 5.500%, due 1/1/34		775		894
#	A45790, 7.500%, due 5/1/35		137		160
#	G02141, 6.000%, due 3/1/36		325		382
#	G03201, 6.500%, due 6/1/37		196		235
#	A66843, 6.500%, due 10/1/37		328		380
#	A81799, 6.500%, due 9/1/38		381		468
#	G06964, 5.500%, due 11/1/38		1,168		1,349
#	G05875, 5.500%, due 2/1/40		160		183
#	G07300, 6.000%, due 4/1/40		561		660
#	C03665, 9.000%, due 4/1/41		397		502
#	G06583, 5.000%, due 6/1/41		1,629		1,846
Total FHLMC Mortgage Obligations					9,597

Federal National Mortgage Association (FNMA)—41.2%
#	643217, 6.500%, due 6/1/17		22		22
#	679247, 7.000%, due 8/1/17		36		37
#	695910, 5.000%, due 5/1/18		82		84
#	740847, 6.000%, due 10/1/18		53		55
#	323501, 6.500%, due 1/1/19		18		20
#	751313, 5.000%, due 3/1/19		107		111
#	852864, 7.000%, due 7/1/20		348		368
#	458147, 10.000%, due 8/15/20		34		35
#	835563, 7.000%, due 10/1/20		145		155
#	831430, 5.500%, due 3/1/21		236		252
#	888555, 5.500%, due 9/1/21		1,521		1,623
#	735574, 8.000%, due 3/1/22		121		129
#	679253, 6.000%, due 10/1/22		343		393
FNR G93-19 SH, 11.234%, due 4/25/23, VRN			11		15
#	982878, 4.500%, due 5/1/23		208		224
#	AC5124, 4.000%, due 11/1/24		695		747
#	932095, 4.000%, due 11/1/24		3,892		4,194
#	932100, 4.500%, due 11/1/24		939		1,016
#	AC6257, 4.000%, due 12/1/24		795		855


Issuer		NRSRO Rating		Principal Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#	AC0596, 4.000%, due 12/1/24		$	216	$	232
#	AD4073, 4.000%, due 5/1/25			103		111
#	AD4677, 4.000%, due 6/1/25			668		719
#	935995, 4.000%, due 6/1/25			105		113
#	AE1176, 4.000%, due 8/1/25			297		314
#	255956, 5.500%, due 10/1/25			56		63
#	AL2851, 4.000%, due 8/1/26			2,426		2,614
#	AI9811, 4.500%, due 8/1/26			445		481
#	AJ3203, 4.000%, due 10/1/26			1,093		1,177
#	AJ7724, 4.000%, due 12/1/26			879		945
#	256639, 5.000%, due 2/1/27			11		13
#	AB4818, 4.000%, due 4/1/27			1,994		2,149
#	AL2590, 4.000%, due 7/1/27			1,490		1,603
#	806458, 8.000%, due 6/1/28			112		125
#	880155, 8.500%, due 7/1/29			214		252
#	797846, 7.000%, due 3/1/32			97		104
#	745519, 8.500%, due 5/1/32			154		184
#	654674, 6.500%, due 9/1/32			62		72
#	733897, 6.500%, due 12/1/32			236		271
#	688034, 5.500%, due 3/1/33			174		201
#	254693, 5.500%, due 4/1/33			9		10
#	555531, 5.500%, due 6/1/33			89		100
#	711736, 5.500%, due 6/1/33			104		119
#	555591, 5.500%, due 7/1/33			15		16
#	AL3455, 5.500%, due 11/1/33			2,127		2,465
#	762505, 5.500%, due 11/1/33			146		169
#	776964, 5.000%, due 4/1/34			398		450
#	725424, 5.500%, due 4/1/34			91		104
#	824463, 5.500%, due 7/1/35			205		230
#	888884, 5.500%, due 12/1/35			192		221
#	886220, 6.000%, due 7/1/36			253		296
#	AL3449, 6.000%, due 7/1/36			1,045		1,234
#	888703, 6.500%, due 8/1/37			1,023		1,216
#	928658, 6.500%, due 9/1/37			36		45
#	889385, 6.000%, due 2/1/38			454		531
#	962058, 6.500%, due 3/1/38			538		651
#	AL5817, 6.000%, due 11/1/38			1,073		1,254
#	991911, 7.000%, due 11/1/38			180		221
#	AA8587, 5.500%, due 7/1/39			883		1,022
#	AD0315, 6.500%, due 8/1/39			347		416
#	AC3237, 5.000%, due 10/1/39			162		182
#	AC6156, 5.500%, due 11/1/39			2,215		2,585
#	AC9569, 5.000%, due 2/1/40			236		268
#	AB1200, 5.500%, due 7/1/40			471		544
#	AL0028, 5.000%, due 2/1/41			1,181		1,334
#	AL5815, 5.500%, due 4/1/41			752		872
Total FNMA Mortgage Obligations						38,633

*Asset-Backed Securities—9.2%*
Hertz Vehicle Financing LLC—144A, 2013-1A, Tranche B1, 1.860%, 8/25/17		Baa1		333		333
Mercedes Benz Auto Lease Trust, 2016-A, Tranche A2B, 1.002%, 7/16/18, VRN		Aaa		1,000		1,000
Harley-Davidson Motorcycle Trust, 2015-2, Tranche A2B, 0.692%, 1/15/19, VRN		AAA		970		970

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

Income Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

Asset-Backed Securities—(continued)
Citibank Credit Card Issuance Trust, 2008-A2, Tranche A2, 1.601%, 1/23/20, VRN	AAA	$	1,225	$	1,242
GE Capital Credit Card Master Note Trust, 2012-6, Tranche B, 1.830%, 8/17/20	AA+		1,705		1,706
American Express Credit Account Master Trust, 2008-2, Tranche A, 1.702%, 9/15/20, VRN	AAA		1,000		1,016
Capital One Multi-Asset Execution Trust, 2016-A1, Tranche A1, 0.900%, 2/15/22, VRN	AAA		1,850		1,854
SLM Private Education Loan Trust—144A, 2011-A, Tranche A3, 2.942%, 1/15/43, VRN	AAA		500		504
Total Asset-Backed Securities					8,625

Corporate Obligations—31.7%
Macquarie Group Ltd.—144A, 4.875%, due 8/10/17	A3		1,000		1,032
Morgan Stanley, 6.625%, due 4/1/18	A		1,000		1,084
Bank of America Corporation, 6.875%, due 11/15/18	A		1,000		1,114
Honeywell International, Inc., 5.000%, due 2/15/19	A		750		827
Burlington Northern Santa Fe LLC, 4.700%, due 10/1/19	A		750		830
Boston Properties L.P., 5.875%, due 10/15/19	A-		1,000		1,125
Petroleos Mexicanos, 6.000%, due 3/5/20	BBB+		500		539
PepsiCo, Inc., 2.150%, due 10/14/20	A1		900		926
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20	A+		1,000		1,134
Mitsubishi UFJ Financial Group, Inc., 2.950%, due 3/1/21	A1		1,000		1,038
Discovery Communications LLC, 4.375%, due 6/15/21	BBB-		750		806
Capital One Financial Corporation, 4.750%, due 7/15/21	A-		1,000		1,114
General Electric Capital Corporation, 4.650%, due 10/17/21	AA+		750		859
Verizon Communications, Inc., 3.500%, due 11/1/21	A-		750		809
Ryder System, Inc., 3.450%, due 11/15/21	A-		900		942
Gilead Sciences, Inc., 4.400%, due 12/1/21	A		1,000		1,130
Masco Corporation, 5.950%, due 3/15/22	BBB		750		840
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22	BBB+		750		784
Wyndham Worldwide Corporation, 3.900%, due 3/1/23	BBB-		750		769
Toll Brothers Finance Corporation, 4.375%, due 4/15/23	BBB-		850		842
Wells Fargo & Co., 4.480%, due 1/16/24	A+		750		823

Issuer	NRSRO Rating	Principal Amount/ Contracts		Value

Corporate Obligations—(continued)
The Goldman Sachs Group, Inc., 4.000%, due 3/3/24	A	$	1,000	$	1,071
Fibria Overseas Finance, Ltd., 5.250%, due 5/12/24	BBB-		750		769
BRF S.A.—144A, 4.750%, due 5/22/24	BBB		750		748
Grupo Bimbo S.A.B. de C.V.—144A, 3.875%, due 6/27/24	BBB		750		783
Synchrony Financial, 4.250%, due 8/15/24	BBB-		700		726
BNP Paribas S.A., 4.250%, due 10/15/24	A		750		772
Brookfield Asset Management, Inc., 4.000%, due 1/15/25	A-		1,000		1,018
ERP Operating L.P., 3.375%, due 6/1/25	A-		750		793
Simon Property Group L.P., 3.300%, due 1/15/26	A		750		802
ConocoPhillips Co., 4.950%, due 3/15/26	A-		750		852
Crown Castle Towers LLC—144A, 6.113%, due 1/15/40	A2		1,000		1,113
JPMorgan Chase & Co., 5.000%, due 12/29/49, VRN	BBB-		1,000		959
Total Corporate Obligations					29,773
Total Long-Term Investments—98.4% (cost $90,664)					92,354

Repurchase Agreement
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $992, collateralized by FNMA, 7.125%, due 1/15/30			992		992
Total Repurchase Agreement—1.1% (cost $992)					992

Purchased Option—0.0%
Eurodollar Future, September 2016, Strike $97, Put			150		1

Total Purchased Option—0.0% (cost $47)					1

Total Investments—99.5% (cost $91,703)					93,347
Cash and other assets, less liabilities—0.5%					430
Net assets—100.0%				$	93,777

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.

100

Semiannual Report

June 30, 2016

	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

Paul J. Sularz Christopher T. Vincent	The William Blair Low Duration Fund (Class N shares) returned 1.13%, net of fees, for the six months ended June 30, 2016. By comparison, the Fund’s benchmark, the Bank of America/Merrill Lynch 1-Year U.S. Treasury Note Index, returned 0.65%. A couple of factors contributed to the Fund’s outperformance relative to the Index year-to-date. The Fund’s interest rate exposures contributed to outperformance. The Fund’s strategy provides exposure to interest rate risk that is slightly higher than the risk-free rate, and shorter-term interest rates declined year-to-date. In addition, allocations to floating-rate asset-backed and investment-grade corporate securities had a positive impact on performance. The Fund’s agency mortgage-backed securities experienced widening risk spreads year-to-date despite earning positive total returns. This factor was the most significant detractor to the Fund’s relative performance year-to-date. Please refer to the Fixed Income Market Review and Outlook relating to the Fund on page 90.

June 30, 2016

William Blair Funds

101

Low Duration Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016

	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception(a)
Class N		1.13	%		1.08	%		1.00	%		1.02	%		1.13	%
Class I		1.23			1.29			1.17			1.18			1.29
Institutional Class		1.24			1.31			1.23			1.28			1.42
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index		0.65			0.59			0.38			0.34			0.41

(a)	For the period from December 1, 2009 (Commencement of Operations) to June 30, 2016.

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 adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and 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.

102

Semiannual Report

June 30, 2016

Low Duration Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


		Principal
Issuer		Amount			Value

*U.S. Government and U.S. Government Agency—55.6%*

Federal Home Loan Mortgage Corp. (FHLMC)—22.9%
#	E95760, 4.500%, due 4/1/18	$	4	$	4
#	E99582, 5.000%, due 9/1/18		7		8
#	E99684, 5.000%, due 10/1/18		182		188
#	B11362, 5.500%, due 12/1/18		18		19
#	B11849, 5.500%, due 1/1/19		46		47
#	B13870, 4.500%, due 5/1/19		37		38
#	G11604, 5.000%, due 7/1/19		46		48
#	G11596, 5.500%, due 8/1/19		38		40
#	G11605, 5.500%, due 9/1/19		22		23
#	B17294, 5.000%, due 11/1/19		106		111
#	B19222, 4.500%, due 4/1/20		99		102
#	G11697, 5.500%, due 4/1/20		101		105
#	J02537, 5.000%, due 9/1/20		41		43
#	G11836, 5.500%, due 12/1/20		13		14
#	G12113, 5.500%, due 5/1/21		122		130
#	G12395, 6.000%, due 10/1/21		452		490
#	E02322, 5.500%, due 5/1/22		26		28
#	G12725, 6.000%, due 6/1/22		173		190
#	G13124, 6.000%, due 12/1/22		140		154
#	J06871, 5.500%, due 1/1/23		86		93
#	J08450, 5.500%, due 7/1/23		40		44
#	J08703, 5.500%, due 9/1/23		74		80
#	J10351, 4.000%, due 7/1/24		152		163
#	C00351, 8.000%, due 7/1/24		57		68
#	J10600, 4.000%, due 8/1/24		10		10
#	G13695, 4.000%, due 9/1/24		649		697
#	J11208, 5.000%, due 11/1/24		90		96
#	G00363, 8.000%, due 6/1/25		87		99
#	J12853, 4.000%, due 8/1/25		186		199
#	C80329, 8.000%, due 8/1/25		19		21
#	J13022, 4.000%, due 9/1/25		203		214
#	J14491, 4.000%, due 2/1/26		3,399		3,652
#	J16051, 4.500%, due 7/1/26		2,319		2,503
#	G30348, 6.000%, due 7/1/27		1,212		1,400
#	G07837, 6.500%, due 2/1/38		1,814		2,221
#	G04424, 6.000%, due 6/1/38		82		95
#	G04778, 6.000%, due 7/1/38		102		120
#	G04544, 6.000%, due 8/1/38		398		462
#	G04687, 6.000%, due 9/1/38		101		117
#	G04745, 6.000%, due 9/1/38		53		61
#	A81799, 6.500%, due 9/1/38		357		439
#	G06085, 6.500%, due 9/1/38		14		16
#	G06964, 5.500%, due 11/1/38		3,485		4,023
#	G05723, 6.500%, due 11/1/38		1,581		1,934
#	G07480, 6.000%, due 5/1/39		3,509		4,088
#	G07300, 6.000%, due 4/1/40		5,773		6,787
#	G06017, 5.500%, due 6/1/40		1,257		1,425
#	4122, Tranche FP, 0.842%, due 10/15/42, VRN		952		950
Total FHLMC Mortgage Obligations					33,859

Federal National Mortgage Association (FNMA)—32.7%
#	672953, 5.000%, due 12/1/17		5		5
#	888979, 6.000%, due 12/1/17		1		1
#	695838, 5.500%, due 4/1/18		14		15
#	697593, 5.000%, due 5/1/18		46		47


		Principal
Issuer		Amount			Value

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

Federal National Mortgage Association (FNMA)-—continued)
#	705741, 5.000%, due 6/1/18	$	25	$	26
#	656573, 5.000%, due 6/1/18		34		35
#	709848, 5.000%, due 6/1/18		31		32
#	728715, 5.000%, due 7/1/18		59		60
#	711991, 5.000%, due 8/1/18		34		35
#	257378, 5.000%, due 9/1/18		8		8
#	743183, 5.000%, due 10/1/18		16		16
#	749596, 5.000%, due 11/1/18		67		69
#	753866, 6.000%, due 12/1/18		98		101
#	761246, 5.000%, due 1/1/19		90		93
#	766059, 5.500%, due 2/1/19		79		82
#	766276, 5.000%, due 3/1/19		246		254
#	751313, 5.000%, due 3/1/19		47		48
#	779363, 5.000%, due 6/1/19		22		23
#	785259, 5.000%, due 8/1/19		90		94
#	788424, 5.500%, due 9/1/19		52		54
#	761489, 5.500%, due 9/1/19		53		56
#	725953, 5.000%, due 10/1/19		29		31
#	745877, 5.000%, due 1/1/20		64		67
#	AL5831, 5.000%, due 1/1/20		3,192		3,292
#	357865, 5.000%, due 7/1/20		67		70
#	888105, 5.000%, due 8/1/20		4		4
#	357978, 5.000%, due 9/1/20		644		679
#	844026, 6.000%, due 11/1/20		310		330
#	745735, 5.000%, due 3/1/21		257		271
#	879607, 5.500%, due 4/1/21		43		46
#	831497, 6.000%, due 4/1/21		142		152
#	831525, 5.500%, due 6/1/21		54		58
#	888555, 5.500%, due 9/1/21		1,913		2,041
#	880993, 6.000%, due 1/1/22		10		11
#	888982, 6.000%, due 12/1/22		171		187
#	972934, 5.500%, due 2/1/23		159		175
#	982878, 4.500%, due 5/1/23		188		203
#	889670, 5.500%, due 6/1/23		55		59
#	555734, 5.000%, due 7/1/23		423		469
#	AE0011, 5.500%, due 9/1/23		67		73
#	747339, 5.500%, due 10/1/23		205		230
#	995395, 6.000%, due 12/1/23		151		165
#	AA4519, 4.500%, due 3/1/24		678		729
#	934808, 4.500%, due 3/1/24		103		109
#	AA5028, 4.500%, due 4/1/24		177		191
#	AA5999, 4.500%, due 5/1/24		1,068		1,130
#	190988, 9.000%, due 6/1/24		44		48
#	AC1848, 4.500%, due 9/1/24		400		432
#	AC6600, 4.500%, due 11/1/24		40		43
#	AL3422, 5.000%, due 1/1/25		686		744
#	AL3889, 4.000%, due 5/1/25		283		304
#	AE1176, 4.000%, due 8/1/25		556		589
#	AI4872, 4.500%, due 6/1/26		60		65
#	AI4856, 4.500%, due 6/1/26		1,498		1,621
#	AL2851, 4.000%, due 8/1/26		2,329		2,509
#	AK7384, 4.000%, due 3/1/27		410		439
#	AL2590, 4.000%, due 7/1/27		2,484		2,671
#	759336, 6.000%, due 1/1/34		1,583		1,856
#	AL3449, 6.000%, due 7/1/36		1,672		1,975
#	886762, 7.000%, due 9/1/36		376		470

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

103

Low Duration Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


		NRSRO	Principal
Issuer		Rating	Amount		Value

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

Federal National Mortgage Association (FNMA)—continued)
#	831926, 6.000%, due 12/1/36		$	705	$	819
#	899057, 6.000%, due 3/1/37			86		100
#	928574, 6.000%, due 7/1/37			152		176
#	888703, 6.500%, due 8/1/37			3,820		4,542
#	948637, 6.500%, due 8/1/37			474		553
#	889371, 6.000%, due 1/1/38			922		1,081
#	965534, 6.000%, due 1/1/38			54		63
#	889385, 6.000%, due 2/1/38			649		758
#	975649, 6.000%, due 7/1/38			144		166
#	889987, 5.500%, due 8/1/38			101		117
#	AD0100, 7.000%, due 12/1/38			1,033		1,307
#	AA8706, 5.500%, due 6/1/39			2,796		3,236
#	AD0315, 6.500%, due 8/1/39			755		904
#	AC3270, 5.500%, due 9/1/39			1,733		2,023
#	AD3360, 5.500%, due 5/1/40			2,225		2,571
#	AL5815, 5.500%, due 4/1/41			3,761		4,362
Total FNMA Mortgage Obligations						48,470

Asset-Backed Securities—24.3%
Volvo Financial Equipment LLC—144A, 2015-1A, Tranche A2, 0.950%, 11/15/17		Aaa		512		512
John Deere Owner Trust 2015, 2015-A, Tranche A2B, 0.712%, 2/15/18, VRN		Aaa		71		71
Ford Credit Auto Owner Trust, 2015-B, Tranche A2B, 0.672%, 3/15/18, VRN		Aaa		590		590
Mercedes Benz Auto Lease Trust, 2016-A, Tranche A2B, 1.002%, 7/16/18, VRN		Aaa		2,800		2,799
Ford Credit Floorplan Master Owner Trust A, 2013-5, Tranche A2, 0.912%, 9/15/18, VRN		AAA		200		200
Ford Credit Auto Lease Trust, 2016-A, Tranche A2B, 0.982%, 11/15/18, VRN		AAA		650		650
Ford Credit Auto Owner Trust, 2016-A, Tranche A2B, 0.842%, 12/15/18, VRN		AAA		1,550		1,552
Citibank Credit Card Issuance Trust, 2006-A8, Tranche A8, 0.668%, 12/17/18, VRN		AAA		200		200
Harley-Davidson Motorcycle Trust, 2015-2, Tranche A2B, 0.692%, 1/15/19, VRN		AAA		970		970
Nissan Auto Receivables 2016-B Owner Trust, 2016-B, Tranche A2B, 0.742%, 4/15/19, VRN		Aaa		1,000		1,001
Discover Card Master Trust, 2012-A4, Tranche A, 0.370%, 5/15/19, VRN		AAA		2,000		2,003
American Express Issuance Trust II, 2013-2, Tranche A, 0.872%, 8/15/19, VRN		AAA		640		642


	NRSRO	Principal
Issuer	Rating	Amount		Value

*Asset-Backed Securities—(continued)*
Bank of America Credit Card Trust, 2007-A11, Tranche A11, 0.512%, 12/15/19, VRN	AAA	$	915	$	914
Capital One Multi-Asset Execution Trust, 2007-A2, Tranche A2, 0.522%, 12/16/19, VRN	AAA		715		714
Citibank Credit Card Issuance Trust, 2008-A2, Tranche A2, 1.601%, 1/23/20, VRN	AAA		2,980		3,022
Mercedes-Benz Master Owner Trust—144A, 2015-BA, Tranche A, 0.822%, 4/15/20, VRN	Aaa		1,500		1,494
Citibank Credit Card Issuance Trust, 2013-A2, Tranche A2, 0.732%, 5/26/20, VRN	AAA		1,900		1,902
Chase Issuance Trust, 2013-A6, Tranche A6, 0.862%, 7/15/20, VRN	AAA		2,000		2,003
Discover Card Execution Note Trust, 2015-A1, Tranche A1, 0.792%, 8/17/20, VRN	AAA		1,950		1,955
American Express Credit Account Master Trust, 2008-2, Tranche A, 1.702%, 9/15/20, VRN	AAA		2,200		2,235
Chase Issuance Trust, 2016-A1, Tranche A, 0.852%, 5/17/21, VRN	AAA		2,000		2,002
Bank of America Credit Card Trust, 2014-A1, Tranche A, 0.822%, 6/15/21, VRN	AAA		1,000		1,000
MBNA Credit Card Master Note Trust, 2004-A3, Tranche A3, 0.702%, 8/16/21, VRN	AAA		515		513
Capital One Multi-Asset Execution Trust, 2014-A3, Tranche A3, 0.822%, 1/18/22, VRN	AAA		750		750
Capital One Multi-Asset Execution Trust, 2016-A1, Tranche A1, 0.900%, 2/15/22, VRN	AAA		2,750		2,756
SLM Student Loan Trust, 2008-4, Tranche A4, 2.288%, 7/25/22, VRN	Aaa		1,030		1,031
Sierra Timeshare 2012-2 Receivables Funding LLC—144A, 2012-2A, Tranche A, 2.380%, 3/20/29	A+		273		273
SLM Private Education Loan Trust—144A, 2011-A, Tranche A3, 2.942%, 1/15/43, VRN	AAA		2,250		2,266
Total Asset-Backed Securities					36,020

Corporate Obligations—18.9%
Fifth Third Bancorp, 1.067%, due 12/20/16, VRN	A-		1,000		999
JPMorgan Chase & Co., 1.146%, due 2/15/17, VRN	A+		1,000		1,001
Barclays Bank plc, 1.208%, due 2/17/17, VRN	A2		1,620		1,618

See accompanying Notes to Financial Statements.

104

Semiannual Report

June 30, 2016

Low Duration Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)


	NRSRO	Principal
Issuer	Rating	Amount		Value

*Corporate Obligations—(continued)*
Caterpillar Financial Services Corporation, 0.911%, due 3/3/17, VRN	A	$	2,200	$	2,203
Nissan Motor Acceptance Corp.—144A, 1.231%, due 3/3/17, VRN	A-		1,500		1,501
Citigroup, Inc., 1.198%, due 3/10/17, VRN	A		1,500		1,501
Mizuho Bank Ltd.—144A, 1.063%, due 4/16/17, VRN	A1		1,000		1,000
Tencent Holdings Ltd.—144A, 2.000%, due 5/2/17	A+		1,200		1,207
American Express Credit Corporation, 0.950%, due 6/5/17, VRN	A2		1,000		999
Standard Chartered plc—144A, 1.001%, due 9/8/17, VRN	A1		2,000		1,986
Royal Bank of Canada, 0.890%, due 10/13/17, VRN	AA		1,725		1,720
Canadian National Railway Co., 0.796%, due 11/14/17, VRN	A		500		500
General Electric Capital Corporation, 1.182%, due 12/7/17, VRN	AA+		500		498
Exxon Mobil Corporation, 1.274%, due 2/28/18, VRN	Aaa		1,000		1,008
Wells Fargo & Co., 1.268%, due 4/23/18, VRN	AA-		1,000		1,003
Morgan Stanley, 1.918%, due 4/25/18, VRN	A		2,000		2,020
KeyBank NA, 1.193%, due 6/1/18, VRN	A-		1,200		1,198
PNC Bank NA, 1.093%, due 6/1/18, VRN	A+		1,035		1,034
Toyota Motor Credit Corporation, 1.445%, due 2/19/19, VRN	AA-		1,000		1,000
American Honda Finance Corporation, 1.479%, due 2/22/19, VRN	A+		1,000		1,011
PepsiCo, Inc., 1.244%, due 2/22/19, VRN	A1		1,000		1,007
Johnson & Johnson, 0.943%, due 3/1/19, VRN	AAA		1,000		1,003
Westpac Banking Corporation, 1.337%, due 5/13/19, VRN	Aa2		1,000		1,002
Total Corporate Obligations					28,019

Total Long-Term Investments—98.8% (cost $145,747)					146,368

	Principal
	Amount/
Issuer	Contracts			Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $1,656, collateralized by FHLB, 5.500%, due 7/15/36	$	1,656		$	1,656
Total Repurchase Agreement—1.1% (cost $1,656)					1,656

Purchased Option—0.0%
Eurodollar Future, September 2016, Strike $97, Put		300			2

Total Purchased Option—0.0% (cost $95)					2

Total Investments—99.9% (cost $147,498)					148,026

Securities Sold Short, Not Yet Purchased

U.S. Government and U.S. Government Agency—(7.0)%
Federal National Mortgage Association (FNMA)—(7.0)%
TBA, 2.500%, due 7/1/31	$	(10,000	)		(10,347	)

Total Securities Sold Short, Not Yet Purchased—(7.0)% (proceeds $10,277)					(10,347	)
Cash and other assets, less liabilities—7.1%					10,542
Net assets—100.0%				$	148,221

The obligations of certain U.S. Government-sponsored securities are neither issued nor guaranteed by the U.S. Treasury.

TBA = To Be Announced—TBAs are mortgage-backed securities traded under delayed delivery commitments, settling after June 30, 2016. The term TBA comes from the fact that the specific mortgage-backed security that will be delivered to fulfill a TBA trade is not designated at the time the trade is made.

VRN = Variable Rate Note

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

105

	Macro Allocation Fund

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Thomas Clarke Brian D. Singer	The William Blair Macro Allocation Fund (Class N shares) posted a 0.27% increase, net of fees, for the six-month period ending June 30, 2016. By comparison, the Fund’s benchmark index the Bank of America/Merrill Lynch 3-month U.S. Treasury Bill Index and the Long-Term Comparative Index (40% Barclays U.S. Aggregate Index, 30% MSCI All Country World Index (net), and 30% Bank of America/Merrill Lynch 3-month U.S. Treasury Bill Index), increased 0.15% and 2.67%, respectively. Capital market volatility was more muted in the second quarter of 2016 than it was in the first quarter, though in June high volatility and uncertainty snapped back to the fore when British voters opted to leave the European Union in a historic referendum (“Brexit”). Even accounting for this development—which was a surprise to market expectations—global equities were essentially flat for the second quarter, with little differentiation between emerging and developed markets. U.S. equities made overall gains, which were offset by losses in Europe and Japan. Bond yields moved even lower, with the average 10-year yield in the eurozone falling to negative territory. The U.S. dollar was generally strong against other developed world currencies, particularly so against the British pound, but the Japanese yen was the strongest major currency indicating demand for its safe-haven credentials. Emerging market currencies were stable overall, with more differentiation and somewhat lower positive correlations than they have exhibited in prior quarters. Throughout the first half of 2016, the Fund maintained a low-risk posture, which was instrumental in minimizing exposure to key macro risks such as the United Kingdom’s Brexit vote in June. During the period, the Fund’s market strategy (e.g., equity and fixed income) detracted from performance while its currency strategy contributed to performance. Within the market strategy, equity exposures contributed negatively in aggregate to the Fund’s relative performance, largely driven by long exposure to European equities, while fixed income was a positive contributor in aggregate to the Fund’s relative performance, mostly due to long exposure to U.S. government bonds and U.S. credit. The Fund was disadvantaged by short exposure to European government bonds. Within currency, emerging markets were strong contributors to the Fund’s relative performance largely driven by long exposures to the Russian ruble, Indonesian rupiah, and Brazilian real, as well as long exposure to the Japanese yen. Currency exposure that detracted from the Fund’s relative performance included long exposure to the Mexican peso and short exposure to the euro. While some macro events have passed, a period of uncertainty surrounding the U.K. exit from the European Union is beginning to set in. Additionally, macro themes, including the rise and fall of commodity prices and an increase in political populism, continue to have a material impact on price movements which are keeping correlations between and within equities and currencies somewhat elevated. We believe that our investment process, dialogue, and decision-making are all well-equipped to meet the challenges we now face. We will continue to use our rigorous investment framework and our experienced judgment to appropriately (and more fully) increase the Fund’s risk posture in addition to the partial steps we have taken so far. We remain vigilant as we assess new and relevant information in our attempt to capture future investment opportunities in a timely manner, and we will continue balancing the relationship between risk taken and compensation expected.

106

Semiannual Report

June 30, 2016

Macro Allocation Fund

Performance Highlights (Unaudited)

Average Annual Total Return at 6/30/2016
	Year									Since
	to Date			1 Year			3 Year			Inception
Class N(a)		0.27	%		(9.64	)%		1.63	%		5.50	%
Class I(a)		0.44			(9.37	)		1.92			5.77
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index(a)		0.15			0.19			0.09			0.09
Long-Term Comparative Index(a)		2.67			1.56			3.61			4.06
Institutional Class(b)		0.53			(9.28	)		—			(0.29	)
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index(b)		0.15			0.19			—			0.25
Long-Term Comparative Index(b)		2.67			1.56			—			2.55

(a)	For the period from November 29, 2011 (Commencement of Operations) to June 30, 2016.

(b)	For the period from October 21, 2013 (Commencement of Operations) to June 30, 2016.

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. The Fund involves a high level of risk and may not be appropriate for everyone. You could lose money by investing in the Fund. There can be no assurance that the Fund’s investment objective will be achieved or that the Fund’s investment strategies will be successful. The Fund is not a complete investment program. From time to time, the investment adviser may waive fees or reimburse expenses for the Fund. Without these waivers/reimbursements, 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 Investment Management, LLC and William Blair & Company, L.L.C., without a sales load or distribution fee (12b-1 fee). 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 (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index measures total return on cash, including price and interest income, based on short-term government Treasury Bills of about 90-day maturity. The Index is unmanaged, does not incur fees or expenses, and cannot be invested in directly.

The Long-Term Comparative Index return is comprised of the following indices: 40% Barclays Capital U.S. Aggregate Index, 30% Morgan Stanley Capital International (MSCI) All Country World Index (net), and 30% BofA Merrill Lynch 3-month U.S. Treasury Bill Index.

Portfolio Allocation (Unaudited)

The table below provides the allocation of the Fund’s holdings as a percent of net assets as of June 30, 2016.

Category	%
Equity Exchange-Traded Funds		49.7	%
Fixed Income Exchange-Traded Funds		14.1	%
U.S. Government		17.3	%
Purchased Options		0.3	%
Repurchase Agreements		17.7	%
Written Option		(0.3	)%
Cash and Other Assets, Less Liabilities		1.2	%
Net Assets		100.0	%

June 30, 2016

William Blair Funds

107

Macro Allocation Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

	Shares or
	Principal
Issuer	Amount		Value

*Exchange-Traded Funds—63.8%*

Equity Exchange-Traded Funds—49.7%
Consumer Staples Select Sector SPDR Fund		672,000	$	37,061
Energy Select Sector SPDR Fund		836,000		57,049
Global X FTSE Greece 20 ETF		2,450,071		17,714
iShares Global Energy ETF		546,000		17,641
iShares MSCI Emerging Markets ETF		634,000		21,784
iShares MSCI India ETF		1,654,000		46,180
iShares MSCI Japan ETF(a)		2,301,000		26,461
iShares MSCI Switzerland Capped ETF(a) .		503,000		14,914
iShares Russell 1000 Growth ETF		299,000		30,008
iShares Russell 1000 Value ETF(a)		2,097,000		216,536
SPDR S&P 500 ETF Trust		1,539,000		322,467
Utilities Select Sector SPDR Fund		677,000		35,522
VanEck Vectors Russia ETF		1,084,000		18,883
Total Equity Exchange-Traded Funds				862,220

Fixed Income Exchange-Traded Funds—14.1%
iShares iBoxx $ Investment Grade Corporate Bond ETF		1,128,000		138,439
iShares JP Morgan USD Emerging Markets Bond ETF		312,000		35,927
SPDR Barclays High Yield Bond ETF		1,573,000		56,156
WisdomTree Emerging Markets Local Debt Fund ETF		370,000		13,842
Total Fixed Income Exchange-Traded Funds				244,364

Total Exchange-Traded Funds—63.8% (cost $1,087,889)				1,106,584

Repurchase Agreement—17.7%
Fixed Income Clearing Corporation, 0.030% dated 6/30/16, due 7/1/16, repurchase price $307,110, collateralized by FFCB, 3.120%-3.340%, due 2/8/30-3/14/31, and FHLB, 3.300%-5.500%, due 5/7/32-7/15/36, and FHLMC, 4.125%-6.250%, due 7/15/32-10/11/33, and FNMA, 3.100%-7.125%, due 1/15/30-3/10/31		$307,110		307,110

Total Repurchase Agreement—17.7% (cost $307,110)				307,110

U.S. Government—17.3%
U.S. Treasury Bill, 0.343%, due 7/21/16 (b)		35,000		34,997
U.S. Treasury Bill, 0.380%, due 8/18/16 (a)(b)		35,000		34,990
U.S. Treasury Bill, 0.403%, due 9/15/16 (a)(b)		35,000		34,985
U.S. Treasury Bill, 0.303%, due 10/13/16 (a)(b)		35,000		34,978
U.S. Treasury Bill, 0.431%, due 11/10/16 (a)(b)		35,000		34,968
U.S. Treasury Bill, 0.536%, due 12/8/16 (a)(b)		35,000		34,956
U.S. Treasury Bill, 0.577%, due 1/5/17 (a)(b)		35,000		34,939

	Principal
	Amount/
Issuer	Contracts			Value

U.S. Government—(continued)
U.S. Treasury Bill, 0.542%, due 2/2/17	$	10,000		$	9,980
U.S. Treasury Bill, 0.670%, due 3/2/17		10,000			9,974
U.S. Treasury Bill, 0.617%, due 3/30/17		10,000			9,971
U.S. Treasury Bill, 0.597%, due 4/27/17		10,000			9,967
U.S. Treasury Bill, 0.677%, due 5/25/17		8,000			7,971
U.S. Treasury Bill, 0.577%, due 6/22/17		8,000			7,966

Total U.S. Government—17.3% (cost $300,408)					300,642

Purchased Options—0.3%
Energy Select Sector SPDR Fund, July 2016, Strike $63.5, Put		13,187			198
IBEX 8630 OTC, July 2016, Strike 8,630 EUR, Call		7,252			208
IBEX 9769 OTC, July 2016, Strike 9,769 EUR, Call		6,859			—	(c)
iShares MSCI Emerging Markets, September 2016, Strike $31.5, Put		25,956			1,376
iShares Russell 2000 ETF, July 2016, Strike $112, Call		6,308			2,019
iShares Russell 2000 ETF, July 2016, Strike $112, Put		6,308			530
S&P 500 Index, November 2016, Strike $1,900, Put		419			1,592

Total Purchased Options—0.3% (cost $14,366)					5,923

Total Investments in Securities—99.1% (cost $1,709,773)					1,720,259

Written Options—(0.3)%
ESTX Bank, July 2016, Strike 97.5 EUR, Call		(6,318	)		(53	)
EURO STOXX 50 Index, July 2016, Strike 2,975 EUR, Call		(2,069	)		(298	)
FTSE 100 Index, July 2016, Strike 6,200 GBP, Call		(776	)		(3,192	)
Utilities Select Sector SPDR Fund, Strike $52, Call		(13,838	)		(1,896	)

Total Written Option—(0.3)%
(premiums received $6,354)					(5,439	)

Cash and other assets, less liabilities—1.2%					21,014
Net assets—100.0%				$	1,735,834

(a)	Security, or portion of security, is segregated as collateral for OTC swap contracts, OTC options, and listed written options aggregating a total value of $89,545.

(b)	Security, or portion of security, is pledged as collateral for the credit default swaps and to cover initial margin requirements on open futures contracts aggregating a total value of $61,872.

(c)	Amount rounds to less than minimum amount disclosed

See accompanying Notes to Financial Statements.

108

Semiannual Report

June 30, 2016

Macro Allocation Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

If a 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 Fund had the following transactions during the period ended June 30, 2016 with companies deemed affiliated during the period or at June 30, 2016.

	Share Activity					Period Ended June 30, 2016
															Change in net
															unrealized
		Balance		Balance				Dividend			Net realized				appreciation
Security Name		12/31/2015	Purchases	Sales	6/30/2016	Value		Income			gain (loss)				(depreciation)
pGlobal X MSCI Greece ETF		1,987,000	753,071	290,000	2,450,071	$	17,714		$	—		$	(465	)		$	(526	)
						$	17,714		$	—		$	(465	)		$	(526	)

p = Affiliated company at June 30, 2016. The Fund’s total value in companies deemed to be affiliated at June 30, 2016 was $17,714.

Forward Foreign Currency Contracts
							Net Unrealized
Settlement			Local Currency				Appreciation
Date	Deliver/Receive	Counterparty	(in thousands)		Current Value		(Depreciation)
Purchased
9/21/16	Brazilian Real	Citibank N.A. London		115,672	$	35,114		$	1,954
9/21/16	Swiss Franc	Citibank N.A. London		112,535		115,794			(1,442	)
9/21/16	Chinese Yuan Renminbi	Citibank N.A. London		256,714		38,372			(505	)
9/21/16	Colombian Peso	Citibank N.A. London		204,248,435		68,715			(253	)
9/21/16	Euro	Citibank N.A. London		70,468		78,440			(1,511	)
9/21/16	British Pound Sterling	Citibank N.A. London		65,463		87,218			(7,730	)
9/21/16	Hungarian Forint	Citibank N.A. London		15,638,284		54,954			(2,535	)
9/21/16	Indonesian Rupiah	Citibank N.A. London		1,642,108,619		123,138			574
9/21/16	Indian Rupee	Citibank N.A. London		5,496,500		80,291			(1,102	)
9/21/16	Japanese Yen	Citibank N.A. London		670,691		6,514			214
9/21/16	Mexican Peso	Citibank N.A. London		1,515,544		82,211			(441	)
9/21/16	Malaysian Ringgit	Citibank N.A. London		352,927		88,280			712
9/21/16	Norwegian Krone	Citibank N.A. London		144,537		17,268			(601	)
9/21/16	Polish Zloty	Citibank N.A. London		183,134		46,332			(1,946	)
9/21/16	Russian Ruble	Citibank N.A. London		3,654,528		55,910			(147	)
9/21/16	Singapore Dollar	Citibank N.A. London		64,725		48,006			(21	)
9/21/16	Thai Baht	Citibank N.A. London		139,597		3,967			(10	)
9/21/16	New Turkish Lira	Citibank N.A. London		50,259		17,140			100
9/21/16	South African Rand	Citibank N.A. London		675,607		45,108			176
								$	(14,514	)
Sold
9/21/16	Australian Dollar	Citibank N.A. London		74,678	$	55,528		$	85
9/21/16	Canadian Dollar	Citibank N.A. London		134,668		104,253			1,579
9/21/16	Swiss Franc	Citibank N.A. London		285,072		293,329			5,337
9/21/16	Czech Koruna	Citibank N.A. London		1,917,406		78,821			2,281
9/21/16	Euro	Citibank N.A. London		131,191		146,033			3,170
9/21/16	British Pound Sterling	Citibank N.A. London		78,986		105,235			8,081
9/21/16	Hong Kong Dollar	Citibank N.A. London		724,119		93,430			(35	)
9/21/16	Indonesian Rupiah	Citibank N.A. London		50,023,447		3,751			2
9/21/16	Japanese Yen	Citibank N.A. London		3,846,998		37,361			314
9/21/16	South Korean Won	Citibank N.A. London		8,960,418		7,766			(3	)
9/21/16	New Zealand Dollar	Citibank N.A. London		126,381		89,859			(1,649	)
9/21/16	Thai Baht	Citibank N.A. London		4,499,104		127,863			(68	)
9/21/16	Taiwan Dollar	Citibank N.A. London		245,758		7,648			2
								$	19,096

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

109

Macro Allocation Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

Futures Contracts
				Notional Amount		Net Unrealized
Number of				(Local,		Appreciation
Contracts	Description	Expiration Date	Local Currency	in thousands)		(Depreciation)
Long
220	Amsterdam Index	July 2016	Euro		19,153		$	638
165	IBEX 35 Index	July 2016	Euro		13,410			(117	)
2,350	OMXS 30 Index	July 2016	Swedish Krona		309,848			798
422	Euro-Bund Put, Strike 160.50-FSO	July 2016	Euro		4			(284	)
80	HANG SENG Index	July 2016	Hong Kong Dollar		83,788			513
1,940	MSCI Singapore ETS Index	July 2016	Singapore Dollar		61,556			2,767
325	MSCI Taiwan Index	July 2016	U.S. Dollar		10,319			312
269	KOSPI 200 Index	September 2016	South Korean Won		32,851,625			(112	)
416	10YR JGB Mini	September 2016	Japanese Yen		6,357,728			307
275	SPI 200 Index	September 2016	Australian Dollar		35,585			(67	)
18	DAX Index	September 2016	Euro		4,351			1
1,561	EURO STOXX Banks Index	September 2016	Euro		6,447			(1,681	)
698	FTSE 100 Index	September 2016	British Pound Sterling		44,829			2,392
385	FTSE MIB Index	September 2016	Euro		31,168			(717	)
							$	4,750
Short
92	CAC 40 Index	July 2016	Euro		3,895		$	(73	)
330	H-Shares Index	July 2016	Hong Kong Dollar		143,963			(839	)
184	EURO-OAT*	September 2016	Euro		29,585			(470	)
360	NIKKEI 225 Index	September 2016	Japanese Yen		2,799,000			1,619
2,332	FTSE/JSE Top 40 Index	September 2016	South African Rand		1,083,121			1,377
1,414	MEX BOLSA Index	September 2016	Mexican Peso		651,995			(692	)
129	S&P TSX 60 Index	September 2016	Canadian Dollar		21,009			(64	)
92	EURO STOXX 50 Index	September 2016	Euro		2,627			(142	)
496	Russell 2000 Mini Index	September 2016	U.S. Dollar		56,911			583
4,718	S&P 500 E Mini Index	September 2016	U.S. Dollar		493,078			(725	)
532	10YR Can Bond	September 2016	Canadian Dollar		78,757			(1,439	)
37	10YR US Treasury Notes*	September 2016	U.S. Dollar		4,920			(2	)
110	Long Gilt	September 2016	British Pound Sterling		14,134			(915	)
459	5YR US Treasury Notes*	September 2016	U.S. Dollar		56,073			(1,006	)
							$	(2,788	)

*	Exposure to Futures Contract is achieved through the use of a swap contract with Credit Suisse.

	FSO = Futures-Style Option

Interest Rate Swap

Notional

Unrealized

Pay/Receive

Maturity

Amount

Appreciation

Floating Rate Reference

Floating Rate

Fixed Rates

Dates

Counterparty

(in thousands)

(Depreciation)

6 Month Swiss Franc LIBOR Rate

Receive

1.250%

June 2025

Credit Suisse International

41,330 CHF

(3,141

)

6 Month Swiss Franc LIBOR Rate

Receive

1.250%

June 2025

Goldman Sachs & Co.

4,200 CHF

(201

)

(3,342

)

See accompanying Notes to Financial Statements.

110

Semiannual Report

June 30, 2016

Macro Allocation Fund

Portfolio of Investments, June 30, 2016 (all dollar amounts in thousands) (unaudited)

Total Return Swaps

Notional

Unrealized

Pay/Receive

Maturity

Amount

Appreciation

Reference Entity

Floating Rate

Floating Rates

Dates

Counterparty

(in thousands)

(Depreciation)

Consumer Discretionary Select Sector Total Return Index

Receive

3 Month LIBOR minus 42 bp

Aug 2016

Goldman Sachs International

61,658

(915

)

Dow Jones US Health Care Total Return Index

Receive

3 Month LIBOR minus 30 bp

Aug 2016

Goldman Sachs International

26,222

(1,082

)

Dow Jones US Telecommunications Total Return Index

Receive

3 Month LIBOR minus 45 bp

Aug 2016

Goldman Sachs International

35,025

(4,105

)

Financial Select Sector Total Return Index

Receive

1 Month LIBOR plus 3 bp

July 2016

Citibank N.A.

34,492

(397

)

Vietnam Equity Basket

Pay

3 Month LIBOR plus 100 bp

Aug 2016

Goldman Sachs International

17,376

106

MSCI China Small Cap Index (Net)

Pay

1 Month LIBOR plus 125 bp

Aug 2016 to Nov 2016

Goldman Sachs International

20,123

(2,696

)

MSCI China Small Cap Index (Net)

Pay

1 Month LIBOR plus 20 bp - 40bp

Dec 2016 to June 2017

Citibank N.A.

20,581

(1,047

)

MSCI China Small Cap Index (Net)

Pay

1 Month LIBOR plus 75 bp

Mar 2017

Credit Suisse International

3,068

MSCI Emerging Markets Small Cap (Net)

Pay

1 Month LIBOR plus 110 bp - 115 bp

Aug 2016 to Sep 2016

Goldman Sachs International

4,161

(492

)

MSCI Emerging Markets Small Cap (Net)

Pay

1 Month LIBOR plus 94 bp - 96 bp

Nov 2016 to Mar 2017

Credit Suisse International

31,750

562

MSCI Vietnam Daily Total Return Index

Pay

3 Month LIBOR plus 100 bp

Aug 2016

Goldman Sachs International

17,450

(51

)

(10,040

)

Centrally Cleared Credit Default Swaps

Notional

Unrealized

Buy/Sell

Fixed Deal

Maturity

Amount

Appreciation

Reference Entity

Protection

Pay Rate

Date

Cleared Exchange

(in thousands)

(Depreciation)

iTRAXX Europe S25

Sell

1.000%

June 2021

ICE

43,630 EUR

(405

)

iTRAXX Europe Crossover S25

Sell

5.000%

June 2021

ICE

13,465 EUR

(516

)

(921

)

Variance Swaps

Notional

Unrealized

Pay/Receive

Variance

Maturity

Amount

Appreciation

Reference Entity

Floating Rate

Strike Price

Date

Counterparty

(in thousands)

(Depreciation)

Euro Stoxx 50

Pay

1,030.4100

Sep 2016

Credit Suisse International

465

2,425

Euro Stoxx 50

Pay

910.2289

Dec 2017

Citibank N.A.

757

1,915

4,340

Total Net Unrealized Appreciation (Depreciation) on Swaps

(9,963

)

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

111

Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

			Large Cap			Mid Cap			Mid Cap
	Growth		Growth			Growth			Value
	Fund		Fund			Fund			Fund
Assets
Investments in securities, at cost	$	648,226	$	71,405		$	137,723		$	3,030
Investments in securities, at value	$	803,631	$	85,432		$	153,142		$	3,549
Receivable for securities sold		—		—			947			107
Receivable for fund shares sold		433		223			66			5
Receivable from Adviser		—		21			36			20
Dividend and interest receivable		381		36			40			5
Total assets		804,445		85,712			154,231			3,686
Liabilities
Payable for investment securities purchased		8,956		—			1,816			116
Payable for fund shares redeemed		307		60			21			—
Management fee payable		490		49			119			3
Distribution fee payable		26		3			5			—
Other payables and accrued expenses		219		27			84			18
Total liabilities		9,998		139			2,045			137
Net assets	$	794,447	$	85,573		$	152,186		$	3,549
Capital
Composition of net assets
Par value of shares of beneficial interest	$	61	$	8		$	13		$	—
Capital paid in excess of par value		628,136		72,547			135,523			2,861
Accumulated net investment income (loss)		23		107			(307	)		16
Accumulated net realized gain (loss)		10,822		(1,116	)		1,538			153
Net unrealized appreciation (depreciation) of investments and foreign currencies		155,405		14,027			15,419			519
Net assets	$	794,447	$	85,573		$	152,186		$	3,549

Class N shares
Net assets	$	126,357	$	12,305		$	22,247		$	1,251
Shares outstanding		10,293,508		1,217,219			1,986,710			118,711
Net asset value per share	$	12.28	$	10.11		$	11.20		$	10.53
Class I shares
Net assets	$	668,090	$	73,268		$	129,939		$	2,298
Shares outstanding		50,396,158		6,941,865			11,116,423			217,590
Net asset value per share	$	13.26	$	10.55		$	11.69		$	10.56

See accompanying Notes to Financial Statements.

112

Semiannual Report

June 30, 2016

Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

				Large Cap			Mid Cap			Mid Cap
	Growth			Growth			Growth			Value
	Fund			Fund			Fund			Fund
Investment income
Dividends	$	3,749		$	432		$	614		$	26
Interest		1			—			—			—
Total income		3,750			432			614			26
Expenses
Investment advisory fees		2,935			272			810			13
Distribution fees		165			14			27			1
Custodian fees		14			12			22			12
Transfer agent fees		51			5			11			1
Sub-transfer agent fees
Class N		125			7			14			—
Class I		299			20			91			—
Professional fees		30			16			20			13
Registration fees		26			26			29			25
Shareholder reporting fees		14			2			22			—
Trustee fees		45			4			11			—
Other expenses		23			4			6			3
Total expenses before expense limitation		3,727			382			1,063			68
Expenses waived or reimbursed by the Adviser		—			(57	)		(142	)		(53	)
Net expenses		3,727			325			921			15
Net investment income (loss)		23			107			(307	)		11
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities		(1,018	)		(694	)		(4,131	)		72
Total net realized gain (loss)		(1,018	)		(694	)		(4,131	)		72
Change in net unrealized appreciation (depreciation) of:
Investments in securities		(15,421	)		1,208			2,276			111
Change in net unrealized appreciation (depreciation)		(15,421	)		1,208			2,276			111
Net increase (decrease) in net assets resulting from operations	$	(16,416	)	$	621		$	(2,162	)	$	194

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

113

Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

							Large Cap						Mid Cap						Mid Cap
	Growth Fund						Growth Fund						Growth Fund						Value Fund
	2016			2015			2016			2015			2016			2015			2016			2015
Operations
Net investment income (loss)	$	23		$	(250	)	$	107		$	(4	)	$	(307	)	$	(1,275	)	$	11		$	22
Net realized gain (loss) on investments, and other assets and liabilities		(1,018	)		57,036			(694	)		4,789			(4,131	)		36,493			72			661
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(15,421	)		(9,544	)		1,208			(463	)		2,276			(30,371	)		111			(671	)
Net increase (decrease) in net assets resulting from operations		(16,416	)		47,242			621			4,322			(2,162	)		4,847			194			12
Distributions to shareholders from
Net investment income
Class N		—			—			—			—			—			—			—			(2	)
Class I		—			—			—			—			—			—			—			(10	)
Net realized gain
Class N		—			(18,526	)		—			(971	)		—			(5,530	)		—			(149	)
Class I		—			(80,435	)		—			(5,265	)		—			(35,853	)		—			(438	)
Total distributions		—			(98,961	)		—			(6,236	)		—			(41,383	)		—			(599	)
Capital stock transactions
Net proceeds from sale of shares		43,345			122,787			23,355			17,152			8,268			33,162			789			661
Shares issued in reinvestment of income dividends and capital gain distributions		—			95,837			—			5,376			—			39,576			—			573
Less cost of shares redeemed		(78,980	)		(281,210	)		(7,884	)		(10,742	)		(53,642	)		(176,266	)		(102	)		(1,747	)
Net increase (decrease) in net assets resulting from capital share transactions		(35,635	)		(62,586	)		15,471			11,786			(45,374	)		(103,528	)		687			(513	)
Increase (decrease) in net assets		(52,051	)		(114,305	)		16,092			9,872			(47,536	)		(140,064	)		881			(1,100	)
Net assets
Beginning of period		846,498			960,803			69,481			59,609			199,722			339,786			2,668			3,768
End of period	$	794,447		$	846,498		$	85,573		$	69,481		$	152,186		$	199,722		$	3,549		$	2,668
Accumulated net investment income (loss) at the end of the period	$	23		$	—		$	107		$	—		$	(307	)	$	—		$	16		$	5

See accompanying Notes to Financial Statements.

114

Semiannual Report

June 30, 2016

Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

	Small-Mid				Small-Mid				Small Cap			Small Cap
	Cap Growth				Cap Value				Growth			Value
		Fund				Fund			Fund			Fund
Assets
Investments in securities, at cost		$	1,099,471			$	3,930		$	297,936		$	494,679
Investments in affiliated companies, at cost			—				—			5,482			—
Investments in securities, at value		$	1,255,043			$	4,533		$	351,924		$	592,298
Investments in affiliated companies, at value			—				—			6,678			—
Receivable for securities sold			7,394				32			7,533			8,605
Receivable for fund shares sold			2,658				2			215			616
Receivable from Adviser			101				8			20			33
Dividend and interest receivable			365				6			70			742
Total assets			1,265,561				4,581			366,440			602,294
Liabilities
Payable for investment securities purchased			2,970				69			462			4,137
Payable for fund shares redeemed			304				—			230			337
Management fee payable			1,034				4			329			534
Distribution fee payable			42				—			22			6
Other payables and accrued expenses			342				36			210			72
Total liabilities			4,692				109			1,253			5,086
Net assets		$	1,260,869			$	4,472		$	365,187		$	597,208
Capital
Composition of net assets
Par value of shares of beneficial interest		$	65			$	—		$	15		$	33
Capital paid in excess of par value			1,090,807				3,855			311,187			492,642
Accumulated net investment income (loss)			(2,233	)			16			(1,079	)		1,789
Accumulated net realized gain (loss)			16,658				(2	)		(120	)		5,125
Net unrealized appreciation (depreciation) of investments and foreign currencies			155,572				603			55,184			97,619
Net assets		$	1,260,869			$	4,472		$	365,187		$	597,208

Class N shares
Net assets		$	206,875			$	915		$	105,104		$	31,153
Shares outstanding			11,055,944				68,718			4,501,421			1,748,554
Net asset value per share		$	18.71			$	13.31		$	23.35		$	17.82
Class I shares
Net assets		$	1,053,994			$	3,557		$	260,083		$	566,055
Shares outstanding			54,151,140				266,830			10,342,334			30,998,243
Net asset value per share		$	19.46			$	13.33		$	25.15		$	18.27

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

115

Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

	Small-Mid				Small-Mid				Small Cap				Small Cap
	Cap Growth				Cap Value				Growth				Value
	Fund				Fund				Fund				Fund
Investment income
Dividends		$	4,374			$	34			$	1,224			$	5,155
Less foreign tax withheld			(19	)			—				(4	)			—
Interest.			4				—				1				2
Total income			4,359				34				1,221				5,157
Expenses
Investment advisory fees			5,806				20				1,914				3,137
Distribution fees			227				1				128				39
Custodian fees			19				16				15				15
Transfer agent fees			42				—				30				16
Sub-transfer agent fees
Class N			103				—				65				21
Class I			546				1				105				350
Professional fees			50				16				25				26
Registration fees			62				26				34				21
Shareholder reporting fees			91				—				73				24
Trustee fees			62				—				20				32
Other expenses			32				3				10				26
Total expenses before expense limitation			7,040				83				2,419				3,707
Expenses waived or reimbursed by the Adviser			(448	)			(61	)			(119	)			(103	)
Net expenses			6,592				22				2,300				3,604
Net investment income (loss)			(2,233	)			12				(1,079	)			1,553
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities			(2,938	)			(15	)			2,169				1,176
Redemptions in-kind			13,849				—				—				—
Total net realized gain (loss)			10,911				(15	)			2,169				1,176
Change in net unrealized appreciation (depreciation) of:
Investments in securities			7,905				261				12,273	⁽¹⁾			33,203
Change in net unrealized appreciation (depreciation)			7,905				261				12,273				33,203
Net increase (decrease) in net assets resulting from operations		$	16,583			$	258			$	13,363			$	35,932

(1)	Includes $1,079 from companies deemed affiliated during the period.

See accompanying Notes to Financial Statements.

116

Semiannual Report

June 30, 2016

Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

	Small-Mid						Small-Mid						Small Cap						Small Cap
	Cap Growth Fund						Cap Value Fund						Growth Fund						Value Fund
	2016			2015			2016			2015			2016			2015			2016			2015
Operations
Net investment income (loss)	$	(2,233	)	$	(3,239	)	$	12		$	21		$	(1,079	)	$	(3,146	)	$	1,553		$	2,407
Net realized gain (loss) on investments, and other assets and liabilities		10,911			61,943			(15	)		129			2,169			27,594			1,176			6,099
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		7,905			(21,167	)		261			(280	)		12,273			(39,914	)		33,203			(41,101	)
Net increase (decrease) in net assets resulting from operations		16,583			37,537			258			(130	)		13,363			(15,466	)		35,932			(32,595	)
Distributions to shareholders from
Net investment income
Class N		—			—			—			(1	)		—			—			—			—
Class I		—			—			—			(10	)		—			—			—			(1,363	)
Net realized gain
Class N		—			(8,564	)		—			(44	)		—			(9,437	)		—			(107	)
Class I		—			(50,588	)		—			(162	)		—			(20,150	)		—			(1,836	)
Total distributions		—			(59,152	)		—			(217	)		—			(29,587	)		—			(3,306	)
Capital stock transactions
Net proceeds from sale of shares		263,809			428,159			289			435			25,807			94,104			51,214			174,197
Shares issued in reinvestment of income dividends and capital gain distributions		—			57,336			—			136			—			28,974			—			3,045
Less cost of shares redeemed		(208,662	)		(151,577	)		(150	)		(502	)		(47,196	)		(217,254	)		(102,299	)		(114,166	)
Net increase (decrease) in net assets resulting from capital share transactions		55,147			333,918			139			69			(21,389	)		(94,176	)		(51,085	)		63,076
Increase (decrease) in net assets		71,730			312,303			397			(278	)		(8,026	)		(139,229	)		(15,153	)		27,175
Net assets
Beginning of period		1,189,139			876,836			4,075			4,353			373,213			512,442			612,361			585,186
End of period	$	1,260,869		$	1,189,139		$	4,472		$	4,075		$	365,187		$	373,213		$	597,208		$	612,361
Accumulated net investment income (loss) at the end of the period	$	(2,233	)	$	—		$	16		$	4		$	(1,079	)	$	—		$	1,789		$	236

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

117

Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

													Institutional
	Global				International				International				International
	Leaders				Leaders				Equity				Equity
	Fund				Fund				Fund				Fund
Assets
Investments in securities, at cost		$	161,853			$	185,122			$	65,344			$	14,848
Investments in securities, at value		$	179,570			$	196,872			$	70,725			$	15,781
Foreign currency, at value (cost $29; $37; $26; $7)			29				37				26				7
Receivable for securities sold			2,630				4,957				455				101
Receivable for fund shares sold			60				3				40				—
Receivable from Adviser			30				42				30				9
Dividend and interest receivable			530				668				368				104
Total assets			182,849				202,579				71,644				16,002
Liabilities
Payable for investment securities purchased			3,767				1,347				584				132
Payable to custodian			4				7				—				—
Management fee payable			147				149				58				12
Shareholder administration fee payable			6				2				—				—
Distribution fee payable			1				—				1				—
Other payables and accrued expenses			83				129				57				40
Total liabilities			4,008				1,634				700				184
Net assets		$	178,841			$	200,945			$	70,944			$	15,818
Capital
Composition of net assets
Par value of shares of beneficial interest		$	16			$	16			$	5			$	1
Capital paid in excess of par value			164,206				190,585				141,131				105,426
Accumulated net investment income (loss)			912				1,585				1,381				153
Accumulated net realized gain (loss)			(3,997	)			(2,930	)			(76,946	)			(90,692	)
Net unrealized appreciation (depreciation) of investments and foreign currencies			17,704				11,689				5,373				930
Net assets		$	178,841			$	200,945			$	70,944			$	15,818

Class N shares
Net assets		$	6,054			$	552			$	2,862				—
Shares outstanding			531,554				43,484				210,574				—
Net asset value per share		$	11.39			$	12.71			$	13.59				—
Class I shares
Net assets		$	46,181			$	20,745			$	68,082				—
Shares outstanding			4,044,962				1,629,645				4,957,315				—
Net asset value per share		$	11.42			$	12.74			$	13.73				—
Institutional Class shares
Net assets		$	126,606			$	179,648				—			$	15,818
Shares outstanding			11,085,188				14,113,861				—				1,328,089
Net asset value per share		$	11.42			$	12.73				—			$	11.91

See accompanying Notes to Financial Statements.

118

Semiannual Report

June 30, 2016

Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

													Institutional
	Global				International				International				International
	Leaders				Leaders				Equity				Equity
	Fund				Fund				Fund				Fund
Investment income
Dividends		$	1,999			$	2,441			$	1,233			$	317
Less foreign tax withheld			(154	)			(239	)			(107	)			(26	)
Interest			1				1				—				—
Total income			1,846				2,203				1,126				291
Expenses
Investment advisory fees			872				703				313				68
Distribution fees			7				1				3				—
Shareholder administration fees			37				12				—				—
Custodian fees			23				25				21				16
Transfer agent fees			5				2				2				—
Sub-transfer agent fees
Class N			3				—				1				—
Class I			11				6				26				—
Professional fees			26				33				32				30
Registration fees			22				39				26				13
Shareholder reporting fees			2				—				1				—
Trustee fees			10				6				3				1
Other expenses			11				9				4				2
Total expenses before expense limitation			1,029				836				432				130
Expenses waived or reimbursed by the Adviser			(135	)			(126	)			(101	)			(54	)
Net expenses			894				710				331				76
Net investment income (loss)			952				1,493				795				215
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign capital gains taxes, if applicable			(4,151	)			(2,739	)			(1,989	)			(614	)
Foreign currency transactions			(20	)			(24	)			(8	)			—
Total net realized gain (loss)			(4,171	)			(2,763	)			(1,997	)			(614	)
Change in net unrealized appreciation (depreciation) of:
Investments in securities			42				1,274				197				118
Foreign currency translations			13				(48	)			(1	)			—
Change in net unrealized appreciation (depreciation)			55				1,226				196				118
Net increase (decrease) in net assets resulting from operations		$	(3,164	)		$	(44	)		$	(1,006	)		$	(281	)

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

119

Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

																			Institutional
				Global			International						International						International
	Leaders Fund						Leaders Fund						Equity Fund						Equity Fund
	2016			2015			2016			2015			2016			2015			2016			2015
Operations
Net investment income (loss)	$	952		$	848		$	1,493		$	857		$	795		$	875		$	215		$	194
Net realized gain (loss) on investments, and other assets and liabilities		(4,171	)		7,126			(2,763	)		(149	)		(1,997	)		1,894			(614	)		417
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		55			(3,415	)		1,226			4,684			196			(1,349	)		118			(426	)
Net increase (decrease) in net assets resulting from operations		(3,164	)		4,559			(44	)		5,392			(1,006	)		1,420			(281	)		185
Distributions to shareholders from
Net investment income
Class N		—			(3	)		—			(1	)		—			(26	)		—			—
Class I		—			(152	)		—			(22	)		—			(750	)		—			—
Institutional Class		—			(552	)		—			(323	)		—			—			—			(156	)
Net realized gain
Class N		—			(252	)		—			(2	)		—			—			—			—
Class I		—			(2,063	)		—			(73	)		—			—			—			—
Institutional Class		—			(6,144	)		—			(578	)		—			—			—			—
Total distributions		—			(9,166	)		—			(999	)		—			(776	)		—			(156	)
Capital stock transactions
Net proceeds from sale of shares		30,667			41,785			90,356			24,052			9,052			5,655			69			2,425
Shares issued in reinvestment of income dividends and capital gain distributions		—			8,986			—			773			—			706			—			156
Less cost of shares redeemed		(37,630	)		(20,858	)		(5,445	)		(1,102	)		(1,008	)	$	(11,608	)		—			(1,154	)
Net increase (decrease) in net assets resulting from capital share transactions		(6,963	)		29,913			84,911			23,723			8,044			(5,247	)		69			1,427
Increase (decrease) in net assets		(10,127	)		25,306			84,867			28,116			7,038			(4,603	)		(212	)		1,456
Net assets
Beginning of period		188,968			163,662			116,078			87,962			63,906			68,509			16,030			14,574
End of period	$	178,841		$	188,968		$	200,945		$	116,078		$	70,944		$	63,906		$	15,818		$	16,030
Accumulated net investment income (loss) at the end of the period	$	912		$	(40	)	$	1,585		$	92		$	1,381		$	586		$	153		$	(62	)

See accompanying Notes to Financial Statements.

120

Semiannual Report

June 30, 2016

Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

					Institutional				International
	International				International				Small Cap
	Growth				Growth				Growth
	Fund				Fund				Fund
Assets
Investments in securities, at cost		$	3,003,977			$	1,897,960			$	496,166
Investment in affiliated fund, at cost			102				63				—
Investments in securities, at value		$	3,234,295			$	2,026,812			$	545,090
Investment in affiliated fund, at value			174				108				—
Foreign currency, at value (cost $2,031, $1,458, $157)			2,030				1,459				154
Receivable for securities sold			20,648				12,870				8,409
Receivable for fund shares sold			2,330				7,845				214
Receivable from Adviser			—				—				43
Dividend and interest receivable			13,925				7,191				1,057
Total assets			3,273,402				2,056,285				554,967
Liabilities
Payable for investment securities purchased			25,107				15,933				11,113
Payable for fund shares redeemed			7,034				1,393				197
Payable to custodian			56				35				—
Management fee payable			2,686				1,563				463
Shareholder administration fee payable			—				—				43
Distribution fee payable			163				—				2
Foreign tax liability			—				—				165
Other payables and accrued expenses			2,016				994				187
Total liabilities			37,062				19,918				12,170
Net assets		$	3,236,340			$	2,036,367			$	542,797
Capital
Composition of net assets
Par value of shares of beneficial interest		$	132			$	140			$	41
Capital paid in excess of par value			3,450,305				1,972,333				510,769
Accumulated net investment income (loss)			51,979				28,218				(2,107	)
Accumulated net realized gain (loss)			(495,584	)			(92,536	)			(14,618	)
Net unrealized appreciation (depreciation) of investments and foreign currencies			229,508				128,212				48,712
Net assets		$	3,236,340			$	2,036,367			$	542,797

Class N shares
Net assets		$	789,678				—			$	10,741
Shares outstanding			32,927,229				—				830,745
Net asset value per share		$	23.99				—			$	12.93
Class I shares
Net assets		$	2,446,662				—			$	327,339
Shares outstanding			99,560,524				—				25,007,399
Net asset value per share		$	24.58				—			$	13.09
Institutional Class shares
Net assets			—			$	2,036,367			$	204,717
Shares outstanding			—				140,057,336				15,553,283
Net asset value per share			—			$	14.54			$	13.16

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

121

Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

					Institutional				International
	International				International				Small Cap
	Growth				Growth				Growth
	Fund				Fund				Fund
Investment income
Dividends		$	56,404			$	34,707			$	9,161
Less foreign tax withheld			(5,590	)			(3,432	)			(834	)
Interest			9				6				2
Total income			50,823				31,281				8,329
Expenses
Investment advisory fees			16,529				9,643				2,781
Distribution fees			1,036				—				13
Shareholder administration fees			—				—				260
Custodian fees			124				87				46
Transfer agent fees			108				29				13
Sub-transfer agent fees
Class N			549				—				6
Class I			1,039				—				128
Professional fees			150				113				59
Registration fees			88				16				31
Shareholder reporting fees			151				21				31
Trustee fees			194				123				31
Other expenses			80				79				15
Total expenses before expense limitation			20,048				10,111				3,414
Expenses waived or reimbursed by the Adviser			—				—				(260	)
Net expenses			20,048				10,111				3,154
Net investment income (loss)			30,775				21,170				5,175
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign capital gains taxes, if applicable			(93,792	)⁽¹⁾			(71,695	)⁽¹⁾			(12,171	)
Redemptions in-kind			—				23,687				—
Foreign currency transactions			(397	)			(330	)			(91	)
Total net realized gain (loss)			(94,189	)			(48,338	)			(12,262	)
Change in net unrealized appreciation (depreciation) of:
Investments in securities			(79,755	)⁽²⁾			(61,589	)⁽²⁾			(15,338	)
Foreign currency translations			(762	)			(520	)			(131	)
Change in net unrealized appreciation (depreciation)			(80,517	)			(62,109	)			(15,469	)
Net increase (decrease) in net assets resulting from operations		$	(143,931	)		$	(89,277	)		$	(22,556	)

(1) Includes $1,574 and $978 related to an affiliated fund (William Blair China A-Share Fund, LLC) for International Growth Fund and Institutional International Growth Fund, respectively.

(2) Includes $(1,620) and $(1,006) related to an affiliated fund (William Blair China A-Share Fund, LLC) for International Growth Fund and Institutional International Growth Fund, respectively.

See accompanying Notes to Financial Statements.

122

Semiannual Report

June 30, 2016

Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

							Institutional						International
	International						International						Small Cap
	Growth Fund						Growth Fund						Growth Fund
	2016			2015			2016			2015			2016			2015
Operations
Net investment income (loss)	$	30,775		$	35,683		$	21,170		$	28,606		$	5,175		$	4,240
Net realized gain (loss) on investments, and other assets and liabilities		(94,189	)		(23,531	)		(48,338	)		(30,439	)		(12,262	)		18,659
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(80,517	)		(14,462	)		(62,109	)		6,930			(15,469	)		36,257
Net increase (decrease) in net assets resulting from operations		(143,931	)		(2,310	)		(89,277	)		5,097			(22,556	)		59,156
Distributions to shareholders from
Net investment income
Class N		—			(9,482	)		—			—			—			(195	)
Class I		—			(30,923	)		—			—			—			(7,300	)
Institutional Class		—			—			—			(13,779	)		—			(4,603	)
Net realized gain
Class N		—			—			—			—			—			(29	)
Class I		—			—			—			—			—			(919	)
Institutional Class		—			—			—			(15,858	)		—			(557	)
Total distributions		—			(40,405	)		—			(29,637	)		—			(13,603	)
Capital stock transactions
Net proceeds from sale of shares		250,409			837,025			79,080			297,180			46,519			78,346
Shares issued in reinvestment of income dividends and capital gain distributions		—			36,885			—			28,849			—			11,877
Less cost of shares redeemed		(548,882	)		(835,938	)		(289,068	)		(305,026	)		(55,766	)		(184,116	)
Net increase (decrease) in net assets resulting from capital share transactions		(298,473	)		37,972			(209,988	)		21,003			(9,247	)		(93,893	)
Increase (decrease) in net assets		(442,404	)		(4,743	)		(299,265	)		(3,537	)		(31,803	)		(48,340	)
Net assets
Beginning of period		3,678,744			3,683,487			2,335,632			2,339,169			574,600			622,940
End of period	$	3,236,340		$	3,678,744		$	2,036,367		$	2,335,632		$	542,797		$	574,600
Accumulated net investment income (loss) at the end of the period	$	51,979		$	21,204		$	28,218		$	7,048		$	(2,107	)	$	(7,282	)

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

123

Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

	Emerging			Emerging			Emerging
	Markets			Markets			Markets
	Leaders			Growth			Small Cap
	Fund			Fund			Growth Fund
Assets
Investments in securities, at cost	$	140,044		$	925,164			$	268,057
Investment in affiliated fund, at cost		—			125				—
Investments in securities, at value	$	150,809		$	1,005,870			$	301,024
Investment in affiliated fund, at value		—			213				—
Foreign currency, at value (cost $465; $268; $3,792)		465			268				3,794
Receivable for securities sold		400			11,177				4,592
Receivable for fund shares sold		498			707				429
Receivable from Adviser		34			14				45
Dividend and interest receivable		528			3,466				1,146
Total assets		152,734			1,021,715				311,030
Liabilities
Payable for investment securities purchased		1,464			3,668				3,812
Payable for fund shares redeemed		15			481				51
Management fee payable		128			895				264
Shareholder administration fee payable		4			14				20
Distribution fee payable		—			2				2
Foreign capital gains tax liability		—			177				1,061
Other payables and accrued expenses		156			621				286
Total liabilities		1,767			5,858				5,496
Net assets	$	150,967		$	1,015,857			$	305,534
Capital
Composition of net assets
Par value of shares of beneficial interest	$	19		$	88			$	20
Capital paid in excess of par value		163,598			1,063,191				303,292
Accumulated net investment income (loss)		841			9,179				(491	)
Accumulated net realized gain (loss)		(24,252	)		(137,250	)			(29,202	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		10,761			80,649				31,915
Net assets	$	150,967		$	1,015,857			$	305,534

Class N shares
Net assets	$	1,876		$	9,350			$	10,903
Shares outstanding		232,571			820,242				728,354
Net asset value per share	$	8.07		$	11.40			$	14.97
Class I shares
Net assets	$	27,766		$	104,588			$	164,563
Shares outstanding		3,427,777			9,071,638				10,939,254
Net asset value per share	$	8.10		$	11.53			$	15.04
Institutional Class shares
Net assets	$	121,325		$	901,919			$	130,068
Shares outstanding		14,985,527			77,608,984				8,630,686
Net asset value per share	$	8.10		$	11.62			$	15.07

See accompanying Notes to Financial Statements.

124

Semiannual Report

June 30, 2016

Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

	Emerging Markets Leaders Fund			Emerging Markets Growth Fund			Emerging Markets Small Cap Growth Fund
Investment income
Dividends	$	1,756		$	12,676		$	4,444
Less foreign tax withheld		(183	)		(1,431	)		(335	)
Interest		—			3			—
Total income		1,573			11,248			4,109
Expenses
Investment advisory fees		686			4,846			1,534
Distribution fees		2			11			13
Shareholder administration fees		22			83			120
Custodian fees		50			146			111
Transfer agent fees		6			21			27
Sub-transfer agent fees
Class N		1			3			6
Class I		7			37			38
Professional fees		59			80			90
Registration fees		37			41			32
Shareholder reporting fees		9			6			19
Trustee fees		7			47			15
Other expenses		12			27			14
Total expenses before expense limitation		898			5,348			2,019
Expenses waived or reimbursed by the Adviser		(107	)		(83	)		(218	)
Net expenses		791			5,265			1,801
Net investment income (loss)		782			5,983			2,308
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign capital gains taxes, if applicable		(12,429	)		(71,295	)⁽¹⁾		(24,422	)
Foreign currency transactions		(85	)	��	(244	)		(508	)
Total net realized gain (loss)		(12,514	)		(71,539	)		(24,930	)
Change in net unrealized appreciation (depreciation) of:
Investments in securities		16,862			111,916	⁽²⁾		26,245
Foreign currency translations		(2	)		(141	)		(871	)
Change in net unrealized appreciation (depreciation)		16,860			111,775			25,374
Net increase (decrease) in net assets resulting from operations	$	5,128		$	46,219		$	2,752

(1)	Includes $1,931 related to an affiliated fund (William Blair China A-Share Fund, LLC).
(2)	Includes $(1,988) related to an affiliated fund (William Blair China A-Share Fund, LLC).

See accompanying Notes to Financial Statements.

June 30, 2016

William Blair Funds

125

Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

	Emerging Markets Leaders Fund						Emerging Markets Growth Fund						Emerging Markets Small Cap Growth Fund
	2016			2015			2016			2015			2016			2015
Operations
Net investment income (loss)	$	782		$	575	$		5,983		$	5,753		$	2,308		$	902
Net realized gain (loss) on investments, and other assets and liabilities		(12,514	)		(10,580	)		(71,539	)		(53,698	)		(24,930	)		3,803
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		16,860			(9,023	)		111,775			(91,961	)		25,374			(24,287	)
Net increase (decrease) in net assets resulting from operations		5,128			(19,028	)		46,219			(139,906	)		2,752			(19,582	)
Distributions to shareholders from
Net investment income
Class N		—			—			—			—			—			—
Class I		—			(105	)		—			—			—			—
Institutional Class		—			(331	)		—			—			—			(1	)
Net realized gain
Class N		—			(2	)		—			(107	)		—			(474	)
Class I		—			(44	)		—			(1,427	)		—			(6,262	)
Institutional Class		—			(126	)		—			(8,324	)		—			(4,988	)
Total distributions		—			(608	)		—			(9,858	)		—			(11,725	)
Capital stock transactions
Net proceeds from sale of shares		48,480			81,180			184,013			315,208			26,957			123,362
Shares issued in reinvestment of income dividends and capital gain distributions		—			549			—			8,609			—			9,559
Less cost of shares redeemed		(30,319	)		(40,597	)		(93,486	)		(280,776	)		(21,016	)		(58,676	)
Net increase (decrease) in net assets resulting from capital share transactions		18,161			41,132			90,527			43,041			5,941			74,245
Increase (decrease) in net assets		23,289			21,496			136,746			(106,723	)		8,693			42,938
Net assets
Beginning of period		127,678			106,182			879,111			985,834			296,841			253,903
End of period	$	150,967		$	127,678		$	1,015,857		$	879,111		$	305,534		$	296,841
Accumulated net investment income (loss) at the end of the period	$	841		$	59		$	9,179		$	3,196		$	(491	)	$	(2,799	)

See accompanying Notes to Financial Statements.

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Statements of Assets and Liabilities

As of June 30, 2016 (dollar amounts in thousands) (unaudited)

	Bond Fund			Income Fund			Low Duration Fund			Macro Allocation Fund
Assets
Investments in securities, at cost	$	542,943		$	90,711		$	145,842		$	1,380,859
Investments in affiliated companies, at cost		—			—			—			21,804
Repurchase agreement, at cost		5,763			992			1,656			307,110
Investments in securities, at value	$	563,865		$	92,355		$	146,370		$	1,395,435
Investments in affiliated companies, at value		—			—			—			17,714
Repurchase agreement, at value		5,763			992			1,656			307,110
Receivable for securities sold		—			—			10,277			35,565
Receivable for fund shares sold		606			360			125			7,247
Receivable for variation margin on centrally cleared swaps		—			—			—			63
Receivable from Adviser		91			—			25			149
Dividend and interest receivable		4,186			541			392			2,003
Unrealized appreciation on swap contracts		—			—			—			471
Unrealized appreciation on forward foreign currency contracts		—			—			—			4,582
Total assets		574,511			94,248			158,845			1,770,339
Liabilities
Securities sold, not yet purchased (proceeds $—; $—; $10,277; $—)		—			—			10,347			—
Option written, at value (proceeds $—; $—; $—; $6,354)		—			—			—			5,439
Payable for futures variation margin		—			—			—			5,401
Payable for variation margin on centrally cleared swaps		38			—			—			—
Payable for investment securities purchased		—			—			—			4,934
Payable for fund shares redeemed		942			376			171			2,800
Swap premium received		—			—			—			4,541
Unrealized depreciation on swap contracts		—			—			—			9,513
Management fee payable		139			31			36			1,145
Shareholder administration fee payable		56			—			15			149
Distribution fee payable		19			4			1			22
Distributions payable to shareholders		130			12			7			—
Other payables and accrued expenses		63			48			47			561
Total liabilities		1,387			471			10,624			34,505
Net assets	$	573,124		$	93,777		$	148,221		$	1,735,834
Capital
Composition of net assets
Par value of shares of beneficial interest	$	54		$	10		$	16		$	152
Capital paid in excess of par value		559,561			113,664			166,141			1,899,254
Accumulated net investment income (loss)		(2,546	)		(486	)		(756	)		(7,175	)
Accumulated net realized gain (loss)		(4,857	)		(21,055	)		(17,638	)		(164,275	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		20,912			1,644			458			7,878
Net assets	$	573,124		$	93,777		$	148,221		$	1,735,834
Class N shares
Net assets	$	151,711		$	35,122		$	6,561		$	102,369
Shares outstanding		14,179,156			3,889,307			716,010			9,018,717
Net asset value per share	$	10.70		$	9.03		$	9.16		$	11.35
Class I shares
Net assets	$	313,945		$	58,655		$	116,168		$	1,100,027
Shares outstanding		29,641,378			6,542,238			12,680,265			96,244,825
Net asset value per share	$	10.59		$	8.97		$	9.16		$	11.43
Institutional Class shares
Net assets	$	107,468			—		$	25,492		$	533,438
Shares outstanding		10,154,228			—			2,782,839			46,591,394
Net asset value per share	$	10.58			—		$	9.16		$	11.45

See accompanying Notes to Financial Statements.

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Statements of Operations

For the Period Ended June 30, 2016 (all amounts in thousands) (unaudited)

	Bond Fund			Income Fund		Low Duration Fund			Macro Allocation Fund
Investment income
Dividends	$	—		$	—	$	—		$	11,457
Interest		8,698			1,297		1,279			725
Total income		8,698			1,297		1,279			12,182
Expenses
Investment advisory fees		788			183		212			6,864
Distribution fees		108			25		4			155
Shareholder administration fees		315			—		86			911
Custodian fees		31			18		26			62
Transfer agent fees		23			7		8			228
Sub-transfer agent fees
Class N		91			20		2			69
Class I		82			9		11			475
Professional fees		21			17		23			128
Registration fees		54			19		24			143
Shareholder reporting fees		13			4		1			79
Trustee fees		25			5		7			93
Other expenses		15			5		9			187
Total expenses before expense limitation		1,566			312		413			9,394
Expenses waived or reimbursed by the Adviser		(370	)		—		(114	)		(911	)
Net expenses		1,196			312		299			8,483
Net investment income (loss)		7,502			985		980			3,699
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities		(2,489	)		22		(303	)		(4,675	)⁽¹⁾
Options		—			—		—			(7,569	)
Futures contracts		—			—		—			(54,651	)
Swaps		(121	)		—		—			(4,365	)
Forward foreign currency contracts		—			—		—			24,603
Foreign currency transactions		—			—		—			29
Total net realized gain (loss)		(2,610	)		22		(303	)		(46,628	)
Change in net unrealized appreciation (depreciation) of:
Investments in securities		23,242			1,909		1,042			51,890	⁽²⁾
Options		—			—		—			1,432
Futures contracts		—			—		—			(666	)
Swaps		27			—		—			(6,179	)
Forward foreign currency contracts		—			—		—			2,849
Foreign currency translations		—			—		—			39
Change in net unrealized appreciation (depreciation)		23,269			1,909		1,042			49,365
Net increase (decrease) in net assets resulting from operations	$	28,161		$	2,916	$	1,719		$	6,436

(1) Includes $(465) from companies deemed affiliated during the period.

(2) Includes $(526) from companies deemed affiliated during the period.

See accompanying Notes to Financial Statements.

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Statements of Changes in Net Assets

For the Period Ended June 30, 2016 (unaudited) and the Year Ended December 31, 2015 (all amounts in thousands)

	Bond Fund						Income Fund						Low Duration Fund						Macro Allocation Fund
	2016			2015			2016			2015			2016			2015			2016			2015

Operations
Net investment income (loss)	$	7,502		$	9,519		$	985		$	1,862		$	980		$	1,409		$	3,699		$	10,368
Net realized gain (loss) on investments, and other assets and liabilities		(2,610	)		514			22			(88	)		(303	)		(652	)		(46,628	)		(107,732	)
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		23,269			(11,340	)		1,909			(1,268	)		1,042			(267	)		49,365			(40,618	)
Net increase (decrease) in net assets resulting from operations		28,161			(1,307	)		2,916			506			1,719			490			6,436			(137,982	)
Distributions to shareholders from
Net investment income
Class N		(2,653	)		(1,822	)		(500	)		(1,007	)		(65	)		(95	)		—			(915	)
Class I		(5,350	)		(6,812	)		(981	)		(1,971	)		(1,364	)		(2,839	)		—			(10,747	)
Institutional Class		(2,069	)		(3,598	)		—			—			(329	)		(1,185	)		—			(4,368	)
Total distributions		(10,072	)		(12,232	)		(1,481	)		(2,978	)		(1,758	)		(4,119	)		—			(16,030	)
Capital stock transactions
Net proceeds from sale of shares		129,387			300,131			8,147			24,005			34,631			47,534			394,582			1,559,297
Shares issued in reinvestment of income dividends and capital gain distributions		8,761			9,535			1,338			2,686			1,467			3,096			—			14,020
Less cost of shares redeemed		(63,907	)		(78,860	)		(12,807	)		(27,409	)		(19,550	)		(92,786	)		(397,071	)		(646,104	)
Net increase (decrease) in net assets resulting from capital share transactions		74,241			230,806			(3,322	)		(718	)		16,548			(42,156	)		(2,489	)		927,213
Increase (decrease) in net assets		92,330			217,267			(1,887	)		(3,190	)		16,509			(45,785	)		3,947			773,201
Net assets
Beginning of period		480,794			263,527			95,664			98,854			131,712			177,497			1,731,887			958,686
End of period	$	573,124		$	480,794		$	93,777		$	95,664		$	148,221		$	131,712		$	1,735,834		$	1,731,887
Accumulated net investment income (loss) at the end of the period	$	(2,546	)	$	24		$	(486	)	$	10		$	(756	)	$	22		$	(7,175	)	$	(10,874	)

See accompanying Notes to Financial Statements.

June 30, 2016

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Notes to Financial Statements

(1) Organization

(a) Description of the Trust

William Blair Funds (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-two funds (the “Funds”), each with its own investment objective and policies. For each Fund, the number of shares authorized is unlimited.

Domestic Equity Funds	International Equity Funds
Growth	International Leaders
Large Cap Growth	International Equity
Mid Cap Growth	Institutional International Equity
Mid Cap Value	International Growth
Small-Mid Cap Growth	Institutional International Growth
Small-Mid Cap Value	International Small Cap Growth
Small Cap Growth	Emerging Markets Leaders
Small Cap Value	Emerging Markets Growth
Global Equity Fund	Emerging Markets Small Cap Growth
Global Leaders	Fixed Income Funds
Multi-Asset and Alternative Fund	Bond
Macro Allocation	Income
	Low Duration

Prior to July 1, 2015, William Blair & Company, L.L.C. (“WBC” or the “Distributor”) served as both the Trust’s investment adviser and the Trust’s principal underwriter and distributor. Effective July 1, 2015, WBC transferred the management agreement for the Trust to William Blair Investment Management, LLC (“WBIM”). There were no changes to the Funds’ portfolio management teams or principal investment strategies as a result of the transfer. Any reference to the “Adviser” prior to July 1, 2015 should be read to mean WBC; any reference to the “Adviser” subsequent to July 1, 2015 should be read to mean WBIM. WBC continues to serve as the principal underwriter and distributor of the Trust.

(b) Share Classes

Three different classes of shares currently exist: N, I and Institutional.

Class N shares are offered 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 Domestic Equity, Global Equity, International Equity and Multi-Asset and Alternative Funds and 0.15% for the Fixed Income Funds), 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 Global Leaders, International Leaders, International Small Cap Growth, Emerging Markets Leaders, Emerging Markets Growth, Emerging Markets Small Cap Growth, Bond, Low Duration and Macro Allocation Funds). The shareholder administration fee is currently being waived. This waiver will not be removed without approval of the Board of Trustees.

Class I shares are offered to a limited group of investors. They do not carry any sales load or distribution fees and generally have lower ongoing expenses than 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 an annual shareholder administration fee (0.15% for Global Leaders, International Leaders, International Small Cap Growth, Emerging Markets Leaders, Emerging Markets Growth, Emerging Markets Small Cap Growth, Bond, Low Duration and Macro Allocation Funds). The shareholder administration fee is currently being waived. This waiver will not be removed without approval of the Board of Trustees.

Institutional Class shares are offered to institutional investors, including but not limited to employee benefit plans, endowments, foundations, trusts and corporations, who are able to meet the share class’s high minimum investment requirement. The minimum initial investment required is $5 million.

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Sub-transfer agent fees: For Class N and Class I shares, the Funds may reimburse WBC for fees paid to intermediaries such as banks, broker-dealers, financial advisers or other financial institutions for sub-administration, sub-transfer agency and other services provided to investors whose shares are held of record 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.

(c) Fund Objectives

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).
Multi-Asset and Alternative	Maximize long-term risk-adjusted total return.

(2) Significant Accounting Policies

The following is a summary of the Trust’s significant accounting policies in effect during the periods covered by the financial statements, which are in accordance with U.S. generally accepted accounting principles, which includes the accounting and reporting guidelines under Accounting Standards Topic 946, Financial Services—Investment Companies.

(a) Investment income and transactions

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.

Dividend income and expense are recorded on the ex-dividend date, except for those dividends from certain foreign securities that are recorded when the information is available.

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 Macro Allocation Funds were the rates in effect on June 30, 2016. Put bonds may be redeemed at the discretion of the holder on specified dates prior to maturity.

Premiums and discounts are amortized and accreted 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, 2016, the Bond, Income and Low Duration Funds recognized a reduction of interest income and a corresponding decrease of net realized loss of $2,651, $487 and $779, respectively (in thousands). This reclassification had no effect on the net asset value or the net assets of the Funds.

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131

The Funds do not isolate the portion of operations resulting from fluctuations in foreign currency exchange rates on investments from the fluctuations arising from changes in the value of securities held. Such currency 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 year 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.

(b) 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 “NYSE”), which is generally 4:00 p.m. Eastern time, on each day the NYSE is open.

Distributions from net investment income, if any, for all Equity and Multi-Asset and Alternative Funds are declared and paid at least annually. Distributions from net investment income for the Bond, Income and Low Duration Funds are declared daily and paid monthly. Capital gain distributions, if any, for all Funds, are declared and paid at least annually in December. Distributions payable to shareholders are recorded on the ex-dividend date.

(c) Foreign Currency Translation

The 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 NYSE. 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.

(d) Income Taxes

Each Fund intends to comply with the provisions of Subchapter M of the Internal Revenue Code, as amended (the “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. Such taxes, if applicable, are included within net realized gain (loss) on transactions from investments in securities on the Statement of Operations.

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’ prior three years tax returns remain open and the returns are subject to examination.

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Adjustments to the cost of investments for tax purposes are due to the deferred loss associated with current and prior year wash sales, income recognition from investments in real estate investment trusts and partnerships, and the Funds’ election to mark-to-market their investments in Passive Foreign Investment Companies (“PFICs”). The cost of investments for federal income tax purposes and related gross unrealized appreciation (depreciation) and net unrealized appreciation/(depreciation) at June 30, 2016, were as follows (in thousands):

				Net
		Gross	Gross	Unrealized
	Cost of	Unrealized	Unrealized	Appreciation/
Fund	Investments	Appreciation	Depreciation	(Depreciation)
Growth	$608,935	$168,237	$(14,123)	$154,114
Large Cap Growth	70,861	15,008	(1,359)	13,649
Mid Cap Growth	133,436	19,367	(5,334)	14,033
Mid Cap Value	2,957	593	(105)	488
Small-Mid Cap Growth	1,078,076	183,912	(33,168)	150,744
Small-Mid Cap Value	3,837	780	(196)	584
Small Cap Growth	299,241	61,450	(12,097)	49,353
Small Cap Value	482,103	116,754	(23,375)	93,379
Global Leaders	160,449	19,636	(4,050)	15,586
International Leaders	181,687	16,400	(4,950)	11,450
International Equity	65,205	8,280	(3,080)	5,200
Institutional International Equity	14,776	1,650	(762)	888
International Growth	2,928,534	335,748	(114,648)	221,100
Institutional International Growth	1,835,812	203,503	(77,342)	126,161
International Small Cap Growth	478,049	69,897	(22,650)	47,247
Emerging Markets Leaders	139,577	9,380	(1,983)	7,397
Emerging Markets Growth	940,601	76,299	(17,810)	58,489
Emerging Markets Small Cap Growth	268,751	34,432	(3,738)	30,694
Bond	543,078	22,222	(1,435)	20,787
Income	90,710	2,018	(374)	1,644
Low Duration	135,569	1,207	(753)	454
Macro Allocation	1,400,992	30,680	(23,962)	6,718

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, PFIC gains and losses, expiration of capital loss carryforward, paydown gains and losses, investments in real estate investment trusts and partnerships, and utilization of earnings and profits distributed to shareholders on redemption of shares. These reclassifications have no impact on the net asset values of the Funds. Accordingly, at December 31, 2015, the following reclassifications were recorded (in thousands):

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	Accumulated			Accumulated
	Undistributed			Undistributed			Capital Paid
	Net Investment			Net Realized			in Excess
Fund	Income (Loss)			Gain/(Loss)			of Par Value
Growth		$ 250			$ 118			$ (368	)
Large Cap Growth		4			(4	)		—
Mid Cap Growth		1,275			13			(1,288	)
Mid Cap Value		(5	)		4			1
Small-Mid Cap Growth		3,239			513			(3,752	)
Small-Mid Cap Value		(6	)		7			(1	)
Small Cap Growth		3,146			193			(3,339	)
Small Cap Value		(808	)		808			—
Global Leaders		(187	)		187			—
International Leaders		(34	)		34			—
International Equity		(4	)		3			1
Institutional International Equity		(1	)		3			(2	)
International Growth		3,097			(3,097	)		—
Institutional International Growth		1,512			(1,512	)		—
International Small Cap Growth		6,190			(6,188	)		(2	)
Emerging Markets Leaders		150			(147	)		(3	)
Emerging Markets Growth		1,131			(1,134	)		3
Emerging Markets Small Cap Growth		(1,847	)		2,305			(458	)
Bond		2,735			(2,734	)		(1	)
Income		1,116			8,074			(9,190	)
Low Duration		2,732			(2,732	)		—
Macro Allocation		(9,335	)		9,335			—

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.

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 2015 and 2014 was as follows (in thousands):

	Distributions Paid in 2015								Distributions Paid in 2014
	Ordinary				Long-Term				Ordinary				Long-Term
	Income				Capital Gains				Income				Capital Gains
Fund	Class N		Class I		Class N		Class I		Class N		Class I		Class N		Class I
Growth		$ 416		$ 1,808		$ 18,110		$ 78,627		$2,675		$ 6,408		$35,886		$85,974
Large Cap Growth		17		89		954		5,176		60		342		706		4,053
Mid Cap Growth		—		—		5,530		35,853		—		—		4,943		43,297
Mid Cap Value		2		10		149		438		2		50		23		442
Small-Mid Cap Growth		13		75		8,551		50,513		—		—		6,031		62,751
Small-Mid Cap Value		1		10		44		162		12		54		64		224
Small Cap Growth		—		—		9,437		20,150		940		2,145		24,996		56,995
Small Cap Value		—		1,363		107		1,836		34		1,020		1,401		18,381
Global Leaders		3		152		252		2,063		—		75		8		85
International Leaders		1		22		2		73		1		71		—		1
International Equity		26		750		—		—		21		576		—		—
International Growth		9,482		30,923		—		—		8,591		33,318		—		—
International Small Cap Growth		195		7,300		29		919		153		5,751		1,829		53,860

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	Distributions Paid in 2015								Distributions Paid in 2014
	Ordinary				Long-Term				Ordinary				Long-Term
	Income				Capital Gains				Income				Capital Gains
Fund	Class N		Class I		Class N		Class I		Class N		Class I		Class N		Class I
Emerging Markets Leaders	$	—	$	105	$	2	$	44	$	—	$	69	$	33	$	718
Emerging Markets Growth		—		—		107		1,427		75		1,350		688		8,980
Emerging Markets Small Cap Growth		—		—		474		6,262		15		558		434		4,997
Bond		1,822		6,812		—		—		463		5,570		—		3
Income		1,007		1,971		—		—		1,089		1,984		—		—
Low Duration		95		2,839		—		—		138		3,119		—		—
Macro Allocation		915		10,747		—		—		7,774		32,682		—		—

	Distributions Paid in 2015				Distributions Paid in 2014
	Ordinary		Long-Term		Ordinary		Long-Term
	Income		Capital Gains		Income		Capital Gains
	Institutional		Institutional		Institutional		Institutional
Global Leaders		$ 552		$ 6,144		$ 301		$ 165
International Leaders		323		578		738		8
Institutional International Equity		156		—		293		—
Institutional International Growth		13,779		15,858		47,484		186,607
International Small Cap Growth		4,603		557		4,140		32,999
Emerging Markets Leaders		331		126		303		1,894
Emerging Markets Growth		—		8,324		7,711		42,214
Emerging Markets Small Cap Growth		1		4,988		732		5,385
Bond		3,598		—		3,958		2
Low Duration		1,185		—		1,371		—
Macro Allocation		4,368		—		8,256		—

As of December 31, 2015, the components of distributable earnings on a tax basis were as follows (in thousands):

			Accumulated			Undistributed		Net Unrealized
	Undistributed		Capital and			Long-Term		Appreciation/
Fund	Ordinary Income		Other Losses			Capital Gain		(Depreciation)
Growth		$ —		$ —			$13,627		$ 169,039
Large Cap Growth		57		(301	)		—		12,641
Mid Cap Growth		—		—			7,330		11,482
Mid Cap Value		6		—			108		380
Small-Mid Cap Growth		—		—			8,148		145,266
Small-Mid Cap Value		4		—			28		327
Small Cap Growth		—		—			4,135		36,487
Small Cap Value		237		—			6,259		62,105
Global Leaders		—		(23	)		794		17,012
International Leaders		595		(65	)		—		9,858
International Equity		850		(74,849	)		—		4,813
Institutional International Equity		2		(90,033	)		—		703
International Growth		34,033		(395,163	)		—		290,964
Institutional International Growth		14,993		(38,368	)		—		176,546
International Small Cap Growth		—		(1,400	)		96		55,847
Emerging Markets Leaders		77		(8,757	)		—		(9,098	)
Emerging Markets Growth		4,462		(51,589	)		—		(46,514	)
Emerging Markets Small Cap Growth		—		(2,116	)		796		790
Bond		2		(2,339	)		—		(2,243	)
Income		15		(21,125	)		—		(219	)
Low Duration		65		(17,424	)		—		(495	)
Macro Allocation		—		(122,596	)		—		(47,412	)

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As of December 31, 2015, 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	2016		2017		2018		Total
International Equity	$	—	$	74,815	$	—	$	74,815
Institutional International Equity		—		90,030		—		90,030
International Growth		—		358,606		—		358,606
Income		14,459		4,577		—		19,036
Low Duration		—		—		955		955

Income Fund had $9,190 (in thousands) of capital loss carryforward that expired in 2015 unused.

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 in which 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, 2015, the Funds incurred the following capital losses which will not expire (in thousands):

	Short-		Long-
Fund	Term		Term
International Leaders	$	65	$	—
International Growth		36,557		—
Institutional International Growth		34,229		—
Emerging Markets Leaders		5,694		—
Emerging Markets Growth		27,954		—
Bond		1,545		794
Income		787		1,194
Low Duration		8,090		8,099
Macro Allocation		75,778		37,778

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 short term or long term capital losses incurred between November 1 and the end of their fiscal year, December 31, 2015. 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, 2015.

As of December 31, 2015, the following Funds deferred, on a tax basis, qualified late year losses of (in thousands):

	Qualified Late Year Losses
Fund	Ordinary Income		Short-Term Capital		Long-Term Capital
Large Cap Growth	$	—	$	141	$	160
Global Leaders		23		—		—
International Equity		—		34		—
Institutional International Equity		3		—		—
Institutional International Growth		—		4,139		—
International Small Cap Growth		1,400		—		—
Emerging Markets Leaders		—		2,797		266
Emerging Markets Growth		—		20,829		2,806
Emerging Markets Small Cap Growth		—		2,116		—
Income		—		75		33
Low Duration		—		115		165
Macro Allocation		9,040		—		—

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(e) 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 collateral. The Adviser monitors, on an ongoing basis, the value of the underlying collateral to ensure that the value always equals or exceeds the repurchase price plus accrued interest. Repurchase agreements may 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 collateral. 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. The Funds have master repurchase agreements which allow the Funds to offset amounts owed to a counterparty with amounts owed from the same counterparty, including any collateral, in the event the counterparty defaults. As of June 30, 2016, each Fund’s outstanding repurchase agreements, if any, and related collateral, are shown on the Fund’s Portfolio of Investments. Although no definitive creditworthiness criteria are used, the Adviser 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.

(f) TBA Securities

The Fixed Income Funds may invest in mortgage pass-through securities eligible to be sold in the “to-be announced” market (“TBAs”). TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The term TBA comes from the fact that the specific mortgage-backed security that will be delivered to fulfill a TBA trade is not designated at the time the trade is made, but rather is generally announced 48 hours before the settlement date. When a Fund sells TBAs, it incurs a risk of loss because it could have to purchase the securities at a price that is higher than the price at which it sold the securities. A Fund generally has the ability to close out a TBA obligation on or before the settlement date, rather than take delivery of the security.

(g) Securities Sold, Not Yet Purchased

A Fund may sell a security it does not own in anticipation of a decline in the fair value of that security. When a fund sells a security short, it must borrow the security sold short and deliver it to the broker through which it made the short sale. A gain, limited to the price at which the fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale. A fund is also subject to the risk that it may be unable to reacquire a security to terminate a short position except at a price substantially in excess of the price it sold the security short.

(h) 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.

(i) 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.

(j) Redemption In-Kind

In accordance with the Trust’s prospectus, the Funds may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the Fund recognizes a gain or loss on the transfer of securities depending on the value of those securities on the date of redemption. Gains and losses realized on in-kind redemptions may not be recognized for tax purposes and are reclassified from accumulated net realized gain (loss) to capital paid in excess of par value. During the period ended June 30, 2016, the Small-Mid Cap Growth and Institutional International Growth Funds redeemed in-kind fund share redemptions of $47,902 and $210,330 (in thousands), respectively, with securities rather than cash and recognized net realized gains of $13,849 and $23,687 (in thousands), respectively, on the securities distributed to shareholders.

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(3) Valuation

(a) Investment Valuation

The value of domestic equity securities, including exchange-traded funds, 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, at the mean between the last reported bid and ask prices.

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, at the mean between the last reported bid and ask prices. 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 price the security as of the close of regular trading on the NYSE. 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 prices).

Fixed income securities are generally valued using evaluated prices provided by an independent pricing service. The evaluated prices are formed using various market inputs that the pricing service believes accurately represent the 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.

Repurchase agreements are valued at cost, which approximates fair value.

Option contracts on securities, currencies and other financial instruments traded on one or more exchanges are valued at their most recent sale price on the exchange on which they are traded most extensively. Option contracts on foreign indices are valued at the settlement price. Futures contracts (and options and swaps thereon) are valued at the most recent settlement price on the exchange on which they are traded most extensively. Forward foreign currency contracts are valued on the basis of the value of the underlying currencies at the prevailing currency exchange rate as supplied by an independent pricing service.

Over-the-Counter (“OTC”) swap contracts are valued by an independent pricing service. Depending on the product and the terms of the transaction, the independent pricing service may use a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, yield curves, dividends and exchange rates.

Centrally cleared swaps listed or settled on a multilateral or trade facility platform, such as a registered exchange, are valued at the daily settlement price determined by the respective exchange. For centrally cleared credit default swaps the clearing facility requires its members to provide actionable price levels across complete term structures. These levels along with external third-party prices are used to produce daily settlement prices.

Investments in other investment funds that are not exchange-traded funds are valued at the underlying fund’s ending net asset value on the date of valuation.

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 Valuation Procedures approved by the Board of Trustees. The value of fair valued securities may be different from the last sale price (or the mean between the last reported bid and ask prices), and there is no guarantee that a fair valued security will be sold at the price at which a Fund is carrying the security.

As of June 30, 2016, there were securities held in the International Growth, Institutional International Growth and Emerging Markets Small Cap Growth Funds requiring fair valuation pursuant to the Valuation Procedures.

(b) 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.

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	•	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 at which 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.

A description of the valuation technique applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis as follows:

Exchange-Traded Securities

Securities traded on a national securities exchange (or reported on the NASDAQ national market), including exchange-traded funds, are stated at the last reported sales price on the day of valuation. Other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the mean between the last reported bid and ask prices. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Securities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.

Fixed Income Securities

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities and non-U.S. bonds are generally valued using evaluated prices provided by an independent pricing service. The evaluated prices are formed using various market inputs that the pricing service believes accurately represent the fair 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 that use similar valuation techniques and observable inputs as described above are categorized as Level 2 of the fair value hierarchy.

Short-Term Investments

Repurchase agreements are valued at cost, which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

Derivative Instruments

Listed derivatives, such as certain options and futures contracts, that are actively traded are valued based on quoted prices from the exchange on which they are traded most extensively and are categorized as Level 1 of the fair value hierarchy. OTC derivative contracts include forward foreign currency contracts, swap and certain option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices, or commodity prices. Depending on the product and the terms of the transaction, the fair value of OTC derivative products can be modeled taking into account the counterparties’ creditworthiness and using a series of techniques, including simulation models. Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgments and the pricing inputs are observed from actively quoted markets, as is the case of forward foreign currency contracts and interest rate swaps. A substantial majority of OTC derivative products valued by a Fund using pricing models fall into this category and are categorized as Level 2 of the fair value hierarchy.

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. Transfer amounts are based on end of period values.

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As of June 30, 2016, the hierarchical input levels of securities in each Fund, segregated by security class or other financial instruments, are as follows (in thousands):

Investments in securities		Growth	Large Cap Growth	Mid Cap Growth	Mid Cap Value
Level 1—Quoted prices
Common Stocks		$763,049	$84,510	$147,469	$3,445
Level 2—Other significant observable inputs
Short-Term Investments		40,582	922	5,673	104
Level 3—Significant unobservable inputs
None		—	—	—	—
Total investments in securities		$803,631	$85,432	$153,142	$3,549

Investments in securities		Small-Mid Cap Growth	Small-Mid Cap Value	Small Cap Growth	Small Cap Value
Level 1—Quoted prices
Common Stocks		$1,228,820	$4,421	$341,020	$575,482
Exchange-Traded Fund		—	—	7,574	—
Level 2—Other significant observable inputs
Short-Term Investments		26,223	112	10,008	16,816
Level 3—Significant unobservable inputs
None		—	—	—	—
Total investments in securities		$1,255,043	$4,533	$358,602	$592,298

Investments in securities	Global Leaders	International Leaders	International Equity	Institutional International Equity	International Growth
Level 1—Quoted prices
Common Stocks	$116,570	$ 34,788	$16,209	$ 3,632	$ 568,455
Level 2—Other significant observable inputs
Affiliated Fund	—	—	—	—	174
Common Stocks	59,465	158,349	54,196	12,032	2,581,005
Short-Term Investments	3,535	3,735	320	117	84,835
Level 3—Significant unobservable inputs
Common Stocks	—	—	—	—	—
Total investments in securities	$179,570	$196,872	$70,725	$15,781	$3,234,469
Level 1 and Level 2 transfers
Transfers from Level 1 to Level 2 (a)	$ 50,539	$126,833	$45,195	$10,017	$2,003,629
Transfers from Level 2 to Level 1	—	—	—	—	—

Investments in securities	Institutional International Growth	International Small Cap Growth	Emerging Markets Leaders	Emerging Markets Growth	Emerging Markets Small Cap Growth
Level 1—Quoted prices
Common Stocks	$ 354,135	$ 67,896	$ 38,458	$ 266,445	$ 59,458
Preferred Stock	—	—	1,566	5,553	—
Level 2—Other significant observable inputs
Affiliated Fund	108	—	—	213	—
Common Stocks	1,607,730	457,400	106,950	726,879	239,502
Short-Term Investments	64,947	19,794	3,835	6,993	1,579
Level 3—Significant unobservable inputs
Common Stocks	—	—	—	—	485
Total investments in securities	$2,026,920	$545,090	$150,809	$1,006,083	$301,024
Level 1 and Level 2 transfers
Transfers from Level 1 to Level 2 (a)	$1,248,106	$344,994	$ 69,028	$ 473,724	$156,056
Transfers from Level 2 to Level 1	—	—	—	—	—

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Investments in securities	Bond			Income		Low Duration			Macro Allocation
Assets
Level 1—Quoted Prices
Exchange-Traded Funds	$	—		$	—	$	—		$	1,106,584
Purchased Options		2			1		2			5,715
Level 2—Other significant observable inputs
Asset-Backed Securities		13,805			8,625		36,020			—
Commercial Paper		5,000			—		—			—
Corporate Obligation/Notes		256,931			29,773		28,019			—
Purchased Options		—			—		—			208
Short-Term Investments		5,763			992		1,656			307,110
U.S. Government and U.S. Government Agency		288,127			53,956		82,329			300,642
Level 3—Significant unobservable inputs
None		—			—		—			—
Liabilities
Level 1 - Quoted Prices
Written Options		—			—		—			(5,439	)
Level 2 - Other significant observable inputs
None		—			—		—			—
Level 3 - Significant unobservable inputs
None		—			—		—			—
Total investments in securities	$	569,628		$	93,347	$	148,026		$	1,714,820
Other financial instruments
Assets
Level 1—Quoted Prices
Futures Contracts	$	—		$	—	$	—		$	11,307
Level 2—Other significant observable inputs
Forward Foreign Currency Contracts		—			—		—			24,581
Swaps		—			—		—			5,085
Level 3—Significant unobservable inputs
None		—			—		—			—
Liabilities
Level 1—Quoted Prices
Futures Contracts		—			—		—			(7,867	)
Level 2—Other significant observable inputs
Forward Foreign Currency Contracts		—			—		—			(19,999	)
Futures Contracts		—			—		—			(1,478	)
Swaps		(10	)		—		—			(15,048	)
U.S Government and U.S. Government Agency		—			—		(10,347	)		—
Level 3—Significant unobservable inputs
None		—			—		—			—
Total other financial instruments	$	(10	)	$	—	$	(10,347	)	$	(3,419	)

(a)	Fair valuation estimates were obtained from the Funds’ pricing vendor and applied to certain foreign securities at June 30, 2016, but not at December 31, 2015.

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 and Emerging Markets Small Cap Growth Funds were determined in good faith by the Pricing Committee, pursuant to the Valuation Procedures approved 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 and market trends that influence its performance. Level 3 securities represented 0.00%, 0.00%, and 0.16% as a percentage of net assets in the International Growth, Institutional International Growth and Emerging Markets Small Cap Growth Funds, respectively. The change in net unrealized gain (loss) related to those securities held at June 30, 2016 is included in the change in net unrealized appreciation (depreciation) of investments on the Statements of Operations.

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(4) Transactions with Affiliates

(a) Management and Expense Limitation Agreements

Each Fund has a management agreement with the Adviser for investment management, clerical, bookkeeping and administrative services. Each Fund pays the Adviser 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	0.70	%
Mid Cap Growth	0.95	%
Mid Cap Value	0.95	%
Small-Mid Cap Growth	1.00	%
Small-Mid Cap Value	1.00	%
Small Cap Growth	1.10	%
Small Cap Value	1.10	%

Fixed Income Funds
Bond	0.30	%
Income¹:
First $250 million	0.25	%
In excess of $250 million	0.20	%
Low Duration	0.30	%

Multi-Asset and Alternative Fund
Macro Allocation	0.80	%

Global Equity Fund
Global Leaders	1.00	%

International Equity Funds
International Leaders	0.95	%
International Equity:
First $250 million	1.00	%
In excess of $250 million	0.90	%
Institutional International Equity:
First $500 million	0.90	%
Next $500 million	0.85	%
In excess of $1 billion	0.80	%
International Growth:
First $250 million	1.10	%
Next $2.25 billion	1.00	%
Next $2.5 billion	0.975	%
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 Small Cap Growth	1.00	%
Emerging Markets Leaders	1.10	%
Emerging Markets Growth	1.10	%
Emerging Markets Small Cap Growth	1.10	%

1	Management fee also includes a charge of 5% of gross income.

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Some of the Funds have also entered into an Amended and Restated Expense Limitation Agreement with the Adviser. Under the terms of the agreement, the Adviser will waive its management fee and/or reimburse a Fund for expenses in excess of the agreed upon rate. The amount the Adviser owes a Fund as of the reporting date is recorded as Receivable from Adviser on the Statements of Assets and Liabilities. The Adviser reimburses the Funds on a monthly basis. Under the terms of the agreement, the Adviser has agreed to waive its management fees and/or absorb other operating expenses through April 30, 2017, 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, 2016 through April 30, 2017		Effective May 1, 2015 through April 30, 2016		Effective May 1, 2016 through April 30, 2017		Effective May 1, 2015 through April 30, 2016		Effective May 1, 2016 through April 30, 2017		Effective May 1, 2015 through April 30, 2016
Growth	N/A		N/A		N/A		N/A		N/A		N/A
Large Cap Growth	1.05	%	1.05	%	0.80	%	0.80	%	N/A		N/A
Mid Cap Growth	1.30	%	1.30	%	1.05	%	1.05	%	N/A		N/A
Mid Cap Value	1.30	%	1.30	%	1.05	%	1.05	%	N/A		N/A
Small-Mid Cap Growth	1.35	%	1.35	%	1.10	%	1.10	%	N/A		N/A
Small-Mid Cap Value	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
Small Cap Value	1.50	%	1.50	%	1.25	%	1.25	%	N/A		N/A
Global Leaders	1.40	%	1.40	%	1.15	%	1.15	%	1.00	%	1.00	%
International Leaders	1.35	%	1.35	%	1.10	%	1.10	%	0.95	%	0.95	%
International Equity	1.30	%	1.30	%	1.05	%	1.05	%	N/A		N/A
Institutional International Equity	N/A		N/A		N/A		N/A		1.00	%	1.00	%
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 Small Cap Growth	1.65	%	1.65	%	1.40	%	1.40	%	1.25	%	1.25	%
Emerging Markets Leaders	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 Small Cap Growth	1.65	%	1.65	%	1.40	%	1.40	%	1.25	%	1.25	%
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	%
Macro Allocation	1.35	%	1.35	%^(a)	1.10	%	1.10	%^(a)	0.95	%	0.95	%^(a)

(a)	Effective March 1, 2015 through April 30, 2016.

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For the period ended June 30, 2016, the fee waivers and/or reimbursements received by each Fund (including the expense limitation described above and the shareholder administration fee waiver described below) were as follows (in thousands):

Fund	Fund Level Waiver	Class N Specific Waiver	Class I Specific Waiver	Total Waiver
Large Cap Growth	30	7	20	57
Mid Cap Growth	37	14	91	142
Mid Cap Value	53	—	—	53
Small-Mid Cap Growth	—	71	377	448
Small-Mid Cap Value	60	—	1	61
Small Cap Growth	—	50	69	119
Small Cap Value	—	7	96	103
Global Leaders	98	4	33	135
International Leaders	114	—	12	126
International Equity	74	1	26	101
Institutional International Equity	54	—	—	54
International Small Cap Growth	—	8	252	260
Emerging Markets Leaders	85	1	21	107
Emerging Markets Growth	—	7	76	83
Emerging Markets Small Cap Growth	98	8	112	218
Bond	52	111	207	370
Low Duration	28	4	82	114
Macro Allocation	—	93	818	911

(b) Underwriting, Distribution Services, and Shareholder Administration Agreements

Pursuant to separate Underwriting and Distribution Agreements, WBC is the principal underwriter and distributor for the continuous offering of shares of the Trust and acts as agent of the Trust in the sale of its shares. The Underwriting Agreement provides that the Distributor will use its best efforts to distribute the Trust’s shares. The Distributor is not compensated under the Underwriting Agreement.

Each Fund, except the Institutional International Equity Fund and Institutional International Growth Fund, has a Distribution Agreement with WBC for distribution services to the Funds’ Class N shares. Each Fund pays WBC 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 Bond, Income and Low Duration Funds, which is 0.15%. Pursuant to the Distribution Agreement, WBC enters into related selling group agreements with various firms at various rates for sales of the Funds’ Class N shares.

The Global Leaders, International Leaders, International Small Cap Growth, Emerging Markets Leaders, Emerging Markets Growth, Emerging Markets Small Cap Growth, Bond, Low Duration and Macro Allocation Funds have a Shareholder Administration Agreement with WBC to provide shareholder administration services to Class N and Class I shares. Class N and Class I shares of the Funds have agreed to pay an annual fee, payable monthly, of 0.15% of average daily net assets attributable to each class, respectively. Beginning in 2013, the SEC conducted a limited scope examination of a number of mutual fund sponsors, including WBC, regarding distribution and servicing of mutual fund shares through intermediaries. In November 2014, the SEC informed WBC that it had opened a non-public investigation with respect to shareholder administration fees paid by the applicable Funds. The investigation does not involve the investment management operations of the Funds. In December 2015, the SEC staff sent WBC a notification that staff intended to recommend an enforcement action against WBC to the SEC Commissioners (Wells Notice), and WBC has submitted a response. At this time, it is unclear whether or not the Commission will allow the matter to enter enforcement proceedings. While WBC believes that any possible claims made by the staff would be without merit, WBC cannot predict the outcome of any enforcement proceeding the SEC may choose to bring. The shareholder administration fee for each Fund is currently being waived by WBC. This waiver will not be removed without approval of the Board of Trustees.

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For the period ended June 30, 2016, the following shareholder administration fees were incurred and waived (in thousands):

Fund	Class N		Class I		Total		Total Waived	Net Total Shareholder Administration Fee
Global Leaders	$	4	$	33	$	37	$ 37		$—
International Leaders		—		12		12	12		—
International Small Cap Growth		8		252		260	260		—
Emerging Markets Leaders		1		21		22	22		—
Emerging Markets Growth		7		76		83	83		—
Emerging Markets Small Cap Growth		8		112		120	120		—
Bond		108		207		315	315		—
Low Duration		4		82		86	86		—
Macro Allocation		93		818		911	911		—

(5) Investment Transactions

Investment transactions, excluding money market instruments, repurchase agreements and U.S. government securities for the period ended June 30, 2016, were as follows (in thousands):

Fund	Purchases		Sales
Growth	$	192,367	$	248,140
Large Cap Growth		28,132		12,420
Mid Cap Growth		58,434		107,475
Mid Cap Value		1,122		529
Small-Mid Cap Growth		440,793		410,955
Small-Mid Cap Value		756		594
Small Cap Growth		180,155		208,702
Small Cap Value		80,926		133,781
Global Leaders		74,459		78,865
International Leaders		109,048		25,656
International Equity		30,131		20,548
Institutional International Equity		5,464		5,235
International Growth		1,462,185		1,694,947
Institutional International Growth		910,787		1,096,978
International Small Cap Growth		204,175		203,849
Emerging Markets Leaders		99,405		82,538
Emerging Markets Growth		546,942		456,423
Emerging Markets Small Cap Growth		224,187		218,973
Bond		174,744		50,230
Income		17,793		10,532
Low Duration		110,723		77,544
Macro Allocation		237,264		299,507

Transactions in written call and put options for Macro Allocation Fund for the period ended June 30, 2016 were as follows:

	# of Contracts		Premium (in thousands)
Balance at December 31, 2015	4,746			$	652
Sales	41,664				12,654
Closing Buys	(17,694	)			(5,575	)
Expirations	(5,715	)			(1,377	)
Balance at June 30, 2016	23,001			$	6,354

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(6) Financial Derivative Instruments

Each Fund may use derivative instruments to maintain liquidity, to provide hedging, or in anticipation of changes in the composition of its portfolio holdings or as otherwise provided in each Fund’s prospectus. Macro Allocation Fund may also use derivative instruments to obtain investment exposures. The derivative instruments held as of June 30, 2016, as disclosed in each Fund’s Portfolios of Investments, are representative of each Fund’s derivative instrument trading activity during the period ended June 30, 2016.

Derivative transactions carry counterparty risk as they are based on contracts between a Fund and the applicable counterparty. For exchange-traded or cleared derivative contracts, such counterparty risk is limited due to the role of the exchange or clearinghouse. OTC derivative contracts, however, are exposed to counterparty risk in the amount of unrealized gains, net of collateral held, for the duration of the contract.

Macro Allocation Fund is subject to certain netting arrangements through International Swaps and Derivatives Association, Inc. Master Agreements and Credit Support Annexes (“ISDAs”). The ISDAs maintain provisions for general obligations, representations, agreements, collateral and events of default or termination. The ISDAs cover certain OTC derivative securities entered into by Macro Allocation Fund with various counterparties and allow Macro Allocation Fund to close out and net its total exposure to a counterparty in the event of a default.

Futures Contracts

A futures contract provides for the future sale by one party and purchase by another party of a specified amount of a specific financial instrument for a specified price at a designated date, time and place. An index futures contract is an agreement pursuant to which the parties agree to take or make delivery of an amount of cash equal to the difference between the value of the index at the close of the last trading day of the contract and the price at which the index futures contract was originally written. If the offsetting purchase price is less than the original sale price, a Fund realizes a gain; if it is more, a Fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price, a Fund realizes a gain; if it is less, a Fund realizes a loss. The transaction costs must also be included in these calculations. There can be no assurance, however, that a Fund will be able to enter into an offsetting transaction with respect to a particular futures contract at a particular time. If a Fund is not able to enter into an offsetting transaction, a Fund will continue to be required to maintain the margin deposits on the futures contract.

Upon entering into a futures contract, a Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other liquid assets equal to a certain percentage of the contract amount (“initial margin deposit”). Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by a Fund and a cash payment is either made to or received from the broker. Futures held through swaps are marked to market daily, however, a Fund does not make or receive cash payments to/from the broker. Gains or losses are recognized but not considered realized until the contracts expire or are closed and are included in the Statement of Operations.

Options

The purchase or sale of an option by a Fund involves the payment or receipt of a premium by the investor and the corresponding right or obligation, as the case may be, either to purchase or sell the underlying security, commodity, or other instrument for a specific price at a certain time or during a certain period. Purchasing options involves the risk that the underlying instrument will not change price in the manner expected, so the investor loses its premium. Writing options involves potentially greater risk because the investor is exposed to the extent of the actual price movement in the underlying security rather than only the amount of the premium paid (which could result in a potentially unlimited loss). OTC options also involve counterparty credit risk. Purchased options are shown as an asset on the Statement of Assets and Liabilities and are included in Investments in securities. Premiums received for written options are shown as a liability on the Statement of Assets and Liabilities. Realized gains and losses on the sale, expiration or assignment of an option are disclosed on the Statement of Operations.

Forward Foreign Currency Contracts

The Global Equity, International Equity and Multi-Asset and Alternative Funds may enter into forward foreign currency contracts. When entering into a forward foreign currency contract, a Fund agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. A Fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statement of Assets and Liabilities. Realized and unrealized gains and losses are included in the Statement of Operations. These instruments may involve market risk, credit risk, or both kinds of risks in excess of the amount recognized in the Statement of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from the price movements in currencies.

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Swap Contracts

Swap agreements may include total return, interest rate, securities index, commodity, security, currency exchange rate, credit default index, volatility and variance swaps. Swap agreements typically are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to several years. Cleared swaps are transacted through futures commission merchants that are members of central clearing houses with the clearing house serving as a central counterparty similar to transactions in futures contracts. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount” (i.e., the change in the value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a “basket” of securities representing a particular index). Swap agreements are subject to the risk that the counterparty to the swap will default on its obligation to pay a Fund and the risk that a Fund will not be able to meet its obligations to pay the counterparty to the swap. Swap agreements may also involve fees, commissions or other costs that may reduce a Fund’s gains from a swap agreement or may cause a Fund to lose money. To the extent permitted by its investment policies and restrictions, a Fund may invest in the following types of swaps:

Credit Default Swaps—A Fund may invest in credit default swaps as a means of “buying” credit protection (i.e., attempting to mitigate the risk of default or credit quality deterioration in some portion of a Fund’s holdings) or “selling” credit protection (i.e., attempting to gain exposure to an underlying issuer’s credit quality characteristics without directly investing in that issuer). A credit default swap is a contract between a buyer and a seller of protection against a pre-defined credit event (e.g., a ratings downgrade or default) on an underlying reference obligation, which may be a single debt instrument or baskets or indices of securities. A Fund may be a buyer or seller of a credit default swap. As a seller of protection on credit default swap agreements, a Fund will generally receive from the buyer of protection a fixed rate of income throughout the term of the swap provided that there is no credit event. A Fund adds leverage to its portfolio because the Fund is subject to investment exposure on the notional amount of the swap. The maximum potential amount of future payments that a Fund as a seller of protection could be required to make under a credit default swap agreement equals the notional amount of the agreement. Notional amounts of each individual credit default swap agreement outstanding as of period end for which a Fund is the seller of protection are disclosed in Portfolio of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for the same referenced entity or entities. For credit default swap contracts on credit indices, the quoted market prices and resulting values serve as an indicator of the payment performance risk. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent deterioration of the referenced entities’ credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the swap.

Interest Rate Swap—A Fund may invest in interest rate swaps to gain or mitigate exposure to changes in interest rates. Interest rate swap agreements involve a commitment between parties to pay either a fixed interest rate or a floating interest rate based on a notional amount of principal. The parties make payments at predetermined intervals throughout the life of the swap. As a payer, a Fund would make the fixed payment and receive the floating payment. As a receiver, a Fund would make the floating payment and receive the fixed payment.

Total Return Swap—A Fund may invest in total return swaps to gain or mitigate exposure to an underlying security, or securities. Total return swap agreements may involve commitments to pay interest in exchange for the return on the underlying security, or securities. At maturity, a net cash flow is exchanged between the parties based on the total return of the underlying security, or securities, less a financing rate. As a receiver, a Fund would receive a payment for a positive return and would make a payment for a negative return. As a payer, a Fund would make a payment for a positive return and would receive a payment for a negative return.

Variance Swap—A Fund may invest in variance swaps in order to gain or mitigate its exposure to an underlying reference entity such as a broad based index. A variance swap is an agreement between two parties to exchange cash flows based on the measured variance of a reference entity. The payer agrees to exchange the fixed rate, or the variance strike price of the reference entity, to the receiver for the floating rate, or realized variance price of the reference entity. At the time the trade is originated, the agreed upon variance strike price is generally set so that the fair value of the swap is near zero. At maturity, a net cash flow is exchanged between the parties based on the difference between the final realized variance price of the swap and the variance strike price multiplied by the notional, or vega amount. As a receiver of the floating rate, a Fund would receive a payment if the final realized variance price is greater than the variance strike price and would make a payment if the final realized variance price is less than the variance strike price. As a payer of the floating rate, a Fund would receive a payment if the final realized variance price is

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less than the variance strike price and would make a payment if the final realized variance price is greater than the variance strike price.

The following table presents the value of financial derivative instruments, by primary risk exposure, as of June 30, 2016 and their respective location on the Statements of Assets and Liabilities (in thousands):

Assets

Liabilities

Primary Risk Exposure

Statements of Assets
and Liabilities

Value

Statements of Assets
and Liabilities

Value

Bond

Interest rate

Investments in securities, at value

None

—

Credit

Receivable for variation margin on centrally cleared swaps

—

Payable for variation margin on centrally cleared swaps

Income

Interest rate

Investments in securities, at value

None

—

Low Duration

Interest rate

Investments in securities, at value

None

—

Macro Allocation

Credit

Receivable for variation margin on centrally cleared swaps

—

Payable for variation margin on centrally cleared swaps

921

Currency

Unrealized appreciation on forward currency contracts

24,581

Unrealized depreciation on forward currency contracts

19,999

Equity

Investments in securities, at value

5,923

Options written, at value

5,439

Equity

Receivable for variation margin on futures

11,000

Payable for variation margin on futures

5,229

Equity

Unrealized appreciation on swap contract

5,085

Unrealized depreciation on swap contract

10,785

Interest rate

Receivable for variation margin on futures

307

Payable for variation margin on futures

4,116

Interest rate

Unrealized appreciation on swap contract

—

Unrealized depreciation on swap contract

3,342

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The following table indicates the effect of derivatives, by primary risk exposure, on the Statements of Operations for the period ended June 30, 2016 (in thousands):

	Realized Gain (Loss)					Change in Net Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Statements of Operations	Value				Statements of Operations	Value
Bond
Interest Rate	Options		$	—		Options		$	—
Credit	Swaps			(121	)	Swaps			27
Income
Interest Rate	Options			—		Options			—
Low Duration
Interest Rate	Options			—		Options			—
Macro Allocation
Credit	Swaps			1,067		Swaps			(1,078	)
Currency	Forward foreign currency contracts			24,603		Forward foreign currency contracts			2,849
Currency	Options			1,233		Options			1,355
Equity	Futures Contracts			(48,906	)	Futures Contracts			2,674
Equity	Options			(6,190	)	Options			(718	)
Equity	Swaps			(4,081	)	Swaps			(2,555	)
Interest rate	Futures Contracts			(5,745	)	Futures Contracts			(3,340	)
Interest Rate	Options			(2,612	)	Options			795
Interest Rate	Swaps			(1,351	)	Swaps			(2,546	)

The following table indicates gross OTC derivative asset exposure, by investment type, included in the Statements of Assets and Liabilities at June 30, 2016 (in thousands):

							Net Amounts of		Gross Amounts Not Offset
				Gross Amounts			Assets		in the Statements
	Gross			Offset in the			Presented in the		of Assets and Liabilities
	Amounts of			Statements of			Statements of				Cash
	Recognized			Assets and			Assets and		Financial		Collateral		Net
Description	Assets			Liabilities			Liabilities		Instruments		Received		Amount
Macro Allocation
Citibank N.A.
Forward foreign currency contracts		$24,581			$(19,999	)		$4,582		$ —		$ —		$4,582
Swaps		1,915			(1,444	)		471		—		—		471
Credit Suisse
Option		208			—			208		—		—		208
Swaps		3,064			(3,064	)		—		—		—		—
Goldman Sachs
Option		—	(a)		—			—		—		—		—
Swaps		106			(106	)		—		—		—		—

(a) Amount rounds to less than minimum amount disclosed.

The following table indicates gross OTC derivative liability exposure, by investment type, included in the Statements of Assets and Liabilities at June 30, 2016 (in thousands):

						Net Amounts of		Gross Amounts Not Offset
			Gross Amounts			Liabilities		in the Statements
	Gross		Offset in the			Presented in the		of Assets and Liabilities
	Amounts of		Statements of			Statements of				Cash		Net Amount
	Recognized		Assets and			Assets and		Financial		Collateral		(not less
Description	Liabilities		Liabilities			Liabilities		Instruments		Pledged		than zero)
Macro Allocation
Citibank N.A.
Forward foreign currency contracts		$19,999		$(19,999	)	$	—	$	—	$	—	$	—
Swaps		1,444		(1,444	)		—		—		—		—
Credit Suisse
Swaps		3,141		(3,064	)		77		9,695		—		—
Goldman Sachs
Swaps		9,542		(106	)		9,436		8,941		—		—


June 30, 2016	William Blair Funds	149

(7) Fund Share Transactions

The following tables summarize the activity in capital shares of each Fund for the period ended June 30, 2016 (in thousands):

																Class N
							Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	6,543	$	—	$	26,478	$	(19,935	)		555		—		2,224		(1,669	)
Large Cap Growth		3,474		—		1,678		1,796			358		—		170		188
Mid Cap Growth		1,813		—		4,378		(2,565	)		169		—		407		(238	)
Mid Cap Value		568		—		73		495			56		—		7		49
Small-Mid Cap Growth		64,575		—		31,238		33,337			3,672		—		1,766		1,906
Small-Mid Cap Value		42		—		38		4			4		—		3		1
Small Cap Growth		3,816		—		14,279		(10,463	)		180		—		660		(480	)
Small Cap Value		3,600		—		7,873		(4,273	)		218		—		468		(250	)
Global Leaders		905		—		351		554			81		—		32		49
International Leaders		234		—		64		170			19		—		5		14
International Equity		303		—		400		(97	)		23		—		30		(7	)
International Growth		78,039		—		264,495		(186,456	)		3,424		—		11,547		(8,123	)
International Small Cap Growth		706		—		842		(136	)		55		—		65		(10	)
Emerging Markets Leaders		2,761		—		2,585		176			359		—		333		26
Emerging Markets Growth		103		—		552		(449	)		10		—		53		(43	)
Emerging Markets Small Cap Growth		946		—		1,408		(462	)		66		—		100		(34	)
Bond		32,645		2,598		27,732		7,511			3,105		246		2,641		710
Income		4,495		475		3,301		1,669			501		53		368		186
Low Duration		5,154		56		1,353		3,857			562		6		148		420
Macro Allocation		13,613		—		61,771		(48,158	)		1,220		—		5,509		(4,289	)

																Class I
							Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	36,802	$	—	$	52,502	$	(15,700	)		2,880		—		4,111		(1,231	)
Large Cap Growth		19,881		—		6,206		13,675			1,968		—		605		1,363
Mid Cap Growth		6,455		—		49,264		(42,809	)		573		—		4,303		(3,730	)
Mid Cap Value		221		—		29		192			22		—		3		19
Small-Mid Cap Growth		199,234		—		177,424		21,810			10,969		—		9,767		1,202
Small-Mid Cap Value		247		—		112		135			19		—		9		10
Small Cap Growth		21,991		—		32,917		(10,926	)		982		—		1,448		(466	)
Small Cap Value		47,614		—		94,426		(46,812	)		2,824		—		5,733		(2,909	)
Global Leaders		5,191		—		4,174		1,017			485		—		397		88
International Leaders		12,878		—		5,366		7,512			1,018		—		432		586
International Equity		8,749		—		608		8,141			646		—		45		601
International Growth		172,370		—		284,387		(112,017	)		7,253		—		11,765		(4,512	)
International Small Cap Growth		37,573		—		39,043		(1,470	)		2,916		—		2,984		(68	)
Emerging Markets Leaders		1,921		—		7,950		(6,029	)		257		—		1,072		(815	)
Emerging Markets Growth		9,858		—		37,490		(27,632	)		920		—		3,749		(2,829	)
Emerging Markets Small Cap Growth		19,800		—		18,635		1,165			1,378		—		1,342		36
Bond		91,899		4,222		29,381		66,740			8,853		404		2,824		6,433
Income		3,652		863		9,506		(4,991	)		410		97		1,067		(560	)
Low Duration		20,477		1,086		12,508		9,055			2,234		118		1,364		988
Macro Allocation		247,938		—		305,818		(57,880	)		21,918		—		27,173		(5,255	)

150

Semiannual Report

June 30, 2016

														Institutional Class
							Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	24,571	$	—	$	33,105	$	(8,534	)		2,205		—		2,987		(782	)
International Leaders		77,244		—		15		77,229			6,190		—		—		6,190
Institutional International Equity		69		—		—		69			6		—		—		6
Institutional International Growth		79,080		—		289,068		(209,988	)		5,551		—		20,420		(14,869	)
International Small Cap Growth		8,240		—		15,881		(7,641	)		628		—		1,185		(557	)
Emerging Markets Leaders		43,798		—		19,784		24,014			5,646		—		2,705		2,941
Emerging Markets Growth		174,052		—		55,444		118,608			16,099		—		5,408		10,691
Emerging Markets Small Cap Growth		6,211		—		973		5,238			442		—		68		374
Bond		4,843		1,941		6,794		(10	)		466		186		655		(3	)
Low Duration		9,000		325		5,689		3,636			982		36		621		397
Macro Allocation		133,031		—		29,482		103,549			11,812		—		2,629		9,183

	Net Change in Net Assets Relating to Fund Share Activity
	Dollars											Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	43,345	$	—	$	78,980	$	(35,635	)		3,435		—		6,335		(2,900	)
Large Cap Growth		23,355		—		7,884		15,471			2,326		—		775		1,551
Mid Cap Growth		8,268		—		53,642		(45,374	)		742		—		4,710		(3,968	)
Mid Cap Value		789		—		102		687			78		—		10		68
Small-Mid Cap Growth		263,809		—		208,662		55,147			14,641		—		11,533		3,108
Small-Mid Cap Value		289		—		150		139			23		—		12		11
Small Cap Growth		25,807		—		47,196		(21,389	)		1,162		—		2,108		(946	)
Small Cap Value		51,214		—		102,299		(51,085	)		3,042		—		6,201		(3,159	)
Global Leaders		30,667		—		37,630		(6,963	)		2,771		—		3,416		(645	)
International Leaders		90,356		—		5,445		84,911			7,227		—		437		6,790
International Equity		9,052		—		1,008		8,044			669		—		75		594
Institutional International Equity		69		—		—		69			6		—		—		6
International Growth		250,409		—		548,882		(298,473	)		10,677		—		23,312		(12,635	)
Institutional International Growth		79,080		—		289,068		(209,988	)		5,551		—		20,420		(14,869	)
International Small Cap Growth		46,519		—		55,766		(9,247	)		3,599		—		4,234		(635	)
Emerging Markets Leaders		48,480		—		30,319		18,161			6,262		—		4,110		2,152
Emerging Markets Growth		184,013		—		93,486		90,527			17,029		—		9,210		7,819
Emerging Markets Small Cap Growth		26,957		—		21,016		5,941			1,886		—		1,510		376
Bond		129,387		8,761		63,907		74,241			12,424		836		6,120		7,140
Income		8,147		1,338		12,807		(3,322	)		911		150		1,435		(374	)
Low Duration		34,631		1,467		19,550		16,548			3,778		160		2,133		1,805
Macro Allocation		394,582		—		397,071		(2,489	)		34,950		—		35,311		(361	)

June 30, 2016

William Blair Funds

151

The following tables summarize the activity in capital shares of each Fund for the year ended December 31, 2015 (in thousands):

	Class N
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	20,920	$	18,415	$	155,588	$	(116,253	)		1,510		1,477		11,153		(8,166	)
Large Cap Growth		3,479		966		2,462		1,983			315		96		226		185
Mid Cap Growth		5,086		4,873		16,859		(6,900	)		358		436		1,203		(409	)
Mid Cap Value		632		151		127		656			50		15		10		55
Small-Mid Cap Growth		113,394		8,500		28,874		93,020			5,722		460		1,469		4,713
Small-Mid Cap Value		72		7		100		(21	)		5		1		7		(1	)
Small Cap Growth		11,167		9,324		41,312		(20,821	)		440		416		1,662		(806	)
Small Cap Value		5,971		107		10,763		(4,685	)		344		6		616		(266	)
Global Leaders		766		246		275		737			61		21		22		60
International Leaders		226		2		8		220			18		—		1		17
International Equity		279		26		830		(525	)		19		2		57		(36	)
International Growth		359,131		9,388		312,397		56,122			14,223		378		12,310		2,291
International Small Cap Growth		2,310		205		5,668		(3,153	)		176		15		439		(248	)
Emerging Markets Leaders		6,520		2		6,488		34			751		—		746		5
Emerging Markets Growth		2,105		97		3,386		(1,184	)		164		9		289		(116	)
Emerging Markets Small Cap Growth		5,302		473		3,847		1,928			319		32		240		111
Bond		137,843		1,819		14,345		125,317			13,112		173		1,372		11,913
Income		13,105		972		14,256		(179	)		1,439		107		1,574		(28	)
Low Duration		1,525		49		3,744		(2,170	)		164		5		403		(234	)
Macro Allocation		180,974		898		162,486		19,386			14,474		79		13,669		884

																Class I
							Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	101,867	$	77,422	$	125,622	$	53,667			6,840		5,761		8,641		3,960
Large Cap Growth		13,673		4,410		8,280		9,803			1,213		418		736		895
Mid Cap Growth		28,076		34,703		159,407		(96,628	)		1,907		2,974		10,676		(5,795	)
Mid Cap Value		29		422		1,620		(1,169	)		2		43		124		(79	)
Small-Mid Cap Growth		314,765		48,836		122,703		240,898			15,422		2,545		6,027		11,940
Small-Mid Cap Value		363		129		402		90			27		10		30		7
Small Cap Growth		82,937		19,650		175,942		(73,355	)		3,105		816		6,445		(2,524	)
Small Cap Value		168,226		2,938		103,403		67,761			9,544		173		5,798		3,919
Global Leaders		11,928		2,130		19,402		(5,344	)		963		185		1,586		(438	)
International Leaders		4,408		96		1,095		3,409			340		7		83		264
International Equity		5,376		680		10,778		(4,722	)		365		49		730		(316	)
International Growth		477,894		27,497		523,541		(18,150	)		17,911		1,082		19,687		(694	)
International Small Cap Growth		62,196		6,895		116,983		(47,892	)		4,698		511		8,807		(3,598	)
Emerging Markets Leaders		15,832		113		5,667		10,278			1,800		15		709		1,106
Emerging Markets Growth		46,581		1,207		55,599		(7,811	)		3,709		109		4,716		(898	)
Emerging Markets Small Cap Growth		107,086		4,486		51,918		59,654			6,516		302		3,162		3,656
Bond		136,906		4,457		45,989		95,374			13,136		426		4,406		9,156
Income		10,900		1,714		13,153		(539	)		1,216		191		1,466		(59	)
Low Duration		41,356		1,978		38,076		5,258			4,452		213		4,113		552
Macro Allocation		1,054,314		8,797		456,003		607,108			85,643		772		38,103		48,312

152

Semiannual Report

June 30, 2016

															Institutional Class
								Dollars									Shares
Fund	Sales		Reinvest		Redemptions			Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	29,091	$	6,610	$	1,181		$	34,520			2,398		574		95		2,877
International Leaders		19,418		675		(1	)		20,094			1,480		53		—		1,533
Institutional International Equity		2,425		156		1,154			1,427			187		13		91		109
Institutional International Growth		297,180		28,849		305,026			21,003			18,912		1,922		19,237		1,597
International Small Cap Growth		13,840		4,777		61,465			(42,848	)		1,040		352		4,482		(3,090	)
Emerging Markets Leaders		58,828		434		28,442			30,820			6,983		56		3,358		3,681
Emerging Markets Growth		266,522		7,305		221,791			52,036			22,032		656		17,376		5,312
Emerging Markets Small Cap Growth		10,974		4,600		2,911			12,663			660		309		186		783
Bond		25,382		3,259		18,526			10,115			2,443		311		1,756		998
Low Duration		4,653		1,069		50,966			(45,244	)		497		115		5,489		(4,877	)
Macro Allocation		324,009		4,325		27,615			300,719			26,463		379		2,365		24,477

	Net Change in Net Assets Relating to Fund Share Activity
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	122,787	$	95,837	$	281,210	$	(62,586	)		8,350		7,238		19,794		(4,206	)
Large Cap Growth		17,152		5,376		10,742		11,786			1,528		514		962		1,080
Mid Cap Growth		33,162		39,576		176,266		(103,528	)		2,265		3,410		11,879		(6,204	)
Mid Cap Value		661		573		1,747		(513	)		52		58		134		(24	)
Small-Mid Cap Growth		428,159		57,336		151,577		333,918			21,144		3,005		7,496		16,653
Small-Mid Cap Value		435		136		502		69			32		11		37		6
Small Cap Growth		94,104		28,974		217,254		(94,176	)		3,545		1,232		8,107		(3,330	)
Small Cap Value		174,197		3,045		114,166		63,076			9,888		179		6,414		3,653
Global Leaders		41,785		8,986		20,858		29,913			3,422		780		1,703		2,499
International Leaders		24,052		773		1,102		23,723			1,838		60		84		1,814
International Equity		5,655		706		11,608		(5,247	)		384		51		787		(352	)
Institutional International Equity		2,425		156		1,154		1,427			187		13		91		109
International Growth		837,025		36,885		835,938		37,972			32,134		1,460		31,997		1,597
Institutional International Growth		297,180		28,849		305,026		21,003			18,912		1,922		19,237		1,597
International Small Cap Growth		78,346		11,877		184,116		(93,893	)		5,914		878		13,728		(6,936	)
Emerging Markets Leaders		81,180		549		40,597		41,132			9,534		71		4,813		4,792
Emerging Markets Growth		315,208		8,609		280,776		43,041			25,905		774		22,381		4,298
Emerging Markets Small Cap Growth		123,362		9,559		58,676		74,245			7,495		643		3,588		4,550
Bond		300,131		9,535		78,860		230,806			28,691		910		7,534		22,067
Income		24,005		2,686		27,409		(718	)		2,655		298		3,040		(87	)
Low Duration		47,534		3,096		92,786		(42,156	)		5,113		333		10,005		(4,559	)
Macro Allocation		1,559,297		14,020		646,104		927,213			126,580		1,230		54,137		73,673

June 30, 2016

William Blair Funds

153

Financial Highlights

Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	12.52		$	13.55		$	14.79		$	12.05		$	10.73		$	11.28
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		(0.04	)		(0.07	)		(0.07	)		(0.01	)		(0.04	)
Net realized and unrealized gain (loss) on investments			(0.22	)		0.75			1.03			4.25			1.69			(0.19	)
Total from investment operations			(0.24	)		0.71			0.96			4.18			1.68			(0.23	)
Less distributions from:
Net investment income			—			—			—			—			0.00	^		—
Net realized gain			—			1.74			2.20			1.44			0.36			0.32
Total distributions			—			1.74			2.20			1.44			0.36			0.32
Net asset value, end of year		$	12.28		$	12.52		$	13.55		$	14.79		$	12.05		$	10.73
Total return (%)*			(1.92	)		5.31			6.59			35.00			15.67			(1.93	)
Ratios to average daily net assets (%):**
Expenses			1.24			1.19			1.18			1.19			1.20			1.21
Net investment income (loss)			(0.29	)		(0.29	)		(0.50	)		(0.51	)		(0.06	)		(0.37	)
Class N net assets at end of year (in thousands)		$	126,357		$	149,754		$	272,765		$	291,326		$	248,121		$	204,476
Portfolio turnover rate (%)*			76			78			100			52			73			59

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015		2014			2013			2012		2011
Net asset value, beginning of year		$	13.50		$	14.43	$	15.56		$	12.58		$	11.18	$	11.71
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)^		0.01		(0.03	)		(0.03	)		0.04		0.00	^
Net realized and unrealized gain (loss) on investments			(0.24	)		0.80		1.10			4.45			1.75		(0.20	)
Total from investment operations			(0.24	)		0.81		1.07			4.42			1.79		(0.20	)
Less distributions from:
Net investment income			—			—		—			0.00	^		0.03		0.01
Net realized gain			—			1.74		2.20			1.44			0.36		0.32
Total distributions			—			1.74		2.20			1.44			0.39		0.33
Net asset value, end of year		$	13.26		$	13.50	$	14.43		$	15.56		$	12.58	$	11.18
Total return (%)*			(1.78	)		5.69		6.96			35.43			16.03		(1.60	)
Ratios to average daily net assets (%):**
Expenses			0.89			0.89		0.86			0.85			0.89		0.86
Net investment income (loss)			0.07			0.06		(0.20	)		(0.17	)		0.30		(0.03	)
Class I net assets at end of year (in thousands)		$	668,090		$	696,744	$	688,038		$	623,225		$	468,124	$	362,266
Portfolio turnover rate (%)*			76			78		100			52			73		59

*	Not annualized for periods less than a year.
**	Annualized for periods 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.

154

Semiannual Report

June 30, 2016

Financial Highlights

Large Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	10.15		$	10.46		$	10.03		$	8.14		$	6.88		$	7.14
Income (loss) from investment operations:
Net investment income (loss)			0.00	^		(0.02	)		(0.02	)		(0.03	)		(0.02	)		(0.01	)
Net realized and unrealized gain (loss) on investments			(0.04	)		0.75			1.46			2.70			1.28			(0.25	)
Total from investment operations			(0.04	)		0.73			1.44			2.67			1.26			(0.26	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.04			1.01			0.78			—			—
Total distributions			—			1.04			1.01			0.78			—			—
Net asset value, end of year		$	10.11		$	10.15		$	10.46		$	10.03		$	8.14		$	6.88
Total return (%)*			(0.39	)		7.04			14.29			33.00			18.31			(3.64	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.07			1.13			1.20			1.20			1.20
Expenses, before waivers and reimbursements			1.25			1.28			1.31			1.46			1.57			1.51
Net investment income (loss), net of waivers and reimbursements			0.06			(0.22	)		(0.23	)		(0.36	)		(0.21	)		(0.13	)
Net investment income (loss), before waivers and reimbursements			(0.14	)		(0.43	)		(0.41	)		(0.62	)		(0.58	)		(0.44	)
Class N net assets at end of year (in thousands)		$	12,305		$	10,443		$	8,831		$	6,678		$	4,238		$	3,387
Portfolio turnover rate (%)*			34			38			50			48			50			67

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	10.58		$	10.84		$	10.33		$	8.35		$	7.03		$	7.30
Income (loss) from investment operations:
Net investment income (loss)			0.02			(0.00	)^		0.00	^		(0.01	)		0.00	^		0.01
Net realized and unrealized gain (loss) on investments			(0.05	)		0.78			1.52			2.77			1.32			(0.27	)
Total from investment operations			(0.03	)		0.78			1.52			2.76			1.32			(0.26	)
Less distributions from:
Net investment income			—			—			—			—			—			0.01
Net realized gain			—			1.04			1.01			0.78			—			—
Total distributions			—			1.04			1.01			0.78			—			0.01
Net asset value, end of year		$	10.55		$	10.58		$	10.84		$	10.33		$	8.35		$	7.03
Total return (%)*			(0.28	)		7.26			14.65			33.24			18.78			(3.54	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.80			0.82			0.88			0.95			0.95			0.95
Expenses, before waivers and reimbursements			0.94			0.95			1.00			1.11			1.23			1.16
Net investment income (loss), net of waivers and reimbursements			0.32			0.03			0.02			(0.11	)		0.03			0.11
Net investment income (loss), before waivers and reimbursements			0.18			(0.10	)		(0.10	)		(0.27	)		(0.25	)		(0.10	)
Class I net assets at end of year (in thousands)		$	73,268		$	59,038		$	50,778		$	40,513		$	24,175		$	21,562
Portfolio turnover rate (%)*			34			38			50			48			50			67

*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

155

Financial Highlights

Mid Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	11.28		$	14.20		$	15.21		$	12.65		$	11.66		$	12.50
Income (loss) from investment operations:
Net investment income (loss)			(0.03	)		(0.09	)		(0.12	)		(0.13	)		(0.02	)		(0.08	)
Net realized and unrealized gain (loss) on investments			(0.05	)		0.04			1.26			3.74			1.29			0.25
Total from investment operations			(0.08	)		(0.05	)		1.14			3.61			1.27			0.17
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			2.87			2.15			1.05			0.28			1.01
Total distributions			—			2.87			2.15			1.05			0.28			1.01
Net asset value, end of year		$	11.20		$	11.28		$	14.20		$	15.21		$	12.65		$	11.66
Total return (%)*			(0.71	)		(0.20	)		7.53			28.77			10.90			1.65
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.30			1.32			1.35			1.35			1.35			1.35
Expenses, before waivers and reimbursements			1.48			1.43			1.35			1.42			1.42			1.43
Net investment income (loss), net of waivers and reimbursements			(0.57	)		(0.65	)		(0.80	)		(0.90	)		(0.15	)		(0.65	)
Net investment income (loss), before waivers and reimbursements			(0.75	)		(0.76	)		(0.80	)		(0.97	)		(0.22	)		(0.73	)
Class N net assets at end of year (in thousands)		$	22,247		$	25,105		$	37,413		$	41,849		$	40,940		$	30,093
Portfolio turnover rate (%)*			79			65			81			83			62			70

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012		2011
Net asset value, beginning of year		$	11.76		$	14.65		$	15.58		$	12.91		$	11.87	$	12.68
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		(0.06	)		(0.09	)		(0.10	)		0.03		(0.05	)
Net realized and unrealized gain (loss) on investments			(0.05	)		0.04			1.31			3.82			1.31		0.25
Total from investment operations			(0.07	)		(0.02	)		1.22			3.72			1.34		0.20
Less distributions from:
Net investment income			—			—			—			—			0.02		—
Net realized gain			—			2.87			2.15			1.05			0.28		1.01
Total distributions			—			2.87			2.15			1.05			0.30		1.01
Net asset value, end of year		$	11.69		$	11.76		$	14.65		$	15.58		$	12.91	$	11.87
Total return (%)*			(0.60	)		0.00			7.87			29.04			11.30		1.86
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.07			1.10			1.10			1.07		1.10
Expenses, before waivers and reimbursements			1.21			1.14			1.10			1.15			1.07		1.13
Net investment income (loss), net of waivers and reimbursements			(0.33	)		(0.41	)		(0.55	)		(0.65	)		0.19		(0.42	)
Net investment income (loss), before waivers and reimbursements			(0.49	)		(0.48	)		(0.55	)		(0.70	)		0.19		(0.45	)
Class I net assets at end of year (in thousands)		$	129,939		$	174,617		$	302,373		$	385,779		$	329,295	$	115,661
Portfolio turnover rate (%)*			79			65			81			83			62		70

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

156

Semiannual Report

June 30, 2016

Financial Highlights

Mid Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	9.92		$	12.88		$	13.39		$	11.39		$	10.48		$	10.75
Income (loss) from investment operations:
Net investment income (loss)			0.03			0.07			0.03			0.05			0.08			0.12
Net realized and unrealized gain (loss) on investments			0.58			(0.36	)		1.40			3.50			1.34			(0.17	)
Total from investment operations			0.61			(0.29	)		1.43			3.55			1.42			(0.05	)
Less distributions from:
Net investment income			—			0.03			0.04			0.06			0.08			0.09
Net realized gain			—			2.64			1.90			1.49			0.43			0.13
Total distributions			—			2.67			1.94			1.55			0.51			0.22
Net asset value, end of year		$	10.53		$	9.92		$	12.88		$	13.39		$	11.39		$	10.48
Total return (%)*			6.15			(2.13	)		10.83			31.46			13.54			(0.34	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.30			1.32			1.35			1.35			1.35			1.35
Expenses, before waivers and reimbursements			5.08			4.14			3.77			3.37			3.40			3.85
Net investment income (loss), net of waivers and reimbursements			0.57			0.59			0.23			0.36			0.70			1.15
Net investment income (loss), before waivers and reimbursements			(3.21	)		(2.23	)		(2.19	)		(1.66	)		(1.35	)		(1.35	)
Class N net assets at end of year (in thousands)		$	1,251		$	694		$	189		$	232		$	79		$	58
Portfolio turnover rate (%)*			61			53			33			42			63			69

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	9.94		$	12.88		$	13.40		$	11.39		$	10.48		$	10.76
Income (loss) from investment operations:
Net investment income (loss)			0.04			0.08			0.07			0.08			0.10			0.13
Net realized and unrealized gain (loss) on investments			0.58			(0.32	)		1.39			3.51			1.35			(0.17	)
Total from investment operations			0.62			(0.24	)		1.46			3.59			1.45			(0.04	)
Less distributions from:
Net investment income			—			0.06			0.08			0.09			0.11			0.11
Net realized gain			—			2.64			1.90			1.49			0.43			0.13
Total distributions			—			2.70			1.98			1.58			0.54			0.24
Net asset value, end of year		$	10.56		$	9.94		$	12.88		$	13.40		$	11.39		$	10.48
Total return (%)*			6.24			(1.73	)		11.04			31.82			13.77			(0.25	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.07			1.10			1.10			1.10			1.10
Expenses, before waivers and reimbursements			4.75			3.77			3.08			3.04			3.13			3.60
Net investment income (loss), net of waivers and reimbursements			0.76			0.65			0.49			0.59			0.92			1.20
Net investment income (loss), before waivers and reimbursements			(2.94	)		(2.05	)		(1.49	)		(1.35	)		(1.11	)		(1.30	)
Class I net assets at end of year (in thousands)		$	2,298		$	1,974		$	3,579		$	4,225		$	4,058		$	4,515
Portfolio turnover rate (%)*			61			53			33			42			63			69

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2016

William Blair Funds

157

Financial Highlights

Small-Mid Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012		2011
Net asset value, beginning of year		$	18.53		$	18.72		$	18.80		$	14.21		$	13.00	$	14.40
Income (loss) from investment operations:
Net investment income (loss)			(0.05	)		(0.10	)		(0.12	)		(0.15	)		0.02		(0.11	)
Net realized and unrealized gain (loss) on investments			0.23			0.93			1.68			6.01			1.57		0.03
Total from investment operations			0.18			0.83			1.56			5.86			1.59		(0.08	)
Less distributions from:
Net investment income			—			—			—			—			0.02		—
Net realized gain			—			1.02			1.64			1.27			0.36		1.32
Total distributions			—			1.02			1.64			1.27			0.38		1.32
Net asset value, end of year		$	18.71		$	18.53		$	18.72		$	18.80		$	14.21	$	13.00
Total return (%)*			0.97			4.47			8.33			41.49			12.20		(0.27	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.35			1.35			1.35			1.35			1.35		1.35
Expenses, before waivers and reimbursements			1.42			1.42			1.38			1.46			1.47		1.46
Net investment income (loss), net of waivers and reimbursements			(0.59	)		(0.51	)		(0.63	)		(0.88	)		0.16		(0.77	)
Net investment income (loss), before waivers and reimbursements			(0.66	)		(0.58	)		(0.66	)		(0.99	)		0.04		(0.88	)
Class N net assets at end of year (in thousands)		$	206,875		$	169,595		$	83,047		$	73,207		$	42,015	$	34,123
Portfolio turnover rate (%)*			58			44			49			53			82		76

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012		2011
Net asset value, beginning of year		$	19.25		$	19.36		$	19.34		$	14.55		$	13.32	$	14.68
Income (loss) from investment operations:
Net investment income (loss)			(0.03	)		(0.06	)		(0.08	)		(0.11	)		0.07		(0.08	)
Net realized and unrealized gain (loss) on investments			0.24			0.97			1.74			6.17			1.58		0.04
Total from investment operations			0.21			0.91			1.66			6.06			1.65		(0.04	)
Less distributions from:
Net investment income			—			—			—			—			0.06		—
Net realized gain			—			1.02			1.64			1.27			0.36		1.32
Total distributions			—			1.02			1.64			1.27			0.42		1.32
Net asset value, end of year		$	19.46		$	19.25		$	19.36		$	19.34		$	14.55	$	13.32
Total return (%)*			1.09			4.74			8.62			41.89			12.36		0.01
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10			1.10			1.10			1.10			1.10		1.10
Expenses, before waivers and reimbursements			1.17			1.15			1.15			1.10			1.20		1.12
Net investment income (loss), net of waivers and reimbursements			(0.35	)		(0.28	)		(0.38	)		(0.62	)		0.48		(0.54	)
Net investment income (loss), before waivers and reimbursements			(0.42	)		(0.33	)		(0.43	)		(0.62	)		0.38		(0.56	)
Class I net assets at end of year (in thousands)		$	1,053,994		$	1,019,544		$	793,789		$	617,374		$	349,345	$	219,474
Portfolio turnover rate (%)*			58			44			49			53			82		76

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

158

Semiannual Report

June 30, 2016

Financial Highlights

Small-Mid Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011(a)
Net asset value, beginning of year		$	12.54		$	13.63		$	14.11		$	11.29		$	10.45		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.03			0.04			0.00	^		0.00	^		0.10			0.00	^
Net realized and unrealized gain (loss) on investments			0.74			(0.47	)		0.64			4.06			1.15			0.45
Total from investment operations			0.77			(0.43	)		0.64			4.06			1.25			0.45
Less distributions from:
Net investment income			—			0.01			—			—			0.09			—
Net realized gain			—			0.65			1.12			1.24			0.32			—
Total distributions			—			0.66			1.12			1.24			0.41			—
Net asset value, end of year		$	13.31		$	12.54		$	13.63		$	14.11		$	11.29		$	10.45
Total return (%)*			6.14			(3.13	)		4.66			36.29			11.95			4.50
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.35			1.37			1.40			1.40			1.40			1.40
Expenses, before waivers and reimbursements			4.33			3.93			4.50			4.50			6.34			18.68
Net investment income (loss), net of waivers and reimbursements			0.41			0.27			0.02			(0.04	)		0.87			0.53
Net investment income (loss), before waivers and reimbursements			(2.57	)		(2.29	)		(3.08	)		(3.14	)		(4.07	)		(16.75	)
Class N net assets at end of year (in thousands)		$	915		$	855		$	946		$	1,205		$	950		$	860
Portfolio turnover rate (%)*			36			35			69			61			56			1

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	12.54		$	13.63		$	14.12		$	11.29		$	10.45		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.04			0.07			0.05			0.03			0.13			0.00	^
Net realized and unrealized gain (loss) on investments			0.75			(0.47	)		0.63			4.07			1.15			0.45
Total from investment operations			0.79			(0.40	)		0.68			4.10			1.28			0.45
Less distributions from:
Net investment income			—			0.04			0.05			0.03			0.12			—
Net realized gain			—			0.65			1.12			1.24			0.32			—
Total distributions			—			0.69			1.17			1.27			0.44			—
Net asset value, end of year		$	13.33		$	12.54		$	13.63		$	14.12		$	11.29		$	10.45
Total return (%)*			6.30			(2.86	)		4.96			36.69			12.22			4.50
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.10			1.12			1.15			1.15			1.15			1.15
Expenses, before waivers and reimbursements			4.12			3.72			4.16			4.24			5.88			18.43
Net investment income (loss), net of waivers and reimbursements			0.67			0.52			0.36			0.21			1.12			0.79
Net investment income (loss), before waivers and reimbursements			(2.35	)		(2.08	)		(2.65	)		(2.88	)		(3.61	)		(16.49	)
Class I net assets at end of year (in thousands)		$	3,557		$	3,220		$	3,407		$	2,073		$	1,442		$	1,296
Portfolio turnover rate (%)*			36			35			69			61			56			1

(a)	For the period from December 15, 2011 (Commencement of Operations) to December 31, 2011.
*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

159

Financial Highlights

Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	22.47		$	25.61		$	30.02		$	23.68		$	20.13		$	23.22
Income (loss) from investment operations:
Net investment income (loss)			(0.09	)		(0.22	)		(0.30	)		(0.26	)		(0.22	)		(0.28	)
Net realized and unrealized gain (loss) on investments			0.97			(0.93	)		1.02			12.52			3.87			(2.81	)
Total from investment operations			0.88			(1.15	)		0.72			12.26			3.65			(3.09	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.99			5.13			5.92			0.10			—
Total distributions			—			1.99			5.13			5.92			0.10			—
Net asset value, end of year		$	23.35		$	22.47		$	25.61		$	30.02		$	23.68		$	20.13
Total return (%)*			3.92			(4.44	)		2.62			52.76			18.15			(13.31	)
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			1.60			1.59			1.56			1.57			1.59			1.59
Net investment income (loss), net of waivers and reimbursements			(0.80	)		(0.85	)		(1.00	)		(0.87	)		(0.96	)		(1.25	)
Net investment income (loss), before waivers and reimbursements			(0.90	)		(0.94	)		(1.06	)		(0.94	)		(1.05	)		(1.34	)
Class N net assets at end of year (in thousands)		$	105,104		$	111,944		$	148,201		$	211,562		$	130,382		$	202,341
Portfolio turnover rate (%)*			107			91			82			91			89			97

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014			2013			2012			2011
Net asset value, beginning of year		$	24.17		$	27.32		$	31.61		$	24.66		$	20.91		$	24.07
Income (loss) from investment operations:
Net investment income (loss)			(0.06	)		(0.17	)		(0.23	)		(0.19	)		(0.16	)		(0.23	)
Net realized and unrealized gain (loss) on investments			1.04			(0.99	)		1.07			13.06			4.01			(2.93	)
Total from investment operations			0.98			(1.16	)		0.84			12.87			3.85			(3.16	)
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.99			5.13			5.92			0.10			—
Total distributions			—			1.99			5.13			5.92			0.10			—
Net asset value, end of year		$	25.15		$	24.17		$	27.32		$	31.61		$	24.66		$	20.91
Total return (%)*			4.05			(4.20	)		2.87			53.13			18.43			(13.13	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25			1.25			1.25			1.25			1.25			1.25
Expenses, before waivers and reimbursements			1.30			1.30			1.30			1.27			1.35			1.35
Net investment income (loss), net of waivers and reimbursements			(0.55	)		(0.61	)		(0.75	)		(0.63	)		(0.71	)		(1.00	)
Net investment income (loss), before waivers and reimbursements			(0.60	)		(0.66	)		(0.80	)		(0.65	)		(0.81	)		(1.10	)
Class I net assets at end of year (in thousands)		$	260,083		$	261,269		$	364,241		$	415,797		$	266,431		$	352,397
Portfolio turnover rate (%)*			107			91			82			91			89			97

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

160

Semiannual Report

June 30, 2016

Financial Highlights

Small Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	16.68	$	17.76		$	17.63		$	13.65		$	12.26	$	13.71
Income (loss) from investment operations:
Net investment income (loss)			0.03		0.02			(0.03	)		(0.05	)		0.10		0.00	^
Net realized and unrealized gain (loss) on investments			1.11		(1.05	)		0.81			5.32			1.43		(0.97	)
Total from investment operations			1.14		(1.03	)		0.78			5.27			1.53		(0.97	)
Less distributions from:
Net investment income			—		—			—			—			0.08		0.02
Net realized gain			—		0.05			0.65			1.29			0.06		0.46
Return of capital			—		—			—			—			—		0.00	^
Total distributions			—		0.05			0.65			1.29			0.14		0.48
Net asset value, end of year		$	17.82	$	16.68		$	17.76		$	17.63		$	13.65	$	12.26
Total return (%)*			6.83		(5.77	)		4.49			38.91			12.49		(6.95	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.50		1.50			1.50			1.49			1.43		1.38
Expenses, before waivers and reimbursements			1.54		1.54			1.53			1.55			1.60		1.60
Net investment income (loss), net of waivers and reimbursements			0.32		0.14			(0.17	)		(0.33	)		0.78		(0.01	)
Net investment income (loss), before waivers and reimbursements			0.28		0.10			(0.20	)		(0.39	)		0.61		(0.23	)
Class N net assets at end of year (in thousands)		$	31,153	$	33,351		$	40,223		$	55,464		$	39,084	$	40,712
Portfolio turnover rate (%)*			37		30			39			51			51		65

	Class I
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2016		2015			2014		2013			2012		2011
Net asset value, beginning of year		$	17.08	$	18.17		$	18.00	$	13.88		$	12.47	$	13.93
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.08			0.02		(0.01	)		0.14		0.03
Net realized and unrealized gain (loss) on investments			1.14		(1.08	)		0.82		5.42			1.45		(0.98	)
Total from investment operations			1.19		(1.00	)		0.84		5.41			1.59		(0.95	)
Less distributions from:
Net investment income			—		0.04			0.02		0.00	^		0.12		0.03
Net realized gain			—		0.05			0.65		1.29			0.06		0.46
Return of capital			—		—			—		—			—		0.02
Total distributions			—		0.09			0.67		1.29			0.18		0.51
Net asset value, end of year		$	18.27	$	17.08		$	18.17	$	18.00		$	13.88	$	12.47
Total return (%)*			6.97		(5.47	)		4.73		39.31			12.73		(6.68	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25		1.24			1.23		1.24			1.18		1.14
Expenses, before waivers and reimbursements			1.29		1.24			1.23		1.25			1.29		1.30
Net investment income (loss), net of waivers and reimbursements			0.56		0.43			0.12		(0.07	)		1.02		0.26
Net investment income (loss), before waivers and reimbursements			0.52		0.43			0.12		(0.08	)		0.91		0.10
Class I net assets at end of year (in thousands)		$	566,055	$	579,010		$	544,963	$	352,832		$	196,184	$	190,686
Portfolio turnover rate (%)*			37		30			39		51			51		65

*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

161

Financial Highlights

Global Leaders Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015			2014		2013		2012			2011
Net asset value, beginning of year		$	11.58		$	11.84		$	11.43	$	9.47	$	8.10		$	8.40
Income (loss) from investment operations:
Net investment income (loss)			0.05			0.02			0.02		0.02		0.03			0.02
Net realized and unrealized gain (loss) on investments			(0.24	)		0.27			0.41		1.96		1.37			(0.31	)
Total from investment operations			(0.19	)		0.29			0.43		1.98		1.40			(0.29	)
Less distributions from:
Net investment income			—			0.01			—		0.02		0.03			0.01
Net realized gain			—			0.54			0.02		—		—			—
Total distributions			—			0.55			0.02		0.02		0.03			0.01
Net asset value, end of year		$	11.39		$	11.58		$	11.84	$	11.43	$	9.47		$	8.10
Total return (%)*			(1.64	)		2.49			3.76		20.86		17.25			(3.47	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.34			1.39			1.50		1.50		1.50			1.50
Expenses, before waivers and reimbursements			1.61			1.61			1.62		1.63		1.84			1.82
Net investment income (loss), net of waivers and reimbursements			0.82			0.12			0.16		0.18		0.29			0.29
Net investment income (loss), before waivers and reimbursements			0.55			(0.10	)		0.04		0.05		(0.05	)		(0.03	)
Class N net assets at end of year (in thousands)		$	6,054		$	5,588		$	5,007	$	6,403	$	5,215		$	3,740
Portfolio turnover rate (%)*			71			55			60		70		73			75

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2016			2015		2014		2013		2012		2011
Net asset value, beginning of year		$	11.59		$	11.85	$	11.42	$	9.47	$	8.09	$	8.40
Income (loss) from investment operations:
Net investment income (loss)			0.06			0.06		0.04		0.04		0.05		0.04
Net realized and unrealized gain (loss) on investments			(0.23	)		0.26		0.43		1.95		1.38		(0.31	)
Total from investment operations			(0.17	)		0.32		0.47		1.99		1.43		(0.27	)
Less distributions from:
Net investment income			—			0.04		0.02		0.04		0.05		0.04
Net realized gain			—			0.54		0.02		—		—		—
Total distributions			—			0.58		0.04		0.04		0.05		0.04
Net asset value, end of year		$	11.42		$	11.59	$	11.85	$	11.42	$	9.47	$	8.09
Total return (%)*			(1.47	)		2.77		4.08		21.05		17.64		(3.26	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.10		1.25		1.25		1.25		1.25
Expenses, before waivers and reimbursements			1.32			1.32		1.33		1.35		1.56		1.55
Net investment income (loss), net of waivers and reimbursements			1.10			0.45		0.38		0.40		0.54		0.52
Net investment income (loss), before waivers and reimbursements			0.83			0.23		0.30		0.30		0.23		0.22
Class I net assets at end of year (in thousands)		$	46,181		$	45,853	$	52,090	$	53,562	$	45,757	$	38,834
Portfolio turnover rate (%)*			71			55		60		70		73		75

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

162

Semiannual Report

June 30, 2016

Financial Highlights

Global Leaders Fund

		Institutional Class
	(unaudited) Period Ended June 30,				Periods Ended December 31,
		2016			2015		2014		2013		2012(a)
Net asset value, beginning of year		$	11.59		$	11.85	$	11.42	$	9.47	$	9.50
Income (loss) from investment operations:
Net investment income (loss)			0.06			0.06		0.06		0.04		0.00	^
Net realized and unrealized gain (loss) on investments			(0.23	)		0.27		0.43		1.97		(0.03	)
Total from investment operations			(0.17	)		0.33		0.49		2.01		(0.03	)
Less distributions from:
Net investment income			—			0.05		0.04		0.06		—
Net realized gain			—			0.54		0.02		—		—
Total distributions			—			0.59		0.06		0.06		—
Net asset value, end of year		$	11.42		$	11.59	$	11.85	$	11.42	$	9.47
Total return (%)*			(1.47	)		2.85		4.24		21.23		(0.32	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.00			1.03		1.10		1.10		1.10
Expenses, before waivers and reimbursements			1.11			1.11		1.13		1.14		1.26
Net investment income (loss), net of waivers and reimbursements			1.10			0.47		0.51		0.37		(0.91	)
Net investment income (loss), before waivers and reimbursements			0.99			0.39		0.48		0.33		(1.07	)
Institutional Class net assets at end of year (in thousands)		$	126,606		$	137,527	$	106,565	$	87,118	$	16,022
Portfolio turnover rate (%)*			71			55		60		70		73

(a)	For the period from December 19, 2012 (Commencement of Operations) to December 31, 2012.
*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

163

Financial Highlights

International Leaders Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Periods Ended December 31,
		2016			2015		2014			2013		2012(a)
Net asset value, beginning of year		$	12.89		$	12.25	$	12.65		$	10.81		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.10			0.07		0.13			0.03			0.00	^
Net realized and unrealized gain (loss) on investments			(0.28	)		0.66		(0.47	)		1.99			0.82
Total from investment operations			(0.18	)		0.73		(0.34	)		2.02			0.82
Less distributions from:
Net investment income			—			0.02		0.06			0.18			0.01
Net realized gain			—			0.07		—			—			—
Total distributions			—			0.09		0.06			0.18			0.01
Net asset value, end of year		$	12.71		$	12.89	$	12.25		$	12.65		$	10.81
Total return (%)*			(1.40	)		6.01		(2.67	)		18.75			8.16
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.28			1.24		1.45			1.45			1.45
Expenses, before waivers and reimbursements			1.58			1.56		1.59			1.73			4.98
Net investment income (loss), net of waivers and reimbursements			1.58			0.51		1.00			0.29			0.00
Net investment income (loss), before waivers and reimbursements			1.28			0.19		0.86			0.01			(3.53	)
Class N net assets at end of year (in thousands)		$	552		$	377	$	150		$	154		$	542
Portfolio turnover rate (%)*			31			29		79			73			16

	Class I
	(unaudited)
	Period Ended
	June 30,				Periods Ended December 31,
		2016			2015		2014			2013		2012(a)
Net asset value, beginning of year		$	12.91		$	12.25	$	12.65		$	10.81		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.11			0.10		0.16			0.12			0.01
Net realized and unrealized gain (loss) on investments			(0.28	)		0.65		(0.47	)		1.94			0.82
Total from investment operations			(0.17	)		0.75		(0.31	)		2.06			0.83
Less distributions from:
Net investment income			—			0.02		0.09			0.22			0.02
Net realized gain			—			0.07		—			—			—
Total distributions			—			0.09		0.09			0.22			0.02
Net asset value, end of year		$	12.74		$	12.91	$	12.25		$	12.65		$	10.81
Total return (%)*			(1.32	)		6.18		(2.43	)		19.10			8.26
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.03			1.13		1.20			1.20			1.20
Expenses, before waivers and reimbursements			1.34			1.46		1.29			1.40			4.56
Net investment income (loss), net of waivers and reimbursements			1.84			0.75		1.25			1.06			0.22
Net investment income (loss), before waivers and reimbursements			1.53			0.42		1.16			0.86			(3.14	)
Class I net assets at end of year (in thousands)		$	20,745		$	13,474	$	9,561		$	11,629		$	4,336
Portfolio turnover rate (%)*			31			29		79			73			16

(a)	For the period from August 16, 2012 (Commencement of Operations) to December 31, 2012.
*	Not annualized for periods less than a year.
**	Annualized for periods 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.

164

Semiannual Report

June 30, 2016

Financial Highlights

International Leaders Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,				Periods Ended December 31,
		2016			2015		2014			2013		2012(a)
Net asset value, beginning of year		$	12.90		$	12.24	$	12.65		$	10.80		$	10.24
Income (loss) from investment operations:
Net investment income (loss)			0.13			0.11		0.17			0.15			0.00	^
Net realized and unrealized gain (loss) on investments			(0.30	)		0.66		(0.47	)		1.94			0.58
Total from investment operations			(0.17	)		0.77		(0.30	)		2.09			0.58
Less distributions from:
Net investment income			—			0.04		0.11			0.24			0.02
Net realized gain			—			0.07		—			—			—
Total distributions			—			0.11		0.11			0.24			0.02
Net asset value, end of year		$	12.73		$	12.90	$	12.24		$	12.65		$	10.80
Total return (%)*			(1.32	)		6.33		(2.34	)		19.39			5.67
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.95			0.98		1.05			1.05			1.05
Expenses, before waivers and reimbursements			1.10			1.15		1.14			1.25			1.84
Net investment income (loss), net of waivers and reimbursements			2.04			0.88		1.33			1.31			0.01
Net investment income (loss), before waivers and reimbursements			1.89			0.71		1.24			1.11			(0.78	)
Institutional Class net assets at end of year (in thousands)		$	179,648		$	102,227	$	78,251		$	56,991		$	5,286
Portfolio turnover rate (%)*			31			29		79			73			16

(a)	For the period from November 2, 2012 (Commencement of Operations) to December 31, 2012.
*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

165

Financial Highlights

International Equity Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015		2014			2013		2012		2011
Net asset value, beginning of year		$	13.85		$	13.76	$	14.28		$	12.05	$	10.56	$	12.12
Income (loss) from investment operations:
Net investment income (loss)			0.15			0.15		0.16			0.09		0.11		0.13
Net realized and unrealized gain (loss) on investments			(0.41	)		0.06		(0.60	)		2.25		1.75		(1.69	)
Total from investment operations			(0.26	)		0.21		(0.44	)		2.34		1.86		(1.56	)
Less distributions from:
Net investment income			—			0.12		0.08			0.11		0.37		—
Net realized gain			—			—		—			—		—		—
Total distributions			—			0.12		0.08			0.11		0.37		—
Net asset value, end of year		$	13.59		$	13.85	$	13.76		$	14.28	$	12.05	$	10.56
Total return (%)*			(1.88	)		1.54		(3.09	)		19.47		17.57		(12.87	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.30			1.32		1.38			1.45		1.45		1.45
Expenses, before waivers and reimbursements			1.64			1.60		1.56			1.65		1.71		1.60
Net investment income (loss), net of waivers and reimbursements			2.28			1.01		1.11			0.73		0.95		1.09
Net investment income (loss), before waivers and reimbursements			1.94			0.73		0.93			0.53		0.69		0.94
Class N net assets at end of year (in thousands)		$	2,862		$	3,020	$	3,497		$	4,307	$	5,648	$	6,773
Portfolio turnover rate (%)*			59			54		73			88		80		99

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015			2014		2013		2012		2011
Net asset value, beginning of year		$	13.98		$	13.91	$	14.43		$	12.18	$	10.67	$	12.22
Income (loss) from investment operations:
Net investment income (loss)			0.17			0.18		0.19			0.14		0.14		0.17
Net realized and unrealized gain (loss) on investments			(0.42	)		0.07		(0.59	)		2.26		1.77		(1.72	)
Total from investment operations			(0.25	)		0.25		(0.40	)		2.40		1.91		(1.55	)
Less distributions from:
Net investment income			—			0.18		0.12			0.15		0.40		—
Net realized gain			—			—		—			—		—		—
Total distributions			—			0.18		0.12			0.15		0.40		—
Net asset value, end of year		$	13.73		$	13.98	$	13.91		$	14.43	$	12.18	$	10.67
Total return (%)*			(1.79	)		1.80		(2.80	)		19.74		17.89		(12.68	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.05			1.07		1.13			1.20		1.20		1.20
Expenses, before waivers and reimbursements			1.37			1.34		1.32			1.41		1.44		1.33
Net investment income (loss), net of waivers and reimbursements			2.55			1.26		1.35			1.07		1.17		1.43
Net investment income (loss), before waivers and reimbursements			2.23			0.99		1.16			0.86		0.93		1.30
Class I net assets at end of year (in thousands)		$	68,082		$	60,886	$	65,012		$	75,271	$	64,536	$	68,884
Portfolio turnover rate (%)*			59			54		73			88		80		99

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

166

Semiannual Report

June 30, 2016

Financial Highlights

Institutional International Equity Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015		2014			2013		2012		2011
Net asset value, beginning of year		$	12.12		$	12.01	$	12.70		$	10.82	$	9.27	$	10.78
Income (loss) from investment operations:
Net investment income (loss)			0.16			0.15		0.21			0.13		0.13		0.16
Net realized and unrealized gain (loss) on investments			(0.37	)		0.08		(0.65	)		2.00		1.57		(1.47	)
Total from investment operations			(0.21	)		0.23		(0.44	)		2.13		1.70		(1.31	)
Less distributions from:
Net investment income			—			0.12		0.25			0.25		0.15		0.20
Net realized gain			—			—		—			—		—		—
Total distributions			—			0.12		0.25			0.25		0.15		0.20
Net asset value, end of year		$	11.91		$	12.12	$	12.01		$	12.70	$	10.82	$	9.27
Total return (%)*			(1.73	)		1.91		(3.50	)		19.78		18.31		(12.12	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.00			1.00		1.03			1.10		1.10		1.10
Expenses, before waivers and reimbursements			1.71			1.76		1.63			1.12		1.16		1.10
Net investment income (loss), net of waivers and reimbursements			2.83			1.23		1.61			1.12		1.28		1.48
Net investment income (loss), before waivers and reimbursements			2.12			0.47		1.01			1.10		1.22		1.48
Institutional Class net assets at end of year (in thousands)		$	15,818		$	16,030	$	14,574		$	100,805	$	109,690	$	111,474
Portfolio turnover rate (%)*			56			54		61			84		86		91

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2016

William Blair Funds

167

Financial Highlights

International Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015			2014			2013		2012		2011
Net asset value, beginning of year		$	24.94		$	25.24		$	26.30		$	22.43	$	18.68	$	21.85
Income (loss) from investment operations:
Net investment income (loss)			0.19			0.18			0.31			0.27		0.26		0.26
Net realized and unrealized gain (loss) on investments			(1.14	)		(0.25	)		(1.15	)		3.89		4.16		(3.43	)
Total from investment operations			(0.95	)		(0.07	)		(0.84	)		4.16		4.42		(3.17	)
Less distributions from:
Net investment income			—			0.23			0.22			0.29		0.67		—
Net realized gain			—			—			—			—		—		—
Total distributions			—			0.23			0.22			0.29		0.67		—
Net asset value, end of year		$	23.99		$	24.94		$	25.24		$	26.30	$	22.43	$	18.68
Total return (%)*			(3.81	)		(0.27	)		(3.19	)		18.57		23.67		(14.51	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.44			1.42			1.44			1.44		1.44		1.45
Expenses, before waivers and reimbursements.			1.44			1.42			1.44			1.44		1.44		1.46
Net investment income (loss), net of waivers and reimbursements			1.58			0.71			1.17			1.13		1.25		1.22
Net investment income (loss), before waivers and reimbursements			1.58			0.71			1.17			1.13		1.25		1.21
Class N net assets at end of year (in thousands)		$	789,678		$	1,023,588		$	978,433		$	1,418,083	$	1,269,736	$	1,277,534
Portfolio turnover rate (%)*			84			70			79			97		81		103

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015			2014			2013		2012		2011
Net asset value, beginning of year		$	25.51		$	25.82		$	26.91		$	22.94	$	19.10	$	22.34
Income (loss) from investment operations:
Net investment income (loss)			0.24			0.27			0.36			0.35		0.32		0.30
Net realized and unrealized gain (loss) on investments			(1.17	)		(0.28	)		(1.13	)		3.99		4.25		(3.48	)
Total from investment operations			(0.93	)		(0.01	)		(0.77	)		4.34		4.57		(3.18	)
Less distributions from:
Net investment income			—			0.30			0.32			0.37		0.73		0.06
Net realized gain			—			—			—			—		—		—
Total distributions			—			0.30			0.32			0.37		0.73		0.06
Net asset value, end of year		$	24.58		$	25.51		$	25.82		$	26.91	$	22.94	$	19.10
Total return (%)*			(3.65	)		(0.03	)		(2.86	)		18.96		23.96		(14.23	)
Ratios to average daily net assets (%):**
Expenses			1.14			1.14			1.14			1.11		1.15		1.15
Net investment income (loss)			1.96			1.02			1.36			1.43		1.51		1.40
Class I net assets at end of year (in thousands)		$	2,446,662		$	2,655,156		$	2,705,054		$	2,877,541	$	2,402,897	$	1,951,368
Portfolio turnover rate (%)*			84			70			79			97		81		103

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

168

Semiannual Report

June 30, 2016

Financial Highlights

Institutional International Growth Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015			2014			2013		2012		2011
Net asset value, beginning of year		$	15.08		$	15.26		$	17.40		$	14.89	$	12.39	$	14.37
Income (loss) from investment operations:
Net investment income (loss)			0.15			0.19			0.26			0.25		0.23		0.21
Net realized and unrealized gain (loss) on investments			(0.69	)		(0.18	)		(0.71	)		2.56		2.76		(2.17	)
Total from investment operations			(0.54	)		0.01			(0.45	)		2.81		2.99		(1.96	)
Less distributions from:
Net investment income			—			0.09			0.32			0.30		0.49		0.02
Net realized gain			—			0.10			1.37			—		—		—
Total distributions			—			0.19			1.69			0.30		0.49		0.02
Net asset value, end of year		$	14.54		$	15.08		$	15.26		$	17.40	$	14.89	$	12.39
Total return (%)*			(3.58	)		0.09			(2.66	)		18.90		24.11		(13.66	)
Ratios to average daily net assets (%):**
Expenses			0.98			0.96			0.97			0.97		0.98		0.99
Net investment income (loss)			2.06			1.18			1.50			1.58		1.64		1.51
Institutional Class net assets at end of year (in thousands)		$	2,036,367		$	2,335,632		$	2,339,169		$	2,440,149	$	1,974,130	$	1,542,594
Portfolio turnover rate (%)*			85			70			83			97		83		111

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2016

William Blair Funds

169

Financial Highlights

International Small Cap Growth Fund

		Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015		2014			2013		2012		2011
Net asset value, beginning of year		$	13.50		$	12.56	$	16.08		$	13.46	$	11.36	$	13.07
Income (loss) from investment operations:
Net investment income (loss)			0.10			0.05		0.03			0.10		0.08		0.07
Net realized and unrealized gain (loss) on investments			(0.67	)		1.16		(1.38	)		3.35		2.27		(1.66	)
Total from investment operations			(0.57	)		1.21		(1.35	)		3.45		2.35		(1.59	)
Less distributions from:
Net investment income			—			0.24		0.18			0.16		0.25		0.12
Net realized gain			—			0.03		1.99			0.67		—		—
Total distributions			—			0.27		2.17			0.83		0.25		0.12
Net asset value, end of year		$	12.93		$	13.50	$	12.56		$	16.08	$	13.46	$	11.36
Total return (%)*			(4.22	)		9.67		(8.43	)		25.80		20.73		(12.16	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.45			1.47		1.58			1.59		1.61		1.64
Expenses, before waivers and reimbursements			1.60			1.62		1.58			1.59		1.61		1.64
Net investment income (loss), net of waivers and reimbursements			1.55			0.34		0.20			0.67		0.65		0.55
Net investment income (loss), before waivers and reimbursements			1.40			0.19		0.20			0.67		0.65		0.55
Class N net assets at end of year (in thousands)		$	10,741		$	11,350	$	13,676		$	18,910	$	14,771	$	18,991
Portfolio turnover rate (%)*			69			90		127			111		76		85

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2016			2015		2014			2013		2012		2011
Net asset value, beginning of year		$	13.65		$	12.70	$	16.23		$	13.58	$	11.46	$	13.19
Income (loss) from investment operations:
Net investment income (loss)			0.12			0.09		0.09			0.15		0.12		0.12
Net realized and unrealized gain (loss) on investments			(0.68	)		1.18		(1.40	)		3.37		2.30		(1.69	)
Total from investment operations			(0.56	)		1.27		(1.31	)		3.52		2.42		(1.57	)
Less distributions from:
Net investment income			—			0.29		0.23			0.20		0.30		0.16
Net realized gain			—			0.03		1.99			0.67		—		—
Total distributions			—			0.32		2.22			0.87		0.30		0.16
Net asset value, end of year		$	13.09		$	13.65	$	12.70		$	16.23	$	13.58	$	11.46
Total return (%)*			(4.10	)		10.00		(8.10	)		26.11		21.10		(11.84	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.16			1.16		1.28			1.30		1.30		1.28
Expenses, before waivers and reimbursements			1.31			1.31		1.28			1.30		1.30		1.28
Net investment income (loss), net of waivers and reimbursements			1.84			0.66		0.56			0.96		0.95		0.92
Net investment income (loss), before waivers and reimbursements			1.69			0.51		0.56			0.96		0.95		0.92
Class I net assets at end of year (in thousands)		$	327,339		$	342,232	$	364,161		$	508,758	$	359,557	$	364,574
Portfolio turnover rate (%)*			69			90		127			111		76		85

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

170

Semiannual Report

June 30, 2016

Financial Highlights

International Small Cap Growth Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,									Years Ended December 31,
		2016			2015		2014			2013		2012		2011
Net asset value, beginning of year		$	13.72		$	12.77	$	16.32		$	13.64	$	11.51	$	13.24
Income (loss) from investment operations:
Net investment income (loss)			0.12			0.10		0.12			0.18		0.15		0.14
Net realized and unrealized gain (loss) on investments			(0.68	)		1.18		(1.41	)		3.41		2.31		(1.68	)
Total from investment operations			(0.56	)		1.28		(1.29	)		3.59		2.46		(1.54	)
Less distributions from:
Net investment income			—			0.30		0.27			0.24		0.33		0.19
Net realized gain			—			0.03		1.99			0.67		—		—
Total distributions			—			0.33		2.26			0.91		0.33		0.19
Net asset value, end of year		$	13.16		$	13.72	$	12.77		$	16.32	$	13.64	$	11.51
Total return (%)*			(4.08	)		10.03		(7.91	)		26.49		21.36		(11.60	)
Ratios to average daily net assets (%):**
Expenses			1.08			1.08		1.06			1.06		1.08		1.08
Net investment income (loss),			1.92			0.76		0.74			1.20		1.14		1.10
Institutional Class net assets at end of year (in thousands)		$	204,717		$	221,018	$	245,103		$	408,524	$	345,180	$	334,656
Portfolio turnover rate (%)*			69			90		127			111		76		85

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2016

William Blair Funds

171

Financial Highlights

Emerging Markets Leaders Fund

	Class N
	(unaudited)
	Period Ended
	June 30,									Years Ended December 31,
		2016		2015			2014			2013			2012			2011
Net asset value, beginning of year		$	7.73	$	9.06		$	9.10		$	9.20		$	7.68		$	10.34
Income (loss) from investment operations:
Net investment income (loss)			0.03		0.02			0.05			(0.02	)		0.02			0.04
Net realized and unrealized gain (loss) on investments			0.31		(1.34	)		0.14			(0.05	)		1.54			(2.08	)
Total from investment operations			0.34		(1.32	)		0.19			(0.07	)		1.56			(2.04	)
Less distributions from:
Net investment income			—		—			0.00	^		0.03			0.04			—
Net realized gain			—		0.01			0.23			—			—			0.62
Total distributions			—		0.01			0.23			0.03			0.04			0.62
Net asset value, end of year		$	8.07	$	7.73		$	9.06		$	9.10		$	9.20		$	7.68
Total return (%)*			4.40		(14.56	)		2.17			(0.74	)		20.37			(19.55	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.65		1.64			1.65			1.65			1.65			1.65
Expenses, before waivers and reimbursements			1.94		1.89			1.82			1.83			2.10			1.83
Net investment income (loss), net of waivers and reimbursements			0.82		0.18			0.51			(0.23	)		0.26			0.44
Net investment income (loss), before waivers and reimbursements			0.53		(0.07	)		0.34			(0.41	)		(0.19	)		0.26
Class N net assets at end of year (in thousands)		$	1,876	$	1,599		$	1,832		$	1,959		$	249		$	46
Portfolio turnover rate (%)*			113		110			131			131			94			142

	Class I
	(unaudited)
	Period Ended
	June 30,									Years Ended December 31,
		2016		2015			2014			2013			2012			2011
Net asset value, beginning of year		$	7.74	$	9.08		$	9.10		$	9.18		$	7.66		$	10.35
Income (loss) from investment operations:
Net investment income (loss)			0.04		0.05			0.08			0.05			0.07			0.06
Net realized and unrealized gain (loss) on investments			0.32		(1.36	)		0.15			(0.10	)		1.51			(2.08	)
Total from investment operations			0.36		(1.31	)		0.23			(0.05	)		1.58			(2.02	)
Less distributions from:
Net investment income			—		0.02			0.02			0.03			0.06			0.05
Net realized gain			—		0.01			0.23			—			—			0.62
Return of capital			—		—			—			—			—			0.00	^
Total distributions			—		0.03			0.25			0.03			0.06			0.67
Net asset value, end of year		$	8.10	$	7.74		$	9.08		$	9.10		$	9.18		$	7.66
Total return (%)*			4.65		(14.37	)		2.62			(0.60	)		20.64			(19.34	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.30		1.29			1.40			1.40			1.40			1.40
Expenses, before waivers and reimbursements			1.59		1.54			1.60			1.58			1.75			1.58
Net investment income (loss), net of waivers and reimbursements			1.09		0.53			0.84			0.51			0.83			0.69
Net investment income (loss), before waivers and reimbursements			0.80		0.28			0.64			0.33			0.48			0.51
Class I net assets at end of year (in thousands)		$	27,766	$	32,862		$	28,475		$	34,590		$	25,628		$	21,610
Portfolio turnover rate (%)*			113		110			131			131			94			142

*	Not annualized for periods less than a year.
**	Annualized for periods 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

Semiannual Report

June 30, 2016

Financial Highlights

Emerging Markets Leaders Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013			2012		2011
Net asset value, beginning of year		$	7.74	$	9.07		$	9.10	$	9.18		$	7.65	$	10.35
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.04			0.08		0.06			0.08		0.09
Net realized and unrealized gain (loss) on investments			0.31		(1.33	)		0.16		(0.10	)		1.52		(2.10	)
Total from investment operations			0.36		(1.29	)		0.24		(0.04	)		1.60		(2.01	)
Less distributions from:
Net investment income			—		0.03			0.04		0.04			0.07		0.06
Net realized gain			—		0.01			0.23		—			—		0.63
Return of capital			—		—			—		—			—		0.00	^
Total distributions			—		0.04			0.27		0.04			0.07		0.69
Net asset value, end of year		$	8.10	$	7.74		$	9.07	$	9.10		$	9.18	$	7.65
Total return (%)*			4.65		(14.24	)		2.68		(0.46	)		20.97		(19.30	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25		1.25			1.25		1.25			1.25		1.25
Expenses, before waivers and reimbursements			1.39		1.35			1.42		1.42			1.59		1.41
Net investment income (loss), net of waivers and reimbursements			1.31		0.49			0.83		0.68			0.90		0.90
Net investment income (loss), before waivers and reimbursements			1.17		0.39			0.66		0.51			0.56		0.74
Institutional Class net assets at end of year (in thousands)		$	121,325	$	93,217		$	75,875	$	36,509		$	43,102	$	26,166
Portfolio turnover rate (%)*			113		110			131		131			94		142

*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

173

Financial Highlights

Emerging Markets Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013		2012		2011
Net asset value, beginning of year		$	10.85	$	12.91		$	13.28	$	13.40	$	11.16	$	15.76
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.04			0.08		0.05		0.07		0.07
Net realized and unrealized gain (loss) on investments			0.50		(1.98	)		0.37		0.09		2.24		(2.84	)
Total from investment operations			0.55		(1.94	)		0.45		0.14		2.31		(2.77	)
Less distributions from:
Net investment income			—		—			0.08		0.01		0.07		—
Net realized gain			—		0.12			0.74		0.25		—		1.83
Total distributions			—		0.12			0.82		0.26		0.07		1.83
Net asset value, end of year		$	11.40	$	10.85		$	12.91	$	13.28	$	13.40	$	11.16
Total return (%)*			5.07		(15.03	)		3.40		1.05		20.70		(17.29	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.50		1.50			1.64		1.68		1.69		1.68
Expenses, before waivers and reimbursements			1.65		1.65			1.64		1.68		1.69		1.68
Net investment income (loss), net of waivers and reimbursements			0.98		0.33			0.55		0.39		0.59		0.48
Net investment income (loss), before waivers and reimbursements			0.83		0.18			0.55		0.39		0.59		0.48
Class N net assets at end of year (in thousands)		$	9,350	$	9,367		$	12,638	$	13,723	$	16,724	$	17,474
Portfolio turnover rate (%)*			115		121			101		118		90		104

	Class I
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013		2012		2011
Net asset value, beginning of year		$	10.96	$	13.01		$	13.38	$	13.50	$	11.25	$	15.87
Income (loss) from investment operations:
Net investment income (loss)			0.06		0.07			0.11		0.08		0.11		0.11
Net realized and unrealized gain (loss) on investments			0.51		(2.00	)		0.37		0.10		2.25		(2.85	)
Total from investment operations			0.57		(1.93	)		0.48		0.18		2.36		(2.74	)
Less distributions from:
Net investment income			—		—			0.11		0.05		0.11		0.05
Net realized gain			—		0.12			0.74		0.25		—		1.83
Total distributions			—		0.12			0.85		0.30		0.11		1.88
Net asset value, end of year		$	11.53	$	10.96		$	13.01	$	13.38	$	13.50	$	11.25
Total return (%)*			5.20		(14.83	)		3.65		1.36		21.01		(17.00	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.26		1.25			1.40		1.41		1.41		1.38
Expenses, before waivers and reimbursements			1.41		1.40			1.40		1.41		1.41		1.38
Net investment income (loss), net of waivers and reimbursements			1.17		0.58			0.79		0.62		0.86		0.77
Net investment income (loss), before waivers and reimbursements			1.02		0.43			0.79		0.62		0.86		0.77
Class I net assets at end of year (in thousands)		$	104,588	$	130,491		$	166,488	$	152,588	$	144,942	$	124,739
Portfolio turnover rate (%)*			115		121			101		118		90		104

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

174

Semiannual Report

June 30, 2016

Financial Highlights

Emerging Markets Growth Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013		2012		2011
Net asset value, beginning of year		$	11.05	$	13.09		$	13.46	$	13.59	$	11.32	$	15.96
Income (loss) from investment operations:
Net investment income (loss)			0.07		0.08			0.14		0.12		0.14		0.14
Net realized and unrealized gain (loss) on investments			0.50		(2.00	)		0.37		0.08		2.27		(2.87	)
Total from investment operations			0.57		(1.92	)		0.51		0.20		2.41		(2.73	)
Less distributions from:
Net investment income			—		—			0.14		0.08		0.14		0.08
Net realized gain			—		0.12			0.74		0.25		—		1.83
Total distributions			—		0.12			0.88		0.33		0.14		1.91
Net asset value, end of year		$	11.62	$	11.05		$	13.09	$	13.46	$	13.59	$	11.32
Total return (%)*			5.16		(14.67	)		3.85		1.49		21.28		(16.82	)
Ratios to average daily net assets (%):**
Expenses			1.18		1.17			1.18		1.19		1.20		1.19
Net investment income (loss)			1.39		0.61			1.00		0.87		1.12		0.93
Institutional Class net assets at end of year (in thousands)		$	901,919	$	739,253		$	806,708	$	833,711	$	802,571	$	675,633
Portfolio turnover rate (%)*			115		121			101		118		90		104

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

June 30, 2016

William Blair Funds

175

Financial Highlights

Emerging Markets Small Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013			2012			2011(a)
Net asset value, beginning of year		$	14.84	$	16.52		$	15.12	$	12.99		$	9.73		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.09		(0.01	)		0.04		0.05			0.06			0.00	^
Net realized and unrealized gain (loss) on investments			0.04		(1.05	)		2.13		2.08			3.27			(0.27	)
Total from investment operations			0.13		(1.06	)		2.17		2.13			3.33			(0.27	)
Less distributions from:
Net investment income			—		—			0.03		—			0.07			—
Net realized gain			—		0.62			0.74		0.00	^		—			—
Total distributions			—		0.62			0.77		0.00	^		0.07			—
Net asset value, end of year		$	14.97	$	14.84		$	16.52	$	15.12		$	12.99		$	9.73
Total return (%)*			0.88		(6.40	)		14.41		16.42			34.23			(2.70	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.61		1.65			1.65		1.65			1.65			1.65
Expenses, before waivers and reimbursements			1.83		1.94			1.74		2.19			4.76			9.53
Net investment income (loss), net of waivers and reimbursements			1.32		(0.06	)		0.21		0.38			0.56			0.08
Net investment income (loss), before waivers and reimbursements			1.10		(0.35	)		0.12		(0.16	)		(2.54	)		(7.80	)
Class N net assets at end of year (in thousands)		$	10,903	$	11,306		$	10,745	$	9,313		$	3,016		$	1,012
Portfolio turnover rate (%)*			148		167			124		138			78			17

	Class I
	(unaudited)
	Period Ended
	June 30,								Years Ended December 31,
		2016		2015			2014		2013			2012			2011(a)
Net asset value, beginning of year		$	14.90	$	16.52		$	15.13	$	12.99		$	9.73		$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.12		0.05			0.02		0.05			0.08			0.01
Net realized and unrealized gain (loss) on investments			0.02		(1.05	)		2.20		2.12			3.29			(0.28	)
Total from investment operations			0.14		(1.00	)		2.22		2.17			3.37			(0.27	)
Less distributions from:
Net investment income			—		—			0.09		0.03			0.11			—
Net realized gain			—		0.62			0.74		0.00	^		—			—
Total distributions			—		0.62			0.83		0.03			0.11			—
Net asset value, end of year		$	15.04	$	14.90		$	16.52	$	15.13		$	12.99		$	9.73
Total return (%)*			0.94		(6.03	)		14.73		16.70			34.62			(2.70	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.30		1.31			1.40		1.40			1.40			1.40
Expenses, before waivers and reimbursements			1.52		1.52			1.49		1.72			4.40			9.28
Net investment income (loss), net of waivers and reimbursements			1.63		0.30			0.15		0.35			0.70			0.33
Net investment income (loss), before waivers and reimbursements			1.41		0.09			0.06		0.03			(2.30	)		(7.55	)
Class I net assets at end of year (in thousands)		$	164,563	$	162,375		$	119,662	$	58,123		$	8,763		$	2,260
Portfolio turnover rate (%)*			148		167			124		138			78			17

(a)	For the period from October 24, 2011 (Commencement of Operations) to December 31, 2011.
*	Not annualized for periods that are less than a year.
**	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.

176

Semiannual Report

June 30, 2016

Financial Highlights

Emerging Markets Small Cap Growth Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,			Periods Ended December 31,
		2016		2015			2014		2013			2012(a)
Net asset value, beginning of year		$	14.92	$	16.53		$	15.14	$	13.00		$	12.79
Income (loss) from investment operations:
Net investment income (loss)			0.12		0.06			0.06		0.07			0.00	^
Net realized and unrealized gain (loss) on investments			0.03		(1.05	)		2.18		2.11			0.21
Total from investment operations			0.15		(0.99	)		2.24		2.18			0.21
Less distributions from:
Net investment income			—		0.00	^		0.11		0.04			—
Net realized gain			—		0.62			0.74		0.00	^		—
Total distributions			—		0.62			0.85		0.04			—
Net asset value, end of year		$	15.07	$	14.92		$	16.53	$	15.14		$	13.00
Total return (%)*			1.01		(5.97	)		14.85		16.80			1.64
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			1.25		1.25			1.25		1.25			1.25
Expenses, before waivers and reimbursements			1.32		1.31			1.34		1.56			2.32
Net investment income (loss), net of waivers and reimbursements			1.72		0.34			0.37		0.47			(0.87	)
Net investment income (loss), before waivers and reimbursements			1.65		0.28			0.28		0.16			(1.93	)
Institutional Class net assets at end of year (in thousands)		$	130,068	$	123,160		$	123,496	$	91,663		$	15,242
Portfolio turnover rate (%)*			148		167			124		138			78

(a)	For the period from December 20, 2012 (Commencement of Operations) to December 31, 2012.
*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

177

Financial Highlights

Bond Fund

	Class N
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	10.34	$	10.74		$	10.60		$	11.28		$	10.91	$	10.70
Income (loss) from investment operations:
Net investment income (loss)			0.14		0.27			0.31			0.32			0.36		0.43
Net realized and unrealized gain (loss) on investments			0.41		(0.29	)		0.23			(0.47	)		0.53		0.34
Total from investment operations			0.55		(0.02	)		0.54			(0.15	)		0.89		0.77
Less distributions from:
Net investment income			0.19		0.38			0.40			0.42			0.45		0.47
Net realized gain			—		—			0.00	^		0.11			0.07		0.09
Total distributions			0.19		0.38			0.40			0.53			0.52		0.56
Net asset value, end of year		$	10.70	$	10.34		$	10.74		$	10.60		$	11.28	$	10.91
Total return (%)*			5.37		(0.23	)		5.10			(1.37	)		8.33		7.41
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.62		0.61			0.65			0.65			0.65		0.65
Expenses, before waivers and reimbursements			0.80		0.79			0.85			0.82			0.81		0.76
Net investment income (loss), net of waivers and reimbursements			2.69		2.60			2.90			2.89			3.25		3.97
Net investment income (loss), before waivers and reimbursements			2.51		2.42			2.70			2.72			3.09		3.86
Class N net assets at end of year (in thousands)		$	151,711	$	139,303		$	16,720		$	11,389		$	32,867	$	8,345
Portfolio turnover rate (%)*			24		32			35			41			25		28

	Class I
		(unaudited)
		Period Ended
	June 30,				Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	10.24	$	10.64		$	10.49		$	11.17		$	10.80	$	10.59
Income (loss) from investment operations:
Net investment income (loss)			0.15		0.31			0.33			0.33			0.38		0.45
Net realized and unrealized gain (loss) on investments			0.40		(0.31	)		0.23			(0.48	)		0.52		0.33
Total from investment operations			0.55		—			0.56			(0.15	)		0.90		0.78
Less distributions from:
Net investment income			0.20		0.40			0.41			0.42			0.46		0.48
Net realized gain			—		—			0.00	^		0.11			0.07		0.09
Total distributions			0.20		0.40			0.41			0.53			0.53		0.57
Net asset value, end of year		$	10.59	$	10.24		$	10.64		$	10.49		$	11.17	$	10.80
Total return (%)*			5.40		(0.05	)		5.37			(1.28	)		8.54		7.62
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.41		0.41			0.50			0.50			0.50		0.50
Expenses, before waivers and reimbursements			0.58		0.59			0.60			0.58			0.56		0.55
Net investment income (loss), net of waivers and reimbursements			2.90		2.93			3.07			3.05			3.45		4.17
Net investment income (loss), before waivers and reimbursements			2.73		2.75			2.97			2.97			3.39		4.12
Class I net assets at end of year (in thousands)		$	313,945	$	237,587		$	149,466		$	145,939		$	172,836	$	154,224
Portfolio turnover rate (%)*			24		32			35			41			25		28

*	Not annualized for periods less than a year.
**	Annualized for periods 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

Semiannual Report

June 30, 2016

Financial Highlights

Bond Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	10.23	$	10.63		$	10.48		$	11.16		$	10.80	$	10.58
Income (loss) from investment operations:
Net investment income (loss)			0.15		0.32			0.34			0.35			0.40		0.45
Net realized and unrealized gain (loss) on investments			0.40		(0.31	)		0.23			(0.48	)		0.51		0.36
Total from investment operations			0.55		0.01			0.57			(0.13	)		0.91		0.81
Less distributions from:
Net investment income			0.20		0.41			0.42			0.44			0.48		0.50
Net realized gain			—		—			0.00	^		0.11			0.07		0.09
Total distributions			0.20		0.41			0.42			0.55			0.55		0.59
Net asset value, end of year		$	10.58	$	10.23		$	10.63		$	10.48		$	11.16	$	10.80
Total return (%)*			5.43		0.01			5.53			(1.13	)		8.61		7.88
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.35		0.35			0.35			0.35			0.35		0.35
Expenses, before waivers and reimbursements			0.37		0.38			0.41			0.39			0.38		0.39
Net investment income (loss), net of waivers and reimbursements			2.97		3.01			3.23			3.19			3.60		4.24
Net investment income (loss), before waivers and reimbursements			2.95		2.98			3.17			3.15			3.57		4.20
Institutional Class net assets at end of year (in thousands)		$	107,468	$	103,904		$	97,341		$	87,527		$	91,039	$	69,447
Portfolio turnover rate (%)*			24		32			35			41			25		28

*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

179

Financial Highlights

Income Fund

	Class N
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
		2016		2015			2014		2013			2012		2011
Net asset value, beginning of year		$	8.90	$	9.12		$	9.11	$	9.55		$	9.32	$	9.22
Income (loss) from investment operations:
Net investment income (loss)			0.09		0.15			0.18		0.20			0.24		0.32
Net realized and unrealized gain (loss) on investments			0.17		(0.11	)		0.10		(0.35	)		0.31		0.15
Total from investment operations			0.26		0.04			0.28		(0.15	)		0.55		0.47
Less distributions from:
Net investment income			0.13		0.26			0.27		0.29			0.32		0.37
Net realized gain			—		—			—		—			—		—
Total distributions			0.13		0.26			0.27		0.29			0.32		0.37
Net asset value, end of year		$	9.03	$	8.90		$	9.12	$	9.11		$	9.55	$	9.32
Total return (%)*			2.94		0.39			3.06		(1.61	)		6.00		5.21
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.81		0.81			0.84		0.85			0.83		0.85
Expenses, before waivers and reimbursements			0.81		0.81			0.84		1.03			0.83		0.91
Net investment income (loss), net of waivers and reimbursements			1.91		1.71			1.99		2.13			2.49		3.40
Net investment income (loss), before waivers and reimbursements			1.91		1.71			1.99		1.95			2.49		3.34
Class N net assets at end of year (in thousands)		$	35,122	$	32,942		$	34,020	$	41,662		$	68,947	$	44,802
Portfolio turnover rate (%)*			27		21			30		41			33		39

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
			2016	2015			2014		2013			2012		2011
Net asset value, beginning of year		$	8.83	$	9.05		$	9.05	$	9.48		$	9.25	$	9.15
Income (loss) from investment operations:
Net investment income (loss)			0.10		0.18			0.20		0.21			0.26		0.34
Net realized and unrealized gain (loss) on investments			0.18		(0.12	)		0.09		(0.34	)		0.31		0.15
Total from investment operations			0.28		0.06			0.29		(0.13	)		0.57		0.49
Less distributions from:
Net investment income			0.14		0.28			0.29		0.30			0.34		0.39
Net realized gain			—		—			—		—			—		—
Total distributions			0.14		0.28			0.29		0.30			0.34		0.39
Net asset value, end of year		$	8.97	$	8.83		$	9.05	$	9.05		$	9.48	$	9.25
Total return (%)*			3.19		0.63			3.20		(1.41	)		6.28		5.46
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.57		0.55			0.59		0.70			0.58		0.64
Expenses, before waivers and reimbursements			0.57		0.55			0.59		0.77			0.58		0.64
Net investment income (loss), net of waivers and reimbursements			2.15		1.97			2.24		2.30			2.78		3.66
Net investment income (loss), before waivers and reimbursements			2.15		1.97			2.24		2.23			2.78		3.66
Class I net assets at end of year (in thousands)		$	58,655	$	62,722		$	64,834	$	64,152		$	72,830	$	67,183
Portfolio turnover rate (%)*			27		21			30		41			33		39

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

180

Semiannual Report

June 30, 2016

Financial Highlights

Low Duration Fund

	Class N
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	9.16	$	9.38		$	9.52		$	9.83		$	9.82	$	9.90
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.07			0.11			0.10			0.13		0.15
Net realized and unrealized gain (loss) on investments			0.05		(0.07	)		(0.00	)^		(0.16	)		0.14		0.02
Total from investment operations			0.10		—			0.11			(0.06	)		0.27		0.17
Less distributions from:
Net investment income			0.10		0.22			0.25			0.25			0.26		0.25
Net realized gain			—		—			—			—			—		—
Total distributions			0.10		0.22			0.25			0.25			0.26		0.25
Net asset value, end of year		$	9.16	$	9.16		$	9.38		$	9.52		$	9.83	$	9.82
Total return (%)*			1.13		0.01			1.20			(0.62	)		2.80		1.73
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.63		0.60			0.70			0.70			0.70		0.70
Expenses, before waivers and reimbursements			0.82		0.77			0.75			0.71			0.74		0.73
Net investment income (loss), net of waivers and reimbursements			1.18		0.71			1.19			1.06			1.37		1.52
Net investment income (loss), before waivers and reimbursements			0.99		0.54			1.14			1.05			1.33		1.49
Class N net assets at end of year (in thousands)		$	6,561	$	2,712		$	4,969		$	5,158		$	11,216	$	6,260
Portfolio turnover rate (%)*			112		106			83			56			20		43

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
			2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	9.16	$	9.37		$	9.52		$	9.83		$	9.82	$	9.89
Income (loss) from investment operations:
Net investment income (loss)			0.06		0.08			0.13			0.12			0.15		0.17
Net realized and unrealized gain (loss) on investments			0.05		(0.05	)		(0.01	)		(0.17	)		0.14		0.02
Total from investment operations			0.11		0.03			0.12			(0.05	)		0.29		0.19
Less distributions from:
Net investment income			0.11		0.24			0.27			0.26			0.28		0.26
Net realized gain			—		—			—			—			—		—
Total distributions			0.11		0.24			0.27			0.26			0.28		0.26
Net asset value, end of year		$	9.16	$	9.16		$	9.37		$	9.52		$	9.83	$	9.82
Total return (%)*			1.23		0.30			1.24			(0.47	)		2.96		1.99
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.42		0.42			0.55			0.55			0.55		0.55
Expenses, before waivers and reimbursements			0.61		0.59			0.60			0.56			0.57		0.58
Net investment income (loss), net of waivers and reimbursements			1.39		0.87			1.35			1.24			1.52		1.67
Net investment income (loss), before waivers and reimbursements			1.20		0.70			1.30			1.23			1.50		1.64
Class I net assets at end of year (in thousands)		$	116,168	$	107,137		$	104,433		$	122,583		$	157,213	$	82,828
Portfolio turnover rate (%)*			112		106			83			56			20		43

*	Not annualized for periods less than a year.
**	Annualized for periods 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, 2016

William Blair Funds

181

Financial Highlights

Low Duration Fund

	Institutional Class
	(unaudited)
	Period Ended
	June 30,			Years Ended December 31,
		2016		2015			2014			2013			2012		2011
Net asset value, beginning of year		$	9.16	$	9.38		$	9.53		$	9.83		$	9.83	$	9.90
Income (loss) from investment operations:
Net investment income (loss)			0.06		0.09			0.14			0.13			0.17		0.18
Net realized and unrealized gain (loss) on investments			0.05		(0.07	)		(0.01	)		(0.15	)		0.12		0.03
Total from investment operations			0.11		0.02			0.13			(0.02	)		0.29		0.21
Less distributions from:
Net investment income			0.11		0.24			0.28			0.28			0.29		0.28
Net realized gain			—		—			—			—			—		—
Total distributions			0.11		0.24			0.28			0.28			0.29		0.28
Net asset value, end of year		$	9.16	$	9.16		$	9.38		$	9.53		$	9.83	$	9.83
Total return (%)*			1.24		0.22			1.40			(0.20	)		3.01		2.14
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements			0.40		0.40			0.40			0.39			0.40		0.40
Expenses, before waivers and reimbursements			0.44		0.42			0.43			0.39			0.41		0.42
Net investment income (loss), net of waivers and reimbursements			1.41		0.94			1.45			1.37			1.68		1.81
Net investment income (loss), before waivers and reimbursements			1.37		0.92			1.42			1.37			1.67		1.79
Institutional Class net assets at end of year (in thousands)		$	25,492	$	21,863		$	68,095		$	46,485		$	118,401	$	68,059
Portfolio turnover rate (%)*			112		106			83			56			20		43

*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

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Financial Highlights

Macro Allocation Fund

	Class N
	(unaudited)
	Period Ended				Periods Ended						Periods Ended
	June 30,				December 31,						October 31,
		2016			2015			2014(b)			2014		2013		2012(a)
Net asset value, beginning of year		$	11.32		$	12.14		$	13.07		$	12.61	$	11.28	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.00	^		0.04			0.04			0.02		0.05		0.11
Net realized and unrealized gain (loss) on investments			0.03			(0.80	)		(0.31	)		0.76		1.59		1.24
Total from investment operations			0.03			(0.76	)		(0.27	)		0.78		1.64		1.35
Less distributions from:
Net investment income			—			0.06			0.66			0.09		0.11		0.07
Net realized gain			—			—			—			0.23		0.20		—
Total distributions			—			0.06			0.66			0.32		0.31		0.07
Net asset value, end of year		$	11.35		$	11.32		$	12.14		$	13.07	$	12.61	$	11.28
Total return (%)*			0.27			(6.24	)		(2.00	)		6.34		14.87		13.61
Ratios to average daily net assets (%)**:
Expenses (excluding short dividend expense), net of waivers and reimbursements			1.27			1.27			1.35			1.35		1.35		1.35
Expenses, net of waivers and reimbursements			1.27			1.27			1.38			1.47		1.49		1.41
Expenses, before waivers and reimbursements			1.42			1.42			1.46			1.60		1.78		2.95
Net investment income (loss), net of waivers and reimbursements			0.08			0.32			2.06			0.20		0.37		1.18
Net investment income (loss), before waivers and reimbursements			(0.07	)		0.17			1.98			0.07		0.08		(0.36	)
Class N net assets at end of year (in thousands)		$	102,369		$	150,606		$	150,778		$	150,785	$	97,498	$	10,045
Portfolio turnover rate (%)*			57			34			17			59		10		40

	Class I
	(unaudited)
	Period Ended				Periods Ended							Periods Ended
	June 30,					December 31,						October 31,
		2016			2015			2014(b)			2014		2013		2012(a)
Net asset value, beginning of year		$	11.38		$	12.22		$	13.15		$	12.66	$	11.31	$	10.00
Income (loss) from investment operations:
Net investment income (loss)			0.02			0.09			0.05			0.04		0.07		0.16
Net realized and unrealized gain (loss) on investments			0.03			(0.82	)		(0.31	)		0.78		1.60		1.22
Total from investment operations			0.05			(0.73	)		(0.26	)		0.82		1.67		1.38
Less distributions from:
Net investment income			—			0.11			0.67			0.10		0.12		0.07
Net realized gain			—			—			—			0.23		0.20		—
Total distributions			—			0.11			0.67			0.33		0.32		0.07
Net asset value, end of year		$	11.43		$	11.38		$	12.22		$	13.15	$	12.66	$	11.31
Total return (%)*			0.44			(6.00	)		(1.94	)		6.60		15.06		13.91
Ratios to average daily net assets (%)**:
Expenses (excluding short dividend expense), net of waivers and reimbursements			0.99			0.98			1.07			1.10		1.10		1.10
Expenses, net of waivers and reimbursements			0.99			0.99			1.10			1.22		1.24		1.18
Expenses, before waivers and reimbursements			1.14			1.14			1.10			1.27		1.41		2.94
Net investment income (loss), net of waivers and reimbursements			0.42			0.73			2.33			0.32		0.62		1.67
Net investment income (loss), before waivers and reimbursements			0.27			0.58			2.33			0.27		0.45		(0.09	)
Class I net assets at end of year (in thousands)			$1,100,027		$1,155,051			$	649,756		$	617,531	$	224,860	$	23,095
Portfolio turnover rate (%)*			57			34			17			59		10		40

(a)	For the period from November 29, 2011 (Commencement of Operations) to October 31, 2012.
(b)	For the period from November 1, 2014 to December 31, 2014.
*	Not annualized for periods less than a year.
**	Annualized for periods less than a year.

Note: Net investment income (loss) per share is based on the average shares outstanding during the year.

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Financial Highlights

Macro Allocation Fund

	Institutional Class
	(unaudited)
	Period Ended			Periods Ended						Periods Ended
	June 30,			December 31,						October 31,
		2016		2015			2014(b)			2014		2013(a)

Net asset value, beginning of year		$	11.39	$	12.23		$	13.16		$	12.66	$	12.63
Income (loss) from investment operations:
Net investment income (loss)			0.03		0.12			0.05			0.04		0.00	^
Net realized and unrealized gain (loss) on investments			0.03		(0.84	)		(0.31	)		0.79		0.03
Total from investment operations			0.06		(0.72	)		(0.26	)		0.83		0.03
Less distributions from:
Net investment income			—		0.12			0.67			0.10		—
Net realized gain			—		—			—			0.23		—
Total distributions			—		0.12			0.67			0.33		—
Net asset value, end of year		$	11.45	$	11.39		$	12.23		$	13.16	$	12.66
Total return (%)*			0.53		(5.92	)		(1.91	)		6.71		0.24
Ratios to average daily net assets (%)**:
Expenses (excluding short dividend expense), net of waivers and reimbursements			0.91		0.90			0.88			0.93		0.95
Expenses, net of waivers and reimbursements			0.91		0.90			0.91			1.05		1.00
Expenses, before waivers and reimbursements			0.91		0.90			0.91			1.05		1.11
Net investment income (loss), net of waivers and reimbursements			0.54		0.95			2.54			0.32		(0.99	)
Net investment income (loss), before waivers and reimbursements			0.54		0.95			2.54			0.32		(1.10	)
Institutional Class net assets at end of year (in thousands)		$	533,438	$	426,230		$	158,152		$	150,447	$	5,014
Portfolio turnover rate (%)*			57		34			17			59		10

(a)	For the period from October 21, 2013 (Commencement of Share Class) to October 31, 2013.
(b)	For the period from November 1, 2014 to December 31, 2014.
*	Not annualized for periods less than a year.
**	Annualized for periods 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.

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Renewal of the Management Agreement

On April 26, 2016, 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 by 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 Investment Management, LLC (“WBIM” or the “Adviser”) on behalf of each of the William Blair Funds (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 Board did not allot a particular weight to any one factor or group of factors.

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 Adviser under the existing Management Agreement; comparative management fees and expense ratios as prepared by an independent provider (Broadridge); the estimated profits realized by the Adviser; the extent to which the Adviser realizes economies of scale as a Fund grows; and whether any fall-out benefits are being realized by the Adviser. In addition, the Independent Trustees discussed the renewal of the Management Agreement with Trust management and in private sessions with independent legal counsel at which no representatives of the Adviser 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 26, 2016 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 the Adviser. The Adviser provided extensive information in response to the request. After reviewing the information received, the Independent Trustees requested supplemental information, which the Adviser provided. The Independent Trustees also received a memorandum from independent legal counsel advising them of their duties and responsibilities in connection with the consideration of the Management Agreement. The Independent Trustees reviewed comparative performance for a performance peer universe of funds and comparative management fees and expense ratios for an expense peer group and an expense peer universe of funds provided by Broadridge for each Fund. In addition, the Independent Trustees considered: (1) the nature, quality and extent of services provided by the Adviser; (2) information comparing the performance of each Fund to one or more relevant securities indexes; (3) information comparing management fees of each Fund to fees charged by the Adviser to other funds and client accounts with similar investment strategies; (4) the estimated allocated direct or indirect costs of services provided and estimated profits realized by the Adviser for both the Trust as a whole and each Fund individually; and (5) information describing other benefits to the Adviser and its affiliate, William Blair & Company, L.L.C. (the “Distributor”), resulting from its relationship with the Funds. The Independent Trustees also noted that they receive information from the Adviser regarding the Funds throughout the year in connection with regular Board meetings, including presentations from portfolio managers. In addition, the Adviser made an in-person presentation to the Independent Trustees regarding the contract review information, including addressing the supplemental information request, and answered questions from the Independent Trustees. The Board determined that, given the totality of the information provided with respect to the Management Agreement, the Board had received sufficient information to renew the Management Agreement.

On April 15 and 25-26, 2016, 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 Adviser, Broadridge 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 Adviser 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 and, accordingly, recommended to the Board of the Trust the renewal of the Management Agreement for each Fund. 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 Adviser to the Funds, the Board noted that the Adviser 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 Board believes that a long-term relationship with a capable, conscientious adviser is in the best interests of shareholders and that shareholders have invested in the Funds knowing that the Adviser managed the Funds and knowing the management fees. The Board considered biographical information about the Trust’s officers, other Adviser personnel and the Funds’ portfolio managers, including information on the portfolio managers’ personal investments in the Fund(s) they manage. The Board also considered the administrative services performed by the Adviser, financial information regarding the Adviser, the Adviser’s execution quality and use of soft dollars, the Adviser’s risk management activities, the compliance program and the Adviser’s expense limitations in place for a number of the Funds’ share classes. The Board noted that the Adviser pays the

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compensation of all of the officers and the interested Trustees of the Trust. Based upon all relevant factors, the Board concluded that the nature, quality and extent of the services provided by the Adviser to each Fund were appropriate.

Performance. The Board reviewed information on the annualized total returns of the Class N shares of each Fund (except for Institutional International Equity Fund and Institutional International Growth Fund, which do not have Class N shares) for the one-, three-, five- and ten-year periods ended December 31, 2015, as applicable, along with annualized total return information for a performance peer universe of funds provided by Broadridge and one or more benchmark securities indexes. The Broadridge performance peer universe for each Fund included funds with a similar investment style as classified by Broadridge regardless of asset size or primary channel of distribution. Based on the information provided, the Board considered the following with respect to the total returns of each Fund.

Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one-, three- and five year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Russell 3000^®Growth Index) for the one-year period and underperformed the benchmark index for the three- and five-year periods.

Large Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one-, three- and five-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Russell 1000^®Growth Index) for the one- and three-year periods and underperformed the benchmark index for the five-year period ended December 31, 2015.

Large Cap Value Fund. The Board considered that the Adviser proposed to liquidate and terminate the Fund on or about June 15, 2016 and that the Board was asked to renew the Management Agreement to allow the Adviser to manage the Fund through its liquidation and termination date.

Mid Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one-year period and below the average of its Broadridge performance peer universe for the three- and five-year periods ended December 31, 2015. The Board also considered that the Fund was in line with the benchmark (Russell Midcap^®Growth Index) for the one-year period and underperformed the benchmark index for the three- and five-year periods ended December 31, 2015. The Board considered the Adviser’s view that the Fund’s relative underperformance was due primarily to market conditions not favoring the Adviser’s investment style for the Fund during the three- and five-year periods and to stock selection. The Adviser noted meaningful style headwinds of the past five years including higher growth orientation, higher valuation exposure and typical industry biases.

Mid Cap Value Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one-, three- and five-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Russell Midcap^®Value Index) for the one-year period and underperformed the benchmark index for the three- and five-year periods ended December 31, 2015.

Small-Mid Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (Russell 2500^TMGrowth Index) for the one-, three- and five-year periods ended December 31, 2015.

Small-Mid Cap Value Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (Russell 2500^®Value Index) for the one- and three-year periods ended December 31, 2015.

Small Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three-year period and below the average of its Broadridge performance peer universe for the one- and five-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Russell 2000^®Growth Index) for the three-year period and underperformed the benchmark index for the one- and five-year periods ended December 31, 2015.

Small Cap Value Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three-year period and below the average of its Broadridge performance peer universe for the one- and five-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Russell 2000^®Value Index) for the one- and three-year periods and underperformed the benchmark index for the five-year period ended December 31, 2015.

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Global Leaders Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one- and five-year periods and below the average of its Broadridge performance peer universe for the three-year period ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World IMI (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

International Leaders Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (MSCI All Country World Ex-U.S. IMI (net) Index) for the one- and three-year periods ended December 31, 2015.

International Equity Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (MSCI World Ex-U.S. (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

Institutional International Equity Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (MSCI World Ex-U.S. (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

International Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the five-year period and below the average of its Broadridge performance peer universe for the one- and three-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World Ex-U.S. IMI (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

Institutional International Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three- and five-year periods and below the average of its Broadridge performance peer universe for the one-year period ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World Ex-U.S. IMI (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

International Small Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (MSCI All Country World Ex-U.S. Small Cap (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

Emerging Markets Leaders Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three- and five-year periods and below the average of its Broadridge performance peer universe for the one-year period ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (MSCI Emerging Markets (net) Index) for the one-, three- and five-year periods ended December 31, 2015.

Emerging Markets Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three- and five-year periods and below the average of its Broadridge performance peer universe for the one-year period ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (MSCI Emerging Markets IMI (net) Index) for the three- and five-year periods and underperformed the benchmark index for the one-year period ended December 31, 2015.

Emerging Markets Small Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe and the benchmark (MSCI Emerging Markets Small Cap (net) Index) for the one- and three-year periods ended December 31, 2015.

Bond Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three- and five-year periods and below the average of its Broadridge performance peer universe for the one-year period ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Barclays U.S. Aggregate Bond Index) for the five-year period and underperformed the benchmark index for the one- and three-year periods ended December 31, 2015.

Income Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the one-and five-year periods and in line with the average of its Broadridge performance peer universe for the three-year period ended December 31, 2015. The Board also considered that the Fund underperformed the benchmark (Barclays Intermediate Government/Credit Bond Index) for the one- and three- year periods and was in line with the benchmark index for the five- year period ended December 31, 2015.

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Low Duration Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the five-year period and below the average of its Broadridge performance peer universe for the one- and three-year periods ended December 31, 2015. The Board also considered that the Fund outperformed the benchmark (Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index) for the five-year period, was in line with the benchmark index for the three-year period and underperformed the benchmark index for the one-year period ended December 31, 2015.

Macro Allocation Fund. The Board considered that the Fund’s total return was above the average of its Broadridge performance peer universe for the three-year period and below the average of its Broadridge performance peer universe for the one-year period ended December 31, 2015. The Board also considered that the Fund underperformed the custom benchmark (Long-Term Comparative Index) for the one- and three-year periods ended December 31, 2015. The Board considered the Adviser’s opinion that the Fund is distinguishable from its peers because it takes a top-down only and long-term fundamental approach to its strategy. In addition, the Board considered the Adviser’s view that the second-half of 2015 experienced a dramatic price move away from fundamental value in both markets and currencies resulting in a challenging environment for the Fund’s investment philosophy. Given the environment, the Board considered the Adviser’s view that it was prudent risk management to de-risk the portfolio.

The Board considered that the Adviser seeks to provide superior performance over the long term and was committed to managing each Fund consistently with the Fund’s stated investment strategies and that at times relative performance will be affected by whether the market environment favors or disfavors particular investments, styles and/or market capitalizations and concluded that the Adviser’s services benefitted the Funds.

Fees and Expenses. Class N and Class I shares. The Board reviewed each Fund’s management fee and expense ratios for Class N and Class I shares and reviewed information comparing the management fee and expense ratios to those of an expense peer group and an expense peer universe of funds provided by Broadridge for Class N and Class I shares of each Fund. The Broadridge expense peer group for Class N and Class I shares of each Fund (“Class N and Class I Broadridge Expense Group”) consisted of a group of retail no-load funds with a similar investment style and asset size as classified by Broadridge. The Broadridge expense peer universe for Class N and Class I shares of each Fund consisted of the Fund’s Class N and Class I Broadridge Expense Group and other retail no-load funds with an investment style as classified by Broadridge similar to the Fund’s. In considering the Broadridge information, the Board noted that the contractual management fees for the Growth Fund, the Large Cap Growth Fund, the Large Cap Value Fund, the International Small Cap Growth Fund, the Bond Fund, the Income Fund, the Low Duration Fund and the Macro Allocation Fund were at or below the average contractual management fee of their Class N and Class I Broadridge Expense Group. The Board also noted that the contractual management fees for the Mid Cap Growth Fund, the Mid Cap Value Fund, the Small-Mid Cap Growth Fund, the Small Mid-Cap Value Fund, the Small Cap Growth Fund, the Small Cap Value Fund, the Global Leaders Fund, the International Leaders Fund, the International Equity Fund, the International Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Growth Fund and the Emerging Markets Small Cap Growth Fund were above the average contractual management fee of their Class N and Class I Broadridge Expense Group.

Institutional shares. The Board reviewed each Fund’s management fee and expense ratio for institutional shares and reviewed information comparing the management fee and expense ratio to those of an expense peer group and an expense peer universe of funds provided by Broadridge for institutional shares of each Fund. The Broadridge expense peer group for institutional shares of each Fund (“Institutional Broadridge Expense Group”) consisted of a group of institutional funds with a similar investment style and asset size as classified by Broadridge. The Broadridge expense peer universe for institutional shares of each Fund consisted of the Fund’s Institutional Broadridge Expense Group and other institutional funds with an investment style as classified by Broadridge similar to the Fund’s. In considering the Broadridge information, the Board noted that the contractual management fees for the International Small Cap Growth Fund, the Bond Fund and the Low Duration Fund were below the average contractual management fee of their Institutional Broadridge Expense Group. The Board also noted that the contractual management fees for the Global Leaders Fund, the International Leaders Fund, the Institutional International Equity Fund, the Institutional International Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Growth Fund, the Emerging Markets Small Cap Growth Fund and the Macro Allocation Fund were above the average contractual management fee of their Institutional Broadridge Expense Group.

The Board noted the contractual expense limitations in place for all of the Funds, except the Growth Fund and the Institutional International Growth Fund, and considered the management fees waived and other expenses reimbursed by the Adviser on behalf of the Funds in 2015, noting that, for the Large Cap Value Fund, the Mid Cap Value Fund and the Small-Mid Cap Value Fund, the Adviser waived its entire management fee for each Fund and reimbursed other expenses to each Fund. The Board also considered that the Adviser had proposed to continue to contractually limit operating expenses until April 30, 2017 for the Large Cap Growth Fund, the Large Cap Value Fund, the Mid Cap Growth Fund, the Mid Cap Value Fund, the Small-Mid Cap Growth Fund, the Small-Mid Cap Value Fund, the Small Cap Growth Fund, the Small Cap Value Fund, the Global Leaders Fund, the International Leaders Fund, the International Equity Fund, the Institutional International Equity Fund, the International Growth Fund, the International

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Small Cap Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Growth Fund, the Emerging Markets Small Cap Growth Fund, the Bond Fund, the Income Fund, the Low Duration Fund and the Macro Allocation Fund.

For each Fund, the Board also reviewed amounts charged by the Adviser to other pooled investment vehicles, including other registered funds for which the Adviser acts as a sub-adviser, and the Adviser’s fee schedule for institutional accounts. With respect to other pooled investment vehicles and institutional accounts, the Board considered the Adviser’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, including other registered funds for which the Adviser acts as a sub-adviser, and institutional accounts. In addition, the Board considered the Adviser’s statement that institutional accounts are distributed differently, operate under different investment and regulatory structures and have different business risks as compared to the Funds and that there are responsibilities and duties involved in sponsoring a registered fund that are not present in sub-advising a registered fund.

On the basis of all the information provided, the Board concluded that each Fund’s management fee, coupled with applicable expense limitations, was reasonable.

Profitability. With respect to the profitability of the Management Agreement to the Adviser, the Board considered the overall fees paid under the Management Agreement, including the estimated allocated costs of the services provided, management fees waived and other expenses reimbursed, if any, and profits realized by the Adviser from its relationship with the Trust as a whole and each Fund individually. The Board concluded that the estimated profits realized by the Adviser 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 Adviser’s view that the resources required for the Adviser’s fundamental investment process and the liquidity constraints of some of the markets in which the Adviser seeks to invest (other than for the Large Cap Growth Fund) may subject the Funds to capacity constraints which limit the Adviser’s ability to achieve economies of scale. In considering whether fee levels reflect economies of scale for the benefit of Fund investors, the Board considered each Fund’s asset size, breakpoints for those Funds with breakpoints in the management fee schedule, the expense limitations in place for all but two of the Funds and each Fund’s total and net expense ratios, and concluded that in the aggregate they reasonably reflect appropriate recognition of any economies of scale.

Other Benefits. The Board considered benefits derived by the Adviser and its affiliates from their relationship with the Funds, including (1) receipt of research from brokerage firms; (2) soft dollars, which pertain primarily to the Funds investing in equity securities; (3) reimbursement of some intermediary fees in the nature of sub-transfer agency fees; (4) non-management fee revenue from the Funds in the form of shareholder administration fees (which the Board noted that William Blair & Co, L.L.C. was currently waiving); (5) fees from Class N shares of the Funds to the Distributor pursuant to the Rule 12b-1 Plan, the majority of which are paid to third parties; and (6) favorable media coverage. The Board determined that the management fee was reasonable in light of these benefits.

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, 2016

William Blair Funds

189

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, and other significant affiliations are set forth below. The address of each officer and trustee is 222 West Adams Street, Chicago, Illinois 60606.

Name and Year of Birth

Position(s)
Held with
Trust

Term of
Office and
Length of
Time
Served

Principal
Occupation(s)
During Past 5 Years

Number of
Portfolios
in Trust
Complex
Overseen
by Trustee

Other Directorships
Held by Trustee

Interested Trustees

Michelle R. Seitz,
1965*

Chairman of the Board of Trustees and President

Trustee since 2002; Chairman since 2010 and President since 2007

Partner, William Blair: Limited Partner, WBC Holdings, L.P. (since 2008); Member, WBC GP L.L.P. (since November 2008); Director, William Blair International, Ltd. (U.K.) (since 2012)

Chairman, William Blair SICAV; 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; Limited Partner, WBC Holdings, L.P. (since 2008); Member, WBC GP L.L.P. (since November 2008); Director, William Blair International, Ltd. (U.K.) (since 2012)

Director, William Blair SICAV; Director, William Blair MAS Ltd.

Non-Interested Trustees

Vann A. Avedisian,
1964²

Trustee

Since 2012

Principal, Highgate Holdings (hotel investments) since 2009; formerly co-founder and Managing Director, Oxford Capital Partners Inc., 1994 to 2006

Potbelly Corporation (2001 to 2015)

Kathleen T. Barr,
1955

Trustee

Since 2013

Retired; formerly, President, Productive Capital Management, Inc. (registered investment adviser to public entities) and Owner, KT Barr Consulting, LLC (mutual fund and investment management consulting) 2010 to 2013; prior thereto, 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; 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

AmericaFirst Quantitative Funds (5 portfolios); Council Member, Independent Directors Council

Daniel N. Leib,
1966³

Trustee

Since 2016

Executive Vice President and Chief Financial Officer (since 2011) and Group Chief Financial Officer (2009 to 2011), R.R. Donnelley & Sons Company

None

†	William Blair Investment Management, LLC and William Blair & Company, L.L.C. are collectively referred to in this section as “William Blair”, each of which is a wholly owned subsidiary of WBC Holdings, L.P., which is wholly owned by certain William Blair employees (employee owners are referred to as ‘partners’).
*	Ms. Seitz and Mr. Smirl are interested persons of the Trust because they are partners of William Blair.

See accompanying Notes to Financial Statements.

190

Semiannual Report

June 30, 2016

Name and Year of Birth

Position(s)
Held with
Trust

Term of

Office and
Length of
Time
Served¹

Principal
Occupation(s)
During Past 5 Years

Number of
Portfolios
in Trust
Complex
Overseen
by Trustee

Other Directorships
Held by Trustee

Phillip O. Peterson,
1944

Trustee

Since 2007

Retired; formerly, President, Strong Mutual Funds, 2004 to 2005; formerly, Partner, KPMG LLP

The Hartford Group of Mutual Funds (66 portfolios); Symetra Mutual Funds Trust (variable annuity funds) (2012 to 2014)

Donald J. Reaves,
1946⁴

Trustee

Since 2004

Retired; formerly, Chancellor of Winston-Salem State University, 2007 to 2014; prior thereto, Vice President for Administration and Chief Financial Officer, University of Chicago, 2002 to 2007

American Student Assistance Corp., guarantor of student loans; Amica Mutual Insurance Company

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)

Warnaco Group, Inc., intimate apparel, sportswear, and swimwear manufacturer (2005 to 2013); Beverly Enterprises, Inc., provider of elder care and rehabilitative services (2002 to 2006)

Thomas J. Skelly,
1951

Trustee

Since 2007

Advisory Board Member for various U.S. companies; prior to 2005, Managing Partner of various divisions at Accenture

Mutual Trust Financial Group, provider of insurance and investment products; Board Member, First MetLife Insurance Company, NY chartered company for Metropolitan Life Insurance; Clayton Holdings, Inc., provider of information-based analytics, consulting and outsourced services to various financial institutions and investors (2007 to 2008)

(1)	Each Trustee serves until the election and qualification of a successor, or until death, resignation or retirement, or removal as provided in the Trust’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 calendar 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 became a member of the Board of Trustees.
(2)	Mr. Avedisian served as a member of the Board of Directors of Potbelly Corporation (“Potbelly”) from 2001 to 2015. In October 2013, Potbelly completed an underwritten initial public offering of its common stock (the “Offering”). William Blair served as a member of the underwriting syndicate. At the time of the Offering, Mr. Avedisian, through entities he owns or controls, indirectly beneficially owned 1,607,448 shares of Potbelly common stock and warrants to purchase 241,704 shares of common stock representing approximately 8.9% of the shares before the Offering. Mr. Avedisian disclaimed beneficial ownership of the shares except to the extent of his pecuniary interest therein. Potbelly sold 8,474,869 shares and certain stockholders, including two entities affiliated with William Blair, sold 150,131 shares in the Offering at a price to the public of $14.00 per share. Neither Mr. Avedisian nor the entities he owns or controls was a selling stockholder in the Offering. A portion of the net proceeds received by Potbelly from the Offering was used to pay a previously declared cash dividend, in an aggregate amount of approximately $49.9 million, on Potbelly common and preferred shares outstanding immediately prior to the closing of the Offering, which included the outstanding shares indirectly beneficially owned by Mr. Avedisian, William Blair and the two entities affiliated with William Blair.
(3)	The Funds and William Blair use R.R. Donnelley & Sons Company (“RRD”) for financial printing and other services. The Funds and William Blair paid RRD approximately $370,000 and $194,000 in 2014 and 2015, respectively, for the services provided. RRD’s revenue was over $11 billion in each of 2014 and 2015. Mr. Leib, as an Executive Vice President and the Chief Financial Officer of RRD, is not involved in any of the services provided to the Funds or William Blair and his compensation is not directly affected by the fees RRD receives from the Funds and William Blair.
(4)	In his former role as chief financial officer at the University of Chicago, Mr. Reaves had a working relationship with E. David Coolidge III, Vice Chairman of William Blair who is also a trustee of the University of Chicago.

See accompanying Notes to Financial Statements.

June 30, 2016	William Blair Funds	191

Name and Year of Birth	Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years²

Officers

Michael P. Balkin, 1959	Senior Vice President	Since 2008	Partner, William Blair

Stephanie G. Braming, 1970	Senior Vice President	Since 2014	Partner, William Blair

Karl W. Brewer, 1966	Senior Vice President	Since 2000	Partner, William Blair

Thomas Clarke, 1968	Senior Vice President	Since 2011	Partner, William Blair (since 2014); prior thereto, Associate, William Blair (2011-2014); Managing Partner, Singer Partners, LLC (2009-2011)

Daniel Crowe, 1972	Senior Vice President	Since 2016	Partner, William Blair (since 2015); prior thereto, Associate, William Blair

Simon Fennell, 1969	Senior Vice President	Since 2013	Partner, William Blair (since 2013); prior thereto, Associate, William Blair (2011-2013); Goldman Sachs (1997-2011)

Andrew G. Flynn, 1961	Senior Vice President	Since 2013	Partner, William Blair

David C. Fording, 1967	Senior Vice President	Since 2006	Partner, William Blair

James S. Golan, 1961	Senior Vice President	Since 2005	Partner, William Blair

Michael A. Jancosek, 1959	Senior Vice President	Since 2000	Partner, William Blair

John F. Jostrand, 1954	Senior Vice President	Since 1999	Partner, William Blair

Chad M. Kilmer, 1975	Senior Vice President	Since 2006	Partner, William Blair (since 2011); prior thereto, Associate, William Blair

Robert C. Lanphier IV, 1956	Senior Vice President	Since 2003	Partner, William Blair

Mark T. Leslie, 1967	Senior Vice President	Since 2005	Partner, William Blair

Kenneth J. McAtamney, 1966	Senior Vice President	Since 2008	Partner, William Blair

Todd M. McClone, 1968	Senior Vice President	Since 2005	Partner, William Blair

David Merjan, 1960	Senior Vice President	Since 2008	Partner, William Blair

David S. Mitchell, 1960	Senior Vice President	Since 2003	Partner, William Blair

John C. Murphy, 1969	Senior Vice President	Since 2014	Partner, William Blair

Casey K. Preyss, 1976	Senior Vice President	Since 2015	Partner, William Blair

See accompanying Notes to Financial Statements.

192

Semiannual Report

June 30, 2016

Name and Year of Birth	Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years

David P. Ricci, 1958	Senior Vice President	Since 2006	Partner, William Blair

Brian D. Singer, 1960	Senior Vice President	Since 2011	Partner, William Blair (since 2012); prior thereto, Associate, William Blair (2011-2012); Managing Partner, Singer Partners, LLC (2009-2011)

Jeffrey A. Urbina, 1955	Senior Vice President	Since 1998	Partner, William Blair

Christopher T. Vincent, 1956	Senior Vice President	Since 2002	Partner, William Blair

Paul J. Sularz, 1967	Vice President	Since 2009	Associate, William Blair (2006-2012 and since 2014); Partner, William Blair (2012-2014)

Colette M. Garavalia, 1961	Treasurer	Since 2000	Associate, William Blair

Andrew T. Pfau, 1970	Secretary	Since 2009	Associate, William Blair

John M. Raczek, 1970	Assistant Treasurer	Since 2010	Associate, William Blair
Walter R. Randall, Jr., 1960	Chief Compliance Officer and Assistant Secretary	Since 2009	Associate, William Blair

(1)

The Trust’s officers, except the Chief Compliance Officer, are elected annually by the Board of Trustees. The Trust’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 independent trustees. Length of Time Served for all officers indicates the year the individual became an officer of the Trust.

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.

See accompanying Notes to Financial Statements.

June 30, 2016

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 December 31 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 March 31 and September 30) 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.

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, 2015 (in thousands):

Fund	Capital Gain Dividend
Growth	$	96,737
Large Cap Growth		6,130
Mid Cap Growth		41,383
Mid Cap Value		587
Small-Mid Cap Growth		59,064
Small-Mid Cap Value		206
Small Cap Growth		29,587
Small Cap Value		1,943
Global Leaders		8,459
International Leaders		653
Institutional International Growth		15,858
International Small Cap Growth		1,505
Emerging Markets Leaders		172
Emerging Markets Growth		9,858
Emerging Markets Small Cap Growth		11,724

194

Semiannual Report

June 30, 2016

	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 and (2) ongoing costs, including management fees, distribution (12b-1) fees (for Class N shares except for the Institutional International Growth Fund and the Institutional International Equity Fund), shareholder administration fees (for Class N and Class I shares of the Global Leaders Fund, the International Leaders Fund, the International Small Cap Growth Fund, the Emerging Markets Leaders Fund, the Emerging Markets Growth Fund, the Emerging Markets Small Cap Growth Fund, the Bond Fund, the Low Duration Fund and the Macro Allocation 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, 2016 to June 30, 2016.

	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 IRA Fiduciary Administration fees. 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.

June 30, 2016

William Blair Funds

195

Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2016	Ending Account Value 6/30/2016	Expenses Paid During the Period (a)	Annualized Expense Ratio
Growth Fund
Class N-actual return	$1,000.00	$980.83	$6.11	1.24
Class N-hypothetical 5% return	$1,000.00	$1,043.83	$6.30	1.24
Class I-actual return	$1,000.00	$982.22	$4.39	0.89
Class I-hypothetical 5% return	$1,000.00	$1,045.57	$4.53	0.89
Large Cap Growth Fund
Class N-actual return	$1,000.00	$996.06	$5.21	1.05
Class N-hypothetical 5% return	$1,000.00	$1,044.78	$5.34	1.05
Class I-actual return	$1,000.00	$997.16	$3.97	0.80
Class I-hypothetical 5% return	$1,000.00	$1,046.02	$4.07	0.80
Mid Cap Growth Fund
Class N-actual return	$1,000.00	$992.91	$6.44	1.30
Class N-hypothetical 5% return	$1,000.00	$1,043.54	$6.61	1.30
Class I-actual return	$1,000.00	$994.05	$5.21	1.05
Class I-hypothetical 5% return	$1,000.00	$1,044.78	$5.34	1.05
Mid Cap Value Fund
Class N-actual return.	$1,000.00	$1,061.49	$6.66	1.30
Class N-hypothetical 5% return	$1,000.00	$1,043.54	$6.61	1.30
Class I-actual return.	$1,000.00	$1,062.37	$5.38	1.05
Class I-hypothetical 5% return	$1,000.00	$1,044.78	$5.34	1.05
Small-Mid Cap Growth Fund
Class N-actual return	$1,000.00	$1,009.71	$6.75	1.35
Class N-hypothetical 5% return	$1,000.00	$1,043.29	$6.86	1.35
Class I-actual return	$1,000.00	$1,010.91	$5.50	1.10
Class I-hypothetical 5% return	$1,000.00	$1,044.53	$5.59	1.10
Small-Mid Cap Value Fund
Class N-actual return	$1,000.00	$1,061.40	$6.92	1.35
Class N-hypothetical 5% return	$1,000.00	$1,043.29	$6.86	1.35
Class I-actual return	$1,000.00	$1,063.00	$5.64	1.10
Class I-hypothetical 5% return	$1,000.00	$1,044.53	$5.59	1.10
Small Cap Growth Fund
Class N-actual return	$1,000.00	$1,039.16	$7.61	1.50
Class N-hypothetical 5% return	$1,000.00	$1,042.54	$7.62	1.50
Class I-actual return	$1,000.00	$1,040.55	$6.34	1.25
Class I-hypothetical 5% return	$1,000.00	$1,043.78	$6.35	1.25
Small Cap Value Fund
Class N-actual return	$1,000.00	$1,068.35	$7.71	1.50
Class N-hypothetical 5% return	$1,000.00	$1,042.54	$7.62	1.50
Class I-actual return	$1,000.00	$1,069.67	$6.43	1.25
Class I-hypothetical 5% return	$1,000.00	$1,043.78	$6.35	1.25
Global Leaders Fund
Class N-actual return	$1,000.00	$983.59	$6.61	1.34
Class N-hypothetical 5% return	$1,000.00	$1,043.34	$6.81	1.34
Class I-actual return	$1,000.00	$985.33	$5.18	1.05
Class I-hypothetical 5% return	$1,000.00	$1,044.78	$5.34	1.05
Institutional Class-actual return	$1,000.00	$985.33	$5.08	1.00
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.03	$5.08	1.00
International Leaders Fund
Class N-actual return	$1,000.00	$986.04	$6.32	1.28
Class N-hypothetical 5% return	$1,000.00	$1,043.63	$6.50	1.28
Class I-actual return	$1,000.00	$986.83	$5.09	1.03
Class I-hypothetical 5% return	$1,000.00	$1,044.88	$5.24	1.03
Institutional Class-actual return	$1,000.00	$986.82	$4.69	0.95
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.28	$4.83	0.95

196

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June 30, 2016

Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2016	Ending Account Value 6/30/2016	Expenses Paid During the Period (a)	Annualized Expense Ratio
International Equity Fund
Class N-actual return	$1,000.00	$981.23	$6.40	1.30
Class N-hypothetical 5% return	$1,000.00	$1,043.54	$6.61	1.30
Class I-actual return	$1,000.00	$982.12	$5.17	1.05
Class I-hypothetical 5% return	$1,000.00	$1,044.78	$5.34	1.05
Institutional International Equity Fund
Institutional Class-actual return	$1,000.00	$982.67	$4.93	1.00
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.03	$5.08	1.00
International Growth Fund
Class N-actual return	$1,000.00	$961.91	$7.02	1.44
Class N-hypothetical 5% return	$1,000.00	$1,042.84	$7.31	1.44
Class I-actual return	$1,000.00	$963.54	$5.57	1.14
Class I-hypothetical 5% return	$1,000.00	$1,044.33	$5.79	1.14
Institutional International Growth Fund
Institutional Class-actual return	$1,000.00	$964.19	$4.79	0.98
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.13	$4.98	0.98
International Small Cap Growth Fund
Class N-actual return	$1,000.00	$957.78	$7.06	1.45
Class N-hypothetical 5% return	$1,000.00	$1,042.79	$7.36	1.45
Class I-actual return	$1,000.00	$958.97	$5.65	1.16
Class I-hypothetical 5% return	$1,000.00	$1,044.23	$5.90	1.16
Institutional Class-actual return	$1,000.00	$959.18	$5.26	1.08
Institutional Class-hypothetical 5% return	$1,000.00	$1,044.63	$5.49	1.08
Emerging Markets Leaders Fund
Class N-actual return	$1,000.00	$1,043.98	$8.39	1.65
Class N-hypothetical 5% return	$1,000.00	$1,041.80	$8.38	1.65
Class I-actual return	$1,000.00	$1,046.51	$6.61	1.30
Class I-hypothetical 5% return	$1,000.00	$1,043.54	$6.61	1.30
Institutional Class-actual return	$1,000.00	$1,046.51	$6.36	1.25
Institutional Class-hypothetical 5% return	$1,000.00	$1,043.78	$6.35	1.25
Emerging Markets Growth Fund
Class N-actual return	$1,000.00	$1,050.69	$7.65	1.50
Class N-hypothetical 5% return	$1,000.00	$1,042.54	$7.62	1.50
Class I-actual return	$1,000.00	$1,052.01	$6.43	1.26
Class I-hypothetical 5% return	$1,000.00	$1,043.73	$6.40	1.26
Institutional Class-actual return	$1,000.00	$1,051.58	$6.02	1.18
Institutional Class-hypothetical 5% return	$1,000.00	$1,044.13	$6.00	1.18
Emerging Markets Small Cap Growth Fund
Class N-actual return	$1,000.00	$1,008.76	$8.04	1.61
Class N-hypothetical 5% return	$1,000.00	$1,041.99	$8.17	1.61
Class I-actual return	$1,000.00	$1,009.40	$6.49	1.30
Class I-hypothetical 5% return	$1,000.00	$1,043.54	$6.61	1.30
Institutional Class-actual return	$1,000.00	$1,010.05	$6.25	1.25
Institutional Class-hypothetical 5% return	$1,000.00	$1,043.78	$6.35	1.25
Bond Fund
Class N-actual return	$1,000.00	$1,053.67	$3.17	0.62
Class N-hypothetical 5% return	$1,000.00	$1,046.92	$3.16	0.62
Class I-actual return	$1,000.00	$1,053.98	$2.09	0.41
Class I-hypothetical 5% return	$1,000.00	$1,047.96	$2.09	0.41
Institutional Class-actual return	$1,000.00	$1,054.33	$1.79	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	$1,029.39	$4.09	0.81
Class N-hypothetical 5% return	$1,000.00	$1,045.97	$4.12	0.81
Class I-actual return	$1,000.00	$1,031.86	$2.88	0.57
Class I-hypothetical 5% return	$1,000.00	$1,047.17	$2.90	0.57

June 30, 2016

William Blair Funds

197

Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2016	Ending Account Value 6/30/2016	Expenses Paid During the Period (a)	Annualized Expense Ratio
Low Duration Fund
Class N-actual return	$1,000.00	$1,011.26	$3.15	0.63
Class N-hypothetical 5%	$1,000.00	$1,046.87	$3.21	0.63
Class I-actual return	$1,000.00	$1,012.30	$2.10	0.42
Class I-hypothetical 5%	$1,000.00	$1,047.91	$2.14	0.42
Institutional Class-actual return	$1,000.00	$1,012.41	$2.00	0.40
Institutional Class-hypothetical 5% return	$1,000.00	$1,048.01	$2.04	0.40
Macro Allocation Fund
Class N-actual return	$1,000.00	$1,002.65	$6.32	1.27
Class N-hypothetical 5%	$1,000.00	$1,043.68	$6.45	1.27
Class I-actual return	$1,000.00	$1,004.39	$4.93	0.99
Class I-hypothetical 5%	$1,000.00	$1,045.08	$5.03	0.99
Institutional Class-actual return	$1,000.00	$1,005.27	$4.54	0.91
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.52	$4.63	0.91

(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, 182, and divided by 366 (to reflect the one-half year period).

198

Semiannual Report

June 30, 2016

	BOARD OF TRUSTEES

	Vann A. Avedisian
	Principal, Highgate Holdings
	Kathleen T. Barr
	Retired Senior Managing Director, PNC Capital Advisors, LLC
	Daniel N. Leib
	Executive Vice President and Chief Financial Officer, R.R. Donnelley & Sons Company
	Phillip O. Peterson
	Retired Partner, KPMG LLP
	Donald J. Reaves
	Retired 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
	Thomas J. Skelly
	Retired Managing Partner, Accenture
	Richard W. Smirl, Senior Vice President
	Partner, William Blair
	Officers
	Michael P. Balkin, Senior Vice President
	Stephanie G. Braming, Senior Vice President
	Karl W. Brewer, Senior Vice President
	Thomas Clarke, Senior Vice President
	Daniel Crowe, Senior Vice President
	Simon Fennell, Senior Vice President
	Andrew G. Flynn, Senior Vice President
	David C. Fording, Senior Vice President
	James S. Golan, 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
	Kenneth J. McAtamney, Senior Vice President
	Todd M. McClone, Senior Vice President
	David Merjan, Senior Vice President
	David S. Mitchell, Senior Vice President
	John C. Murphy, Senior Vice President
	Casey K. Preyss, Senior Vice President
	David P. Ricci, Senior Vice President
	Brian D. Singer, Senior Vice President
	Jeffrey A. Urbina, Senior Vice President
	Christopher T. Vincent, Senior Vice President
	Paul J. Sularz, Vice President
	Colette M. Garavalia, Treasurer
	Andrew T. Pfau, Secretary
	John M. Raczek, Assistant Treasurer
	Walter R. Randall, Jr., Chief Compliance Officer and Assistant Secretary
	Investment Adviser
	William Blair Investment Management, LLC
	Distributor
	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)

June 30, 2016

William Blair Funds

199


William Blair Funds

DOMESTIC EQUITY	GLOBAL EQUITY	FIXED INCOME
Growth Fund	Global Leaders Fund	Bond Fund
Large Cap Growth Fund		Income Fund
Mid Cap Growth Fund	INTERNATIONAL EQUITY	Low Duration Fund
Mid Cap Value Fund	International Leaders Fund
Small-Mid Cap Growth Fund	International Equity Fund	MULTI-ASSET AND
Small-Mid Cap Value Fund	Institutional International Equity Fund	ALTERNATIVE
Small Cap Growth Fund	International Growth Fund	Macro Allocation Fund
Small Cap Value Fund	Institutional International Growth Fund
	International Small Cap Growth Fund
	Emerging Markets Leaders Fund
	Emerging Markets Growth 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-End Management 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 19, 2016

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 19, 2016

/s/ Colette M. Garavalia

By:

Colette M. Garavalia

Treasurer

(Chief Financial Officer)

Date: August 19, 2016

William Blair Growth N (WBGSX) N-CSRSCertified semi-annual shareholder report (management investment company)