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)

150 North Riverside Plaza, Chicago, IL		60606
(Address of principal executive offices)		(Zip Code)

Stephanie G. Braming, Principal Executive Officer
William Blair Funds
150 North Riverside Plaza, 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, 2018

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, 2018 Semiannual Reports transmitted to shareholders.

June 30, 2018

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

Small-Mid Cap Growth Fund
An Overview from the Portfolio Managers	17
Portfolio of Investments	19

Small-Mid Cap Value Fund
An Overview from the Portfolio Managers	20
Portfolio of Investments	22

Small Cap Growth Fund
An Overview from the Portfolio Managers	24
Portfolio of Investments	26

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

Global Markets Review and Outlook	32

Global Leaders Fund
An Overview from the Portfolio Managers	34
Portfolio of Investments	36

International Leaders Fund
An Overview from the Portfolio Managers	38
Portfolio of Investments	40

International Developed Plus Fund
An Overview from the Portfolio Managers	42
Portfolio of Investments	44

Institutional International Developed Plus Fund
An Overview from the Portfolio Managers	46
Portfolio of Investments	48

International Growth Fund
An Overview from the Portfolio Managers	50
Portfolio of Investments	52

Institutional International Growth Fund
An Overview from the Portfolio Managers	57
Portfolio of Investments	59

International Small Cap Growth Fund
An Overview from the Portfolio Managers	64
Portfolio of Investments	66

June 30, 2018

William Blair Funds

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

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

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

Fixed Income Market Review and Outlook	84

Bond Fund
An Overview from the Portfolio Managers	86
Portfolio of Investments	88

Income Fund
An Overview from the Portfolio Manager	91
Portfolio of Investments	93

Low Duration Fund
An Overview from the Portfolio Managers	95
Portfolio of Investments	97

Macro Allocation Fund
An Overview from the Portfolio Managers	100
Portfolio of Investments	102

Financial Statements	107

Notes to Financial Statements	125

Financial Highlights	149

Renewal of the Management Agreement	179

Trustees and Officers	184

Fund Expenses	189

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

Semiannual Report

June 30, 2018

Performance as of June 30, 2018—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	12.76		26.06	12.38	13.53	9.77	3/20/1946	«««
Morningstar Large Growth	7.51		20.58	12.21	14.37	10.23		Among 1,265
Russell 3000^®Growth Index	7.44		22.47	14.63	16.14	11.78		Large Growth Funds
S&P 500^®Index	2.65		14.37	11.93	13.42	10.17

Large Cap Growth Fund
Class N	12.28		30.77	14.90	17.40	11.18	12/27/1999	««««
Morningstar Large Growth	7.51		20.58	12.21	14.37	10.23		Among 1,265
Russell 1000^®Growth Index	7.25		22.51	14.98	16.36	11.83		Large Growth Funds

Mid Cap Growth Fund
Class N	11.63		22.45	8.85	10.69	9.63	2/1/2006	«««
Morningstar Mid-Cap Growth	6.39		18.06	9.68	12.31	9.45		Among 541
Russell Midcap^®Growth Index	5.40		18.52	10.73	13.37	10.45		Mid-Cap Growth Funds

Small-Mid Cap Growth Fund
Class N	10.74		22.81	13.28	15.31	13.04	12/29/2003	«««««
Morningstar Mid-Cap Growth	6.39		18.06	9.68	12.31	9.45		Among 541
Russell 2500^TMGrowth Index	8.04		21.53	10.86	13.87	11.38		Mid-Cap Growth Funds

Small-Mid Cap Value Fund
Class N	0.84		10.21	8.23	9.56	12.46	12/15/2011	««
Morningstar Small Blend	5.26		14.67	9.41	11.02	—		Among 639
Russell 2500^TMValue Index	3.00		11.49	9.76	10.78	14.21		Small Blend Funds

Small Cap Growth Fund
Class N	15.41		26.65	17.16	16.06	12.81	12/27/1999	«««««
Morningstar Small Growth	11.05		22.70	11.04	12.76	10.85		Among 606
Russell 2000^®Growth Index	9.70		21.86	10.60	13.65	11.24		Small Growth Funds

Small Cap Value Fund
Class N	1.09		9.40	8.68	9.80	9.82	12/23/1996	«««
Morningstar Small Blend	5.26		14.67	9.41	11.02	9.73		Among 639
Russell 2000^®Value Index	5.44		13.10	11.22	11.18	9.88		Small Blend Funds

Global Leaders Fund
Class N	6.33		21.58	10.88	11.36	6.52	10/15/2007	««««
Morningstar World Stock	0.18		10.28	7.91	9.21	6.18		Among 721
MSCI ACW IMI (net)	(0.18	)	11.14	8.34	9.60	6.14		World Large Stock Funds

International Leaders Fund
Class N	1.04		13.69	9.17	9.58	10.01	8/16/2012	««««
Morningstar Foreign Large Growth	(0.43	)	10.53	6.62	7.72	—		Among 344
MSCI ACW Ex-U.S. IMI (net)	(3.65	)	7.75	5.46	6.39	6.96		Foreign Large Growth Funds

June 30, 2018

William Blair Funds

Performance as of June 30, 2018—Class N Shares (Unaudited)—continued

	Year to Date		1 yr		3 yr	5 yr	10 yr (or since inception)	Inception Date	Overall Morningstar Rating
International Developed Plus Fund
Class N	(2.59	)	7.50		4.62	6.50	2.04	5/24/2004	««
Morningstar Foreign Large Growth	(0.43	)	10.53		6.62	7.72	3.92		Among 344
MSCI World Ex-U.S. Index (net)	(2.77	)	7.04		4.87	6.23	2.63		Foreign Large Growth Funds

International Growth Fund
Class N	(1.78	)	10.92		5.03	6.70	3.23	10/1/1992	««
Morningstar Foreign Large Growth	(0.43	)	10.53		6.62	7.72	3.92		Among 344
MSCI ACW Ex-U.S. IMI (net)	(3.65	)	7.75		5.46	6.39	2.93		Foreign Large Growth Funds

International Small Cap Growth Fund
Class N	(4.26	)	8.49		7.38	7.36	5.21	11/1/2005	««
Morningstar Foreign Small/Mid Growth	0.51		15.26		9.30	10.19	6.71		Among 108
MSCI ACW Ex-U.S. Small Cap Index (net)	(2.94	)	10.57		7.94	8.98	5.77		Foreign Small/Mid Growth Funds

Emerging Markets Leaders Fund
Class N	(6.96	)	9.71		4.19	4.60	3.54	5/3/2010	«««
Morningstar Diversified Emerging Markets	(7.05	)	6.09		4.76	4.05	—		Among 688
MSCI Emerging Markets Index (net)	(6.66	)	8.20		5.60	5.01	3.19		Diversified Emerging Markets Funds

Emerging Markets Growth Fund
Class N	(7.35	)	10.96		5.04	5.76	1.87	6/6/2005	«««
Morningstar Diversified Emerging Markets	(7.05	)	6.09		4.76	4.05	2.09		Among 688
MSCI Emerging Markets IMI (net)	(6.86	)	7.90		5.19	4.93	2.52		Diversified Emerging Markets Funds

Emerging Markets Small Cap Growth Fund
Class N	(9.49	)	6.22		2.10	7.03	10.54	10/24/2011	««««
Morningstar Diversified Emerging Markets	(7.05	)	6.09		4.76	4.05	—		Among 688
MSCI Emerging Markets Small Cap Index (net)	(8.45	)	5.64		2.55	4.32	4.75		Diversified Emerging Markets Funds

Bond Fund
Class N	(2.28	)	(0.62	)	1.74	2.54	4.41	5/1/2007	««««
Morningstar Intermediate-Term Bond	(1.55	)	(0.36	)	1.68	2.20	3.89		Among 878
Bloomberg Barclays U.S. Aggregate Index	(1.62	)	(0.40	)	1.72	2.27	3.72		Intermediate-Term Bond Funds

Income Fund
Class N	(1.12	)	(0.61	)	0.83	1.41	2.88	10/1/1990	«««
Morningstar Short-Term Bond	(0.06	)	0.44		1.18	1.27	2.29		Among 447
Bloomberg Barclays Intermediate Government/Credit Bond Index	(0.97	)	(0.58	)	1.16	1.60	3.08		Short-Term Bond Funds

Semiannual Report

June 30, 2018

Performance as of June 30, 2018—Class N Shares (Unaudited)—continued

	Year to Date		1 yr	3 yr		5 yr	10 yr (or since inception)	Inception Date	Overall Morningstar Rating
Low Duration Fund
Class N	0.30		0.87	0.75		0.83	1.01	12/1/2009	«««
Morningstar Ultrashort Bond	0.74		1.41	1.14		0.92	—		Among 139
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index	0.65		0.92	0.64		0.49	0.47		Ultrashort Bond Funds

Macro Allocation Fund
Class N	(1.60	)	0.63	(1.68	)	2.00	4.60	11/29/2011	«««
Morningstar Multialternative	(1.19	)	2.00	1.09		2.02	—		Among 288
Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index	0.81		1.36	0.68		0.42	0.34		Multialternative Funds

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. Results shown are average annual total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or a loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. From time to time, the investment 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 06/30/2018 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 1,265/1,141/825 large growth funds; Mid Cap Growth Fund «««/««/««« and Small-Mid Cap Growth Fund «««««/«««««/««««« out of 541/480/344 mid-cap growth funds; Small Cap Growth Fund «««««/«««««/««««, out of 606/534/404 small growth funds; Small-Mid Cap Value Fund «««/««/NA and Small Cap Value Fund «««/««/««« out of 639/539/393 small blend funds; Global Leaders Fund ««««/««««/««« out of 721/596/343 world large stock funds; International Developed Plus Fund ««/««/««, International Growth Fund ««/««/««, and International Leaders Fund ««««/««««/NA out of 344/304/218 foreign large growth funds; International Small Cap Growth Fund ««/««/«« out of 108/103/63 foreign small/mid growth funds; Emerging Markets Leaders Fund «««/«««/«««, Emerging Markets Growth Fund «««/««««/«««, and Emerging Markets Small Cap Growth Fund ««/«««««/NA out of 688/489/203 diversified emerging markets funds; Bond Fund «««/««««/«««« out of 878/778/563 intermediate-term bond funds; Income Fund ««/«««/«««« out of 447/378/250 short-term bond funds; Low Duration Fund ««/«««/ NA out of 139/109/NA ultrashort bond funds; and Macro Allocation Fund ««/«««/NA out of 288/148/NA multialternative funds.

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

June 30, 2018

William Blair Funds

U.S. Growth Market Review and Outlook

Strong second quarter performance across U.S. growth equity benchmarks placed them among the strongest performing investment styles year-to-date. In contrast, first quarter returns were more muted. After robust market performance in January, inflationary fears arose causing market volatility to spike and most major equity benchmarks to retreat in February. While companies generally reported strong financial results for the prior quarter and economic data was mostly positive, trade tensions and building inflationary pressures weighed on returns for the duration of the first quarter.

In the second quarter, growth style indices were broadly positive and volatility moderated from elevated first quarter levels. Higher stock prices and declining volatility were supported by a healthy U.S. economy. Retail spending rebounded, housing starts increased and manufacturing activity remained robust despite an appreciating U.S. dollar. In addition, consumer and business confidence remained elevated. With unemployment reaching 3.8%, its lowest level since 2000, and core inflation just over 2%, in June the Federal Reserve (“Fed”) announced its second rate increase of 2018 and communicated expectations for two more rate increases before year end.

With a strong fundamental backdrop and a positive tax impact, U.S. corporations generally posted robust earnings growth. As a gauge, corporations in the S&P 500 Index reported first quarter earnings growth of approximately 25%, as compared to the same period in the prior year, with over 80% of companies in the Index topping investor expectations. However, aggregate forward P/E ratios contracted as investors appeared to be mindful of risks on the horizon. Notably, trade tensions between the U.S. and China were a focus for investors over the course of the second quarter, and as more countries became involved, anxiety grew that tariffs could potentially escalate into a trade war.

Despite the Fed pursuing monetary tightening and the potential for a global trade war, optimism still persists across consumers, businesses and investors as we enter the tenth year of the current economic expansion. While interest rates remain low relative to history, the Fed has telegraphed a path of rate increases, and its ability to navigate the economy in the face of inflationary pressures from a potential trade war remains a risk. Further, continued uncertainty around the ultimate outcome of proposed tariffs could disrupt business planning and dampen overall productivity. However, the impact of fiscal stimulus in the form of lower corporate tax rates has largely overwhelmed trade concerns thus far. One early benefit of corporate tax reform in the U.S. has been an increase in capital expenditures, which in turn has the potential to boost productivity and create jobs longer-term. In addition, the current administration has been aggressive in reducing regulation on businesses, which could be a continued tailwind for companies.

It remains to be seen how long the expansion can persist given the unprecedented fiscal stimulus at this point of the economic cycle. Broadly speaking, corporate earnings trends and forward-looking guidance are reflective of the strong economy. But to the extent that rising wages, raw materials prices and freight costs begin to compress margins for the average company, we believe our portfolio companies, which generally offer strong value propositions to their customers and have more pricing flexibility, are better positioned to withstand these pressures. Our focus remains on identifying companies with durable growth drivers, independent of the economic backdrop, whose stocks present compelling risk/reward opportunities.

Semiannual Report

June 30, 2018

U.S. Value Market Review and Outlook

After a strong start to the year, a spike in market volatility in February, stemming from investor anxiety over higher inflation, wiped out solid market returns in January. While volatility quickly retreated, inflationary concerns continued. The combination of investor concerns about higher inflation and heightened fears of a trade war seemed to overshadow positive economic data and generally strong corporate earnings results, even excluding the positive impact from tax reform.

In contrast to the more muted returns during the first quarter, robust corporate earnings growth and solid domestic economic data contributed to the strong second quarter performance across the domestic equity indices, pushing virtually all into positive territory for the year. Higher stock prices and more moderate volatility were supported by a generally strong U.S. economy, which is expected to grow about 3% this year. Some of the more notable economic data points included a rebound in retail spending, increased housing starts, and strong manufacturing activity, despite appreciation in the U.S. dollar. Consumer, corporate, and investor confidence remained elevated, contributing to higher U.S. Treasury yields. Supported by continued strong domestic economic data, an unemployment rate that dropped to 3.8%, and inflation that was slightly above 2%, the Federal Reserve (Fed) announced its second rate increase for the year and telegraphed expectations for another two rate increases before the end of the year.

Increased trade concerns seemed to motivate investors to rapidly move into smaller cap stocks, as small cap ETFs experienced an inflow of over $9 billion during the second quarter, contributing to the outperformance of this asset class during the period. Smaller cap stocks can be viewed as a safe haven and somewhat insulated in a trade war due to less revenue generation exposure overseas.

As the current bull market enters its tenth year, the U.S. markets have been resilient despite the increased risks posed by the potential for a global trade war, geopolitical tensions, emerging market turmoil, and a possible slowdown in global growth. While the Fed has laid the groundwork for future rate increases, current interest rates remain low relative to history. While global trade tensions continue to fluctuate, an escalation into a full-blown trade war would negatively impact global market activity and may disrupt business planning and dampen overall productivity. To date, the positive impact from lower corporate tax rates has largely overshadowed these trade concerns. In addition, the current administration has been aggressive in reducing regulation on businesses, which could continue to provide a tailwind for companies.

We continue to be mindful about the increased debt levels that companies face, and believe investors should place more of an emphasis on corporate balance sheets. Small cap companies have taken on a considerable amount of debt over the years as a result of a perpetually low interest rate environment. However, with the Fed tightening monetary policy and the potential for higher interest rates on the horizon, this will become a concern at some point. We believe those lower quality companies that are either more highly levered or lack the cash flow necessary to service their debt in a higher interest rate environment should struggle, and the stocks of higher quality companies with solid cash flow should outperform.

From our bottom up perspective, we remain constructive on corporate earnings. Although many companies may face increasing margin pressure from higher wages, raw materials, and freight, some of this year’s pressure will be offset by the lower corporate tax rate. We are also mindful and concerned about rising input costs and are focused on owning companies that have pricing power and are able to mitigate inflationary pressures via new products and price increases. 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 our portfolios are well-suited to withstand a variety of market scenarios and add value over the long-term.

June 30, 2018

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 12.76% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 3000^®Growth Index (the “Index”), increased 7.44%. For the year-to-date period ended June 30, 2018, the Fund outperformed the Index, driven by both positive stock selection and a style tailwind. Stock selection was positive across many sectors, most notably Industrials, Health Care, and Consumer Discretionary. The top contributor to the Fund’s performance was global payments company Mastercard, Inc. (Information Technology), which reported strong financial results amid strong underlying business momentum. Amazon.com, Inc. (Consumer Discretionary) was also a top contributor to the Fund’s performance. Amazon reported strong financial results which reflected accelerating trends across many of its business segments. Other top contributors to the Fund’s performance were CoStar Group, Inc. (Industrials), Domino’s Pizza, Inc. (Consumer Discretionary), and Red Hat, Inc. (Information Technology). Conversely, top detractors from the Fund’s performance were MaxLinear, Inc. (Information Technology) and Monster Beverage Corporation (Consumer Staples). MaxLinear, which produces mixed-signal radio frequency semiconductors used in broadband communications, experienced slowing growth in several of its more mature products, while newer and higher-growth products have yet to offset the slowing growth in some mature products. Energy drink company Monster Beverage reported early in the year that sales growth and earnings missed expectations, as its international distributors reduced inventory. Other top detractors were Newell Brands Inc. (Consumer Discretionary), The Middleby Corporation (Industrials), and Starbucks Corporation (Consumer Discretionary). Additionally, not owning Netflix, Inc. (Consumer Discretionary), a strong relative performer year-to-date, detracted from the Fund’s performance. From a style perspective, as investors became more focused on the potential implications of inflation-related cost pressures on businesses, our higher and more sustainable growth bias, which leads us to companies with value-added products and services and flexible pricing, was a tailwind. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6 for additional information.

Semiannual Report

June 30, 2018

Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		12.76	%		26.06	%		12.38	%		13.53	%		9.77	%
Class I		12.95			26.39			12.71			13.88			10.12
Russell 3000^® Growth Index		7.44			22.47			14.63			16.14			11.78
S&P 500^®Index		2.65			14.37			11.93			13.42			10.17

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, 2018. 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, 2018

William Blair Funds

Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—37.6%
*	Adobe Systems, Inc.		20,303	$	4,950
*	Akamai Technologies, Inc.		69,344		5,078
*	Alphabet, Inc. Class “A”		20,989		23,701
	Booz Allen Hamilton Holding Corporation		85,892		3,756
*	Carbon Black, Inc.		84,270		2,191
*	Cars.com, Inc.		66,656		1,893
*	Facebook, Inc. Class “A”		52,935		10,286
*	Guidewire Software, Inc.		25,786		2,289
	Mastercard, Inc. Class “A”		77,317		15,194
*	MaxLinear, Inc.		96,044		1,497
	Microsoft Corporation		243,354		23,997
	National Instruments Corporation		67,277		2,824
*	Pure Storage, Inc.		166,241		3,970
*	Red Hat, Inc.		37,310		5,013
*	Rogers Corporation		15,297		1,705
	Sabre Corporation		142,675		3,516
	Texas Instruments, Inc.		57,478		6,337
*	Ultimate Software Group, Inc.		13,442		3,459
*	Worldpay, Inc.		89,545		7,323
					128,979
	Consumer Discretionary—19.2%
*	Amazon.com, Inc.		13,359		22,708
	Domino’s Pizza, Inc.		18,819		5,310
*	Grand Canyon Education, Inc.		36,619		4,087
*	Hilton Grand Vacations, Inc.		120,668		4,187
*	Laureate Education, Inc.		157,471		2,256
*	Live Nation Entertainment, Inc.		89,554		4,350
	Six Flags Entertainment Corporation		68,232		4,780
	Starbucks Corporation		98,640		4,819
	Steven Madden, Ltd.		55,828		2,964
*	Ulta Salon Cosmetics & Fragrance, Inc.		27,534		6,428
	Vail Resorts, Inc.		14,277		3,915
					65,804
	Health Care—15.6%
	Agilent Technologies, Inc.		71,847		4,443
*	Charles River Laboratories International, Inc.		30,964		3,476
*	Codexis, Inc.		163,098		2,349
*	Ligand Pharmaceuticals, Inc.		12,793		2,650
	Stryker Corporation		40,791		6,888
	Teleflex, Inc.		12,237		3,282
	UnitedHealth Group, Inc.		55,160		13,533
*	Veeva Systems, Inc.		36,640		2,816
	West Pharmaceutical Services, Inc.		37,324		3,706
	Zoetis, Inc.		121,909		10,386
					53,529
	Industrials—11.5%
	BWX Technologies, Inc.		102,580		6,393
*	Copart, Inc.		75,092		4,247
*	CoStar Group, Inc.		13,002		5,365
	Healthcare Services Group, Inc.		88,998		3,844
	Raytheon Co.		33,374		6,447
*	The Middleby Corporation		19,839		2,072
*	Verisk Analytics, Inc.		72,190		7,771
	Wabtec Corporation		34,950		3,445
					39,584

	Issuer	Shares or Principal Amount		Value

	Common Stocks—(continued)

	Financials—6.6%
	East West Bancorp, Inc.		48,764	$	3,179
*	Encore Capital Group, Inc.		64,894		2,375
	Intercontinental Exchange, Inc.		133,312		9,805
	The Progressive Corporation		125,524		7,425
					22,784
	Consumer Staples—5.0%
	Costco Wholesale Corporation		31,706		6,626
*	Monster Beverage Corporation		98,547		5,647
	The Estee Lauder Cos., Inc.		33,189		4,735
					17,008
	Materials—3.5%
	Ball Corporation		136,742		4,861
	Praxair, Inc.		44,499		7,037
					11,898
	Total Common Stocks—99.0% (cost $224,778)				339,586

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $2,559, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$2,559		2,559
	Total Repurchase Agreement—0.8% (cost $2,559)				2,559
	Total Investments—99.8% (cost $227,337)				342,145
	Cash and other assets, less liabilities—0.2%				758
	Net assets—100.0%			$	342,903

* = Non-income producing security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

		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 12.28% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 1000^®Growth Index (the “Index”), increased 7.25%. For the year-to-date period ended June 30, 2018, the Fund outperformed the Index, driven by both positive stock selection and a style tailwind. Stock selection was positive across many sectors, most notably Industrials, Information Technology and Consumer Discretionary. The top contributor to the Fund’s performance for the period was online retailer Amazon.com, Inc. (Consumer Discretionary), which reported strong financial results that reflected accelerating trends across many of its business segments. Digital marketing and media solutions provider Adobe Systems, Inc. (Information Technology) was also a top contributor. Adobe Systems reported earnings and revenue growth that exceeded expectations in the first and second quarter and the stock outperformed. Other top contributors to the Fund’s performance were Mastercard, Inc. (Information Technology), Netflix, Inc. (Consumer Discretionary), and Intuit, Inc. (Information Technology). Conversely, top detractors were Monster Beverage Corporation (Consumer Staples) and Starbucks Corporation (Consumer Discretionary). Energy drink company Monster Beverage reported sales growth and earnings in the first quarter that missed expectations, as its international distributors reduced inventory. Shares of Starbucks underperformed in part due to sluggish same-store sales growth in the U.S., but also in reaction to the company’s pre-announcement of weaker-than-expected second quarter comparable sales which were partially due to weakness in China. Other top detractors were Affiliated Managers Group, Inc. (Financials), Biogen, Inc. (Health Care), and PPG Industries, Inc. (Materials). From a style perspective, as investors became more focused on the potential implications of inflation-related cost pressures on businesses, our higher and more sustainable growth bias, which leads us to companies with value-added products and services and flexible pricing, was a tailwind. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6 for additional information.

June 30, 2018

William Blair Funds

Large Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		12.28	%		30.77	%		14.90	%		17.40	%		11.18	%
Class I		12.38			31.02			15.17			17.69			11.46
Russell 1000^® Growth Index		7.25			22.51			14.98			16.36			11.83

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, 2018

Large Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—38.2%
	Accenture plc†		53,100	$	8,687
*	Adobe Systems, Inc.		28,070		6,844
*	Alphabet, Inc. Class “A”		9,910		11,190
*	Alphabet, Inc. Class “C”		5,026		5,607
*	Facebook, Inc.		53,310		10,359
	Intuit, Inc.		28,300		5,782
	Mastercard, Inc.		43,200		8,490
	Microsoft Corporation		184,960		18,239
*	PayPal Holdings, Inc.		59,870		4,985
*	Red Hat, Inc.		38,010		5,107
	Texas Instruments, Inc.		62,110		6,848
					92,138
	Consumer Discretionary—16.5%
*	Amazon.com, Inc.		10,440		17,746
*	Live Nation Entertainment, Inc.		130,590		6,343
	McDonald’s Corporation		36,330		5,693
*	Netflix, Inc.		12,680		4,963
	Starbucks Corporation		105,250		5,141
					39,886
	Health Care—15.1%
*	ABIOMED, Inc.		9,590		3,923
*	Biogen, Inc.		11,500		3,338
	Danaher Corporation		25,300		2,496
	Stryker Corporation		38,370		6,479
	UnitedHealth Group, Inc.		45,630		11,195
	Zoetis, Inc.		104,440		8,897
					36,328
	Industrials—10.2%
*	Copart, Inc.		84,410		4,774
	Fortive Corporation		58,900		4,542
	Raytheon Co.		29,300		5,660
	TransDigm Group, Inc.		10,800		3,727
*	Verisk Analytics, Inc.		55,600		5,985
					24,688
	Consumer Staples—6.6%
*	Monster Beverage Corporation		115,740		6,632
	The Coca-Cola Co.		106,600		4,676
	The Estee Lauder Cos., Inc.		32,540		4,643
					15,951
	Financials—5.3%
	Intercontinental Exchange, Inc.		80,400		5,914
	The Progressive Corporation		115,120		6,809
					12,723
	Materials—3.6%
	PPG Industries, Inc.		23,460		2,433
	Praxair, Inc.		40,010		6,328
					8,761

		Shares or
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Real Estate—1.9%
*	SBA Communications Corporation		27,130	$	4,480
	Energy—1.6%
	EOG Resources, Inc.		31,240		3,887
	Total Common Stocks—99.0% (cost $170,213)				238,842

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $1,883, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$1,883		1,883
	Total Repurchase Agreement—0.8% (cost $1,883)				1,883
	Total Investments—99.8% (cost $172,096)				240,725
	Cash and other assets, less liabilities—0.2%				486
	Net assets—100.0%			$	241,211

† = U.S. listed foreign security

* = Non-income producing security

See accompanying Notes to Financial Statements.

June 30, 2018

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 11.63% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell Midcap^®Growth Index (the “Index”), increased 5.40%. For the year-to-date period ended June 30, 2018, the Fund outperformed the Index, driven by both positive stock selection and a style tailwind. Stock selection was positive across many sectors, most notably Industrials, including positions in Copart, Inc. and CoStar Group, Inc., and Health Care, including our positions in ABIOMED, Inc. and Encompass Health Corporation. The top individual contributors to the Fund’s performance were ABIOMED and CoStar. ABIOMED develops, manufactures, and markets advanced medical technologies designed to assist or replace the pumping function of a failing heart. The company reported strong results as its Impella heart pump is increasingly becoming the standard of care for acute heart failure patients. Real estate information provider CoStar outperformed due to accelerating growth in both the commercial real estate and multifamily housing segments of its businesses. Another top contributor was Domino’s Pizza, Inc. (Consumer Discretionary). The Middleby Corporation (Industrials) was the top detractor from the Fund’s performance for the year-to-date period. Middleby Corporation reported revenue and earnings that were below expectations primarily due to weakness in its commercial foodservice segment. Coherent, Inc. (Information Technology), which designs and manufactures lasers used to manufacture OLED displays, was also a top detractor. Coherent’s stock came under pressure due to questions surrounding how quickly and to what extent smartphone manufacturers will adopt OLED screens going forward. Other top detractors were Newell Brands Inc. (Consumer Discretionary), Mohawk Industries, Inc. (Consumer Discretionary), and Ball Corporation (Materials). From a style perspective, as investors became more focused on the potential implications of inflation-related cost pressures on businesses, our higher and more sustainable growth bias, which leads us to companies with value-added products and services and flexible pricing, was a tailwind. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6 for additional information.

Semiannual Report

June 30, 2018

Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		11.63	%		22.45	%		8.85	%		10.69	%		9.63	%
Class I		11.75			22.72			9.13			10.96			9.91
Russell Midcap^® Growth Index		5.40			18.52			10.73			13.37			10.45

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 & 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, 2018

William Blair Funds

Mid Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—23.6%
*	Akamai Technologies, Inc.		15,445	$	1,131
	Analog Devices, Inc.		7,575		727
	Booz Allen Hamilton Holding Corporation		35,424		1,549
	Global Payments, Inc.		12,450		1,388
*	GoDaddy, Inc.		15,640		1,104
*	Guidewire Software, Inc.		9,536		847
	j2 Global, Inc.		7,605		659
	Microchip Technology, Inc.		9,585		872
*	Red Hat, Inc.		6,685		898
	Sabre Corporation		27,809		690
*	Tyler Technologies, Inc.		3,770		837
*	Ultimate Software Group, Inc.		5,835		1,501
*	WEX, Inc.		6,240		1,189
*	Worldpay, Inc.		17,659		1,444
					14,836
	Industrials—21.7%
	BWX Technologies, Inc.		26,714		1,665
*	Copart, Inc.		37,650		2,130
*	CoStar Group, Inc.		5,269		2,174
	Equifax, Inc.		10,975		1,373
	Fortive Corporation		15,330		1,182
*	The Middleby Corporation		10,490		1,095
*	Verisk Analytics, Inc.		18,815		2,025
	Wabtec Corporation		11,045		1,089
	Xylem, Inc.		13,630		919
					13,652
	Consumer Discretionary—18.6%
	Aptiv plc†		9,990		915
*	CarMax, Inc.		10,480		764
	Domino’s Pizza, Inc.		5,385		1,520
*	Live Nation Entertainment, Inc.		28,965		1,407
*	Mohawk Industries, Inc.		3,670		786
	Ross Stores, Inc.		23,100		1,958
	Six Flags Entertainment Corporation		22,260		1,559
*	Ulta Salon Cosmetics & Fragrance, Inc.		6,340		1,480
	Vail Resorts, Inc.		4,790		1,313
					11,702
	Health Care—16.7%
*	ABIOMED, Inc.		2,185		894
	Agilent Technologies, Inc.		16,150		999
*	Centene Corporation		9,778		1,205
*	Charles River Laboratories International, Inc.		7,585		851
*	DexCom, Inc.		8,020		762
	Encompass Health Corporation		20,750		1,405
*	IDEXX Laboratories, Inc.		3,025		659
*	Mettler-Toledo International, Inc.		2,170		1,256
	Teleflex, Inc.		3,180		853
*	Veeva Systems, Inc.		11,076		851
	West Pharmaceutical Services, Inc.		7,830		777
					10,512

		Shares or
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Materials—7.0%
*	Axalta Coating Systems, Ltd.†		18,815	$	570
	Ball Corporation		47,460		1,687
	Celanese Corporation		5,825		647
	Vulcan Materials Co.		11,390		1,470
					4,374
	Financials—5.9%
	Cboe Global Markets, Inc.		7,715		803
	East West Bancorp, Inc.		17,585		1,146
	The Progressive Corporation		29,280		1,732
					3,681
	Real Estate—1.9%
*	SBA Communications Corporation		7,400		1,222
	Energy—1.7%
*	Parsley Energy, Inc.		34,760		1,053
	Consumer Staples—1.2%
	Conagra Brands, Inc.		20,205		723
	Total Common Stocks—98.3% (cost $48,340)				61,755

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $1,406, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$1,406		1,406
	Total Repurchase Agreement—2.3% (cost $1,406)				1,406
	Total Investments—100.6% (cost $49,746)				63,161
	Liabilities, plus cash and other assets—(0.6)%				(361	)
	Net assets—100.0%			$	62,800

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

		Small-Mid Cap Growth Fund

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

		AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Daniel Crowe Robert C. Lanphier, IV		The William Blair Small-Mid Cap Growth Fund (Class N shares) posted a 10.74% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 2500™ Growth Index (the “Index”), increased 8.04%. The Fund’s outperformance for the year-to-date period was driven by a combination of positive stock selection and a tailwind for our investment style. From a style perspective, our higher and more sustainable growth bias, which leads us to companies with value-added products and services and flexible pricing, provided a tailwind. This dynamic was most evident in the first quarter as investors digested the potential for inflation-related cost pressures on businesses. On a stock specific basis, selection was strong across several sectors, most notably in Health Care and Industrials. The top two individual contributors to the Fund’s performance were Health Care holdings ABIOMED, Inc. and Ligand Pharmaceuticals, Inc. ABIOMED develops, manufactures and markets advanced medical technologies designed to assist or replace the pumping function of a failing heart. The stock outperformed as the company reported two quarters of strong patient utilization results in support of our thesis that ABIOMED’s product Impella, the world’s smallest heart pump, will become the standard of care in the markets it serves. Ligand Pharmaceuticals, a biotechnology company focused on the acquisition and development of a portfolio of royalty generating assets, outperformed on strong revenue trends. Other top performing holdings were Copart, Inc. and CoStar Group, Inc. (Industrials) and Domino’s Pizza (Consumer Discretionary). Conversely, Information Technology stock selection detracted from performance, including the Fund’s positions in Rogers Corporation, MaxLinear, Inc. and Coherent, Inc. Shares of advanced materials company Rogers Corporation declined on disappointing results and near term forward looking guidance, as operational challenges, strong product demand against limited manufacturing capacity and rising raw material costs dampened margins. Other notable laggards included LendingTree in Financials and The Middleby Corporation in Industrials. LendingTree, Inc. provides targeted online marketing that generates qualified leads for loan originators and underperformed on decreased optimism for its mortgage business. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6 for additional information.

June 30, 2018

William Blair Funds

Small-Mid Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		10.74	%		22.81	%		13.28	%		15.31	%		13.04	%
Class I		10.91			23.10			13.59			15.61			13.33
Russell 2500^TM Growth Index		8.04			21.53			10.86			13.87			11.38

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 & 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, 2018

Small-Mid Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Industrials—23.6%
	BWX Technologies, Inc.		1,035,736	$	64,547
*	Copart, Inc.		1,311,115		74,157
*	CoStar Group, Inc.		186,216		76,838
	Donaldson Co., Inc.		379,300		17,114
*	Genesee & Wyoming, Inc.		323,900		26,339
	Healthcare Services Group, Inc.		864,020		37,317
	HEICO Corporation		669,089		40,781
	Hexcel Corporation		692,162		45,946
	Ritchie Bros Auctioneers, Inc.†		745,913		25,451
*	SiteOne Landscape Supply, Inc.		332,463		27,917
*	Teledyne Technologies, Inc.		193,909		38,599
*	The Middleby Corporation		319,805		33,394
	Toro Co.		253,224		15,257
	TransUnion		798,740		57,222
					580,879
	Health Care—19.7%
*	Cambrex Corporation		507,126		26,523
*	Catalent, Inc.		814,969		34,139
*	Charles River Laboratories International, Inc.		312,854		35,121
*	DexCom, Inc.		421,951		40,077
	Encompass Health Corporation		838,727		56,798
*	Exact Sciences Corporation		474,824		28,390
*	Glaukos Corporation		642,198		26,099
*	Horizon Pharma plc†		2,268,765		37,571
*	Insulet Corporation		311,100		26,661
*	Ligand Pharmaceuticals, Inc.		268,018		55,525
*	Repligen Corporation		427,341		20,102
	Teleflex, Inc.		113,425		30,422
*	Veeva Systems, Inc.		497,873		38,266
	West Pharmaceutical Services, Inc.		300,664		29,853
					485,547
	Information Technology—19.3%
*	2U, Inc.		247,345		20,668
*	Aspen Technology, Inc.		256,600		23,797
	Booz Allen Hamilton Holding Corporation		1,180,443		51,621
*	Coherent, Inc.		113,487		17,752
*	Euronet Worldwide, Inc.		313,698		26,278
*	Fortinet, Inc.		311,400		19,441
*	GoDaddy, Inc.		512,720		36,198
*	Guidewire Software, Inc.		421,326		37,405
	j2 Global, Inc.		377,083		32,659
*	MaxLinear, Inc.		626,863		9,773
	National Instruments Corporation		567,545		23,826
*	Nice, Ltd.—ADR		214,803		22,290
*	Novanta, Inc.†		224,226		13,969
*	Pure Storage, Inc.		1,821,381		43,495
*	Rogers Corporation		320,538		35,727
*	Tyler Technologies, Inc.		109,927		24,415
*	WEX, Inc.		179,053		34,106
					473,420
	Consumer Discretionary—15.6%
*	Adtalem Global Education, Inc.		976,035		46,947
*	Burlington Stores, Inc.		162,000		24,386
	Cable One, Inc.		17,922		13,142
	Domino’s Pizza, Inc.		161,980		45,706
*	Floor & Decor Holdings, Inc.		631,321		31,143
*	Grand Canyon Education, Inc.		366,535		40,909

		Shares or
		Principal
	Issuer	Amount		Value

	Common Stocks—(continued)

	Consumer Discretionary—(continued)
*	Hilton Grand Vacations, Inc.		904,488	$	31,386
*	Live Nation Entertainment, Inc.		940,285		45,670
	Six Flags Entertainment Corporation		775,177		54,301
*	Universal Electronics, Inc.		402,400		13,299
	Vail Resorts, Inc.		132,996		36,466
					383,355
	Financials—7.9%
	Bank of the Ozarks, Inc.		594,302		26,767
	BrightSphere Investment Group plc†		936,476		13,354
	Cboe Global Markets, Inc.		300,956		31,321
	East West Bancorp, Inc.		276,221		18,010
*	Encore Capital Group, Inc.		637,827		23,344
	FirstCash, Inc.		450,527		40,480
*	LendingTree, Inc.		79,288		16,952
	Virtu Financial, Inc.		863,537		22,927
					193,155
	Materials—6.5%
*	Axalta Coating Systems, Ltd.†		734,811		22,272
	Ball Corporation		1,175,559		41,791
	Celanese Corporation		349,458		38,811
	Martin Marietta Materials, Inc.		253,219		56,551
					159,425
	Real Estate—2.9%
	Colliers International Group, Inc.†		249,545		18,891
	FirstService Corporation†§		313,098		23,808
	Jones Lang LaSalle, Inc.		169,481		28,132
					70,831
	Energy—1.7%
	Diamondback Energy, Inc.		130,460		17,165
*	Parsley Energy, Inc.		797,936		24,161
					41,326
	Consumer Staples—0.8%
	Nu Skin Enterprises, Inc.		266,722		20,855
	Total Common Stocks—98.0% (cost $2,010,049)				2,408,793

	Repurchase Agreement
	Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $17,258, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$17,257		17,257
	Total Repurchase Agreement—0.7% (cost $17,257)				17,257
	Total Investments—98.7% (cost $2,027,306)				2,426,050
	Cash and other assets, less liabilities—1.3%				32,217
	Net assets—100.0%			$	2,458,267

ADR = American Depository Receipt * = Non-income producing security

† = U.S. listed foreign security

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.97% of the Fund’s net assets at June 30, 2018.

See accompanying Notes to Financial Statements.

June 30, 2018

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 0.84% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 2500™ Value Index (the “Index”), increased 3.00%. The Fund’s underperformance relative to the Index was driven by the combination of stock selection and a negative style headwind given the strategy’s larger market cap bias. At the sector level, the most significant detractor from relative performance was Energy, the best performing sector of the market during the period, due to stock selection and the Fund’s lack of exposure to the Oil & Gas Drilling and the Oil & Gas Refining & Marketing sub-industries. The Fund’s relative underperformance within the Industrials sector was due to stock selection within Machinery, as market cycle concerns generally overshadowed positive corporate earnings for the Fund’s more cyclical portfolio holdings. Within Financials, the relative underperformance within the sector was driven by stock selection within Insurance and Banks; pressured by declining interest rates and a flattening yield curve late in the second quarter. The Fund’s relative outperformance within Consumer Discretionary was the result of strong stock selection within the Leisure Facilities, Education Services and Apparel, Accessories & Luxury Goods sub-industries. Within Information Technology, the relative outperformance was driven by stock selection within IT Services and benefitted from General Dynamics’ acquisition of portfolio holding CSRA, Inc. Looking specifically at stock selection, the Fund’s largest detractors from relative performance were Crane Co. (Industrials), Commscope Holding Co., Inc. (Information Technology), and Acuity Brands, Inc. (Industrials). Offsetting these detractors were the Fund’s investments in lululemon athletica (Consumer Discretionary), CSRA (Information Technology), and Vail Resorts, Inc. (Consumer Discretionary). Please refer to the U.S. Value Market Review and Outlook relating to the Fund on page 7 for additional information.

Semiannual Report

June 30, 2018

Small-Mid Cap Value Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		0.84	%		10.21	%		8.23	%		9.56	%		12.46	%
Class I		0.98			10.46			8.51			9.85			12.75
Russell 2500^TM Value Index		3.00			11.49			9.76			10.78			14.21

(a)	Since inception is for the period from December 15, 2011 (Commencement of Operations) to June 30, 2018.

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 & 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^TMValue Index consists of small to mid-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, 2018

William Blair Funds

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Financials—22.0%
	American Financial Group, Inc.		186	$	20
	CNO Financial Group, Inc.		812		16
*	E*TRADE Financial Corporation		549		34
	East West Bancorp, Inc.		445		29
	First American Financial Corporation		311		16
	FNB Corporation		1,594		21
	Hancock Whitney Corporation		412		19
	Hanover Insurance Group, Inc.		196		23
	Home BancShares, Inc.		999		23
	Iberiabank Corporation		320		24
	PacWest Bancorp		541		27
	Radian Group, Inc.		1,262		21
	Selective Insurance Group, Inc.		367		20
	Sterling Bancorp		1,198		28
*	SVB Financial Group		104		30
	Umpqua Holdings Corporation		921		21
	Voya Financial, Inc.		465		22
*	Western Alliance Bancorp		379		21
	WSFS Financial Corporation		470		25
	Zions Bancorporation		254		13
					453
	Real Estate—14.5%
	Acadia Realty Trust		1,007		28
	American Assets Trust, Inc.		633		24
	American Campus Communities, Inc.		677		29
	Camden Property Trust		241		22
	Columbia Property Trust, Inc.		1,172		27
	Douglas Emmett, Inc.		494		20
	EPR Properties		452		29
*	Equity Commonwealth		696		22
	Equity LifeStyle Properties, Inc.		230		21
	Healthcare Realty Trust, Inc.		914		27
	Pebblebrook Hotel Trust		736		28
	Terreno Realty Corporation		613		23
					300
	Industrials—12.7%
	Acuity Brands, Inc.		220		25
	Crane Co.		300		24
*	Gardner Denver Holdings, Inc.		878		26
	GrafTech International, Ltd.		1,759		32
	IDEX Corporation		203		28
	Lennox International, Inc.		145		29
	Old Dominion Freight Line, Inc.		179		27
	Toro Co.		437		26
	UniFirst Corporation		149		26
*	WABCO Holdings, Inc.		170		20
					263
	Consumer Discretionary—10.0%
	Churchill Downs, Inc.		86		25
	Dunkin’ Brands Group, Inc.		644		44
	Gentex Corporation		1,290		30
*	Michael Kors Holdings, Ltd.†		414		28
	Six Flags Entertainment Corporation		511		36
	Vail Resorts, Inc.		156		43
					206



	Issuer	Shares		Value

	Common Stocks—(continued)

	Information Technology—9.3%
*	Acxiom Corporation		791	$	24
	Avnet, Inc.		507		22
	Belden, Inc.		456		28
	Booz Allen Hamilton Holding Corporation		782		34
*	Cadence Design Systems, Inc.		679		30
	j2 Global, Inc.		362		31
	MAXIMUS, Inc.		375		23
					192
	Energy—8.0%
*	Forum Energy Technologies, Inc.		1,727		21
*	Parsley Energy, Inc.		990		30
	Patterson-UTI Energy, Inc.		1,251		23
	Range Resources Corporation		1,679		28
	Targa Resources Corporation		637		32
*	WPX Energy, Inc.		1,799		32
					166
	Utilities—6.1%
	Alliant Energy Corporation		625		26
	Atmos Energy Corporation		339		31
	IDACORP, Inc.		250		23
	NiSource, Inc.		957		25
*	Vistra Energy Corporation		885		21
					126
	Materials—6.0%
	Carpenter Technology Corporation		482		25
	FMC Corporation		223		20
	Minerals Technologies, Inc.		234		17
	PolyOne Corporation		527		23
	Sensient Technologies Corporation		209		15
	Steel Dynamics, Inc.		521		24
					124
	Health Care—5.1%
	CONMED Corporation		192		14
	Encompass Health Corporation		393		27
*	Hologic, Inc.		583		23
*	Magellan Health, Inc.		183		17
	PerkinElmer, Inc.		311		23
					104
	Consumer Staples—3.3%
	Ingredion, Inc.		186		20
	J&J Snack Foods Corporation		122		19
	Lamb Weston Holdings, Inc.		411		28
					67
	Total Common Stocks—97.0% (cost $1,658)				2,001

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Small-Mid Cap Value Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Exchange-Traded Fund
iShares Russell 2000 Value ETF		471	$	62
Total Exchange-Traded Fund—3.0% (cost $62)				62
Total Investments—100.0% (cost $1,720)				2,063
Cash and other assets, less liabilities—0.0%				—
Net assets—100.0%			$	2,063

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2018

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 Ward D. Sexton		The William Blair Small Cap Growth Fund (Class N shares) posted a 15.41% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 2000^®Growth Index (the “Index”), increased 9.70%. Outperformance versus the Index for the year-to-date period ended June 30, 2018 was driven by positive stock selection across several sectors, most notably Health Care, Industrials, and Financials. At the individual stock level, top contributors to the Fund’s performance included Codexis Inc. (Health Care) and Virtu Financial Inc. (Financials). Codexis, a protein engineering company whose CodeEvolver platform enables faster and more cost-effective enzyme manufacturing, outperformed on strong demand for CodeEvolver and the company’s announced partnership with Nestle Health Science, which represents a significant revenue opportunity for the company going forward. Shares of Virtu Financial, a technology driven high-frequency trading and market-making firm, advanced significantly during the first quarter driven by strong trading volume and expense synergies from a recent acquisition. Other top performing holdings included Varonis Systems, Inc. and LivePerson, Inc. in Information Technology, and AxoGen, Inc. in Health Care. In addition, our sustainable growth bias, which leads us to companies with value-added products and services and flexible pricing, provided a tailwind. This dynamic was most evident in the first quarter, as investors digested the potential for inflation-related cost pressures on businesses. Conversely, Consumer Discretionary stock selection detracted from the Fund’s results in part due to positions in Universal Electronics, Inc., Golden Entertainment, Inc., and Hilton Grand Vacations, Inc. Remote control developer Universal Electronics underperformed as delays from its cable and satellite TV provider customers in deploying next generation remotes negatively impacted first quarter results and second quarter guidance. Elsewhere in the Fund’s portfolio, notable underperformers included MaxLinear, Inc. (Information Technology) and Mercury Systems, Inc. (Industrials). Semiconductor provider MaxLinear underperformed due to weakness in some of its more mature business segments, while some of the company’s new products in more diverse and higher growth end markets have yet to fully take hold. Please refer to the U.S. Growth Market Review and Outlook relating to the Fund on page 6 for additional information.

Semiannual Report

June 30, 2018

Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		15.41	%		26.65	%		17.16	%		16.06	%		12.81	%
Class I		15.57			27.02			17.47			16.35			13.11
Russell 2000^® Growth Index		9.70			21.86			10.60			13.65			11.24

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 & 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, 2018

William Blair Funds

Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Information Technology—21.0%
*	2U, Inc.		65,880	$	5,505
*	Agilysys, Inc.		376,460		5,835
*	Carbon Black, Inc.		230,550		5,994
*	Cars.com, Inc.		208,368		5,916
*	Coherent, Inc.		15,776		2,468
*	EPAM Systems, Inc.		48,664		6,050
*	Etsy, Inc.		180,804		7,628
*	Guidewire Software, Inc.		98,067		8,706
	j2 Global, Inc.		125,972		10,911
	Littelfuse, Inc.		29,193		6,661
*	LivePerson, Inc.		401,837		8,479
*	MaxLinear, Inc.		291,019		4,537
*	Nice, Ltd.—ADR		61,633		6,396
*	Novanta, Inc.†		50,159		3,125
*	Pure Storage, Inc.		379,526		9,063
*	RealPage, Inc.		110,871		6,109
*	Rogers Corporation		41,985		4,680
*	USA Technologies, Inc.		571,225		7,997
*	Varonis Systems, Inc.		118,510		8,829
*	WNS Holdings, Ltd.—ADR		134,502		7,018
					131,907
	Consumer Discretionary—19.5%
*	Adtalem Global Education, Inc.		171,628		8,255
*	At Home Group, Inc.		190,298		7,450
*	Boot Barn Holdings, Inc.		420,724		8,730
	Cable One, Inc.		9,810		7,194
*	Carvana Co.		99,820		4,153
*	Floor & Decor Holdings, Inc.		131,008		6,463
*	Gentherm, Inc.		181,583		7,136
*	Golden Entertainment, Inc.		245,995		6,639
*	Grand Canyon Education, Inc.		59,643		6,657
*	Hilton Grand Vacations, Inc.		216,144		7,500
*	IMAX Corporation†		314,677		6,970
*	Laureate Education, Inc.		504,023		7,223
	LCI Industries		60,891		5,489
	Lithia Motors, Inc.		50,159		4,744
	Nutrisystem, Inc.		174,185		6,706
	Six Flags Entertainment Corporation		125,573		8,796
	Steven Madden, Ltd.		148,725		7,897
*	Universal Electronics, Inc.		143,063		4,728
					122,730
	Health Care—17.8%
*	AxoGen, Inc.		133,253		6,696
*	Cambrex Corporation		180,509		9,441
*	Catalent, Inc.		149,108		6,246
*	Codexis, Inc.		511,503		7,365
*	CryoLife, Inc.		260,517		7,255
	Encompass Health Corporation		188,307		12,752
*	Glaukos Corporation		154,131		6,264
*	Hanger, Inc.		181,383		3,076
*	Horizon Pharma plc†		641,570		10,624
*	Intersect ENT, Inc.		148,973		5,579
*	LHC Group, Inc.		84,095		7,198
*	Ligand Pharmaceuticals, Inc.		56,299		11,664
*	Repligen Corporation		112,091		5,273



	Issuer	Shares		Value

	Common Stocks—(continued)

	Health Care—(continued)
	Simulations Plus, Inc.		231,030	$	5,140
*	Supernus Pharmaceuticals, Inc.		119,959		7,180
					111,753
	Industrials—17.8%
	Albany International Corporation		102,325		6,155
*	Armstrong World Industries, Inc.		108,803		6,876
*	Blue Bird Corporation		461,654		10,318
*	BlueLinx Holdings, Inc.		70,620		2,650
	BWX Technologies, Inc.		154,469		9,626
	Douglas Dynamics, Inc.		194,145		9,319
	ESCO Technologies, Inc.		104,556		6,033
*	Genesee & Wyoming, Inc.		76,987		6,261
	Healthcare Services Group, Inc.		194,117		8,384
	ICF International, Inc.		84,471		6,002
	John Bean Technologies Corporation		88,841		7,898
*	Mercury Systems, Inc.		156,116		5,942
	Ritchie Bros Auctioneers, Inc.†		219,595		7,493
*	SiteOne Landscape Supply, Inc.		71,868		6,035
*	WageWorks, Inc.		132,870		6,643
*	Willdan Group, Inc.		189,374		5,865
					111,500
	Financials—8.5%
*	BofI Holding, Inc.		107,811		4,411
*	Encore Capital Group, Inc.		260,188		9,523
	FirstCash, Inc.		98,948		8,890
	Glacier Bancorp, Inc.		140,995		5,454
	Home BancShares, Inc.		337,204		7,607
	Meta Financial Group, Inc.		64,160		6,249
*	Triumph Bancorp, Inc.		144,308		5,881
	Virtu Financial, Inc.		202,374		5,373
					53,388
	Consumer Staples—5.0%
	Calavo Growers, Inc.		91,831		8,830
	MGP Ingredients, Inc.		83,093		7,379
	Nu Skin Enterprises, Inc.		81,248		6,353
*	Primo Water Corporation		497,363		8,699
					31,261
	Real Estate—3.1%
	Colliers International Group, Inc.†		90,284		6,834
	CoreSite Realty Corporation		55,644		6,166
	FirstService Corporation†		82,727		6,291
					19,291
	Energy—2.0%
*	Callon Petroleum Co.		377,803		4,058
*	Carrizo Oil & Gas, Inc.		156,242		4,351
*	Centennial Resource Development, Inc.		227,860		4,115
					12,524
	Telecommunication Services—1.2%
*	ORBCOMM, Inc.		725,545		7,328
	Materials—0.9%
	Orion Engineered Carbons S.A.†		189,162		5,836
	Total Common Stocks—96.8% (cost $455,847)				607,518

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

Issuer	Shares or Principal Amount		Value

Exchange-Traded Fund
iShares Russell 2000 Growth ETF		28,269	$	5,776
Total Exchange-Traded Fund—0.9% (cost $5,403)				5,776

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $9,561, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$9,560		9,560
Total Repurchase Agreement—1.5% (cost $9,560)				9,560
Total Investments—99.2% (cost $470,810)				622,854
Cash and other assets, less liabilities—0.8%				4,947
Net assets—100.0%			$	627,801

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2018

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	The William Blair Small Cap Value Fund (Class N shares) posted a 1.09% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the Russell 2000^®Value Index (the “Index”), increased 5.44%. The Fund’s underperformance relative to the Index was driven by a combination of stock selection and style headwinds, given the outperformance of smaller cap stocks and the strategy’s bias in favor of the larger market cap stocks within the Fund’s small cap universe. At the sector level, the most significant detractor from relative performance was Industrials due to stock selection within Machinery as market cycle concerns generally overshadowed positive corporate earnings for our more cyclical portfolio holdings. The Fund’s relative underperformance within the Consumer Discretionary sector was the result of stock selection in Auto Parts & Equipment, Apparel Retail, Automobile Manufacturers, and Restaurants. Within the sector, these stock selection detractors more than offset positive contribution from stock selection within Homebuilding and Education Services. Health Care, the best performing sector of the market during the first half of 2018, was the largest contributor to relative performance as strong stock selection within the sector was able to more than offset negative contribution from the Fund’s lack of exposure to Biotechnology stocks. Within the Information Technology sector, the Fund’s relative outperformance was driven by stock selection within IT Services and also General Dynamics’ acquisition of portfolio holding CSRA, Inc. Looking specifically at stock selection, the largest detractors from the Fund’s relative performance were Dana, Inc. (Consumer Discretionary), Halcon Resources Corporation (Energy), and Winnebago Industries, Inc. (Consumer Discretionary). Offsetting these detractors were the Fund’s investments in CSRA (Information Technology), Encompass Health Corporation (Health Care), and CONMED Corporation (Health Care). Please refer to the U.S. Value Market Review and Outlook relating to the Fund on page 7 for additional information.
David S. Mitchell

Semiannual Report

June 30, 2018

Small Cap Value Fund

Performance Highlights (Unaudited)


Average Annual Total Return through 6/30/2018
	Year to Date		1 Year		3 Year		5 Year		10 Year
Class N	1.09	%	9.40	%	8.68	%	9.80	%	9.82	%
Class I	1.21		9.68		8.96		10.08		10.08
Russell 2000^® Value Index	5.44		13.10		11.22		11.18		9.88

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 & 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, 2018

William Blair Funds

Small Cap Value Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	Financials—26.2%
	Banner Corporation		126,403	$	7,601
	Boston Private Financial Holdings, Inc.		427,424		6,796
	CNO Financial Group, Inc.		258,205		4,916
	CoBiz Financial, Inc.		421,619		9,056
	CVB Financial Corporation		222,734		4,994
	FNB Corporation		615,443		8,259
	Glacier Bancorp, Inc.		165,062		6,385
	Green Bancorp, Inc.		44,390		959
	Hancock Whitney Corporation		151,085		7,048
	Hanover Insurance Group, Inc.		73,684		8,810
	Home BancShares, Inc.		364,530		8,224
	Iberiabank Corporation		115,259		8,737
	National Bank Holdings Corporation		161,344		6,226
	OceanFirst Financial Corporation		214,948		6,440
	Radian Group, Inc.		515,965		8,369
	Renasant Corporation		169,306		7,707
	Sandy Spring Bancorp, Inc.		144,803		5,938
*	Seacoast Banking Corporation of Florida		251,923		7,956
	Selective Insurance Group, Inc.		168,331		9,258
	Sterling Bancorp		421,850		9,913
	Umpqua Holdings Corporation		277,844		6,276
*	Western Alliance Bancorp		147,370		8,343
	WSFS Financial Corporation		174,881		9,321
					167,532
	Industrials—12.1%
	Acuity Brands, Inc.		40,515		4,695
	Brady Corporation		202,336		7,800
*	Continental Building Products, Inc.		164,195		5,180
	EMCOR Group, Inc.		62,697		4,776
	GrafTech International, Ltd.		344,399		6,196
	Interface, Inc.		248,441		5,702
	Kadant, Inc.		32,906		3,164
	Matson, Inc.		132,595		5,089
	Moog, Inc.		74,925		5,841
*	MRC Global, Inc.		159,135		3,448
*	Northwest Pipe Co.		183,371		3,552
*	Rexnord Corporation		214,240		6,226
*	Saia, Inc.		60,595		4,899
	Simpson Manufacturing Co., Inc.		85,802		5,336
	UniFirst Corporation		29,456		5,211
					77,115
	Real Estate—11.7%
	Acadia Realty Trust		308,360		8,440
	Agree Realty Corporation		109,600		5,784
	American Assets Trust, Inc.		197,702		7,570
	Columbia Property Trust, Inc.		295,800		6,718
	Education Realty Trust, Inc.		211,020		8,757
*	Equity Commonwealth		169,570		5,341
	Healthcare Realty Trust, Inc.		238,036		6,922
	Highwoods Properties, Inc.		132,331		6,713
	Pebblebrook Hotel Trust		167,182		6,487
	Sunstone Hotel Investors, Inc.		290,405		4,826
	Terreno Realty Corporation		188,768		7,111
					74,669



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	Consumer Discretionary—10.8%
	Abercrombie & Fitch Co.		153,650	$	3,761
*	Adtalem Global Education, Inc.		143,616		6,908
*	Cavco Industries, Inc.		33,685		6,995
	Dana, Inc.		263,513		5,320
*	Dave & Buster’s Entertainment, Inc.		143,390		6,825
	Meredith Corporation		98,275		5,012
	Nutrisystem, Inc.		147,370		5,674
*	Penn National Gaming, Inc.		203,010		6,819
	Six Flags Entertainment Corporation		99,335		6,959
*	TopBuild Corporation		78,019		6,112
	Wolverine World Wide, Inc.		253,691		8,821
					69,206
	Information Technology—10.1%
*	Acxiom Corporation		240,230		7,195
	Avnet, Inc.		155,420		6,666
	Belden, Inc.		139,672		8,537
	Booz Allen Hamilton Holding Corporation		198,693		8,689
*	Ciena Corporation		190,885		5,060
*	Inphi Corporation		173,004		5,642
	j2 Global, Inc.		103,230		8,941
*	Semtech Corporation		133,125		6,263
*	Viavi Solutions, Inc.		726,845		7,443
					64,436
	Energy—7.7%
	Archrock, Inc.		526,758		6,321
*	Callon Petroleum Co.		739,019		7,937
*	Forum Energy Technologies, Inc.		393,810		4,864
*	Halcon Resources Corporation		908,820		3,990
*	Newpark Resources, Inc.		475,809		5,163
*	PDC Energy, Inc.		131,003		7,919
	Range Resources Corporation		390,270		6,529
*	RSP Permian, Inc.		47,944		2,110
*	Solaris Oilfield Infrastructure, Inc.		324,936		4,643
					49,476
	Utilities—5.9%
	ALLETE, Inc.		64,220		4,971
	Chesapeake Utilities Corporation		55,798		4,461
	El Paso Electric Co.		111,190		6,571
	IDACORP, Inc.		82,970		7,653
	ONE Gas, Inc.		91,552		6,843
	Southwest Gas Holdings, Inc.		97,266		7,419
					37,918
	Health Care—5.9%
	CONMED Corporation		134,367		9,836
	Encompass Health Corporation		150,286		10,177
*	Integer Holdings Corporation		158,868		10,271
*	Magellan Health, Inc.		73,774		7,078
					37,362

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Small Cap Value Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

	Issuer	Shares or Principal Amount		Value

	*Common Stocks—(continued)*

	Materials—4.9%
	Carpenter Technology Corporation		130,471	$	6,859
	Minerals Technologies, Inc.		86,068		6,485
	PolyOne Corporation		151,259		6,537
	Sensient Technologies Corporation		91,112		6,519
	Silgan Holdings, Inc.		174,508		4,682
					31,082
	Consumer Staples—3.2%
*	Darling Ingredients, Inc.		365,148		7,259
	J&J Snack Foods Corporation		55,553		8,470
	SpartanNash Co.		190,073		4,851
					20,580

	Telecommunication Services—0.7%
*	Cincinnati Bell, Inc.		293,320		4,605
	Total Common Stocks—99.2%
	(cost $477,126)				633,981
	Exchange-Traded Fund
	iShares Russell 2000 Value ETF		49,000		6,464
	Total Exchange-Traded Fund—1.0%
	(cost $6,502)				6,464

	*Repurchase Agreement*
	Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $12,056, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$12,056		12,056
	Total Repurchase Agreement—1.9% (cost $12,056)				12,056
	Total Investments—102.1% (cost $495,684)				652,501
	Liabilities, plus cash and other assets—(2.1)%				(13,664	)
	Net assets—100.0%			$	638,837

* = Non-income producing security

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Global Markets Review and Outlook

Global equity markets posted mixed results for the first half of 2018, buffeted by escalating trade tensions, the U.S. Federal Reserve’s continued tightening bias and U.S. dollar strength. In contrast to the global synchronized expansion environment of 2017, equity performance in the first six months of 2018 reflected a growing divergence, with the U.S.’s economy, corporate earnings and share prices maintaining positive momentum while the rest of the world rolled over.

The benign 2017 environment of low volatility and uninterrupted monthly gains abruptly reversed course in late January 2018, as worries about the extended bull market culminated in heavy selling pressure following reports that a handful of niche equity volatility-linked ETF products had suffered significant losses, stoking fears of broader risk contagion.

As the first half of the year progressed, investors became increasingly concerned that the Trump administration’s pursuit of protectionist measures would ignite a trade war with China and potentially derail the U.S. expansion. The slowing pace of economic activity in Europe combined with increased turbulence in emerging markets also weighed on investor sentiment.

U.S. equities extended their gains during the first half of 2018 and significantly outpaced non-U.S. markets, bolstered by strong corporate earnings and tax reform. From a market cap perspective, U.S. small caps outperformed their large cap counterparts by approximately 3.5% during the period, as measured by the MSCI USA (net) and MSCI USA Small Cap (net) indices. In addition to being less exposed to trade disputes given lower overseas revenues, U.S. small caps were expected to benefit more from tax reform: according to Bloomberg, for the three years ended December 2017, S&P SmallCap 600 Index companies had an average effective tax rate 4.3% higher than that of S&P 500 Index companies.

Non-U.S. developed market equity performance was hampered by negative returns in Europe, amid softening economic data and renewed political turmoil in Italy. The euro depreciated approximately 3% versus the dollar in the first half of 2018, reflecting these concerns in addition to expectations for prolonged monetary stimulus from the European Central Bank, which announced that interest rates would remain at record lows through the summer of 2019.

Harkening back to the 2013 taper tantrum episode, emerging markets equities and currencies were hit by a significant rise in investor outflows during the first half of the year. The stronger dollar and prospect of higher U.S. interest rates had a particularly detrimental effect on countries with larger current account deficits and dollar-denominated debt, including Argentina and Turkey.

Political uncertainty and a deteriorating economic growth outlook also weighed on emerging markets returns in the first half of 2018. Brazil’s nationwide truckers’ strike was projected to shave a full percentage point off 2018 GDP growth, threatening the country’s nascent economic recovery and further clouding the reform outlook ahead of the presidential election this fall.

Although Chinese equities held up better than most emerging market countries for the six-month period, investors became increasingly wary of escalating trade tensions as the first wave of U.S. tariffs on $34 billion of Chinese exports was scheduled to take effect on July 6.

Information Technology and Energy were the top performing sectors on a global basis during the first half of 2018, while Telecommunication Services, Financials and Consumer Staples underperformed. Within emerging markets, Energy was the only sector in positive territory for the first six-months of 2018, benefiting from the rebound in oil prices.

There is now a great deal of uncertainty about how the recently announced trade tariffs will impact intermediate term economic activity. Despite some market skepticism, global growth remains broad based and robust as we head into the second half of 2018. While global manufacturing Purchasing Managers’ Indexes (“PMIs”) declined from unsustainably elevated levels in February and March, the latest readings suggest that we are nearing the end of the deceleration to PMI levels in line with ongoing growth. Near-term economic fundamentals indicate that the current economic expansion has further to run. In times of economic expansion such as the current one, we expect companies to continue to post robust earnings growth. However, earnings growth cannot continue to accelerate at the same pace we experienced over the past several quarters, especially in the U.S., where acceleration has been quite pronounced. European companies have also enjoyed relatively strong earnings growth, which is also likely to continue but at moderately slower rates in the near term.

While the underlying economy remains robust and economic indicators continue to signal positive momentum, escalating trade war rhetoric will likely have substantial consequences on market volatility, inflation, and growth dynamics over the coming quarters. As examples, tariffs on Canadian lumber are adding to higher costs for wood, which are fueling price increases of up to $9,000 for a new single-family home, according to the National Association of Homebuilders. Elsewhere, prices of washing machines sold in the U.S. surged by nearly 8.5% this year—the first increase since 2012—after the U.S. administration restricted imports earlier this year.

More broadly, some U.S. companies are reportedly using the threat of new tariffs as a reason to raise prices. In short, tariffs amount to either a tax on consumption or corporate margin deterioration if firms choose to absorb some portion of the cost of the tariffs. In aggregate, tariffs worsen the tradeoff between growth and inflation, and will likely lead to tighter monetary policy. Much of this has not played out yet, because the U.S. administration has moved only recently. However, the effects of these

Semiannual Report

June 30, 2018

Global Markets Review and Outlook

new tariffs will begin to manifest themselves over the coming quarters, and it is quite possible that the new tariffs will bring us closer to the end of the current economic expansion cycle.

Longer term, we fear the U.S. administration’s unilateral view of trade policy is suggesting an end to the decades-long building of integrated global markets and supply chains. If the U.S. chooses to limit or regulate trade however it sees fit, regardless of what agreements it may have signed in the past, trade and investment will become more volatile and more politicized. Multinationals from around the world will be more inclined to disentangle their operations from the U.S. The impact of this will only be revealed gradually over the next several years, but could imply meaningful changes to competition, quality, and innovation.

From a portfolio strategy perspective, we believe emerging markets (“EMs”) are susceptible to further downside volatility in the second half of 2018, amid persistent dollar strength as interest rates and growth differentials continue to favor the U.S. and as the Federal Reserve maintains its tightening bias. Positioning within our all county world index-oriented strategies has generally reflected our more cautious outlook, with reduced EM weightings in favor of increased developed market exposure, primarily in Europe. Within our dedicated EM strategies, we have maintained overweighted positions in China and India, and moderated exposures to Brazil and South Africa. Within China, our positioning continues to emphasize domestically-oriented consumer, Health Care and Information Technology companies that we believe are well positioned to benefit from the Chinese economy’s ongoing transition to a consumption and services-driven growth model.

June 30, 2018

William Blair Funds

		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 6.33% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI All Country World IMI Index (net) (the “Index”), decreased 0.18%. Outperformance versus the Index was primarily driven by positive stock selection across most sectors. The Consumer Staples, Health Care and Consumer Discretionary sectors were the most notable sources of the Fund’s relative return. Within Consumer Staples, leading global prestige cosmetics company Estee Lauder contributed to relative results. The company continues to benefit from the rapid growth of recently acquired brands, expansion in the specialty retail and online channels, and strong growth from China. Health Care company ABIOMED, Inc., the creator of the world’s smallest heart pump, is benefiting from strong sales in an underpenetrated market. Its Impella family of devices is designed to provide temporary blood circulation support to heart failure patients. The small pump takes on the pumping function of the heart enabling it to rest and recover. It is the first blood circulation support device to receive FDA approval, which should lead to increased utilization, and we do not see any material competition on the horizon. Within the Consumer Discretionary sector, Amazon.com propelled the Fund’s relative performance on the back of strong results. Amazon’s gross profit and operating income improved, driven by strong performance in North American retail and Amazon Web Services (AWS). Partially offsetting these positive stock selection effects were the Fund’s underweight allocations to the Consumer Staples and Utilities sectors. Given above average stock selection in each sector, the Fund’s overall underweight to these sectors detracted from the Fund’s performance over the period. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

Global Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date		1 Year		3 Year		5 Year		10 Year		Since Inception
Class N	6.33	%	21.58	%	10.88	%	11.36	%	6.52	%	—
Class I	6.46		21.92		11.24		11.69		6.80		—
MSCI ACW IMI (net)	(0.18	)	11.14		8.34		9.60		6.14		—
Institutional Class(a)	6.52		22.08		11.30		11.80		—		11.47	%
MSCI ACW IMI (net)(a)	(0.18	)	11.14		8.34		9.60		—		9.79

(a)	Since inception is for the period from December 19, 2012 (Commencement of Operations) to June 30, 2018.

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 & 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 index approximates the minimum possible dividend reinvestment by deducting for the highest possible withholding tax rates of those markets.

Sector Diversification (Unaudited)

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

June 30, 2018

William Blair Funds

Global Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	*Western Hemisphere—57.6%*
	Canada—2.6%
	Brookfield Asset Management, Inc. Class “A” (Capital markets)†		54,368	$	2,204
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		78,818		3,208
					5,412
	United States—55.0%
*	ABIOMED, Inc. (Health care equipment & supplies)		4,984		2,039
*	Adobe Systems, Inc. (Software)		18,805		4,585
*	Align Technology, Inc. (Health care equipment & supplies)		8,056		2,756
*	Alphabet, Inc. Class “A” (Internet software & services)		4,754		5,368
*	Amazon.com, Inc. (Internet & direct marketing retail)		3,364		5,718
	BlackRock, Inc. (Capital markets)		8,101		4,043
	Carnival Corporation (Hotels, restaurants & leisure)†		39,444		2,261
*	CoStar Group, Inc. (Professional services)		3,945		1,628
	Domino’s Pizza, Inc. (Hotels, restaurants & leisure)		8,828		2,491
	EOG Resources, Inc. (Oil, gas & consumable fuels)		23,610		2,938
*	Facebook, Inc. Class “A” (Internet software & services)		17,340		3,370
	Fifth Third Bancorp (Banks)		112,889		3,240
*	Guidewire Software, Inc. (Software)		11,427		1,014
	Halliburton Co. (Energy equipment & services)		31,053		1,399
	Intercontinental Exchange, Inc. (Capital markets)		46,861		3,447
*	Intuitive Surgical, Inc. (Health care equipment & supplies)		3,396		1,625
	JPMorgan Chase & Co. (Banks)		40,451		4,215
	Lam Research Corporation (Semiconductors & semiconductor equipment)		10,710		1,851
	Mastercard, Inc. Class “A” (IT services)		19,877		3,906
	NextEra Energy, Inc. (Electric utilities)		15,284		2,553
	Pioneer Natural Resources Co. (Oil, gas & consumable fuels)		8,297		1,570
	Prologis, Inc. (Equity REIT)		28,166		1,850
	Raytheon Co. (Aerospace & defense)		15,825		3,057
	Roper Technologies, Inc. (Industrial conglomerates)		7,457		2,057
*	salesforce.com, Inc. (Software)		20,828		2,841
	Southwest Airlines Co. (Airlines)		39,135		1,991
	The Boeing Co. (Aerospace & defense)		11,075		3,716
	The Estee Lauder Cos., Inc. Class “A” (Personal products)		25,895		3,695
	The Goldman Sachs Group, Inc. (Capital markets)		11,830		2,609
	The Home Depot, Inc. (Specialty retail)		20,250		3,951
	Thermo Fisher Scientific, Inc. (Life sciences tools & services)		12,879		2,668



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Western Hemisphere—(continued)*
	United States—(continued)
*	Ulta Salon Cosmetics & Fragrance, Inc. (Specialty retail)		6,969	$	1,627
	Union Pacific Corporation (Road & rail)		22,316		3,162
	UnitedHealth Group, Inc. (Health care providers & services)		19,013		4,665
	Vail Resorts, Inc. (Hotels, restaurants & leisure)		9,568		2,623
	Watsco, Inc. (Trading companies & distributors)		10,239		1,825
*	Weight Watchers International, Inc. (Diversified consumer services)		20,118		2,034
*	Worldpay, Inc. Class “A” (IT services)		40,659		3,325
	Zoetis, Inc. (Pharmaceuticals)		27,598		2,351
					112,064
	*Europe—13.1%*
	Denmark—2.4%
	Chr Hansen Holding A/S (Chemicals)		11,460		1,055
	DSV A/S (Road & rail)		18,850		1,517
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		48,753		2,252
					4,824
	France—3.5%
	BNP Paribas S.A. (Banks)		25,934		1,604
	LVMH Moet Hennessy Louis Vuitton SE (Textiles, apparel & luxury goods)		10,534		3,497
	Valeo S.A. (Auto components)		39,078		2,131
					7,232
	Germany—1.1%
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		87,848		2,231
	Ireland—0.5%
	Allegion plc (Building products)†		12,100		936
	Netherlands—1.5%
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		89,118		3,093
	Sweden—1.5%
	Atlas Copco AB Class “A” (Machinery)		67,945		1,968
*	Epiroc AB Class “A” (Machinery)		103,380		1,085
					3,053
	Switzerland—2.6%
*	Lonza Group AG (Life sciences tools & services)		9,709		2,566
	Partners Group Holding AG (Capital markets)		3,718		2,718
					5,284

	*Japan—9.8%*
	Daikin Industries, Ltd. (Building products)		27,300		3,263
	FANUC Corporation (Machinery)		7,900		1,566
	Keyence Corporation (Electronic equipment, instruments & components)		5,800		3,271

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Global Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Japan—(continued)*
	Komatsu, Ltd. (Machinery)		92,600	$	2,636
	MISUMI Group, Inc. (Machinery)		35,400		1,030
	Nihon M&A Center, Inc. (Professional services)		32,200		933
	Nissan Chemical Industries, Ltd. (Chemicals)		27,000		1,258
	ORIX Corporation (Diversified financial services)		143,200		2,257
	Shin-Etsu Chemical Co., Ltd. (Chemicals)		24,200		2,150
	Start Today Co., Ltd. (Internet & direct marketing retail)		46,400		1,679
					20,043

	*Emerging Asia—8.4%*
	China—5.7%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		19,747		3,664
	Huazhu Group, Ltd.—ADR (Hotels, restaurants & leisure)		27,238		1,144
	Shenzhou International Group Holdings, Ltd. (Textiles, apparel & luxury goods)		101,000		1,243
	Tencent Holdings, Ltd. (Internet software & services)		67,700		3,399
	Yum China Holdings, Inc. (Hotels, restaurants & leisure)		56,141		2,159
					11,609
	India—1.4%
	HDFC Bank, Ltd.—ADR (Banks)		27,014		2,837
	Taiwan—1.3%
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		72,320		2,644

	*Asia—6.4%*
	Australia—3.4%
	CSL, Ltd. (Biotechnology)		24,851		3,537
	Macquarie Group, Ltd. (Capital markets)		36,765		3,351
					6,888
	Hong Kong—3.0%
	AIA Group, Ltd. (Insurance)		427,600		3,725
	Galaxy Entertainment Group, Ltd. (Hotels, restaurants & leisure)		309,000		2,382
					6,107

	*United Kingdom—4.3%*
	Aptiv plc (Auto components)†		22,226		2,037
	BHP Billiton plc (Metals & mining)		137,733		3,091
	Compass Group plc (Hotels, restaurants & leisure)		104,292		2,223
	Fevertree Drinks plc (Beverages)		34,333		1,530
					8,881
	Total Common Stocks—99.6% (cost $145,805)				203,138


	Principal
Issuer	Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $4,055, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$4,055	$	4,055
Total Repurchase Agreement—2.0% (cost $4,055)				4,055
Total Investments—101.6% (cost $149,860)				207,193
Liabilities, plus cash and other assets—(1.6)%				(3,326	)
Net assets—100.0%			$	203,867

ADR = American Depository Receipt

REIT = Real Estate Investment Trust

† = 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, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	20.5	%
Consumer Discretionary	19.3	%
Financials	17.8	%
Industrials	15.9	%
Health Care	12.0	%
Energy	6.0	%
Materials	3.7	%
Consumer Staples	2.6	%
Utilities	1.3	%
Real Estate	0.9	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

U.S. Dollar	63.8	%
Japanese Yen	9.8	%
Euro	6.2	%
Hong Kong Dollar	5.3	%
Australian Dollar	3.4	%
British Pound Sterling	3.4	%
Swiss Franc	2.6	%
Danish Krone	2.4	%
Canadian Dollar	1.6	%
Swedish Krona	1.5	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

		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 1.04% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 3.65%. Outperformance versus the Index was primarily driven by positive stock selection across most sectors. The Consumer Staples and Financials sectors were the most significant contributors to relative return. Within Consumer Staples, Japanese Cosmetics holding Shiseido Co., Ltd. propelled the Fund’s relative results as new management has reformed the organizational structure to place more responsibility in the hands of local managers, improved strategy execution, accelerated product development, and concentrated Shiseido’s investment on prestige brands. Within Financials, Australia-based Macquarie Group is a global provider of banking, financial, advisory, investment, and fund management services with approximately $500 billion AUD in total assets. Management has focused the business, particularly on the attractive asset management segment. Also, it is the global leader in infrastructure funds management, a highly profitable business with robust secular trends, which should lead to expanding performance fees over the next few years. Partially offsetting these effects were underweight allocations to the Consumer Staples and Materials sectors. Given above average stock selection in each sector, the underweight positions detracted from the Fund’s performance over the period. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

International Leaders Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year to Date		1 Year		3 Year		5 Year		Since Inception
Class N(a)	1.04	%	13.69	%	9.17	%	9.58	%		10.01	%
Class I(a)	1.16		13.99		9.43		9.83			10.28
MSCI ACW Ex-U.S. IMI (net)(a)	(3.65	)	7.75		5.46		6.39			6.96
Institutional Class(b)	1.22		14.09		9.54		9.97			10.35
MSCI ACW Ex-U.S. IMI (net)(b)	(3.65	)	7.75		5.46		6.39			6.52

(a)	Since inception is for the period from August 16, 2012 (Commencement of Operations) to June 30, 2018.
(b)	Since inception is for the period from November 2, 2012 (Commencement of Operations) to June 30, 2018.

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. 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 & 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 index approximates the minimum possible dividend reinvestment by deducting for the highest possible withholding tax rates of those markets.

Sector Diversification (Unaudited)

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

June 30, 2018

William Blair Funds

International Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	*Europe—39.9%*
	Belgium—1.5%
	KBC Group N.V. (Banks)		81,517	$	6,261
	Denmark—2.5%
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		137,325		6,343
	Orsted A/S (Electric utilities)		67,304		4,067
					10,410
	France—13.4%
	Airbus SE (Aerospace & defense)		58,872		6,870
	Arkema S.A. (Chemicals)		49,108		5,795
	BNP Paribas S.A. (Banks)		72,679		4,496
	Capgemini SE (IT services)		46,625		6,248
	Cie Generale des Etablissements Michelin SCA (Auto components)		24,371		2,948
	LVMH Moet Hennessy Louis Vuitton SE (Textiles, apparel & luxury goods)		35,075		11,646
	Safran S.A. (Aerospace & defense)		60,285		7,301
	Total S.A. (Oil, gas & consumable fuels)		108,480		6,587
	Valeo S.A. (Auto components)		90,315		4,924
					56,815
	Germany—2.6%
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		275,892		7,008
	Rational AG (Machinery)		6,112		3,980
					10,988
	Ireland—2.0%
	Kingspan Group plc (Building products)		171,441		8,570
	Luxembourg—1.0%
	Tenaris S.A. (Energy equipment & services)		225,034		4,107
	Netherlands—3.8%
	Koninklijke Philips N.V. (Health care equipment & supplies)		183,544		7,776
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		241,383		8,377
					16,153
	Spain—3.2%
	ACS Actividades de Construccion y Servicios S.A. (Construction & engineering)		149,309		6,024
	Amadeus IT Group S.A. (IT services)		93,346		7,340
					13,364
	Sweden—3.6%
	Atlas Copco AB Class “A” (Machinery)		209,730		6,074
	*Epiroc AB Class “A” (Machinery)		319,124		3,349
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		107,736		5,986
					15,409
	Switzerland—6.3%
	Geberit AG (Building products)		12,101		5,181
*	Lonza Group AG (Life sciences tools & services)		30,148		7,967



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Europe—(continued)*
	Switzerland—(continued)
	Partners Group Holding AG (Capital markets)		8,814	$	6,444
*	Temenos AG (Software)		48,072		7,229
					26,821

	Emerging Asia—12.7%
	China—9.4%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		60,584		11,240
	China Merchants Bank Co., Ltd. Class “H” (Banks)		1,830,500		6,733
	NetEase, Inc.—ADR (Internet software & services)		17,287		4,368
	Tencent Holdings, Ltd. (Internet software & services)		219,200		11,007
	Yum China Holdings, Inc. (Hotels, restaurants & leisure)		168,995		6,500
					39,848
	India—1.3%
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		197,569		5,505
	Taiwan—2.0%
	Taiwan Semiconductor Manufacturing Co., Ltd. (Semiconductors & semiconductor equipment)		1,149,000		8,159

	*Japan—11.9%*
	Daikin Industries, Ltd. (Building products)		76,100		9,095
	Keyence Corporation (Electronic equipment, instruments & components)		18,100		10,209
	Komatsu, Ltd. (Machinery)		191,300		5,446
	Nitori Holdings Co., Ltd. (Specialty retail)		39,300		6,114
	ORIX Corporation (Diversified financial services)		441,100		6,953
	Shiseido Co., Ltd. (Personal products)		106,700		8,467
	Suzuki Motor Corporation (Automobiles)		71,600		3,946
					50,230

	*United Kingdom—11.8%*
	BHP Billiton plc (Metals & mining)		420,256		9,432
	Compass Group plc (Hotels, restaurants & leisure)		361,627		7,708
	Experian plc (Professional services)		312,929		7,720
	Ferguson plc (Trading companies & distributors)		65,672		5,313
	London Stock Exchange Group plc (Capital markets)		95,845		5,642
	RELX plc (Professional services)		278,245		5,942
	Segro plc (Equity REIT)		488,588		4,303
	St James’s Place plc (Capital markets)		267,326		4,033
					50,093

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

International Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

	Shares or
	Principal
Issuer	Amount		Value

*Common Stocks—(continued)*

*Canada—10.7%*
Brookfield Asset Management, Inc. Class “A” (Capital markets)†		186,449	$	7,559
Canadian National Railway Co. (Road & rail)		113,643		9,295
Constellation Software, Inc. (Software)		11,340		8,795
Dollarama, Inc. (Multiline retail)		117,057		4,537
Suncor Energy, Inc. (Oil, gas & consumable fuels)		174,659		7,108
The Toronto-Dominion Bank (Banks)		139,245		8,059
				45,353

*Asia—10.1%*
Australia—5.5%
Aristocrat Leisure, Ltd. (Hotels, restaurants & leisure)		190,118		4,342
CSL, Ltd. (Biotechnology)		66,375		9,448
Macquarie Group, Ltd. (Capital markets)		100,766		9,183
				22,973

Hong Kong—4.6%
AIA Group, Ltd. (Insurance)		1,361,200		11,858
Galaxy Entertainment Group, Ltd. (Hotels, restaurants & leisure)		1,002,000		7,724
				19,582

*Emerging Europe, Mid-East, Africa—0.7%*
South Africa—0.7%
Bid Corporation, Ltd. (Food & staples retailing)		155,491		3,114
Total Common Stocks—97.8% (cost $331,235)				413,755

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $5,855, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$5,855		5,855
Total Repurchase Agreement—1.4% (cost $5,855)				5,855
Total Investments—99.2% (cost $337,090)				419,610
Cash and other assets, less liabilities—0.8%				3,237
Net assets—100.0%			$	422,847

ADR = American Depository Receipt

REIT = Real Estate Investment Trust

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Industrials	21.8	%
Information Technology	21.2	%
Financials	20.0	%
Consumer Discretionary	14.6	%
Health Care	7.6	%
Energy	6.3	%
Materials	3.7	%
Consumer Staples	2.8	%
Real Estate	1.0	%
Utilities	1.0	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	28.1	%
Japanese Yen	12.1	%
British Pound Sterling	12.1	%
Canadian Dollar	9.1	%
Hong Kong Dollar	9.0	%
U.S. Dollar	7.2	%
Swiss Franc	6.5	%
Australian Dollar	5.6	%
Swedish Krona	3.7	%
Danish Krone	2.5	%
New Taiwan Dollar	2.0	%
Indian Rupee	1.3	%
All Other Currencies	0.8	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

	International Developed Plus Fund

	The International Developed Plus Fund seeks long-term capital appreciation.

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

David Merjan John C. Murphy	The William Blair International Developed Plus Fund (Class N shares) posted a 2.59% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI World ex-U.S. Index (net) (the “Index”), decreased 2.77%. Outperformance versus the Index was driven by a combination of allocation and stock selection effects. More specifically, the Fund’s underweight allocation to Utilities, coupled with above average stock selection within the Financials and Consumer Staples sectors, boosted relative returns. Within the Financials sector, Japan-based M&A Capital Partners Co., Ltd. outperformed. M&A Capital Partners is a high-quality, small-cap growth company in Japan that provides merger and acquisition advisory services to small and medium-sized enterprises (“SMEs”). The company’s addressable market is significant; industry fragmentation coupled with aging demographics has resulted in succession challenges for many businesses. M&A Capital Partners has a strong track record of growth, generated in part by its industry expertise in dispensing pharmacies, combined with its success in attracting new consultants, thereby expanding internal capacity. Within the Consumer Staples sector, Shiseido Co., Ltd. was a strong contributor. Shiseido is the largest cosmetics company in Japan and fifth largest in the world. We expect a continued rebound in Shiseido’s earnings growth after a ten year period of operational underperformance and market share loss. New management has reformed the organizational structure to place more responsibility in the hands of local managers, improved strategy execution, accelerated product development, and concentrated Shiseido’s investment on prestige brands. Shiseido experienced robust sales growth in the first quarter of 2018, which was mainly driven by rapid growth in high-priced cosmetics and successful new product launches. Partially offsetting these positive effects was negative stock selection within the Materials and Utilities sectors. Within Materials, Norsk Hydro ASA, the Norwegian integrated aluminum producer, detracted from the Fund’s performance. Flooding at the company’s Alunorte facility in Brazil weighed on the share price amid investor concerns that the resulting production disruption would meaningfully impact 2018 earnings. We liquidated the position as a result. Within the Utilities sector, Veolia Environnement S.A., the France-based waste management and water treatment company, detracted from performance. Veolia’s shares were negatively affected by expectations of rising interest rates and disappointing earnings results at competitor Suez Environnement. Veolia continues to see strong trends in organic growth driven by new contract wins and accelerating contributions from new businesses (e.g., toxic waste, recycling and energy management), which now account for 30% of total revenue. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

International Developed Plus Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018
	Year to Date		1 Year		3 Year		5 Year		10 Year
Class N	(2.59	)%	7.50	%	4.62	%	6.50	%	2.04	%
Class I	(2.45	)	7.82		4.88		6.75		2.30
MSCI World Ex-U.S. Index (net)	(2.77	)	7.04		4.87		6.23		2.63

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. 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 & 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 index approximates the minimum possible dividend reinvestment by deducting for the highest possible withholding tax rates of those markets.

Sector Diversification (Unaudited)

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

June 30, 2018

William Blair Funds

International Developed Plus Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	*Europe—30.9%*
	France—7.1%
	Capgemini SE (IT services)		24,109	$	3,231
	Legrand S.A. (Electrical equipment)		21,944		1,607
	LVMH Moet Hennessy Louis Vuitton SE (Textiles, apparel & luxury goods)		5,029		1,670
	Veolia Environnement S.A. (Multi-utilities)		72,068		1,540
					8,048
	Germany—7.3%
	Covestro AG (Chemicals)		20,767		1,846
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		65,494		1,663
	MTU Aero Engines AG (Aerospace & defense)		18,485		3,541
*	QIAGEN N.V. (Life sciences tools & services)†		33,183		1,200
					8,250
	Ireland—1.9%
	Kerry Group plc Class “A” (Food products)		21,033		2,199
	Netherlands—3.1%
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		100,820		3,499
	Sweden—5.2%
	Atlas Copco AB Class “A” (Machinery)		90,459		2,620
	Boliden AB (Metals & mining)		63,531		2,050
*	Epiroc AB Class “A” (Machinery)		112,573		1,181
					5,851
	Switzerland—6.3%
	Geberit AG (Building products)		3,976		1,702
	Partners Group Holding AG (Capital markets)		3,200		2,339
	Straumann Holding AG (Health care equipment & supplies)		2,681		2,033
	Tecan Group AG (Life sciences tools & services)		4,115		999
					7,073

	*United Kingdom—23.6%*
	AstraZeneca plc (Pharmaceuticals)		35,370		2,446
	Compass Group plc (Hotels, restaurants & leisure)		183,710		3,916
	Diageo plc (Beverages)		102,862		3,695
	Halma plc (Electronic equipment, instruments & components)		129,544		2,333
	Legal & General Group plc (Insurance)		440,167		1,540
*	Metro Bank plc (Banks)		26,230		1,116
	Prudential plc (Insurance)		112,469		2,564
	RELX plc (Professional services)		98,112		2,095
	Rio Tinto plc (Metals & mining)		22,445		1,237
	Schroders plc (Capital markets)		63,254		2,625
	Unilever N.V. (Personal products)		55,861		3,112
					26,679



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Japan—16.7%*
	Asahi Group Holdings, Ltd. (Beverages)		39,500	$	2,026
	Daikin Industries, Ltd. (Building products)		21,018		2,512
	Harmonic Drive Systems, Inc. (Machinery)		17,000		717
	Keyence Corporation (Electronic equipment, instruments & components)		3,200		1,805
*	M&A Capital Partners Co., Ltd. (Capital markets)		11,936		1,062
	Nihon M&A Center, Inc. (Professional services)		47,480		1,376
	Nitori Holdings Co., Ltd. (Specialty retail)		12,000		1,867
	Omron Corporation (Electronic equipment, instruments & components)		29,400		1,370
	ORIX Corporation (Diversified financial services)		115,629		1,822
	Seria Co., Ltd. (Multiline retail)		38,900		1,864
	Shimadzu Corporation (Electronic equipment, instruments & components)		33,800		1,020
	Shiseido Co., Ltd. (Personal products)		17,200		1,365
					18,806

	*Canada—13.5%*
	Canadian National Railway Co. (Road & rail)†		33,747		2,759
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)		73,542		2,654
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)†		10,116		365
	Enerplus Corporation (Oil, gas & consumable fuels)		152,798		1,927
	First Quantum Minerals, Ltd. (Metals & mining)		64,039		944
	Lundin Mining Corporation (Metals & mining)		344,361		1,915
	Magna International, Inc. (Auto components)		31,982		1,860
	The Toronto-Dominion Bank (Banks)†		48,661		2,815
					15,239

	*Emerging Asia—6.3%*
	China—2.9%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		12,871		2,388
	Yum China Holdings, Inc. (Hotels, restaurants & leisure)		22,421		862
					3,250
	India—1.3%
	HDFC Bank, Ltd.—ADR (Banks)		14,749		1,549
	Taiwan—2.1%
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		64,127		2,345

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

International Developed Plus Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

	Shares or Principal
Issuer	Amount		Value

*Common Stocks—(continued)*

*Asia—4.9%*
Australia—1.7%
CSL, Ltd. (Biotechnology)		13,544	$	1,928
Hong Kong—3.2%
AIA Group, Ltd. (Insurance)		417,586		3,638

*Emerging Latin America—1.2%*
Peru—1.2%
Credicorp, Ltd. (Banks)†		5,836		1,314
Total Common Stocks—97.1% (cost $92,151)				109,668

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $2,837, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$2,837		2,837
Total Repurchase Agreement—2.5% (cost $2,837)				2,837
Total Investments—99.6% (cost $94,988)				112,505
Cash and other assets, less liabilities—0.4%				491
Net assets—100.0%			$	112,996

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	20.5	%
Industrials	18.3	%
Information Technology	14.7	%
Consumer Staples	11.3	%
Consumer Discretionary	11.0	%
Health Care	7.8	%
Energy	7.7	%
Materials	7.3	%
Utilities	1.4	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	21.8	%
British Pound Sterling	21.5	%
Japanese Yen	17.1	%
U.S. Dollar	14.2	%
Canadian Dollar	8.5	%
Swiss Franc	6.5	%
Swedish Krona	5.3	%
Hong Kong Dollar	3.3	%
Australian Dollar	1.8	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

		Institutional International Developed Plus Fund

		The Institutional International Developed Plus Fund seeks long-term capital appreciation.

		AN OVERVIEW FROM THE PORTFOLIO MANAGERS

David Merjan John C. Murphy		The William Blair Institutional International Developed Plus Fund (Institutional Class shares) posted a 0.96% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI World ex-U.S. Index (net) (the “Index”), decreased 2.77%. Outperformance versus the Index was driven by a combination of allocation and stock selection effects. More specifically, the Fund’s underweight allocation to Utilities, coupled with above average stock selection within the Financials and Consumer Staples sectors, boosted relative returns. Within the Financials sector, Japan-based M&A Capital Partners Co., Ltd. outperformed. M&A Capital Partners is a high-quality, small-cap growth company in Japan that provides merger and acquisition advisory services to small and medium sized enterprises (“SMEs”). The company’s addressable market is significant; industry fragmentation coupled with aging demographics has resulted in succession challenges for many businesses. M&A Capital Partners has a strong track record of growth, generated in part by its industry expertise in dispensing pharmacies, combined with its success in attracting new consultants, thereby expanding internal capacity. Within the Consumer Staples sector, Shiseido Co., Ltd. was a strong contributor. Shiseido is the largest cosmetics company in Japan and fifth largest in the world. We expect a continued rebound in Shiseido’s earnings growth after a ten year period of operational underperformance and market share loss. New management has reformed the organizational structure to place more responsibility in the hands of local managers, improved strategy execution, accelerated product development, and concentrated Shiseido’s investment on prestige brands. Shiseido experienced robust sales growth in the first quarter of 2018, which was mainly driven by rapid growth in high-priced cosmetics and successful new product launches. Partially offsetting these positive effects was negative stock selection within the Materials and Utilities sectors. Within Materials, Norsk Hydro ASA, the Norwegian integrated aluminum producer, detracted from the Fund’s performance. Flooding at the company’s Alunorte facility in Brazil weighed on the share price amid investor concerns that the resulting production disruption would meaningfully impact 2018 earnings. We liquidated the position as a result. Within the Utilities sector, Veolia Environnement S.A., the France-based waste management and water treatment company, detracted from performance. Veolia’s shares were negatively affected by expectations of rising interest rates and disappointing earnings results at competitor Suez Environnement. Veolia continues to see strong trends in organic growth driven by new contract wins and accelerating contributions from new businesses (e.g. toxic waste, recycling and energy management), which now account for 30% of total revenue. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

Institutional International Developed Plus Fund

Performance Highlights (Unaudited)



Average Annual Total Return through 6/30/2018
	Year to Date			1 Year			3 Year			5 Year			10 Year
Institutional International Developed Plus Fund		(0.96	)%		9.65	%		5.49	%		6.99	%		2.36	%
MSCI World Ex-U.S. Index (net)		(2.77	)		7.04			4.87			6.23			2.63

During the first quarter of 2018, the Fund received a litigation settlement that positively impacted the Fund’s performance. This was a one-time event that is not likely to be repeated. With the passage of time the impact of this settlement on the Fund’s performance is likely to diminish.

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. 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. Shares of the Fund are available 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.

June 30, 2018

William Blair Funds

Institutional International Developed Plus Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	*Europe—30.8%*
	France—7.1%
	Capgemini SE (IT services)		4,012	$	538
	Legrand S.A. (Electrical equipment)		3,653		268
	LVMH Moet Hennessy Louis Vuitton SE (Textiles, apparel & luxury goods)		842		279
	Veolia Environnement S.A. (Multi-utilities)		11,752		251
					1,336
	Germany—7.2%
	Covestro AG (Chemicals)		3,456		307
	Infineon Technologies AG (Semiconductors & semiconductor equipment)		10,659		271
	MTU Aero Engines AG (Aerospace & defense)		3,057		585
*	QIAGEN N.V. (Life sciences tools & services)†		5,525		200
					1,363
	Ireland—1.9%
	Kerry Group plc Class “A” (Food products)		3,478		364
	Netherlands—3.1%
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		16,671		578
	Sweden—5.2%
	Atlas Copco AB Class “A” (Machinery)		15,158		439
	Boliden AB (Metals & mining)		10,588		342
*	Epiroc AB Class “A” (Machinery)		18,863		198
					979
	Switzerland—6.3%
	Geberit AG (Building products)		666		285
	Partners Group Holding AG (Capital markets)		533		390
	Straumann Holding AG (Health care equipment & supplies)		446		338
	Tecan Group AG (Life sciences tools & services)		685		166
					1,179

	*United Kingdom—23.5%*
	AstraZeneca plc (Pharmaceuticals)		5,901		408
	Compass Group plc (Hotels, restaurants & leisure)		30,638		653
	Diageo plc (Beverages)		17,155		616
	Halma plc (Electronic equipment, instruments & components)		21,690		391
	Legal & General Group plc (Insurance)		73,355		257
*	Metro Bank plc (Banks)		4,269		182
	Prudential plc (Insurance)		18,598		424
	RELX plc (Professional services)		16,223		346
	Rio Tinto plc (Metals & mining)		3,653		201
	Schroders plc (Capital markets)		10,549		438
	Unilever N.V. (Personal products)		9,316		519
					4,435



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Japan—16.5%*
	Asahi Group Holdings, Ltd. (Beverages)		6,500	$	334
	Daikin Industries, Ltd. (Building products)		3,506		419
	Harmonic Drive Systems, Inc. (Machinery)		2,800		118
	Keyence Corporation (Electronic equipment, instruments & components)		500		282
*	M&A Capital Partners Co., Ltd. (Capital markets)		1,969		175
	Nihon M&A Center, Inc. (Professional services)		7,800		226
	Nitori Holdings Co., Ltd. (Specialty retail)		2,000		311
	Omron Corporation (Electronic equipment, instruments & components)		4,900		228
	ORIX Corporation (Diversified financial services)		19,112		301
	Seria Co., Ltd. (Multiline retail)		6,500		312
	Shimadzu Corporation (Electronic equipment, instruments & components)		5,600		169
	Shiseido Co., Ltd. (Personal products)		2,900		230
					3,105

	*Canada—13.4%*
	Canadian National Railway Co. (Road & rail)†		5,580		456
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)		12,161		439
	Canadian Natural Resources, Ltd. (Oil, gas & consumable fuels)†		1,684		61
	Enerplus Corporation (Oil, gas consumable fuels)		24,867		314
	First Quantum Minerals, Ltd. (Metals & mining)		10,663		157
	Lundin Mining Corporation (Metals & mining)		57,694		321
	Magna International, Inc. (Auto components)		5,205		303
	The Toronto-Dominion Bank (Banks)†		8,046		465
					2,516

	*Emerging Asia—6.3%*
	China—2.9%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		2,156		400
	Yum China Holdings, Inc. (Hotels, restaurants & leisure)		3,736		144
					544
	India—1.3%
	HDFC Bank, Ltd.—ADR (Banks)		2,460		258
	Taiwan—2.1%
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		10,701		391

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Institutional International Developed Plus Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

Issuer	Shares or Principal Amount		Value

Common Stocks—(continued)

Asia—4.9%
Australia—1.7%
CSL, Ltd. (Biotechnology)		2,264	$	322
Hong Kong—3.2%
AIA Group, Ltd. (Insurance)		69,071		602

Emerging Latin America—1.1%
Peru—1.1%
Credicorp, Ltd. (Banks)†		950		214
Total Common Stocks—96.5% (cost $15,017)				18,186

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $624, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$624		624
Total Repurchase Agreement—3.3% (cost $624)				624
Total Investments—99.8% (cost $15,641)				18,810
Cash and other assets, less liabilities—0.2%				44
Net assets—100.0%			$	18,854

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Financials	20.3	%
Industrials	18.4	%
Information Technology	14.7	%
Consumer Staples	11.3	%
Consumer Discretionary	11.0	%
Health Care	7.9	%
Energy	7.7	%
Materials	7.3	%
Utilities	1.4	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	21.8	%
British Pound Sterling	21.5	%
Japanese Yen	17.1	%
U.S. Dollar	14.2	%
Canadian Dollar	8.4	%
Swiss Franc	6.5	%
Swedish Krona	5.4	%
Hong Kong Dollar	3.3	%
Australian Dollar	1.8	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

		International Growth Fund

		The International Growth Fund seeks long-term capital appreciation.

		AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Simon Fennell Kenneth J. McAtamney		The William Blair International Growth Fund (Class N shares) posted a 1.78% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 3.65%. Outperformance versus the Index was primarily driven by positive stock selection across most sectors. The Consumer Staples and Financials sectors were the largest sources of relative return. Within the Consumer Staples sector, Japanese cosmetics holding Shiseido Co., Ltd. boosted the Fund’s relative performance. Shiseido is the largest cosmetics company in Japan and fifth largest in the world. We expect a continued rebound in Shiseido’s earnings growth after a ten year period of operational underperformance and market share loss. New management has reformed the organizational structure to place more responsibility in the hands of local managers, improved strategy execution, accelerated product development, and concentrated Shiseido’s investment on prestige brands. Shiseido experienced robust sales growth in the first quarter of 2018, which was mainly driven by rapid growth in high-priced cosmetics and successful new product launches. Within Financials, Switzerland-based asset manager Partners Group Holding AG bolstered the Fund’s performance. Partners Group manages approximately $78 billion in assets for over 1,000 institutional investors globally, investing in private equity, private real estate, private infrastructure and private debt. Partners Group has benefitted from strong structural demand and continues to stand out for its global footprint (in terms of its distribution, investments, and client base), breadth of private market investment solutions, investment performance, and cash flow generation. Positive operating momentum at the company has been driven by growth in base management fees and performance fees. Partially offsetting these positive effects was negative stock selection within the Telecommunication Services and Information Technology sectors. Within Telecommunication Services, Canadian wireless and cable company Rogers Communications detracted from performance. The company’s share price was hampered by investors’ concerns about rising competitive pressures in the wireless business. While Rogers remains a leader with high quality customers and a favorable spectrum position in Canada, we exited the position in favor of more compelling opportunities. Within the Information Technology sector, U.K. software company Micro Focus International plc’s share price weakened significantly in March after the company provided disappointing revenue guidance for 2018 due to problems integrating the recently acquired Hewlett Packard Enterprise software business, and the announcement that its CEO would resign after only six months in his position. We liquidated the position as a result of these issues. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(1.78	)%		10.92	%		5.03	%		6.70	%		3.23	%
Class I		(1.64	)		11.28			5.34			7.02			3.54
MSCI ACW Ex-U.S. IMI (net)		(3.65	)		7.75			5.46			6.39			2.93

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 & 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.

June 30, 2018

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe, Mid-East—41.3%
	Belgium—1.1%
	KBC Group N.V. (Banks)		414,677	$	31,847
	Denmark—3.3%
	Ambu A/S Class “B” (Health care equipment & supplies)		119,484		4,019
	DSV A/S (Road & rail)		414,618		33,378
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		730,758		33,754
	Orsted A/S (Electric utilities)		291,625		17,620
	Royal Unibrew A/S (Beverages)		77,677		6,173
					94,944
	Finland—0.4%
	Neste Oyj (Oil, gas & consumable fuels)		132,850		10,394
	France—13.4%
	Airbus SE (Aerospace & defense)		254,443		29,692
	Arkema S.A. (Chemicals)		234,648		27,689
	BNP Paribas S.A. (Banks)		311,370		19,260
	Capgemini SE (IT services)		220,047		29,488
	Cie Plastic Omnium S.A. (Auto components)		94,007		3,964
	Dassault Systemes S.A. (Software)		250,583		35,068
	Hermes International (Textiles, apparel & luxury goods)		28,560		17,446
	Ipsen S.A. (Pharmaceuticals)		59,954		9,377
	Kering S.A. (Textiles, apparel & luxury goods)		84,958		47,857
	Nexity S.A. (Real estate management & development)		79,001		4,987
	Orpea (Health care providers & services)		69,866		9,306
	Rubis SCA (Gas utilities)		90,847		5,663
	Teleperformance (Professional services)		53,101		9,372
	Thales S.A. (Aerospace & defense)		215,537		27,730
	Total S.A. (Oil, gas & consumable fuels)		1,032,519		62,700
	Valeo S.A. (Auto components)		291,535		15,896
	Vinci S.A. (Construction & engineering)		357,972		34,362
					389,857
	Germany—4.4%
	Carl Zeiss Meditec AG (Health care equipment & supplies)		112,827		7,699
	KION Group AG (Machinery)		80,557		5,782
	MTU Aero Engines AG (Aerospace & defense)		140,737		26,957
	Norma Group SE (Machinery)		56,805		3,881
	Puma SE (Textiles, apparel & luxury goods)		11,670		6,818
*	QIAGEN N.V. (Life sciences tools & services)†		251,618		9,099
	Siltronic AG (Semiconductors & semiconductor equipment)		34,175		4,856
	Vonovia SE (Real estate management & development)		639,146		30,378
	Washtec AG (Machinery)		24,328		2,145
	Wirecard AG (IT services)		190,991		30,562
					128,177



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Ireland—1.5%
*	ICON plc (Life sciences tools & services)†		112,048	$	14,850
	Kingspan Group plc (Building products)		253,849		12,689
	Smurfit Kappa Group plc (Containers & packaging)		428,579		17,302
					44,841
	Israel—0.3%
*	Wix.com, Ltd. (Internet software & services)†		77,381		7,761
	Italy—2.5%
	Banca Generali SpA (Capital markets)		356,954		8,860
	Brembo SpA (Auto components)		286,489		3,864
	DiaSorin SpA (Health care equipment & supplies)		22,975		2,611
	Ferrari N.V. (Automobiles)		124,102		16,775
	FinecoBank Banca Fineco SpA (Banks)		1,096,394		12,342
	Interpump Group SpA (Machinery)		154,963		4,804
	Moncler SpA (Textiles, apparel & luxury goods)		172,699		7,836
	Recordati SpA (Pharmaceuticals)		253,221		10,034
	Technogym SpA (Leisure products)		371,069		4,379
					71,505
	Luxembourg—1.2%
	Eurofins Scientific SE (Life sciences tools & services)		30,594		16,968
	Tenaris S.A. (Energy equipment & services)		1,038,841		18,959
					35,927
	Netherlands—3.5%
	ASML Holding N.V. (Semiconductors & semiconductor equipment)		168,818		33,407
	Euronext N.V. (Capital markets)		60,398		3,827
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		1,069,388		37,112
	Wolters Kluwer N.V. (Professional services)		473,463		26,598
					100,944
	Norway—0.6%
	Norsk Hydro ASA (Metals & mining)		1,971,000		11,766
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		138,249		5,077
					16,843
	Spain—1.7%
	Amadeus IT Group S.A. (IT services)		397,928		31,290
	Bankinter S.A. (Banks)		1,762,395		17,100
					48,390

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Sweden—3.5%
	Alfa Laval AB (Machinery)		627,288	$	14,809
	Atlas Copco AB Class “A” (Machinery)		824,512		23,878
	Boliden AB (Metals & mining)		461,431		14,892
*	Epiroc AB Class “A” (Machinery)		1,327,782		13,934
	Fabege AB (Real estate management & development)		403,763		4,802
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		407,062		22,619
	Husqvarna AB Class “B” (Household durables)		414,726		3,923
	Nolato AB Class “B” (Industrial conglomerates)		54,900		4,418
					103,275
	Switzerland—3.9%
	Belimo Holding AG (Building products)		634		2,756
*	Glencore plc (Metals & mining)		4,651,674		22,085
	Logitech International S.A. (Technology hardware, storage & peripherals)		218,507		9,573
*	Lonza Group AG (Life sciences tools & services)		135,177		35,720
	Partners Group Holding AG (Capital markets)		39,782		29,083
	Straumann Holding AG (Health care equipment & supplies)		20,864		15,823
					115,040

	Emerging Asia—17.6%
	China—10.2%
	3SBio, Inc. (Biotechnology)		2,368,000		5,351
*	51job, Inc.—ADR (Professional services)		61,018		5,958
*	Alibaba Group Holding, Ltd.-ADR (Internet software & services)		304,275		56,452
	Anhui Conch Cement Co., Ltd. Class “H” (Construction materials)		3,115,000		17,765
*	Baozun, Inc.—ADR (Internet software & services)		101,562		5,555
*	China Mengniu Dairy Co., Ltd. (Food products)		4,904,000		16,540
	China Overseas Land & Investment, Ltd. (Real estate management & development)		4,954,000		16,260
	CSPC Pharmaceutical Group, Ltd. (Pharmaceuticals)		4,660,000		13,993
	Huazhu Group, Ltd.—ADR (Hotels, restaurants & leisure)		217,886		9,149
	Industrial and Commercial Bank of China, Ltd. Class “H” (Banks)		47,182,000		35,190
	Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		2,723,000		24,936
	Shenzhou International Group Holdings, Ltd. (Textiles, apparel & luxury goods)		833,000		10,250
	Tencent Holdings, Ltd. (Internet software & services)		1,034,200		51,933



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	China—(continued)
	Tingyi Cayman Islands Holding Corporation (Food products)		4,246,000	$	9,836
*	Weibo Corporation—ADR (Internet software & services)		109,645		9,732
*	Wuxi Biologics Cayman, Inc. (Life sciences tools & services)		676,500		7,505
					296,405
	India—2.9%
	Britannia Industries, Ltd. (Food products)		93,558		8,519
	HDFC Bank, Ltd. (Banks)		505,181		15,581
	IndusInd Bank, Ltd. (Banks)		352,178		9,969
	InterGlobe Aviation, Ltd. (Airlines)		197,308		3,142
*	MakeMyTrip, Ltd. (Internet & direct marketing retail)†		204,994		7,410
	Maruti Suzuki India, Ltd. (Automobiles)		119,424		15,374
	Motherson Sumi Systems, Ltd. (Auto components)		1,057,046		4,381
	Pidilite Industries, Ltd. (Chemicals)		282,211		4,385
	Titan Co., Ltd. (Textiles, apparel & luxury goods)		401,923		5,145
	Yes Bank, Ltd. (Banks)		2,270,997		11,270
					85,176
	Indonesia—0.8%
	PT Bank Central Asia Tbk (Banks)		15,556,700		23,233
	South Korea—1.4%
	Hotel Shilla Co., Ltd. (Specialty retail)		55,050		6,098
*	Hugel, Inc. (Biotechnology)		7,416		3,207
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		524,213		21,959
	Samsung SDI Co., Ltd. (Electronic equipment, instruments & components)		53,390		10,241
					41,505
	Taiwan—2.3%
	Airtac International Group (Machinery)		294,000		4,173
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		365,000		4,335
	Hiwin Technologies Corporation (Machinery)		419,000		4,936
	MediaTek, Inc. (Semiconductors & semiconductor equipment)		1,497,000		14,695
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		1,041,010		38,059
					66,198

	Japan—14.8%
	Asahi Group Holdings, Ltd. (Beverages)		631,400		32,383
	Asahi Intecc Co., Ltd. (Health care equipment & supplies)		218,300		8,242
	Daikin Industries, Ltd. (Building products)		317,300		37,922
	Hoshizaki Corporation (Machinery)		58,500		5,912

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Japan—(continued)
Japan Lifeline Co., Ltd. (Health care providers & services)		136,400	$	3,344
Keyence Corporation (Electronic equipment, instruments & components)		63,700		35,928
Kobayashi Pharmaceutical Co., Ltd. (Personal products)		66,700		5,757
Koito Manufacturing Co., Ltd. (Auto components)		236,800		15,641
Kose Corporation (Personal products)		59,300		12,755
MinebeaMitsumi, Inc. (Machinery)		270,000		4,550
MISUMI Group, Inc. (Machinery)		374,800		10,905
Nichias Corporation (Building products)		343,000		4,289
Nihon M&A Center, Inc. (Professional services)		329,600		9,549
Nintendo Co., Ltd. (Software)		88,200		28,791
Nitori Holdings Co., Ltd. (Specialty retail)		98,200		15,278
Nomura Research Institute, Ltd. (IT services)		169,800		8,215
Otsuka Corporation (IT services)		239,000		9,356
Pola Orbis Holdings, Inc. (Personal products)		278,700		12,248
Sankyu, Inc. (Road & rail)		103,320		5,423
Shimadzu Corporation (Electronic equipment, instruments & components)		531,300		16,030
Shiseido Co., Ltd. (Personal products)		580,800		46,090
Start Today Co., Ltd. (Internet & direct marketing retail)		305,400		11,050
Taisei Corporation (Construction & engineering)		216,600		11,928
TechnoPro Holdings, Inc. (Professional services)		150,500		9,241
Terumo Corporation (Health care equipment & supplies)		497,500		28,481
TIS, Inc. (IT services)		207,100		9,517
Topcon Corporation (Electronic equipment, instruments & components)		341,600		5,848
Toray Industries, Inc. (Chemicals)		1,244,300		9,821
Tsuruha Holdings, Inc. (Food & staples retailing)		39,200		4,910
Ulvac, Inc. (Semiconductors & semiconductor equipment)		158,400		6,042
Zenkoku Hosho Co., Ltd. (Diversified financial services)		128,700		5,827
				431,273

United Kingdom—12.3%
3i Group plc (Capital markets)		1,421,982		16,835
Abcam plc (Biotechnology)		274,082		4,815
Ashtead Group plc (Trading companies & distributors)		812,349		24,191
AVEVA Group plc (Software)		141,071		4,989
Beazley plc (Insurance)		961,547		7,410
Big Yellow Group plc (Equity REIT)		468,692		5,875
Carnival plc (Hotels, restaurants & leisure)		405,853		23,197
Close Brothers Group plc (Capital markets)		188,621		3,682



	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—(continued)
	Compass Group plc (Hotels, restaurants & leisure)		1,650,812	$	35,188
	Croda International plc (Chemicals)		242,293		15,307
	Dechra Pharmaceuticals plc (Pharmaceuticals)		170,225		6,230
	easyJet plc (Airlines)		220,066		4,841
	Electrocomponents plc (Electronic equipment, instruments & components)		605,614		6,038
	Experian plc (Professional services)		996,542		24,583
	Fevertree Drinks plc (Beverages)		184,516		8,226
	Greggs plc (Hotels, restaurants & leisure)		269,637		3,536
	Halma plc (Electronic equipment, instruments & components)		482,412		8,686
	Hiscox, Ltd. (Insurance)		582,077		11,682
	Intermediate Capital Group plc (Capital markets)		541,155		7,840
	Intertek Group plc (Professional services)		186,672		14,036
	Kindred Group plc (Hotels, restaurants & leisure)		552,003		6,915
	London Stock Exchange Group plc (Capital markets)		393,201		23,148
	Melrose Industries plc (Electrical equipment)		3,793,850		10,615
*	Metro Bank plc (Banks)		89,293		3,799
	Renishaw plc (Electronic equipment, instruments & components)		81,980		5,715
	Rentokil Initial plc (Commercial services & supplies)		3,070,631		14,158
	Rotork plc (Machinery)		962,285		4,238
	Segro plc (Equity REIT)		1,704,727		15,013
	Spirax-Sarco Engineering plc (Machinery)		148,866		12,766
	Synthomer plc (Chemicals)		589,591		4,086
	Victrex plc (Chemicals)		258,549		9,898
	WH Smith plc (Specialty retail)		417,880		10,999
					358,537

	Canada—5.5%
	Constellation Software, Inc. (Software)		18,804		14,583
	Dollarama, Inc. (Multiline retail)		321,222		12,452
	Finning International, Inc. (Trading companies & distributors)		163,810		4,043
*	Lululemon Athletica, Inc. (Textiles, apparel & luxury goods)		139,784		17,452
*	Shopify, Inc. Class “A” (Internet software & services)†		145,505		21,228
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		1,112,811		45,286
	The Toronto—Dominion Bank (Banks)		780,795		45,191
					160,235

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Asia—4.4%
	Australia—1.6%
	Aristocrat Leisure, Ltd. (Hotels, restaurants & leisure)		853,791	$	19,498
	CSL, Ltd. (Biotechnology)		194,864		27,738
					47,236
	Hong Kong—2.7%
	AIA Group, Ltd. (Insurance)		5,321,200		46,355
*	China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		6,597,000		—
	Galaxy Entertainment Group, Ltd. (Hotels, restaurants & leisure)		4,107,000		31,659
					78,014
	Singapore—0.1%
	Venture Corporation, Ltd. (Electronic equipment, instruments & components)		283,000		3,697

	Emerging Europe, Mid-East, Africa—1.1%
	Russia—0.3%
	Globaltrans Investment plc-GDR (Road & rail)		284,606		2,902
*	Yandex N.V. Class “A” (Internet software & services)†		177,086		6,357
					9,259
	South Africa—0.8%
	Bid Corporation, Ltd. (Food & staples retailing)		217,320		4,352
	Bidvest Group, Ltd. (Industrial conglomerates)		217,320		3,112
	Mr. Price Group, Ltd. (Specialty retail)		449,818		7,382
	RMB Holdings, Ltd. (Diversified financial services)		1,360,256		7,484
					22,330

	Emerging Latin America—0.9%
	Argentina—0.1%
	Grupo Financiero Galicia S.A.—ADR (Banks)		78,143		2,577
	Brazil—0.2%
	M Dias Branco S.A. (Food products)		335,300		3,235
	Via Varejo S.A. (Specialty retail)		632,200		3,036
					6,271
	Mexico—0.1%
	Arca Continental S.A.B. de C.V. (Beverages)		137,383		844
	Peru—0.5%
	Credicorp, Ltd. (Banks)†		67,942		15,295
	Total Common Stocks—97.9% (cost $2,377,004)				2,847,830

Issuer	Shares or Principal Amount		Value

Preferred Stock
Germany—0.3%
Fuchs Petrolub SE (Chemicals)		169,591	$	8,345
Total Preferred Stock—0.3% (cost $8,420)				8,345

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $7,204, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$7,204		7,204
Total Repurchase Agreement—0.3% (cost $7,204)				7,204
Total Investments—98.5% (cost $2,392,628)				2,863,379
Cash and other assets, less liabilities—1.5%				45,050
Net assets—100.0%			$	2,908,429

ADR = American Depository Receipt

GDR = Global Depository Receipt

REIT = Real Estate Investment Trust

* = Non-income producing security

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures approved by the Board of Trustees. Fair Value was determined using significant unobservable inputs. This holding represents 0.00% of the Fund’s net assets at June 30, 2018.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.00% of the Fund’s net assets at June 30, 2018.

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

International Growth Fund

Portfolio of Investments, June 30, 2018 (unaudited)

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	21.2	%
Industrials	18.0	%
Financials	15.4	%
Consumer Discretionary	14.2	%
Health Care	9.7	%
Energy	6.3	%
Consumer Staples	6.0	%
Materials	5.7	%
Real Estate	2.7	%
Utilities	0.8	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	29.6	%
Japanese Yen	15.1	%
British Pound Sterling	13.1	%
Hong Kong Dollar	10.1	%
U.S. Dollar	8.0	%
Canadian Dollar	4.3	%
Swedish Krona	3.9	%
Danish Krone	3.3	%
Swiss Franc	3.3	%
Indian Rupee	2.7	%
Australian Dollar	1.7	%
South Korean Won	1.4	%
All Other Currencies	3.5	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

	Institutional International Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Simon Fennell Kenneth J. McAtamney	The William Blair Institutional International Growth Fund (Institutional Class shares) posted a 1.60% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. IMI Index (net) (the “Index”), decreased 3.65%. Outperformance versus the Index was primarily driven by positive stock selection across most sectors. The Consumer Staples and Financials sectors were the largest sources of relative return. Within the Consumer Staples sector, Japanese cosmetics holding Shiseido Co., Ltd. boosted the Fund’s relative performance. Shiseido is the largest cosmetics company in Japan and fifth largest in the world. We expect a continued rebound in Shiseido’s earnings growth after a ten year period of operational underperformance and market share loss. New management has reformed the organizational structure to place more responsibility in the hands of local managers, improved strategy execution, accelerated product development, and concentrated Shiseido’s investment on prestige brands. Shiseido experienced robust sales growth in the first quarter of 2018, which was mainly driven by rapid growth in high-priced cosmetics and successful new product launches. Within Financials, Switzerland-based asset manager Partners Group Holding AG bolstered the Fund’s performance. Partners Group manages approximately $78 billion in assets for over 1,000 institutional investors globally, investing in private equity, private real estate, private infrastructure and private debt. Partners Group has benefitted from strong structural demand and continues to stand out for its global footprint (in terms of its distribution, investments, and client base), breadth of private market investment solutions, investment performance, and cash flow generation. Positive operating momentum at the company has been driven by growth in base management fees and performance fees. Partially offsetting these positive effects was negative stock selection within the Telecommunication Services and Information Technology sectors. Within Telecommunication Services, Canadian wireless and cable company Rogers Communications detracted from performance. The company’s share price was hampered by investors’ concerns about rising competitive pressures in the wireless business. While Rogers remains a leader with high quality customers and a favorable spectrum position in Canada, we exited the position in favor of more compelling opportunities. Within the Information Technology sector, U.K. software company Micro Focus International plc’s share price weakened significantly in March after the company provided disappointing revenue guidance for 2018 due to problems integrating the recently acquired Hewlett Packard Enterprise software business, and the announcement that its CEO would resign after only six months in his position. We liquidated the position as a result of these issues. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

June 30, 2018

William Blair Funds

Institutional International Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Institutional International Growth Fund		(1.60	)%		11.31	%		5.46	%		7.11	%		3.68	%
MSCI ACW Ex-U.S. IMI (net)		(3.65	)		7.75			5.46			6.39			2.93

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. 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. Shares of the Fund are available 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, 2018

Institutional International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe, Mid-East—41.3%
	Belgium—1.1%	��
	KBC Group N.V. (Banks)		310,097	$	23,816
	Denmark—3.3%
	Ambu A/S Class “B” (Health care equipment & supplies)		89,350		3,006
	DSV A/S (Road & rail)		310,074		24,961
	Novo Nordisk A/S Class “B” (Pharmaceuticals)		546,464		25,241
	Orsted A/S (Electric utilities)		218,078		13,177
	Royal Unibrew A/S (Beverages)		58,087		4,616
					71,001
	Finland—0.4%
	Neste Oyj (Oil, gas & consumable fuels)		99,345		7,773
	France—13.4%
	Airbus SE (Aerospace & defense)		190,273		22,204
	Arkema S.A. (Chemicals)		175,471		20,706
	BNP Paribas S.A. (Banks)		231,117		14,296
	Capgemini SE (IT services)		164,552		22,052
	Cie Plastic Omnium S.A. (Auto components)		70,299		2,964
	Dassault Systemes S.A. (Software)		187,387		26,224
	Hermes International (Textiles, apparel & luxury goods)		21,358		13,047
	Ipsen S.A. (Pharmaceuticals)		44,834		7,012
	Kering S.A. (Textiles, apparel & luxury goods)		63,532		35,787
	Nexity S.A. (Real estate management & development)		58,793		3,712
	Orpea (Health care providers & services)		52,246		6,959
	Rubis SCA (Gas utilities)		67,936		4,235
	Teleperformance (Professional services)		39,709		7,008
	Thales S.A. (Aerospace & defense)		161,180		20,736
	Total S.A. (Oil, gas & consumable fuels)		772,122		46,888
	Valeo S.A. (Auto components)		218,150		11,894
	Vinci S.A. (Construction & engineering)		267,693		25,696
					291,420
	Germany—4.4%
	Carl Zeiss Meditec AG (Health care equipment & supplies)		84,372		5,757
	KION Group AG (Machinery)		60,241		4,324
	MTU Aero Engines AG (Aerospace & defense)		105,244		20,159
	Norma Group SE (Machinery)		42,479		2,902
	Puma SE (Textiles, apparel & luxury goods)		8,705		5,085
*	QIAGEN N.V. (Life sciences tools & services)†		188,161		6,804
	Siltronic AG (Semiconductors & semiconductor equipment)		25,556		3,631
	Vonovia SE (Real estate management & development)		477,956		22,717
	Washtec AG (Machinery)		18,193		1,604
	Wirecard AG (IT services)		142,824		22,855
					95,838



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Ireland—1.5%
*	ICON plc (Life sciences tools & services)†		83,790	$	11,105
	Kingspan Group plc (Building products)		189,830		9,489
	Smurfit Kappa Group plc (Containers & packaging)		320,493		12,938
					33,532
	Israel—0.3%
*	Wix.com, Ltd. (Internet software & services)†		57,866		5,804
	Italy—2.5%
	Banca Generali SpA (Capital markets)		266,932		6,625
	Brembo SpA (Auto components)		214,238		2,890
	DiaSorin SpA (Health care equipment & supplies)		17,143		1,948
	Ferrari N.V. (Automobiles)		92,804		12,544
	FinecoBank Banca Fineco SpA (Banks)		819,888		9,230
	Interpump Group SpA (Machinery)		115,882		3,592
	Moncler SpA (Textiles, apparel & luxury goods)		129,145		5,860
	Recordati SpA (Pharmaceuticals)		189,359		7,503
	Technogym SpA (Leisure products)		277,487		3,275
					53,467
	Luxembourg—1.2%
	Eurofins Scientific SE (Life sciences tools & services)		22,878		12,688
	Tenaris S.A. (Energy equipment & services)		776,849		14,178
					26,866
	Netherlands—3.5%
	ASML Holding N.V. (Semiconductors & semiconductor equipment)		126,243		24,981
	Euronext N.V. (Capital markets)		45,166		2,862
	Royal Dutch Shell plc Class “A” (Oil, gas & consumable fuels)		799,693		27,753
	Wolters Kluwer N.V. (Professional services)		354,058		19,890
					75,486
	Norway—0.6%
	Norsk Hydro ASA (Metals & mining)		1,473,922		8,798
	TGS NOPEC Geophysical Co. ASA (Energy equipment & services)		103,383		3,797
					12,595
	Spain—1.7%
	Amadeus IT Group S.A. (IT services)		297,572		23,399
	Bankinter S.A. (Banks)		1,317,926		12,788
					36,187
	Sweden—3.5%
	Alfa Laval AB (Machinery)		469,089		11,074
	Atlas Copco AB Class “A” (Machinery)		616,573		17,856
	Boliden AB (Metals & mining)		345,060		11,136
*	Epiroc AB Class “A” (Machinery)		992,921		10,420
	Fabege AB (Real estate management & development)		301,936		3,591

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Sweden—(continued)
	Hexagon AB Class “B” (Electronic equipment, instruments & components)		304,402	$	16,915
	Husqvarna AB Class “B” (Household durables)		310,134		2,934
	Nolato AB Class “B” (Industrial conglomerates)		41,055		3,304
					77,230
	Switzerland—3.9%
	Belimo Holding AG (Building products)		474		2,061
*	Glencore plc (Metals & mining)		3,478,541		16,515
	Logitech International S.A. (Technology hardware, storage & peripherals)		163,400		7,159
*	Lonza Group AG (Life sciences tools & services)		101,086		26,712
	Partners Group Holding AG (Capital markets)		29,749		21,748
	Straumann Holding AG (Health care equipment & supplies)		15,602		11,832
					86,027

	Emerging Asia—17.6%
	China—10.2%
	3SBio, Inc. (Biotechnology)		1,770,500		4,001
*	51job, Inc.—ADR (Professional services)		45,630		4,455
*	Alibaba Group Holding, Ltd.-ADR (Internet software & services)		227,538		42,215
	Anhui Conch Cement Co., Ltd. Class “H” (Construction materials)		2,329,500		13,285
*	Baozun, Inc.—ADR (Internet software & services)		75,948		4,154
*	China Mengniu Dairy Co., Ltd. (Food products)		3,667,000		12,368
	China Overseas Land & Investment, Ltd. (Real estate management & development)		3,704,000		12,157
	CSPC Pharmaceutical Group, Ltd. (Pharmaceuticals)		3,484,000		10,462
	Huazhu Group, Ltd.—ADR (Hotels, restaurants & leisure)		162,936		6,842
	Industrial and Commercial Bank of China, Ltd. Class “H” (Banks)		35,283,000		26,316
	Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		2,036,000		18,645
	Shenzhou International Group Holdings, Ltd. (Textiles, apparel & luxury goods)		623,000		7,666
	Tencent Holdings, Ltd. (Internet software & services)		773,400		38,837
	Tingyi Cayman Islands Holding Corporation (Food products)		3,174,000		7,352
*	Weibo Corporation—ADR (Internet software & services)		81,993		7,278
*	Wuxi Biologics Cayman, Inc. (Life sciences tools & services)		506,000		5,613
					221,646



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	India—2.9%
	Britannia Industries, Ltd. (Food products)		69,963	$	6,371
	HDFC Bank, Ltd. (Banks)		377,776		11,651
	IndusInd Bank, Ltd. (Banks)		263,360		7,455
	InterGlobe Aviation, Ltd. (Airlines)		147,548		2,349
*	MakeMyTrip, Ltd. (Internet & direct marketing retail)†		153,295		5,542
	Maruti Suzuki India, Ltd. (Automobiles)		89,306		11,497
	Motherson Sumi Systems, Ltd. (Auto components)		790,463		3,276
	Pidilite Industries, Ltd. (Chemicals)		211,039		3,279
	Titan Co., Ltd. (Textiles, apparel & luxury goods)		300,560		3,848
	Yes Bank, Ltd. (Banks)		1,698,261		8,427
					63,695
	Indonesia—0.8%
	PT Bank Central Asia Tbk (Banks)		11,633,300		17,373
	South Korea—1.4%
	Hotel Shilla Co., Ltd. (Specialty retail)		41,166		4,560
*	Hugel, Inc. (Biotechnology)		5,546		2,398
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		392,009		16,421
	Samsung SDI Co., Ltd. (Electronic equipment, instruments & components)		39,925		7,658
					31,037
	Taiwan—2.3%
	Airtac International Group (Machinery)		220,000		3,123
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		273,000		3,242
	Hiwin Technologies Corporation (Machinery)		313,000		3,688
	MediaTek, Inc. (Semiconductors & semiconductor equipment)		1,119,000		10,984
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		778,472		28,461
					49,498

	Japan—14.8%
	Asahi Group Holdings, Ltd. (Beverages)		472,200		24,218
	Asahi Intecc Co., Ltd. (Health care equipment & supplies)		163,200		6,162
	Daikin Industries, Ltd. (Building products)		237,300		28,361
	Hoshizaki Corporation (Machinery)		43,800		4,427
	Japan Lifeline Co., Ltd. (Health care providers & services)		102,000		2,501
	Keyence Corporation (Electronic equipment, instruments & components)		47,600		26,847
	Kobayashi Pharmaceutical Co., Ltd. (Personal products)		49,900		4,307
	Koito Manufacturing Co., Ltd. (Auto components)		177,100		11,698
	Kose Corporation (Personal products)		44,400		9,550

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Institutional International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Japan—(continued)
MinebeaMitsumi, Inc. (Machinery)		201,900	$	3,402
MISUMI Group, Inc. (Machinery)		280,300		8,155
Nichias Corporation (Building products)		256,000		3,201
Nihon M&A Center, Inc. (Professional services)		246,500		7,142
Nintendo Co., Ltd. (Software)		65,900		21,512
Nitori Holdings Co., Ltd. (Specialty retail)		73,500		11,435
Nomura Research Institute, Ltd. (IT services)		127,000		6,144
Otsuka Corporation (IT services)		178,700		6,996
Pola Orbis Holdings, Inc. (Personal products)		208,400		9,158
Sankyu, Inc. (Road & rail)		77,260		4,055
Shimadzu Corporation (Electronic equipment, instruments & components)		397,300		11,987
Shiseido Co., Ltd. (Personal products)		434,300		34,464
Start Today Co., Ltd. (Internet & direct marketing retail)		228,400		8,264
Taisei Corporation (Construction & engineering)		162,000		8,921
TechnoPro Holdings, Inc. (Professional services)		112,500		6,908
Terumo Corporation (Health care equipment & supplies)		372,000		21,296
TIS, Inc. (IT services)		154,900		7,119
Topcon Corporation (Electronic equipment, instruments & components)		255,400		4,372
Toray Industries, Inc. (Chemicals)		930,500		7,344
Tsuruha Holdings, Inc. (Food & staples retailing)		29,300		3,670
Ulvac, Inc. (Semiconductors & semiconductor equipment)		118,500		4,520
Zenkoku Hosho Co., Ltd. (Diversified financial services)		96,300		4,360
				322,496

United Kingdom—12.3%
3i Group plc (Capital markets)		1,063,364		12,589
Abcam plc (Biotechnology)		204,959		3,601
Ashtead Group plc (Trading companies & distributors)		607,478		18,090
AVEVA Group plc (Software)		105,494		3,730
Beazley plc (Insurance)		719,049		5,541
Big Yellow Group plc (Equity REIT)		350,490		4,394
Carnival plc (Hotels, restaurants & leisure)		303,499		17,346
Close Brothers Group plc (Capital markets)		141,051		2,754
Compass Group plc (Hotels, restaurants & leisure)		1,234,484		26,314
Croda International plc (Chemicals)		181,188		11,447
Dechra Pharmaceuticals plc (Pharmaceuticals)		127,295		4,659
easyJet plc (Airlines)		164,566		3,620
Electrocomponents plc (Electronic equipment, instruments & components)		452,880		4,515
Experian plc (Professional services)		745,218		18,384



	Issuer	Shares		Value

	Common Stocks—(continued)

	United Kingdom—(continued)
	Fevertree Drinks plc (Beverages)		137,982	$	6,151
	Greggs plc (Hotels, restaurants & leisure)		201,636		2,644
	Halma plc (Electronic equipment, instruments & components)		360,750		6,496
	Hiscox, Ltd. (Insurance)		435,280		8,736
	Intermediate Capital Group plc (Capital markets)		404,678		5,863
	Intertek Group plc (Professional services)		139,594		10,496
	Kindred Group plc (Hotels, restaurants & leisure)		412,790		5,171
	London Stock Exchange Group plc (Capital markets)		294,037		17,310
	Melrose Industries plc (Electrical equipment)		2,837,057		7,938
*	Metro Bank plc (Banks)		66,774		2,841
	Renishaw plc (Electronic equipment, instruments & components)		61,305		4,274
	Rentokil Initial plc (Commercial services & supplies)		2,296,230		10,587
	Rotork plc (Machinery)		719,601		3,169
	Segro plc (Equity REIT)		1,274,802		11,227
	Spirax-Sarco Engineering plc (Machinery)		111,323		9,546
	Synthomer plc (Chemicals)		440,899		3,055
	Victrex plc (Chemicals)		193,344		7,402
	WH Smith plc (Specialty retail)		312,493		8,225
					268,115

	Canada—5.5%
	Constellation Software, Inc. (Software)		14,061		10,905
	Dollarama, Inc. (Multiline retail)		240,212		9,311
	Finning International, Inc. (Trading companies & distributors)		122,498		3,024
*	Lululemon Athletica, Inc. (Textiles, apparel & luxury goods)		104,531		13,051
*	Shopify, Inc. Class “A” (Internet software & services)†		108,809		15,874
	Suncor Energy, Inc. (Oil, gas & consumable fuels)		832,165		33,865
	The Toronto-Dominion Bank (Banks)		583,882		33,794
					119,824

	Asia—4.4%
	Australia—1.6%
	Aristocrat Leisure, Ltd. (Hotels, restaurants & leisure)		638,468		14,581
	CSL, Ltd. (Biotechnology)		145,720		20,742
					35,323
	Hong Kong—2.7%
	AIA Group, Ltd. (Insurance)		3,979,263		34,665
*	China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)**§		3,373,000		—
	Galaxy Entertainment Group, Ltd. (Hotels, restaurants & leisure)		3,071,000		23,673
					58,338

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Institutional International Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Asia—(continued)
	Singapore—0.1%
	Venture Corporation, Ltd. (Electronic equipment, instruments & components)		211,700	$	2,766

	Emerging Europe, Mid-East, Africa—1.1%
	Russia—0.3%
	Globaltrans Investment plc-GDR (Road & rail)		212,830		2,170
*	Yandex N.V. Class “A” (Internet software & services)†		127,729		4,585
					6,755
	South Africa—0.8%
	Bid Corporation, Ltd. (Food & staples retailing)		162,513		3,254
	Bidvest Group, Ltd. (Industrial conglomerates)		162,513		2,327
	Mr. Price Group, Ltd. (Specialty retail)		336,376		5,521
	RMB Holdings, Ltd. (Diversified financial services)		1,017,205		5,597
					16,699

	Emerging Latin America—0.9%
	Argentina—0.1%
	Grupo Financiero Galicia S.A.—ADR (Banks)		58,435		1,927
	Brazil—0.2%
	M Dias Branco S.A. (Food products)		250,700		2,419
	Via Varejo S.A. (Specialty retail)		472,800		2,270
					4,689
	Mexico—0.1%
	Arca Continental S.A.B. de C.V. (Beverages)		101,974		626
	Peru—0.5%
	Credicorp, Ltd. (Banks)†		50,807		11,438
	Total Common Stocks—97.9% (cost $1,790,748)				2,129,287

	Preferred Stock
	Germany—0.3%
	Fuchs Petrolub SE (Chemicals)		126,821		6,240
	Total Preferred Stock—0.3% (cost $6,374)				6,240


	Principal
Issuer	Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $8,051, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$8,051	$	8,051
Total Repurchase Agreement—0.4% (cost $8,051)				8,051
Total Investments—98.6% (cost $1,805,173)				2,143,578
Cash and other assets, less liabilities—1.4%				31,194
Net assets—100.0%			$	2,174,772

ADR = American Depository Receipt

GDR = Global Depository Receipt

REIT = Real Estate Investment Trust

* = Non-income producing security

† = U.S. listed foreign security

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.00% of the Fund’s net assets at June 30, 2018.

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Institutional International Growth Fund

Portfolio of Investments, June 30, 2018 (unaudited)

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	21.1	%
Industrials	18.1	%
Financials	15.4	%
Consumer Discretionary	14.2	%
Health Care	9.7	%
Energy	6.3	%
Consumer Staples	6.0	%
Materials	5.7	%
Real Estate	2.7	%
Utilities	0.8	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Euro	29.6	%
Japanese Yen	15.1	%
British Pound Sterling	13.1	%
Hong Kong Dollar	10.1	%
U.S. Dollar	8.0	%
Canadian Dollar	4.3	%
Swedish Krona	3.9	%
Danish Krone	3.3	%
Swiss Franc	3.3	%
Indian Rupee	2.7	%
Australian Dollar	1.7	%
South Korean Won	1.4	%
All Other Currencies	3.5	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

	International Small Cap Growth Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Simon Fennell Andrew G. Flynn	The William Blair International Small Cap Growth Fund (Class N shares) posted a 4.26% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI All Country World ex-U.S. Small Cap Index (net) (the “Index”), decreased 2.94%. The Fund’s six-month underperformance versus the Index was driven by a combination of allocation and stock selection effects. An underweight allocation to Real Estate, coupled with below average stock selection within the Consumer Discretionary and Energy sectors, hampered relative returns. Within the Consumer Discretionary sector, MGM China Holdings, Ltd. detracted from the Fund’s relative performance. MGM China is a leading developer, owner and operator of gaming and lodging resorts in the Greater China region. MGM China is among the most profitable major casino operators in Macau despite its relatively low market share. MGM China’s share price dropped in the later part of the six-month period along with other Macau-related names after weaker casino revenues for the month of May. Nevertheless, we believe the company will continue to benefit from its strong mass market exposure, differentiated property positioning and solid execution. Within Energy, Canada-based CES Energy Solutions Corporation, a quickly growing, asset-light oil service company, was a detractor for the first half of the year. The company reported record high revenue, however, gross margin weakness amid rising input costs drove below-consensus EBITDA performance. While the operating environment was incrementally more challenging, we believe CES remains a compelling investment. Partially offsetting these negative effects was the Fund’s underweight allocation to Canada coupled with above average stock selection within the Consumer Staples and Materials sectors. Within Consumer Staples, beverage companies Fevertree Drinks plc and Royal Unibrew A/S bolstered the Fund’s relative returns. Fevertree produces premium mixers, including tonic water, ginger beer, cola, and lemonade. We expect that the company will experience rapid growth due to its expanding geographic presence, increased product mix, and the trend towards premium spirits. Royal Unibrew, based in Denmark, benefited from strong earnings in the fourth quarter of 2017 that exceeded estimates. We believe the company is well positioned for future growth through a combination of organic growth (via distribution expansion and a wider product range) and small acquisitions to leverage established distribution and logistics networks. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

International Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year
	to Date			1 Year			3 Year			5 Year			10 Year
Class N		(4.26	)%		8.49	%		7.38	%		7.36	%		5.21	%
Class I		(4.09	)		8.92			7.74			7.69			5.56
Institutional Class		(4.01	)		8.96			7.81			7.83			5.73
MSCI ACW Ex-U.S. Small Cap Index (net)		(2.94	)		10.57			7.94			8.98			5.77

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. 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. International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors, and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees. Institutional Class shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

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

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

Sector Diversification (Unaudited)

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

June 30, 2018

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Europe, Mid-East—33.0%
	Austria—0.5%
	Schoeller-Bleckmann Oilfield Equipment AG (Energy equipment & services)		24,907	$	2,989
	Belgium—1.0%
	Melexis N.V. (Semiconductors & semiconductor equipment)		65,032		6,020
	Denmark—1.9%
	Royal Unibrew A/S (Beverages)		134,535		10,691
	France—3.9%
	Alten S.A. (IT services)		40,087		4,121
	Nexity S.A. (Real estate management & development)		81,851		5,167
	Rubis SCA (Gas utilities)		113,483		7,074
*	Worldline S.A. (IT services)		105,851		5,985
					22,347
	Germany—4.0%
	AURELIUS Equity Opportunities SE & Co KGaA (Capital markets)		79,710		4,718
	CTS Eventim AG & Co KGaA (Media)		132,462		6,504
	GRENKE AG (Diversified financial services)		51,275		5,845
	Norma Group SE (Machinery)		90,392		6,176
					23,243
	Ireland—1.7%
	Kingspan Group plc (Building products)		86,202		4,309
	UDG Healthcare plc (Health care providers & services)		504,797		5,486
					9,795
	Israel—3.3%
	Frutarom Industries, Ltd. (Chemicals)		70,362		6,920
	Mizrahi Tefahot Bank, Ltd. (Banks)		276,958		5,096
*	Wix.com, Ltd. (Internet software & services)†		73,094		7,331
					19,347
	Italy—5.5%
	Amplifon SpA (Health care providers & services)		339,768		7,025
	Autogrill SpA (Hotels, restaurants & leisure)		255,480		3,156
	Banca IFIS SpA (Diversified financial services)		97,892		2,936
	Brunello Cucinelli SpA (Textiles, apparel & luxury goods)		37,457		1,668
	Cerved Group SpA (Diversified financial services)		317,297		3,398
	DiaSorin SpA (Health care equipment & supplies)		71,958		8,178
	Gima TT SpA (Machinery)		174,344		2,863
	IMA Industria Macchine Automatiche SpA (Machinery)		27,966		2,427
					31,651
	Jersey—0.8%
	Sanne Group plc (Capital markets)		529,536		4,710



	Issuer	Shares		Value

	Common Stocks—(continued)

	Europe, Mid-East—(continued)
	Luxembourg—0.8%
	Stabilus S.A. (Machinery)		53,885	$	4,841
	Netherlands—1.1%
	Euronext N.V. (Capital markets)		101,243		6,415
	Norway—0.7%
	TGS Nopec Geophysical Co. ASA (Energy equipment & services)		110,410		4,055
	Sweden—6.3%
	Dometic Group AB (Auto components)		575,379		5,631
	Evolution Gaming Group AB (Hotels, restaurants & leisure)		119,796		7,413
	Indutrade AB (Trading companies & distributors)		252,038		5,999
	Loomis AB Class “B” (Commercial services & supplies)		58,425		2,024
	Nolato AB Class “B” (Industrial conglomerates)		33,468		2,693
*	Swedish Orphan Biovitrum AB (Biotechnology)		168,022		3,659
	Thule Group AB (Leisure products)		357,754		8,868
					36,287
	Switzerland—1.5%
*	Kardex AG (Machinery)		22,900		3,169
	Tecan Group AG (Life sciences tools & services)		22,011		5,341
					8,510

	United Kingdom—20.2%
	Abcam plc (Biotechnology)		451,141		7,925
	Arrow Global Group plc (Consumer finance)		710,264		2,262
	AVEVA Group plc (Software)		178,545		6,314
	Beazley plc (Insurance)		1,337,392		10,306
	Burford Capital, Ltd. (Capital markets)		344,279		6,771
	CVS Group plc (Health care providers & services)		81,959		1,227
	Dechra Pharmaceuticals plc (Pharmaceuticals)		200,477		7,337
	Diploma plc (Trading companies & distributors)		327,550		5,650
	Domino’s Pizza Group plc (Hotels, restaurants & leisure)		1,171,251		5,345
	Electrocomponents plc (Electronic equipment, instruments & components)		610,779		6,089
	Fevertree Drinks plc (Beverages)		161,241		7,188
	Halma plc (Electronic equipment, instruments & components)		226,337		4,075
	Hill & Smith Holdings plc (Metals & mining)		202,831		3,946
	Intermediate Capital Group plc (Capital markets)		377,412		5,468
	Rotork plc (Machinery)		772,253		3,401
	Scapa Group plc (Chemicals)		511,465		2,933

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares			Value

	Common Stocks—(continued)

	United Kingdom—(continued)
	Spirax-Sarco Engineering plc (Machinery)		64,614	$	5,541
	SSP Group plc (Hotels, restaurants & leisure)		1,006,471		8,398
	The UNITE Group plc (Real estate management & development)		598,000		6,786
	Victrex plc (Chemicals)		87,801		3,361
	Workspace Group plc (Equity REIT)		480,489		6,830
					117,153

	Japan—18.1%
	Asahi Intecc Co., Ltd. (Health care equipment & supplies)		197,000		7,438
	Benefit One, Inc. (Professional services)		78,200		2,205
	en-japan, Inc. (Professional services)		122,300		6,154
	Japan Lifeline Co., Ltd. (Health care providers & services)		94,300		2,312
	Kose Corporation (Personal products)		33,200		7,141
	Maeda Corporation (Construction & engineering)		352,100		4,035
	Matsumotokiyoshi Holdings Co., Ltd. (Food & staples retailing)		133,100		5,973
	Meitec Corporation (Professional services)		63,500		3,044
	Nihon M&A Center, Inc. (Professional services)		254,300		7,368
	Nihon Unisys, Ltd. (IT services)		5,000		125
	Nissan Chemical Industries, Ltd. (Chemicals)		132,900		6,191
	PALTAC Corporation (Distributors)		125,600		7,223
	Pola Orbis Holdings, Inc. (Personal products)		83,200		3,656
	Sankyu, Inc. (Road & rail)		95,520		5,013
	Seria Co., Ltd. (Multiline retail)		51,200		2,454
	Stanley Electric Co., Ltd. (Auto components)		103,100		3,510
	TechnoPro Holdings, Inc. (Professional services)		79,100		4,857
	TIS, Inc. (IT services)		166,000		7,629
	Tokyo Century Corporation (Diversified financial services)		132,100		7,478
	Topcon Corporation (Electronic equipment, instruments & components)		280,000		4,793
	Tsuruha Holdings, Inc. (Food & staples retailing)		22,600		2,831
*	UT Group Co., Ltd. (Professional services)		88,537		3,307
					104,737

	Emerging Asia—13.7%
	Cambodia—0.5%
	NagaCorp, Ltd. (Hotels, restaurants & leisure)		2,958,000		2,679



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	China—4.7%
	3SBio, Inc. (Biotechnology)		1,943,000	$	4,391
*	51job, Inc.—ADR (Professional services)		35,986		3,514
*	Baozun, Inc.—ADR (Internet software & services)		48,108		2,631
	China Medical System Holdings, Ltd. (Pharmaceuticals)		1,070,000		2,131
	Fuyao Glass Industry Group Co., Ltd. Class “H” (Auto components)		367,600		1,242
	Kingsoft Corporation, Ltd. (Software)		1,525,000		4,603
*	Li Ning Co., Ltd. (Textiles, apparel & luxury goods)		2,623,500		2,886
*	Noah Holdings, Ltd.—ADR (Capital markets)		60,331		3,146
	Travelsky Technology, Ltd. Class “H” (IT services)		970,000		2,816
					27,360
	India—3.6%
	Balkrishna Industries, Ltd. (Auto components)		109,411		1,665
	Crompton Greaves Consumer Electricals, Ltd. (Household durables)		1,002,368		3,302
	Cyient, Ltd. (Software)		240,700		2,694
	Indiabulls Housing Finance, Ltd. (Thrifts & mortgage finance)		169,139		2,819
	Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		223,104		4,540
	KEC International, Ltd. (Construction & engineering)		467,800		2,290
	MindTree, Ltd. (IT services)		236,315		3,401
					20,711
	South Korea—0.8%
	Hana Tour Service, Inc. (Hotels, restaurants & leisure)		33,585		2,631
*	Hugel, Inc. (Biotechnology)		5,083		2,198
					4,829
	Taiwan—3.3%
	Chailease Holding Co., Ltd. (Diversified financial services)		2,110,000		6,900
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		240,000		2,851
	Globalwafers Co., Ltd. (Semiconductors & semiconductor equipment)		309,000		5,116
	Silicon Motion Technology Corporation— ADR (Semiconductors & semiconductor equipment)		77,962		4,123
					18,990
	Thailand—0.8%
	Tisco Financial Group PCL (Banks)		1,760,600		4,460

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Asia—4.7%
	Australia—3.0%
	Corporate Travel Management, Ltd. (Hotels, restaurants & leisure)		87,628	$	1,768
	Costa Group Holdings, Ltd. (Food products)		619,441		3,774
	DuluxGroup, Ltd. (Chemicals)		733,275		4,146
	Orora, Ltd. (Containers & packaging)		1,669,594		4,410
	SmartGroup Corporation, Ltd. (Commercial services & supplies)		80,815		698
	The Star Entertainment Group, Ltd. (Hotels, restaurants & leisure)		635,845		2,316
					17,112
	Hong Kong—1.0%
	MGM China Holdings, Ltd. (Hotels, restaurants & leisure)		2,548,400		5,893
	New Zealand—0.7%
	Fisher & Paykel Healthcare Corp., Ltd. (Health care equipment & supplies)		390,538		3,935

	Canada—2.8%
	Reliance Worldwide Corporation, Ltd. (Building products)		730,269		2,891
	Canadian Western Bank (Banks)		169,756		4,474
	CES Energy Solutions Corporation (Energy equipment & services)		679,495		2,321
	Finning International, Inc. (Trading companies & distributors)		232,521		5,739
	Intertape Polymer Group, Inc. (Containers & packaging)		49,515		681
					16,106

	Emerging Europe, Mid-East, Africa—2.0%
	South Africa—2.0%
	AVI, Ltd. (Food products)		468,759		3,703
	Bidvest Group, Ltd. (Industrial conglomerates)		210,760		3,018
	Clicks Group, Ltd. (Food & staples retailing)		352,167		5,028
					11,749

	Emerging Latin America—1.9%
	Argentina—0.8%
*	Globant S.A. (Software)†		73,185		4,156
	Grupo Supervielle S.A.—ADR (Banks)		50,689		536
					4,692
	Brazil—1.1%
	CVC Brasil Operadora e Agencia de Viagens S.A. (Hotels, restaurants & leisure)		256,600		2,992
	Localiza Rent a Car S.A. (Road & rail)		518,985		3,178
					6,170
	Total Common Stocks—96.4% (cost $486,449)				557,477


	Principal
Issuer	Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $21,691, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24		$21,690	$	21,690
Total Repurchase Agreement—3.7% (cost $21,690)				21,690
Total Investments—100.1% (cost $508,139)				579,167
Liabilities, plus cash and other assets—(0.1)%				(670	)
Net assets—100.0%			$	578,497

ADR = American Depository Receipt

REIT = Real Estate Investment Trust

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Industrials	19.1	%
Consumer Discretionary	17.0	%
Financials	15.7	%
Information Technology	14.7	%
Health Care	12.3	%
Consumer Staples	9.0	%
Materials	5.8	%
Real Estate	3.4	%
Energy	1.7	%
Utilities	1.3	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

British Pound Sterling	22.8	%
Japanese Yen	18.8	%
Euro	18.3	%
Swedish Krona	6.5	%
Hong Kong Dollar	4.8	%
U.S. Dollar	4.6	%
Indian Rupee	3.7	%
Australian Dollar	3.6	%
New Taiwan Dollar	2.7	%
Canadian Dollar	2.4	%
Israeli Shekel	2.1	%
South African Rand	2.1	%
Danish Krone	1.9	%
Swiss Franc	1.5	%
Brazilian Real	1.1	%
All Other Currencies	3.1	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

	Emerging Markets Leaders Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Todd M. McClone John C. Murphy	The William Blair Emerging Markets Leaders Fund (Class N shares) posted a 6.96% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Index (net) (the “Index”) decreased 6.66%. Underperformance versus the Index was driven by negative stock selection within the Energy and Industrials sectors. Within Energy, YPF S.A., the Argentinean oil company, weighed on the Fund’s relative results amid broad market weakness and sharp Argentinean Peso depreciation. YPF retains a dominant position in one of the most promising shale resources outside of North America in our view. The combination of a recovery in oil prices and a move toward full liberalization of oil prices should accelerate foreign investment in this resource base and drive long-term volume growth. YPF shares trade at a considerable discount despite its dominant position in the world-class shale resource in Vaca Muerta. While macro risk remains a near-term headwind, international oil companies’ continued interest in participating in the development of Argentinian shale assets underscores the long-term opportunity for YPF shareholders. Within Industrials, KOC Holding A.S., the Turkish industrial conglomerate, dragged down sector performance. KOC maintains leading positions in Turkey’s automotive, consumer durables, energy, and finance sectors. With five of the top ten industrial companies in Turkey under its umbrella, KOC revenues account for approximately 7% of Turkey’s gross domestic product. KOC’s share price decline during the first half of 2018 was driven by the company’s decelerating growth after a strong 2017, deteriorating sentiment towards Turkey, and depreciation of the Turkish Lira. We exited the position amid these increased headwinds. Mitigating these effects were positive contributions from the Consumer Discretionary and Health Care sectors. Consumer Discretionary results were bolstered by the stock selection within the Textile, Apparel and Luxury Goods as well as Hotels, Restaurants and Leisure industries. Shenzhou International Group Holdings, Ltd., the Chinese textile manufacturer, drove strong results as the share price advanced steadily on the back of the company’s robust operating momentum. Shenzhou’s core business is in original equipment manufacturing for sportswear and apparel brands including Nike, Adidas, Uniqlo, and Puma. We expect Shenzhou to benefit from strong volume growth prospectively, supported by capacity expansion and order share gain with key clients. We also foresee margin expansion opportunities driven by a favorable product mix shift, efficiency gains (due to automation in Ningbo, China and capacity ramp-up in Vietnam) and easing cost pressures. Within the Health Care sector, CSPC Pharmaceutical Group, Ltd., the Chinese pharmaceutical company, boosted relative returns. CSPC has evolved from manufacturing low margin bulk products to a high quality pharma company focused on branded generics. CSPC’s share price strengthened amid accelerating operating performance and improving growth outlook supported by its strong product pipeline and growth in innovative drugs, coupled with a favorable regulatory backdrop. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

June 30, 2018

William Blair Funds

Emerging Markets Leaders Fund

Performance Highlights (Unaudited)


Average Annual Total Return through 6/30/2018
	Year															Since
	to Date			1 Year			3 Year			5 Year			10 Year			Inception
Class N(a)		(6.96	)%		9.71	%		4.19	%		4.60	%		—			3.54	%
MSCI Emerging Markets Index (net)(a)		(6.66	)		8.20			5.60			5.01			—			3.19
Class I		(6.76	)		9.95			4.49			4.91			2.31	%		—
Institutional Class		(6.76	)		10.01			4.58			5.00			2.42			—
MSCI Emerging Markets Index (net)		(6.66	)		8.20			5.60			5.01			2.26			—


(a)	Since inception is for the period from May 3, 2010 (Commencement of Operations) to June 30, 2018.

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. These risks may be magnified when investing in emerging markets. 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 & 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 index approximates the minimum possible dividend reinvestment by deducting for the highest possible withholding tax rates of those markets.

Sector Diversification (Unaudited)

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

Semiannual Report

June 30, 2018

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—74.2%
	China—38.1%
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		149,141	$	27,670
	ANTA Sports Products, Ltd. (Textiles, apparel & luxury goods)		830,000		4,377
	Autohome, Inc.—ADR (Internet software & services)		50,385		5,089
	Brilliance China Automotive Holdings, Ltd. (Automobiles)		1,996,000		3,581
	China International Travel Service Corporation, Ltd. Class “A” (Hotels, restaurants & leisure)		501,314		4,868
	China Merchants Bank Co., Ltd. Class “H” (Banks)		1,200,000		4,414
	CNOOC, Ltd. (Oil, gas & consumable fuels)		3,741,000		6,410
	CSPC Pharmaceutical Group, Ltd. (Pharmaceuticals)		2,600,000		7,807
*	Ctrip.com International, Ltd.—ADR (Internet & direct marketing retail)		108,162		5,152
	ENN Energy Holdings, Ltd. (Gas utilities)		457,000		4,476
	Haier Electronics Group Co., Ltd. (Household durables)		2,055,000		7,011
	Huazhu Group, Ltd.—ADR (Hotels, restaurants & leisure)		154,105		6,471
	Jiangsu Hengrui Medicine Co., Ltd. Class “A” (Pharmaceuticals)		618,860		7,062
	Kweichow Moutai Co., Ltd. Class “A” (Beverages)		58,859		6,482
	Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		1,060,000		9,707
	Shenzhou International Group Holdings, Ltd. (Textiles, apparel & luxury goods)		647,000		7,962
	Sunny Optical Technology Group Co., Ltd. (Electronic equipment, instruments & components)		156,000		2,893
*	TAL Education Group—ADR (Diversified consumer services)		87,634		3,225
	Tencent Holdings, Ltd. (Internet software & services)		574,300		28,839
	Tingyi Cayman Islands Holding Corporation (Food products)		2,550,000		5,907
	Yum China Holdings, Inc. (Hotels, restaurants & leisure)		171,607		6,600
					166,003
	India—16.0%
	Asian Paints, Ltd. (Chemicals)		204,952		3,782
	Bajaj Finance, Ltd. (Consumer finance)		203,916		6,857
	Britannia Industries, Ltd. (Food products)		45,062		4,103
	HDFC Bank, Ltd.—ADR (Banks)		15,302		1,607
	HDFC Bank, Ltd. (Banks)		191,556		5,908
	HDFC Standard Life Insurance Co. Ltd. (Insurance)		685,575		4,561
	Hindustan Unilever, Ltd. (Household products)		203,393		4,857



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	India—(continued)
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		377,921	$	10,531
	IndusInd Bank, Ltd. (Banks)		195,649		5,538
	Infosys, Ltd. (IT services)		523,062		10,054
	Maruti Suzuki India, Ltd. (Automobiles)		43,885		5,649
	MRF, Ltd. (Auto components)		5,526		6,058
					69,505
	Indonesia—3.8%
	PT Bank Rakyat Indonesia Persero Tbk (Banks)		27,970,900		5,533
	PT Telekomunikasi Indonesia Persero Tbk (Diversified telecommunication services)		25,480,000		6,673
	PT Unilever Indonesia Tbk (Household products)		1,309,500		4,208
					16,414
	South Korea—6.1%
	LG Chem, Ltd. (Chemicals)		18,450		5,522
	LG Household & Health Care, Ltd. (Personal products)		2,517		3,154
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		429,696		18,000
					26,676
	Taiwan—6.8%
	Taiwan Semiconductor Manufacturing Co. Ltd.—ADR (Semiconductors & semiconductor equipment)		620,616		22,690
	Uni-President Enterprises Corporation (Food products)		2,714,000		6,879
					29,569
	Thailand—3.4%
	Airports of Thailand PCL (Transportation infrastructure)		3,808,100		7,239
	CP ALL PCL (Food & staples retailing)		3,340,500		7,404
					14,643

	Emerging Europe, Mid-East, Africa—11.2%
	Hungary—1.4%
	OTP Bank Nyrt (Banks)		169,976		6,137
	Russia—1.5%
*	Yandex N.V. Class “A” (Internet software & services)†		187,472		6,730
	South Africa—7.6%
	Bid Corporation, Ltd. (Food & staples retailing)		183,396		3,672
	Bidvest Group, Ltd. (Industrial conglomerates)		278,082		3,982
	Capitec Bank Holdings, Ltd. (Banks)		94,188		5,934
	FirstRand, Ltd. (Diversified financial services)		1,170,377		5,437
	Naspers, Ltd. (Media)		55,458		13,984
					33,009

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Emerging Markets Leaders Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

Common Stocks—(continued)

Emerging Europe, Mid-East, Africa—(continued)
Turkey—0.7%
KOC Holding A.S. (Industrial conglomerates)		972,014	$	3,004

Emerging Latin America—11.1%
Argentina—1.0%
Grupo Financiero Galicia S.A.—ADR (Banks)		50,517		1,666
YPF S.A.—ADR (Oil, gas & consumable fuels)		186,923		2,538
				4,204
Brazil—3.3%
AMBEV S.A.—ADR (Beverages)		854,813		3,958
B3 S.A. - Brasil Bolsa Balcao (Capital markets)		787,700		4,156
Lojas Renner S.A. (Multiline retail)		278,900		2,114
Raia Drogasil S.A. (Food & staples retailing)		253,500		4,343
				14,571
Chile—0.9%
Sociedad Quimica y Minera de Chile S.A.— ADR (Chemicals)		80,492		3,868
Mexico—3.1%
Grupo Aeroportuario del Pacifico S.A.B. de C.V. Class “B” (Transportation infrastructure)		496,800		4,610
Grupo Financiero Banorte S.A.B. de C.V. Class “O” (Banks)		1,507,600		8,865
				13,475
Peru—2.8%
Credicorp, Ltd. (Banks)†		36,543		8,226
Southern Copper Corporation (Metals & mining)		86,982		4,077
				12,303
Total Common Stocks—96.5% (cost $360,701)				420,111

Preferred Stocks
Brazil—2.2%
Itau Unibanco Holding S.A. (Banks)		625,450		6,510
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		683,000		3,029
				9,539
Total Preferred Stocks—2.2% (cost $9,254)				9,539


	Principal
Issuer	Amount		Value

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $5,745, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$5,744	$	5,744
Total Repurchase Agreement—1.3% (cost $5,744)				5,744
Total Investments—100.0% (cost $375,699)				435,394
Cash and other assets, less liabilities—0.0%				44
Net assets—100.0%			$	435,438

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	28.4	%
Financials	23.6	%
Consumer Discretionary	17.9	%
Consumer Staples	12.8	%
Industrials	4.4	%
Materials	4.0	%
Health Care	3.5	%
Energy	2.8	%
Telecommunication Services	1.6	%
Utilities	1.0	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

U.S. Dollar	25.5	%
Hong Kong Dollar	21.7	%
Indian Rupee	15.8	%
South African Rand	7.7	%
South Korean Won	6.2	%
Brazilian Real	4.7	%
Yuan Renminbi	4.3	%
Indonesian Rupiah	3.8	%
Thai Baht	3.4	%
Mexican Peso	3.2	%
New Taiwan Dollar	1.6	%
Hungarian Forint	1.4	%
All Other Currencies	0.7	%
Total	100.0	%

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

	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	The William Blair Emerging Markets Growth Fund (Class N shares) posted a 7.35% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets IMI (net) (the “Index”), decreased 6.86%. Underperformance versus the Index was driven primarily by Consumer Discretionary and Energy stock selection. Within Consumer Discretionary, automobile-related names were notable detractors. The shares of Maruti Suzuki India, Ltd., the largest passenger car manufacturer in India, weakened after a strong rally in 2017 as deteriorating investor sentiment and softer operating performance weighed on the stock. Despite weakness during the first half of 2018, we believe the outlook remains compelling for Maruti, supported by improving volumes and increasing first time buyers. The company has a significant advantage with its dealership reach and breadth of models. Within Energy, stock selection was a key detractor mainly due to the lack of exposure to top performing Index holdings. In addition, Petronet LNG, Ltd., the dominant importer of liquefied natural gas in India, weighed on relative performance. We expect India to become increasingly dependent on imports over the next few years, as domestic sources of gas cannot keep pace with demand growth. Petronet’s shares weakened during the first half of 2018 amid concerns about medium term supply/demand fundamentals and the potential for domestic gas to take share from imported liquefied natural gas. Mitigating these negative effects was favorable stock selection within Health Care and Information Technology. Within the Health Care sector, CSPC Pharmaceutical Group, Ltd., the Chinese pharmaceutical company, boosted the Fund’s relative returns. CSPC has evolved from manufacturing low margin bulk products to a high quality pharma company focused on branded generics. CSPC’s share price strengthened amid accelerating operating performance and improving growth outlook supported by its strong pipeline and growth in innovative drugs, coupled with a favorable regulatory backdrop. Within the Information Technology sector, Taiwanese passive components manufacturer Yageo Corporation outperformed. Yageo is a beneficiary of rising demand for high-end passive components, which in turn is driven by increasing complexity in wireless communication and electronic content gains in automotive and industrial applications. Favorable industry dynamics (tight supply and strong demand in passive components) coupled with capacity expansion and recent acquisitions drove Yageo’s share price higher during the first half of the year. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

June 30, 2018

William Blair Funds

Emerging Markets Growth Fund

Performance Highlights (Unaudited)


Average Annual Total Return through 6/30/2018
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(7.35	)%		10.96	%		5.04	%		5.76	%		1.87	%
Class I		(7.21	)		11.16			5.30			6.00			2.13
Institutional Class		(7.16	)		11.31			5.39			6.14			2.29
MSCI Emerging Markets IMI (net)		(6.86	)		7.90			5.19			4.93			2.52

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. These risks may be magnified when investing in emerging markets. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors, and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) fees. Institutional Class shares are available to institutional investors without a sales load or distribution (12b-1) or service fees.

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

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

Sector Diversification (Unaudited)

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

Semiannual Report

June 30, 2018

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks

	Emerging Asia—79.7%
	China—33.4%
*	51job, Inc.—ADR (Professional services)		39,927	$	3,898
*	Alibaba Group Holding, Ltd.—ADR (Internet software & services)		401,025		74,402
	Anhui Conch Cement Co., Ltd. Class “H” (Construction materials)		963,500		5,495
	ANTA Sports Products, Ltd. (Textiles, apparel & luxury goods)		1,464,000		7,720
	Autohome, Inc.—ADR (Internet software & services)		62,503		6,313
*	Baozun, Inc.—ADR (Internet software & services)		86,310		4,721
*	BeiGene, Ltd.—ADR (Biotechnology)		14,624		2,248
	China International Travel Service Corporation, Ltd. Class “A” (Hotels, restaurants & leisure)		1,117,922		10,857
*	Chinasoft International, Ltd. (IT services)		3,960,000		3,079
	Chongqing Zhifei Biological Products Co., Ltd. Class “A” (Biotechnology)		430,000		2,960
	CIFI Holdings Group Co., Ltd. (Real estate management & development)		2,106,000		1,334
	CSPC Pharmaceutical Group, Ltd. (Pharmaceuticals)		5,278,000		15,849
	ENN Energy Holdings, Ltd. (Gas utilities)		788,000		7,717
	Foshan Haitian Flavouring & Food Co., Ltd. Class “A” (Food products)		714,580		7,922
	Gree Electric Appliances, Inc. of Zhuhai Class “A” (Household durables)		595,015		4,220
	Hangzhou Hikvision Digital Technology Co., Ltd. Class “A” (Electronic equipment, instruments & components)		683,374		3,819
	Hangzhou Tigermed Consulting Co., Ltd. Class “A” (Life sciences tools & services)		342,400		3,188
	Hua Hong Semiconductor Ltd. (Semiconductors & semiconductor equipment)		943,000		3,223
	Huadong Medicine Co., Ltd. Class “A” (Health care providers & services)		435,956		3,168
	Huazhu Group, Ltd.—ADR (Hotels, restaurants & leisure)		239,143		10,042
	Jiangsu Hengrui Medicine Co., Ltd. Class “A” (Pharmaceuticals)		463,599		5,290
	Jiangsu Yangnong Chemical Co., Ltd. Class “A” (Chemicals)		317,050		2,672
	Kingdee International Software Group Co., Ltd. (Software)		4,092,000		4,168
	Kweichow Moutai Co., Ltd. Class “A” (Beverages)		101,348		11,162
*	MMG, Ltd. (Metals & mining)		4,472,000		3,113
*	Momo, Inc.—ADR (Internet software & services)		116,850		5,083
	New Oriental Education & Technology Group, Inc.—ADR (Diversified consumer services)		55,808		5,283
	Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		1,737,000		15,907



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*
	China—(continued)
	Shandong Hualu Hengsheng Chemical Co., Ltd. Class “A” (Chemicals)		988,300	$	2,614
	Shanghai International Airport Co., Ltd. Class “A” (Transportation infrastructure)		627,274		5,237
	Shimao Property Holdings, Ltd. (Real estate management & development)		448,000		1,168
	Silergy Corporation (Semiconductors & semiconductor equipment)		106,000		2,576
	Sino Biopharmaceutical, Ltd. (Pharmaceuticals)		5,474,000		8,360
	Sunny Optical Technology Group Co., Ltd. (Electronic equipment, instruments & components)		606,000		11,240
*	TAL Education Group—ADR (Diversified consumer services)		126,257		4,646
	Tencent Holdings, Ltd. (Internet software & services)		1,337,360		67,156
*	Weibo Corporation—ADR (Internet software & services)		61,259		5,437
*	Wuxi Biologics Cayman, Inc. (Life sciences tools & services)		542,000		6,012
	Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. Class “A” (Pharmaceuticals)		223,784		3,771
	Zhejiang Supor Cookware Co., Ltd. Class “A” (Household durables)		538,428		4,173
	Zhejiang Weixing New Building Materials Co., Ltd. Class “A” (Chemicals)		947,580		2,526
					359,769
	India—16.7%
	Bajaj Finance, Ltd. (Consumer finance)		562,622		18,920
	Bajaj Finserv, Ltd. (Insurance)		60,710		5,173
*	Bharat Financial Inclusion, Ltd. (Consumer finance)		232,513		3,946
	Britannia Industries, Ltd. (Food products)		52,891		4,816
	Godrej Consumer Products, Ltd. (Personal products)		245,958		4,384
	Havells India, Ltd. (Electrical equipment)		360,186		2,856
	HDFC Bank, Ltd. (Banks)		1,098,457		33,879
	HDFC Standard Life Insurance Co. Ltd. (Insurance)		843,271		5,610
	Hindustan Unilever, Ltd. (Household products)		370,349		8,843
	Housing Development Finance Corporation, Ltd. (Thrifts & mortgage finance)		974,561		27,156
	Indiabulls Housing Finance, Ltd. (Thrifts & mortgage finance)		329,155		5,487
	IndusInd Bank, Ltd. (Banks)		684,691		19,381
	Maruti Suzuki India, Ltd. (Automobiles)		46,223		5,950
	Page Industries, Ltd. (Textiles, apparel & luxury goods)		6,297		2,548
	Tata Consultancy Services, Ltd. (IT services)		621,932		16,748
	Titan Co., Ltd. (Textiles, apparel & luxury goods)		218,294		2,794

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	India—(continued)
	Yes Bank, Ltd. (Banks)		2,306,728	$	11,447
					179,938
	Indonesia—1.1%
	PT Bank Negara Indonesia Persero Tbk (Banks)		1,285,500		632
	PT Bank Rakyat Indonesia Persero Tbk (Banks)		37,512,505		7,420
	PT United Tractors Tbk (Oil, gas & consumable fuels)		1,905,800		4,196
					12,248
	Malaysia—1.0%
	Public Bank Bhd (Banks)		1,529,700		8,849
	Top Glove Corporation Bhd (Health care equipment & supplies)		599,800		1,799
					10,648
	South Korea—10.6%
	Amorepacific Corporation (Personal products)		15,467		4,477
	Douzone Bizon Co., Ltd. (Software)		13,756		764
	Hana Financial Group, Inc. (Banks)		219,530		8,430
	Hotel Shilla Co., Ltd. (Specialty retail)		51,363		5,689
	Korea Investment Holdings Co., Ltd. (Capital markets)		68,947		5,199
	LG Household & Health Care, Ltd. (Personal products)		6,389		8,006
	Orion Corporation (Food products)		66,262		8,847
*	Samsung Biologics Co., Ltd. (Life sciences tools & services)		17,378		6,504
	Samsung Electro-Mechanics Co., Ltd. (Electronic equipment, instruments & components)		44,458		5,919
	Samsung Electronics Co., Ltd. (Technology hardware, storage & peripherals)		992,770		41,587
	SK Hynix, Inc. (Semiconductors & semiconductor equipment)		241,336		18,525
					113,947
	Taiwan—12.7%
	ASPEED Technology, Inc. (Semiconductors & semiconductor equipment)		92,000		2,409
	Chailease Holding Co., Ltd. (Diversified financial services)		3,137,000		10,259
	Chroma ATE, Inc. (Electronic equipment, instruments & components)		557,000		2,990
	E.Sun Financial Holding Co., Ltd. (Banks)		16,001,255		11,141
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		293,000		3,480
	Globalwafers Co., Ltd. (Semiconductors & semiconductor equipment)		661,000		10,943
	Hiwin Technologies Corporation (Machinery)		753,780		8,880
*	Macronix International (Semiconductors & semiconductor equipment)		1,793,000		2,543



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*
	Taiwan—(continued)
	Nanya Technology Corporation (Semiconductors & semiconductor equipment)		1,209,000	$	3,282
	President Chain Store Corporation (Food & staples retailing)		428,000		4,850
	Silicon Motion Technology Corporation— ADR (Semiconductors & semiconductor equipment)		62,601		3,311
	Taiwan Semiconductor Manufacturing Co., Ltd.—ADR (Semiconductors & semiconductor equipment)		717,003		26,213
	Taiwan Semiconductor Manufacturing Co., Ltd. (Semiconductors & semiconductor equipment)		2,464,000		17,497
	TCI Co., Ltd. (Personal products)		192,000		2,959
	Walsin Technology Corporation (Electronic equipment, instruments & components)		392,000		5,351
	Win Semiconductors Corporation (Semiconductors & semiconductor equipment)		378,000		2,707
*	Yageo Corporation (Electronic equipment, instruments & components)		487,000		17,899
					136,714
	Thailand—2.8%
	Airports of Thailand PCL (Transportation infrastructure)		5,501,500		10,459
	Bangkok Dusit Medical Services PCL Class “F” (Health care providers & services)		6,777,600		5,108
	CP ALL PCL (Food & staples retailing)		4,797,300		10,632
	Home Product Center PCL (Specialty retail)		8,131,500		3,293
					29,492
	Vietnam—1.4%
*	Hoa Phat Group JSC (Metals & mining)		1,999,984		3,332
	Vietjet Aviation JSC (Airlines)		421,344		2,593
	Vietnam Dairy Products JSC (Food products)		498,150		3,674
*	Vincom Retail JSC (Real estate management & development)		1,283,920		2,161
*	Vingroup JSC (Real estate management & development)		786,088		3,661
					15,421

	*Emerging Europe, Mid-East, Africa—8.8%*
	Greece—0.2%
	JUMBO S.A. (Specialty retail)		142,776		2,349
	Hungary—0.9%
	OTP Bank Nyrt (Banks)		261,058		9,426
	Kenya—0.5%
	Safaricom plc (Wireless telecommunication services)		19,382,454		5,620

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

*Common Stocks—(continued)*

*Emerging Europe, Mid-East, Africa—(continued)*
South Africa—5.9%
Capitec Bank Holdings, Ltd. (Banks)		86,947	$	5,478
Clicks Group, Ltd. (Food & staples retailing)		433,612		6,191
FirstRand, Ltd. (Diversified financial services)		1,784,650		8,290
JSE, Ltd. (Capital markets)		197,322		2,325
Mr. Price Group, Ltd. (Specialty retail)		292,698		4,804
Naspers, Ltd. (Media)		125,264		31,585
Sanlam, Ltd. (Insurance)		984,366		5,001
				63,674
United Arab Emirates—1.3%
DP World, Ltd. (Transportation infrastructure)†		127,564		2,936
NMC Health plc (Health care providers & services)		236,507		11,132
				14,068

*Emerging Latin America—7.3%*
Brazil—3.0%
B3 S.A. - Brasil Bolsa Balcao (Capital markets)		1,916,000		10,110
Iochpe-Maxion S.A. (Machinery)		422,300		2,278
IRB Brasil Resseguros S.A. (Insurance)		268,900		3,355
Localiza Rent a Car S.A. (Road & rail)		1,349,120		8,260
Magazine Luiza S.A. (Multiline retail)		117,500		3,880
Via Varejo S.A. (Specialty retail)		506,500		2,432
WEG S.A. (Machinery)		579,920		2,431
				32,746
Chile—1.0%
Banco Santander Chile—ADR (Banks)		328,871		10,336
Mexico—2.4%
Grupo Financiero Banorte S.A.B. de C.V. Class “O” (Banks)		1,221,500		7,183
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		6,987,800		18,444
				25,627
Peru—0.9%
Credicorp, Ltd. (Banks)†		42,269		9,516
Total Common Stocks—95.8% (cost $828,904)				1,031,539

Preferred Stock
Brazil—1.0%
Itau Unibanco Holding S.A. (Banks)		980,860		10,209
Total Preferred Stock—1.0% (cost $15,310)				10,209


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $26,280, collateralized by U.S. Treasury Inflation Indexed Bond, 0.250%, due 1/15/25		$26,279	$	26,279
Total Repurchase Agreement—2.4% (cost $26,279)				26,279
Total Investments—99.2% (cost $870,493)				1,068,027
Cash and other assets, less liabilities—0.8%				8,900
Net assets—100.0%			$	1,076,927

ADR = American Depository Receipt

* = Non-income producing security

† = U.S. listed foreign security

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	35.6	%
Financials	26.9	%
Consumer Discretionary	11.1	%
Consumer Staples	10.1	%
Health Care	7.2	%
Industrials	4.8	%
Materials	1.9	%
Real Estate	0.8	%
Utilities	0.7	%
Telecommunication Services	0.5	%
Energy	0.4	%
Total	100.0	%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Indian Rupee	17.3	%
U.S. Dollar	16.7	%
Hong Kong Dollar	15.5	%
South Korean Won	10.9	%
New Taiwan Dollar	10.5	%
Yuan Renminbi	7.1	%
South African Rand	6.1	%
Brazilian Real	4.1	%
Thai Baht	2.8	%
Mexican Peso	2.5	%
Viet Nam Dong	1.5	%
Indonesian Rupiah	1.2	%
British Pound Sterling	1.1	%
Malaysian Ringgit	1.0	%
All Other Currencies	1.7	%
Total	100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

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 9.49% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark index, the MSCI Emerging Markets Small Cap Index (net) (the “Index”), decreased 8.45%. Underperformance versus the Index was primarily driven by negative stock selection across most sectors. Stock selection within the Consumer Discretionary sector was particularly detrimental to performance, notably hindered by Minth Group and Via Varejo S.A. Minth Group, the Chinese auto supplier, has diverse exposure to original equipment manufacturers covering 80% of global auto production, including Nissan, Toyota, Honda, GM, Ford, and Volkswagen. Investor sentiment deteriorated on the back of the company’s disappointing fiscal year 2017 results, broad automobile weakness and concerns over trade war rhetoric. We exited the position in favor of more compelling opportunities. Via Varejo is Brazil’s largest electronics and home retailer. Despite the company’s solid operating performance, the stock weakened amid concerns about Brazil’s economic and political outlook, truck strike disruption, and currency weakness. Partially offsetting these effects was positive stock selection within the Information Technology and Health Care sectors. Within Information Technology, Yageo Corporation, the Taiwanese passive components manufacturer, propelled the Fund’s relative results. Yageo’s share price was boosted by favorable industry dynamics (tight supply and strong demand in passive components), which allowed the company to raise prices, coupled with the positive effects of capacity expansion and recent acquisitions. Wuxi Biologics Cayman, Inc., a contract development and manufacturing organization for biological drugs in China, boosted the Fund’s returns within the Health Care sector. Wuxi’s share price accelerated amid the company’s strong operating performance and growth outlook supported by strong demand, market share gains, capacity expansion, and a strong pipeline of compounds likely to translate into significant manufacturing contracts in the future. Please refer to the Global Markets Review and Outlook relating to the Fund beginning on page 32 for additional information.

Semiannual Report

June 30, 2018

Emerging Markets Small Cap Growth Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018
	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception
Class N(a)		(9.49	)%		6.22	%		2.10	%		7.03	%		10.54	%
Class I(a)		(9.34	)		6.52			2.42			7.37			10.86
MSCI Emerging Markets Small Cap Index (net)(a)		(8.45	)		5.64			2.55			4.32			4.75
Institutional Class(b)		(9.28	)		6.63			2.51			7.46			8.29
MSCI Emerging Markets Small Cap Index (net)(b)		(8.45	)		5.64			2.55			4.32			3.48

(a)	Since inception is for the period from October 24, 2011 (Commencement of Operations) to June 30, 2018.
(b)	Since inception is for the period from December 20, 2012 (Commencement of Operations) to June 30, 2018.

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. These risks may be magnified when investing in emerging markets. 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 & 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 index that is designed to measure the equity market performance of emerging markets. This index approximates the minimum possible dividend reinvestment by deducting for the highest possible withholding tax rates of those markets.

Sector Diversification (Unaudited)

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

June 30, 2018

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	*Common Stocks*

	*Emerging Asia—81.0%*
	Cambodia—0.5%
	NagaCorp, Ltd. (Hotels, restaurants & leisure)		2,742,000	$	2,483
	China—29.8%
	3SBio, Inc. (Biotechnology)		2,954,000		6,675
*	51job, Inc.—ADR (Professional services)		69,707		6,806
*	A-Living Services Co. Ltd. (Commercial \|services & supplies)		1,005,500		1,833
	Angel Yeast Co., Ltd. (Food products)		497,185		2,669
*	Baozun, Inc.—ADR (Internet software & services)		105,135		5,751
*	China Education Group Holdings, Ltd. (Diversified consumer services)		2,014,000		3,377
	China Everbright Greentech Ltd. (Independent power & renewable electricity producers)		2,090,554		2,180
	China Lilang, Ltd. (Textiles, apparel & luxury goods)		1,243,000		1,781
	China Maple Leaf Educational Systems, Ltd. (Diversified consumer services)		2,490,000		4,471
	China Resources Cement Holdings, Ltd. (Construction materials)		2,434,000		2,449
	China Suntien Green Energy Corporation, Ltd. Class “H” (Oil, gas & consumable fuels)		7,546,000		2,175
*	Chinasoft International, Ltd. (IT services)		4,054,000		3,152
	Chongqing Zhifei Biological Products Co., Ltd. (Biotechnology)		432,810		2,980
	CIFI Holdings Group Co., Ltd. (Real estate management & development)		5,194,000		3,290
	Dali Foods Group Co., Ltd. (Food products)		4,221,500		3,248
	Fu Shou Yuan International Group, Ltd. (Diversified consumer services)		3,350,000		3,770
	Fuyao Glass Industry Group Co. Ltd. Class “H” (Auto components)		484,800		1,638
	Greentown Service Group Co., Ltd. (Commercial services & supplies)		3,218,000		2,913
	Hangzhou Tigermed Consulting Co., Ltd. (Life sciences tools & services)		293,115		2,729
*	Health and Happiness H&H International Holdings, Ltd. (Food products)		594,000		4,092
	Hua Hong Semiconductor Ltd. (Semiconductors & semiconductor equipment)		1,563,600		5,344
*	Huifu Payment Ltd. (IT services)		2,145,600		1,860
*	HUYA, Inc.—ADR (Internet software & services)		31,788		1,045
	Jiangsu Yangnong Chemical Co., Ltd. (Chemicals)		294,223		2,479
	JNBY Design, Ltd. (Textiles, apparel & luxury goods)		902,000		2,061
	Kingdee International Software Group Co., Ltd. (Software)		5,784,000		5,891
	Kingsoft Corporation, Ltd. (Software)		411,000		1,240
	KWG Property Holding, Ltd. (Real estate management & development)		1,393,500		1,741



	Issuer	Shares		Value

	*Common Stocks—(continued)*

	*Emerging Asia—(continued)*
	China—(continued)
	Lonking Holdings, Ltd. (Machinery)		3,395,000	$	1,555
*	Noah Holdings, Ltd.—ADR (Capital markets)		60,303		3,145
*	Ping An Healthcare and Technology Co. Ltd. (Health care technology)		420,900		2,680
	Shanghai Jinjiang International Hotels Development Co., Ltd. (Hotels, restaurants & leisure)		338,103		1,884
	Silergy Corporation (Semiconductors & semiconductor equipment)		112,000		2,722
	SSY Group, Ltd. (Pharmaceuticals)		3,410,000		3,776
	Tianneng Power International, Ltd. (Auto components)		1,356,000		2,105
*	Towngas China Co., Ltd. (Gas utilities)		1,474,000		1,426
	Travelsky Technology, Ltd. Class “H” (IT services)		251,000		729
*	Wuxi Biologics Cayman, Inc. (Life sciences tools & services)		418,000		4,637
	Xiabuxiabu Catering Management China Holdings Co. Ltd. (Hotels, restaurants & leisure)		1,991,500		4,374
	Yantai Jereh Oilfield Services Group Co., Ltd. (Energy equipment & services)		817,476		2,000
	Yihai International Holding, Ltd. (Food products)		1,290,000		2,451
	Yuzhou Properties Co., Ltd. (Real estate management & development)		5,231,000		3,074
	Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (Pharmaceuticals)		173,316		2,920
	Zhejiang Supor Cookware Co., Ltd. (Household durables)		436,272		3,381
	Zhejiang Weixing New Building Materials Co., Ltd. (Chemicals)		1,739,589		4,638
	Zhongsheng Group Holdings, Ltd. (Specialty retail)		1,222,500		3,660
					140,797
	India—17.7%
	Aarti Industries (Chemicals)		137,290		2,453
	APL Apollo Tubes, Ltd. (Metals & mining)		28,510		690
	Astral Polytechnik, Ltd. (Building products)		212,159		3,099
	Biocon, Ltd. (Biotechnology)		216,865		1,955
	Cholamandalam Investment and Finance Co., Ltd. (Consumer finance)		141,727		3,135
	Cyient, Ltd. (Software)		338,765		3,792
	Dilip Buildcon Ltd. (Construction & engineering)		139,904		1,357
	Edelweiss Financial Services, Ltd. (Capital markets)		936,812		4,059
	Endurance Technologies Ltd. (Auto components)		102,449		1,868
	Escorts, Ltd. (Machinery)		256,883		3,266
	Graphite India, Ltd. (Electrical equipment)		197,432		2,421
	Gruh Finance, Ltd. (Thrifts & mortgage finance)		1,007,330		4,488

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Shares		Value

*Common Stocks—(continued)*

*Emerging Asia—(continued)*
India—(continued)
Hexaware Technologies, Ltd. (IT services)		479,007	$	3,204
IIFL Holdings Ltd. (Capital markets)		230,711		2,251
InterGlobe Aviation, Ltd. (Airlines)		114,950		1,830
Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		177,968		3,623
KEC International, Ltd. (Construction & engineering)		826,911		4,047
KEI Industries, Ltd. (Electrical equipment)		565,674		3,361
Minda Industries, Ltd. (Auto components)		91,489		1,689
MindTree, Ltd. (IT services)		167,818		2,415
NIIT Technologies, Ltd. (Software)		239,382		3,861
Oberoi Realty, Ltd. (Real estate management & development)		298,568		2,079
Page Industries, Ltd. (Textiles, apparel & luxury goods)		8,165		3,304
Pidilite Industries, Ltd. (Chemicals)		114,968		1,786
Radico Khaitan, Ltd. (Beverages)		761,819		4,593
Sterlite Technologies, Ltd. (Communications equipment)		482,405		1,939
Sundram Fasteners, Ltd. (Auto components)		225,051		2,053
Tata Elxsi, Ltd. (Software)		187,882		3,672
The Phoenix Mills, Ltd. (Real estate management & development)		316,114		3,052
Titan Co., Ltd. (Textiles, apparel & luxury goods)		168,120		2,152
				83,494
Indonesia—1.3%
PT Ace Hardware Indonesia Tbk (Specialty retail)		39,830,700		3,530
PT Bank Tabungan Negara Persero Tbk (Banks)		15,763,501		2,690
				6,220
Malaysia—3.9%
Dialog Group Bhd (Energy equipment & services)		3,564,200		2,722
Hartalega Holdings Bhd (Health care equipment & supplies)		2,452,300		3,639
Hong Leong Bank Bhd (Banks)		731,200		3,297
Inari Amertron Bhd (Electronic equipment, instruments & components)		4,710,400		2,626
My EG Services Bhd (IT services)		3,890,700		928
Top Glove Corporation Bhd (Health care equipment & supplies)		1,789,600		5,366
				18,578
Philippines—0.8%
Bloomberry Resorts Corporation (Hotels, restaurants & leisure)		7,463,900		1,362
Jollibee Foods Corporation (Hotels, restaurants & leisure)		439,080		2,165
				3,527



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	South Korea—12.3%
	Aekyung Industrial Co., Ltd. (Household products)		7,760	$	516
*	Cafe24 Corporation (Internet software & services)		19,625		3,155
	Cosmax, Inc. (Personal products)		36,678		5,347
	Dentium Co., Ltd. (Health care equipment & supplies)		45,028		3,602
	Douzone Bizon Co., Ltd. (Software)		49,011		2,724
	Fila Korea, Ltd. (Textiles, apparel & luxury goods)		135,520		4,078
	Hana Tour Service, Inc. (Hotels, restaurants & leisure)		18,072		1,416
*	Hugel, Inc. (Biotechnology)		5,752		2,487
	Koh Young Technology, Inc. (Semiconductors & semiconductor equipment)		42,371		3,874
	Korea Investment Holdings Co., Ltd. (Capital markets)		100,883		7,606
	LOTTE Fine Chemical Co., Ltd. (Chemicals)		36,199		2,110
	Medy-Tox, Inc. (Biotechnology)		6,820		4,689
	Modetour Network, Inc. (Hotels, restaurants & leisure)		103,575		2,526
	Orion Corporation (Food products)		49,094		6,555
	POSCO Chemtech Co., Ltd. (Construction materials)		33,764		1,330
	SKCKOLONPI, Inc. (Chemicals)		69,974		3,104
	WONIK IPS Co., Ltd. (Semiconductors & semiconductor equipment)		114,238		2,877
					57,996
	Taiwan—9.5%
	ASPEED Technology, Inc. (Semiconductors & semiconductor equipment)		125,000		3,273
	Chailease Holding Co., Ltd. (Diversified financial services)		1,504,000		4,919
	Chroma ATE, Inc. (Electronic equipment, instruments & components)		811,000		4,354
	Eclat Textile Co., Ltd. (Textiles, apparel & luxury goods)		266,000		3,159
	Globalwafers Co., Ltd. (Semiconductors & semiconductor equipment)		437,000		7,235
	Gourmet Master Co., Ltd. (Hotels, restaurants & leisure)		128,622		1,243
*	Macronix International (Semiconductors & semiconductor equipment)		1,423,000		2,018
	TCI Co., Ltd. (Personal products)		417,000		6,426
	Voltronic Power Technology Corporation (Electrical equipment)		60,000		1,024
*	Wafer Works Corporation (Semiconductors & semiconductor equipment)		2,448,672		4,982
	Walsin Technology Corporation (Electronic equipment, instruments & components)		464,000		6,334
					44,967

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Common Stocks—(continued)

	Emerging Asia—(continued)
	Thailand—3.5%
	Bangkok Chain Hospital PCL (Health care providers & services)		5,703,200	$	2,631
	Beauty Community PCL (Specialty retail)		4,652,000		1,711
	Home Product Center PCL (Specialty retail)		8,231,900		3,334
	Indorama Ventures PCL (Chemicals)		2,901,010		4,790
	Tisco Financial Group PCL (Banks)		818,500		2,073
	TOA Paint Thailand PCL (Chemicals)		1,596,700		1,832
					16,371
	Vietnam—1.7%
*	Hoa Phat Group JSC (Metals & mining)		1,853,362		3,087
	PetroVietnam Gas JSC (Gas utilities)		559,560		2,146
	Vietjet Aviation JSC (Airlines)		423,540		2,607
					7,840

	Emerging Europe, Mid-East, Africa—7.7%
	Kenya—1.2%
	Safaricom, Ltd. (Wireless telecommunication services)		19,691,700		5,710
	Poland—1.7%
*	Dino Polska S.A. (Food & staples retailing)		205,206		5,666
	ING Bank Slaski S.A. (Banks)		47,726		2,275
					7,941
	Romania—0.8%
	Banca Transilvania S.A. (Banks)		5,965,371		3,582
	Russia—0.6%
	TCS Group Holding plc—GDR (Banks)		150,200		3,093
	South Africa—2.3%
	AVI, Ltd. (Food products)		218,554		1,726
	Clicks Group, Ltd. (Food & staples retailing)		183,907		2,626
	JSE, Ltd. (Capital markets)		265,591		3,130
	Mr Price Group, Ltd. (Specialty retail)		130,219		2,137
	Santam, Ltd. (Insurance)		56,120		1,164
					10,783
	United Arab Emirates—1.1%
	NMC Health plc (Health care providers & services)		113,233		5,329

	Emerging Latin America—7.7%
	Argentina—0.6%
	Grupo Supervielle S.A.—ADR (Banks)		251,766		2,664
	Brazil—4.3%
*	Construtora Tenda S.A. (Household durables)		239,336		1,469
	CVC Brasil Operadora e Agencia de Viagens S.A. (Hotels, restaurants & leisure)		216,600		2,526
	Iochpe-Maxion S.A. (Machinery)		401,800		2,168
	IRB Brasil Resseguros S.A. (Insurance)		171,200		2,136
	Linx S.A. (Software)		453,500		2,071
	Localiza Rent a Car S.A. (Road & rail)		584,195		3,577
	Magazine Luiza S.A. (Multiline retail)		104,300		3,444
	Tegma Gestao Logistica S.A. (Road & rail)		359,100		1,428

	Shares or
	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Emerging Latin America—(continued)
Brazil—(continued)
Via Varejo S.A. (Specialty retail)		334,800	$	1,607
				20,426
Chile—0.3%
Sociedad Matriz del Banco de Chile S.A. Class “B” (Banks)		2,480,899		1,192
Mexico—2.1%
Banco del Bajio S.A. (Banks)		2,494,200		5,244
Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (Transportation infrastructure)		339,100		1,771
Grupo Cementos de Chihuahua S.A.B. de C.V. (Construction materials)		484,000		3,133
				10,148
Peru—0.4%
Cia de Minas Buenaventura SAA—ADR (Metals & mining)		140,827		1,920
Total Common Stocks—96.4% (cost $438,237)				455,061

Preferred Stocks
Brazil—1.0%
Banco ABC Brasil S.A. (Banks)		183,200		712
Metalurgica Gerdau S.A. (Metals & mining)		1,573,400		2,509
Randon Participacoes S.A. (Machinery)		977,500		1,556
				4,777
Total Preferred Stocks—1.0% (cost $7,028)				4,777

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $9,844, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25		$9,844		9,844
Total Repurchase Agreement—2.1% (cost $9,844)				9,844
Total Investments—99.5% (cost $455,109)				469,682
Cash and other assets, less liabilities—0.5%				2,269
Net assets—100.0%			$	471,951

ADR = American Depository Receipt

GDR = Global Depository Receipt

* = Non-income producing security

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Emerging Markets Small Cap Growth Fund

Portfolio of Investments, June 30, 2018 (unaudited)

At June 30, 2018, the Fund’s Portfolio of Investments includes the following industry categories (as a percentage of long-term investments):

Information Technology	20.2%
Consumer Discretionary	18.6%
Financials	13.7%
Health Care	12.2%
Industrials	10.1%
Consumer Staples	10.0%
Materials	8.3%
Real Estate	2.9%
Energy	1.5%
Utilities	1.3%
Telecommunication Services	1.2%
Total	100.0%

At June 30, 2018, the Fund’s Portfolio of Investments includes the following currency categories (as a percentage of long-term investments):

Hong Kong Dollar	21.3%
Indian Rupee	18.2%
South Korean Won	12.6%
New Taiwan Dollar	10.4%
Yuan Renminbi	5.6%
Brazilian Real	5.5%
U.S. Dollar	5.3%
Malaysian Ringgit	4.0%
Thai Baht	3.6%
South African Rand	2.3%
Mexican Peso	2.2%
Polish Zloty	1.7%
Viet Nam Dong	1.7%
Indonesian Rupiah	1.4%
Kenyan Shilling	1.2%
British Pound Sterling	1.2%
All Other Currencies	1.8%
Total	100.0%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Fixed Income Market Review and Outlook

Investment-grade bonds declined 1.62% during the first half of 2018, as interest rates rose and risk spreads widened. While the combination of rising interest rates and increasing risk spreads is not unprecedented, risk spreads increased by a magnitude that was larger than any other half-year period when interest rates rose simultaneously over the past 30 years.

The Federal Open Market Committee (“FOMC”) increased policy rates twice during the past six months, and short-term interest rates have risen in coordination with actual and perceived FOMC rate hikes. The Fed Funds futures market carried an implied probability that the FOMC will increase the federal funds rate two additional times during calendar year 2018: in September and in December.

Meanwhile, the FOMC has simultaneously reduced its balance sheet and purchased Treasury and agency mortgage-backed securities (“MBS”). Although the Fed has ended its formal quantitative easing programs, the FOMC continues to purchase agency MBS as it receives principal and interest payments from its balance sheet holdings, a practice known as “FedTrade.” The pace of purchases has slowed considerably since the FOMC began its program to reduce the size of the balance sheet. Beginning in July 2018, the FOMC will allow the balance sheet to shrink by no more than $40 billion per month, and that amount is $10 billion more than the pace of reductions during the second quarter of 2018. Recently released FOMC minutes revealed that reinvestment purchases of agency MBS are projected to fall to zero beginning in the fourth quarter of 2018.

Longer-term Treasury rates rose year-to-date, but they rose by a smaller magnitude than short-term rates rose. As a result, the yield curve flattened and several measures indicated that the yield curve was at risk of inverting (when shorter-term rates are higher than longer-term rates). The yield curve’s dynamics can be partially explained by the FOMC’s simultaneous actions of raising the federal funds rate (short-term rates rose) and purchasing Treasury and agency MBS (longer-term rates suppressed). U.S. Treasury Inflation-Protected Securities (“TIPS”) outperformed similar-maturity fixed-rate Treasury notes and bonds as market-implied inflation expectations increased year-to-date.

Agency MBS experienced negative total returns and increasing risk spreads. The best-performing segments of the market were higher-coupon 30-year pools. Segments that the FOMC targeted in “FedTrade,” such as 30-year 3.0%, 3.5%, and 4.0% pools, were among the weakest-performing segments of the MBS market year-to-date.

Corporate bonds also experienced negative total returns and increasing risk spreads year-to-date. While risk spreads widened, the most speculative areas of the market, specifically B- and CCC-rated bonds, generated gains and outperformed higher-quality securities. Corporate bonds tied to emerging markets underperformed those domiciled in domestic markets. The most distinguishable trend in the corporate bond market during the first half of 2018 was the magnitude by which longer-term corporate bonds underperformed shorter-term corporate bonds. Corporate bond curves steepened year-to-date, which may be an indication that credit market participants are demanding higher risk premiums to protect against the rising-rate regime.

We believe that the FOMC will continue to raise the federal funds rate at a measured pace over the next 12 months. The U.S. economy is growing; forecasters predict a real GDP growth rate of approximately 2.5% to 3.0% during 2018. In addition, the U.S. labor market is adding jobs and the unemployment rate is at 3.9%. Estimates of wage inflation are roughly 3.0%, while estimates of core personal consumption expenditures have been roughly 2.0%. Macroeconomic theory predicts that a robust labor market creates wage inflation, which in turn spurs broader inflation. We believe that the FOMC will raise rates so long as inflationary pressures do not deteriorate.

We believe that the FOMC’s plans to reduce the size of the Fed’s balance sheet will be executed with little disruption to the markets. We believe this is attributable, in part, to strong communication efforts, adequate advance notice, and the absence of security sales to reduce the balance sheet. However, we believe the lower-coupon agency MBS that were purchased by the Fed will underperform higher-coupon alternatives when the FOMC ends its campaign of purchasing agency MBS.

U.S. TIPS have market-implied break-even inflation rates that are at levels within the FOMC’s stated target range of 2.0% to 2.5%. We believe TIPS are an attractive alternative to fixed-rate Treasuries to mitigate the effects of rising interest rates driven by accelerating inflationary pressures.

We believe that agency mortgage-backed securities and corporate bonds remain attractive relative to Treasuries over the intermediate to long term. Corporate risk premiums are at levels near their longer-term averages, and we believe opportunities remain after risk spreads increased year-to-date. Risk premiums of higher-coupon segments of the agency MBS market remain

Semiannual Report

June 30, 2018

Fixed Income Market Review and Outlook

attractive. In addition, we believe Treasuries are likely to struggle as the FOMC tightens the federal funds rate and reduces the scale of its asset purchases.

We believe that higher-coupon segments (30-year MBS coupon rates of 5.0% and above) 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 are in-the-money to refinance their loan. We believe this risk can be mitigated by focusing on pools comprised of borrowers that do not have the economic incentive to refinance their loans: low loan-balance pools.

We believe that there are opportunities in the corporate bond market as risk spreads increase to levels close to the Index’s longer-term average. We remain concerned about company-specific 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 leveraged buyout activity.

June 30, 2018

William Blair Funds

	Bond Fund

	The Bond Fund seeks to outperform the Bloomberg Barclays U.S. Aggregate 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 2.28% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark, the Bloomberg Barclays U.S. Aggregate Index (the “Index”), decreased 1.62%. Multiple factors detracted from the Fund’s performance relative to the Index year-to-date. The Fund experienced negative selection results within its investment-grade corporate bond holdings, as the Fund was overweight to longer-maturity corporate bonds. The Fund held positions in long-maturity bonds issued by AbbVie, Inc., Citigroup, Inc., The Goldman Sachs Group, Inc., and Bank of America Corporation that detracted from performance. The Fund’s allocation to high yield corporate bonds also detracted, as higher-quality segments of the high yield market underperformed. The Fund’s sector allocation also detracted from performance, as the Fund emphasized corporate and agency mortgage-backed securities, and fixed-rate Treasuries outperformed those sectors year-to-date. There were a couple of factors that contributed to the Fund’s relative performance year-to-date. The Fund experienced favorable selection results from its agency mortgage-backed securities holdings, as the Fund was overweight to higher-coupon segments that performed well year-to-date. An allocation to U.S. Treasury Inflation-Protected Securities (TIPS) was also additive to performance. Finally, positions in bonds issued by AT&T, Inc., JBS, and Jaguar Land Rover Automotive plc experienced gains and contributed to results. Please refer to the Fixed Income Market Review and Outlook relating to the Fund beginning on page 84 for additional information.

Semiannual Report

June 30, 2018

Bond Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(2.28	)%		(0.62	)%		1.74	%		2.54	%		4.41	%
Class I		(2.22	)		(0.37	)		1.97			2.73			4.59
Institutional Class		(2.19	)		(0.29	)		2.04			2.83			4.72
Bloomberg Barclays U.S. Aggregate Index		(1.62	)		(0.40	)		1.72			2.27			3.72

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 & 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 Bloomberg Barclays U.S. Aggregate Index indicates broad intermediate government/corporate bond market performance.

This report identifies the Fund’s investments on June 30, 2018. 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.

June 30, 2018

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

U.S. Government and U.S. Government Agency—50.9%

U.S. Treasury Inflation Indexed Notes/Bonds—5.7%
U.S. Treasury Inflation Indexed Bond, 3.875%, due 4/15/29	$	22,706	$	29,963
U.S. Treasury—0.1%
U.S. Treasury Floating Rate Note, 3M Treasury money market yield + 0.070%, 1.979%, due 4/30/19(a)		500		500
Federal Home Loan Mortgage Corp. (FHLMC)—16.0%
#B13747, 5.000%, due 4/1/19		30		30
#G12113, 5.500%, due 5/1/21		116		118
#J02986, 6.500%, due 7/1/21		8		8
#G30255, 7.000%, due 7/1/21		1		1
#G30243, 6.000%, due 12/1/21		1		1
#G12720, 5.500%, due 6/1/22		19		20
#D95621, 6.500%, due 7/1/22		421		441
#G16026, 4.000%, due 11/1/25		6,112		6,299
#G14150, 4.500%, due 4/1/26		1,194		1,248
#J16051, 4.500%, due 7/1/26		668		695
#G02210, 7.000%, due 12/1/28		52		58
#G02183, 6.500%, due 3/1/30		13		15
#G01728, 7.500%, due 7/1/32		85		99
#C01385, 6.500%, due 8/1/32		69		78
#C01623, 5.500%, due 9/1/33		79		86
#A15039, 5.500%, due 10/1/33		2		2
#A17603, 5.500%, due 1/1/34		1,836		2,036
#G01843, 6.000%, due 6/1/35		15		17
#G03711, 6.000%, due 6/1/37		531		587
#G04126, 6.000%, due 6/1/37		1,607		1,798
#A62858, 6.500%, due 7/1/37		94		106
#G03170, 6.500%, due 8/1/37		171		190
#A66843, 6.500%, due 10/1/37		685		774
#G07837, 6.500%, due 2/1/38		2,202		2,497
#G04053, 5.500%, due 3/1/38		629		689
#A78138, 5.500%, due 6/1/38		275		305
#G04641, 6.000%, due 6/1/38		1,179		1,306
#G04466, 5.500%, due 7/1/38		12,601		13,976
#G04544, 6.000%, due 8/1/38		699		775
#A81799, 6.500%, due 9/1/38		353		393
#G06964, 5.500%, due 11/1/38		1,848		2,048
#G05723, 6.500%, due 11/1/38		1,118		1,262
#G07480, 6.000%, due 5/1/39		1,121		1,235
#G60366, 6.000%, due 10/1/39		13,679		15,185
#G05810, 5.000%, due 2/1/40		10,931		11,746
#G05875, 5.500%, due 2/1/40		499		547
#G61450, 6.000%, due 4/1/40		13,143		14,787
#C03665, 9.000%, due 4/1/41		453		522
#G06583, 5.000%, due 6/1/41		1,468		1,585
Total FHLMC Mortgage Obligations				83,565
Federal National Mortgage Association (FNMA)—29.1%
#788424, 5.500%, due 9/1/19		3		3
#900725, 6.000%, due 8/1/21		17		17
#893325, 7.000%, due 9/1/21		5		5
#949589, 5.500%, due 8/1/22		1,437		1,488


Issuer	Principal Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#949592, 6.000%, due 8/1/22	$	2,184	$	2,281
#AC5410, 4.500%, due 10/1/24		246		256
#AL8529, 6.000%, due 11/1/24		3,342		3,495
#AC9560, 5.000%, due 1/1/25		1,005		1,029
#255956, 5.500%, due 10/1/25		11		12
#AL2853, 4.500%, due 6/1/26		5,136		5,366
#AL9730, 4.500%, due 2/1/27		1,643		1,716
#AL2134, 4.000%, due 7/1/27		244		251
#AL9857, 4.000%, due 2/1/29		10,549		10,866
#252925, 7.500%, due 12/1/29		1		1
#AD0729, 7.500%, due 12/1/30		8,124		9,309
#535977, 6.500%, due 4/1/31		6		7
#253907, 7.000%, due 7/1/31		1		1
#545339, 6.500%, due 11/1/31		34		38
#587849, 6.500%, due 11/1/31		7		8
#618547, 6.500%, due 11/1/31		4,189		4,658
#545437, 7.000%, due 2/1/32		41		46
#545759, 6.500%, due 7/1/32		348		390
#545869, 6.500%, due 7/1/32		1,121		1,261
#670385, 6.500%, due 9/1/32		563		629
#254548, 5.500%, due 12/1/32		34		37
#703391, 5.000%, due 5/1/33		129		139
#708993, 5.000%, due 6/1/33		22		24
#730131, 5.000%, due 8/1/33		48		52
#741850, 5.500%, due 9/1/33		379		414
#555800, 5.500%, due 10/1/33		38		41
#756153, 5.500%, due 11/1/33		427		467
#AL3455, 5.500%, due 11/1/33		5,331		5,915
#AL3401, 5.500%, due 2/1/34		712		789
#763798, 5.500%, due 3/1/34		68		75
#725611, 5.500%, due 6/1/34		83		90
#745563, 5.500%, due 8/1/34		502		550
#794474, 6.000%, due 10/1/34		39		43
#745092, 6.500%, due 7/1/35		269		300
#357944, 6.000%, due 9/1/35		13		15
#AD0979, 7.500%, due 10/1/35		63		72
#745349, 6.500%, due 2/1/36		217		245
#888305, 7.000%, due 3/1/36		9		10
#895637, 6.500%, due 5/1/36		60		66
#831540, 6.000%, due 6/1/36		17		18
#893318, 6.500%, due 8/1/36		10		12
#310037, 6.500%, due 10/1/36		145		162
#831926, 6.000%, due 12/1/36		530		591
#902974, 6.000%, due 12/1/36		143		157
#AB0265, 6.000%, due 2/1/37		11,206		12,603
#938440, 6.000%, due 7/1/37		74		82
#948689, 6.000%, due 8/1/37		162		179
#888703, 6.500%, due 8/1/37		3,315		3,776
#AL0904, 5.500%, due 1/1/38		105		115
#889371, 6.000%, due 1/1/38		2,466		2,777
#962058, 6.500%, due 3/1/38		1,107		1,257
#934006, 6.500%, due 9/1/38		284		322
#986856, 6.500%, due 9/1/38		122		140
#991911, 7.000%, due 11/1/38		172		196
#AL3775, 5.000%, due 1/1/39		1,475		1,596
#AD0752, 7.000%, due 1/1/39		517		589
#AA7611, 5.000%, due 5/1/39		599		643

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Bond Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating	Principal Amount			Value

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

Federal National Mortgage Association (FNMA)—(continued)
#AA8443, 5.000%, due 6/1/39		$	160		$	173
#AC1619, 5.500%, due 8/1/39			374			408
#AD0315, 6.500%, due 8/1/39			1,832			2,068
#AC9569, 5.000%, due 2/1/40			1,267			1,371
#AD0761, 5.000%, due 2/1/40			206			223
#AD1594, 5.000%, due 2/1/40			213			230
#932751, 5.000%, due 4/1/40			3,042			3,292
#AD7137, 5.500%, due 7/1/40			3,720			4,127
#BM1689, 5.500%, due 8/1/40			3,130			3,433
#AH0955, 5.000%, due 12/1/40			3,863			4,168
#AH5585, 5.000%, due 2/1/41			141			152
#AI1201, 5.500%, due 4/1/41			4,658			5,068
#AL5815, 5.500%, due 4/1/41			2,808			3,117
#BM3525, 6.000%, due 4/1/41			13,245			14,954
#AI6071, 5.000%, due 6/1/41			1,339			1,449
#AI4222, 5.000%, due 7/1/41			105			114
#AL0672, 5.000%, due 7/1/41			2,332			2,522
#AL0913, 6.000%, due 7/1/41			1,415			1,567
#AL9226, 5.500%, due 12/1/41			14,959			16,605
#AL9225, 6.000%, due 1/1/42			6,970			7,854
#AK2733, 5.000%, due 2/1/42			1,548			1,675
Total FNMA Mortgage Obligations						152,262

Asset-Backed Securities—0.8%
Tesla Auto Lease Trust—144A, 2018-A, Tranche D, 3.300%, 5/20/20	Baa2		500			499
Centre Point Funding LLC—144A, 2012-2A, Tranche 1, 2.610%, 8/20/21	Baa1		1,677			1,658
SLM Private Education Loan Trust— 144A, 2011-A, Tranche A3, 1M USD LIBOR + 2.500%, 4.573%, 1/15/43, VRN	AAA		2,000			2,050
Total Asset-Backed Securities						4,207

Corporate Obligations—47.5%
Boston Properties L.P., 5.875%, due 10/15/19	A-		3,000			3,091
Ford Motor Credit Co. LLC, 8.125%, due 1/15/20	BBB		4,000			4,285
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20	A+		4,000			4,192
UBS Group Funding Switzerland AG, 5 year USD ICE Swap + 5.497%, 6.875%, due 3/22/21, VRN	BBB-		2,000	��		2,054
JBS USA LUX SA / JBS USA Finance, Inc.—144A, 7.250%, due 6/1/21	BB-		3,000			3,045
O’Reilly Automotive, Inc., 4.625%, due 9/15/21	Baa1		2,943			3,042
Fresenius Medical Care US Finance II, Inc.—144A, 5.875%, due 1/31/22	BBB-		2,760			2,928
Masco Corporation, 5.950%, due 3/15/22	BBB		4,050			4,336


Issuer	NRSRO Rating	Principal Amount		Value

Corporate Obligations—(continued)
Discover Financial Services, 5.200%, due 4/27/22	BBB+	$	3,000	$	3,132
Triumph Group, Inc., 5.250%, due 6/1/22	B-		2,500		2,419
Embraer S.A., 5.150%, due 6/15/22	BBB		3,400		3,504
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22	Baa1		4,900		5,016
Navient Corporation, 5.500%, due 1/25/23	BB		2,000		1,973
Jaguar Land Rover Automotive plc- 144A, 5.625%, due 2/1/23	BB+		3,225		3,281
Toll Brothers Finance Corporation, 4.375%, due 4/15/23	BBB-		3,875		3,812
Itau Unibanco Holding S.A.—144A, 5.125%, due 5/13/23	Ba3		2,500		2,481
Wells Fargo & Co., 4.480%, due 1/16/24	A		5,000		5,106
Lennar Corporation, 4.500%, due 4/30/24	BB+		2,450		2,367
Banco Inbursa S.A. Institucion de Banca Multiple—144A, 4.125%, due 6/6/24	BBB+		2,500		2,419
Grupo Bimbo S.A.B. de C.V.—144A, 3.875%, due 6/27/24	BBB		2,500		2,451
Iron Mountain, Inc., 5.750%, due 8/15/24	B		575		565
Synchrony Financial, 4.250%, due 8/15/24	BBB-		5,000		4,908
SBA Communications Corporation, 4.875%, due 9/1/24	B+		3,000		2,877
HSBC Holdings plc, 5 year USD ICE Swap + 3.705%, 6.375%, due 9/17/24, VRN	BBB		5,000		4,958
JPMorgan Chase & Co., 3M USD LIBOR + 3.330%, 6.100%, due 10/1/24, VRN	BBB		4,265		4,409
BNP Paribas S.A., 4.250%, due 10/15/24	A		4,000		3,952
Owens Corning, 4.200%, due 12/1/24	BBB		5,015		4,955
Cemex S.A.B. de C.V.—144A, 5.700%, due 1/11/25	BB		3,000		2,973
Centene Corporation, 4.750%, due 1/15/25	BB+		2,000		1,995
Penske Truck Leasing Co. L.P. / PTL Finance Corporation—144A, 3.950%, due 3/10/25	BBB+		3,800		3,761
Booz Allen Hamilton, Inc.—144A, 5.125%, due 5/1/25	B+		3,000		2,940
Simon Property Group L.P., 3.300%, due 1/15/26	A		4,500		4,322
Penske Automotive Group, Inc., 5.500%, due 5/15/26	B+		2,000		1,965
Vale Overseas, Ltd., 6.250%, due 8/10/26	BBB+		3,025		3,284
Post Holdings, Inc.—144A, 5.000%, due 8/15/26	B		3,000		2,805

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Bond Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating	Principal Amount		Value

Corporate Obligations—(continued)
United Rentals North America, Inc., 5.875%, due 9/15/26	BB	$	2,500	$	2,534
Xylem, Inc., 3.250%, due 11/1/26	BBB		1,950		1,836
Glencore Funding LLC—144A, 4.000%, due 3/27/27	BBB+		5,000		4,728
Hess Corporation, 4.300%, due 4/1/27	BBB-		5,310		5,138
The Chemours Co., 5.375%, due 5/15/27	BB-		4,000		3,880
Sirius XM Radio, Inc.—144A, 5.000%, due 8/1/27	BB		2,500		2,353
Lear Corporation, 3.800%, due 9/15/27	BBB-		3,000		2,822
L Brands, Inc., 5.250%, due 2/1/28	BB+		3,400		3,026
Motorola Solutions, Inc., 4.600%, due 2/23/28	BBB-		5,250		5,232
Anheuser-Busch InBev Worldwide, Inc., 4.000%, due 4/13/28	A-		4,600		4,599
The Kroger Co., 8.000%, due 9/15/29	Baa1		4,100		5,153
Yum! Brands, Inc., 6.875%, due 11/15/37	B+		4,000		3,960
ConocoPhillips, 6.500%, due 2/1/39	A-		4,125		5,285
Petroleos Mexicanos, 6.500%, due 6/2/41	BBB+		2,500		2,357
Express Scripts Holding Co., 6.125%, due 11/15/41	BBB+		4,200		4,732
Citigroup, Inc., 5.875%, due 1/30/42	A		4,000		4,636
Bank of America Corporation, 5.875%, due 2/7/42	A+		4,000		4,692
Morgan Stanley, 6.375%, due 7/24/42	A		3,248		3,958
Cox Communications, Inc.—144A, 4.700%, due 12/15/42	BBB+		4,300		3,779
Mexichem S.A.B. de C.V.—144A, 5.875%, due 9/17/44	BBB		3,500		3,238
AbbVie, Inc., 4.700%, due 5/14/45	A-		5,000		4,965
ERP Operating L.P., 4.500%, due 6/1/45	A		4,500		4,558


Issuer	NRSRO Rating	Principal Amount		Value

Corporate Obligations—(continued)
The Goldman Sachs Group, Inc., 4.750%, due 10/21/45	A	$	3,500	$	3,472
Apple, Inc., 4.650%, due 2/23/46	AA+		5,000		5,399
PepsiCo, Inc., 4.450%, due 4/14/46	A+		4,500		4,732
Verizon Communications, Inc., 4.125%, due 8/15/46	A-		5,000		4,306
BAT Capital Corporation—144A, 4.540%, due 8/15/47	BBB+		4,500		4,218
Brookfield Finance, Inc., 4.700%, due 9/20/47	A-		5,250		4,987
CVS Health Corporation, 5.050%, due 3/25/48	Baa1		5,000		5,108
Microsoft Corporation, 4.750%, due 11/3/55	AAA		4,500		5,130
Union Pacific Corporation, 4.800%, due 9/10/58	A-		5,300		5,506
Petrobras Global Finance BV, 6.850%, due 6/5/15	Ba2		3,325		2,806
Total Corporate Obligations					248,728
Total Investments—99.2% (cost $528,265)					519,225
Cash and other assets, less liabilities—0.8%					4,079
Net assets—100.0%				$	523,304

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

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.

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 $218.

Centrally Cleared Credit Default Swaps

Reference Entity

Buy/Sell
Protection

Fixed Deal
Pay Rate

Payment
Frequency

Maturity
Date

Cleared
Exchange

Notional
Amount
(in thousands)

Upfront
Payment
Received
(Paid)

Value

Unrealized
Appreciation
(Depreciation)

CDX.IG-30

Buy

1.000%

June 2023

Intercontinental
Exchange

$25,000

$(434)

$(378)

$56

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

	Income Fund

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

	AN OVERVIEW FROM THE PORTFOLIO MANAGER

Christopher T. Vincent	The William Blair Income Fund (Class N shares) posted a 1.12% decrease, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark, the Bloomberg Barclays Intermediate Government/Credit Bond Index (the “Index”), decreased 0.97%. Multiple factors detracted from the Fund’s performance relative to the Index year-to-date. An overweight position to bonds issued by companies domiciled in emerging markets hindered results. The Fund also experienced negative selection results from its corporate bond holdings, and those effects stemmed from the Fund’s emphasis on corporate bonds with longer maturities. The Fund held positions in longer-maturity bonds issued by BNP Paribas S.A. and AbbVie, Inc. that hindered results. There were a couple of factors that contributed to relative performance year-to-date. Interest rate positioning contributed to results, as the Fund had less duration than the Index and rates rose. The Fund’s positioning in high-coupon agency mortgage-backed securities and U.S. Treasury Inflation-Protected Securities (TIPS) were also additive. Please refer to the Fixed Income Market Review and Outlook relating to the Fund beginning on page 84 for additional information.

June 30, 2018

William Blair Funds

Income Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018
	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		(1.12	)%		(0.61	)%		0.83	%		1.41	%		2.88	%
Class I		(1.03	)		(0.42	)		1.09			1.64			3.11
Bloomberg Barclays Intermediate Government/ Credit Bond Index		(0.97	)		(0.58	)		1.16			1.60			3.08

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 Bloomberg 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, 2018

Income Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

U.S. Government and U.S. Government Agency—61.5%

U.S. Treasury Inflation Indexed Notes/Bonds—2.8%
U.S. Treasury Inflation Indexed Bond, 3.875%, due 4/15/29	$	1,371	$	1,810
Federal Home Loan Mortgage Corp. (FHLMC)—12.3%
#J05444, 6.000%, due 8/1/22		25		26
#E02388, 6.000%, due 9/1/22		43		45
#E02490, 6.000%, due 4/1/23		53		55
#J13022, 4.000%, due 9/1/25		246		254
#J16051, 4.500%, due 7/1/26		692		720
#A17603, 5.500%, due 1/1/34		531		589
#G01705, 5.500%, due 6/1/34		983		1,091
#A45790, 7.500%, due 5/1/35		119		132
#G04126, 6.000%, due 6/1/37		245		274
#G03201, 6.500%, due 6/1/37		141		157
#A66843, 6.500%, due 10/1/37		219		247
#G04564, 6.000%, due 12/1/37		202		224
#A81799, 6.500%, due 9/1/38		198		220
#G60366, 6.000%, due 10/1/39		1,020		1,132
#G05875, 5.500%, due 2/1/40		100		109
#G61450, 6.000%, due 4/1/40		1,000		1,125
#C03665, 9.000%, due 4/1/41		220		253
#G06583, 5.000%, due 6/1/41		1,156		1,248
Total FHLMC Mortgage Obligations				7,901
Federal National Mortgage Association (FNMA)—46.4%
#740847, 6.000%, due 10/1/18		1		1
#323501, 6.500%, due 1/1/19		1		1
#751313, 5.000%, due 3/1/19		16		16
#458147, 10.000%, due 8/15/20		2		2
#897937, 6.000%, due 8/1/21		129		133
#888555, 5.500%, due 9/1/21		736		750
#880991, 5.500%, due 1/1/22		59		61
#735574, 8.000%, due 3/1/22		50		52
#679253, 6.000%, due 10/1/22		207		226
FNR G93-19 SH, 1M LIBOR + 56.169%, 11.234%, due 4/25/23, VRN		11		13
#982885, 5.000%, due 5/1/23		239		249
#AL0955, 6.000%, due 5/1/23		142		147
#933985, 5.500%, due 8/1/23		148		154
#AL8529, 6.000%, due 11/1/24		2,848		2,979
#255956, 5.500%, due 10/1/25		34		36
#AH0971, 4.000%, due 12/1/25		370		382
#AL2853, 4.500%, due 6/1/26		561		587
#AL9730, 4.500%, due 2/1/27		887		927
#256639, 5.000%, due 2/1/27		7		8
#806458, 8.000%, due 6/1/28		81		89
#AL9857, 4.000%, due 2/1/29		7,469		7,693
#880155, 8.500%, due 7/1/29		188		210
#797846, 7.000%, due 3/1/32		51		52
#745519, 8.500%, due 5/1/32		53		60
#654674, 6.500%, due 9/1/32		49		54
#254693, 5.500%, due 4/1/33		6		6
#711736, 5.500%, due 6/1/33		77		84
#555531, 5.500%, due 6/1/33		55		60
#555591, 5.500%, due 7/1/33		9		10


Issuer	NRSRO Rating	Principal Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#AL3455, 5.500%, due 11/1/33		$	1,566	$	1,737
#776964, 5.000%, due 4/1/34			269		290
#725424, 5.500%, due 4/1/34			59		64
#888884, 5.500%, due 12/1/35			126		137
#888703, 6.500%, due 8/1/37			700		798
#928658, 6.500%, due 9/1/37			22		24
#AL6411, 7.000%, due 12/1/37			728		816
#962058, 6.500%, due 3/1/38			358		407
#991911, 7.000%, due 11/1/38			110		125
#AC9569, 5.000%, due 2/1/40			169		183
#BM1689, 5.500%, due 8/1/40			423		464
#AL5815, 5.500%, due 4/1/41			530		588
#BM3525, 6.000%, due 4/1/41			1,175		1,327
#AL9226, 5.500%, due 12/1/41			5,011		5,563
#AL9225, 6.000%, due 1/1/42			1,917		2,160
Total FNMA Mortgage Obligations					29,725

Asset-Backed Securities—1.6%
Capital One Multi-Asset Execution Trust, 2016-A1, Tranche A1, 1M LIBOR + 0.450%, 2.523%, 2/15/22, VRN	AAA		500		501
SLM Private Education Loan Trust—144A, 2011-A, Tranche A3, 1M USD LIBOR + 2.500%, 4.573%, 1/15/43, VRN	AAA		500		513
Total Asset-Backed Securities					1,014

Corporate Obligations—34.6%
JPMorgan Chase & Co., 3M USD LIBOR + 3.320%, 5.000%, due 7/1/19, VRN	BBB		500		503
Burlington Northern Santa Fe LLC, 4.700%, due 10/1/19	A+		650		665
Boston Properties L.P., 5.875%, due 10/15/19	A-		650		670
Citigroup, Inc., 2.450%, due 1/10/20	A		650		643
Branch Banking & Trust Co., 3M USD LIBOR + 0.450%, 2.798%, due 1/15/20, VRN	A1		500		502
Petroleos Mexicanos, 6.000%, due 3/5/20	BBB+		400		413
American Express Credit Corporation, 3M USD LIBOR + 0.730%, 3.049%, due 5/26/20, VRN	A2		500		504
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20	A+		600		629
Mitsubishi UFJ Financial Group, Inc., 2.950%, due 3/1/21	A1		575		569
HSBC Holdings plc, 3M USD LIBOR + 2.240%, 4.561%, due 3/8/21, VRN	AA-		500		523
Westpac Banking Corporation, 3M USD LIBOR + 1.000%, 3.355%, due 5/13/21, VRN	AA-		500		509

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Income Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating	Principal Amount		Value

Corporate Obligations—(continued)
Chevron Corporation, 3M USD LIBOR + 0.950%, 3.280%, due 5/16/21, VRN	Aa2	$	500	$	512
The Charles Schwab Corporation, 3M USD LIBOR + 0.320%, 2.649%, due 5/21/21, VRN	A		500		502
Capital One Financial Corporation, 4.750%, due 7/15/21	A-		650		672
Apple, Inc., 1.550%, due 8/4/21	AA+		650		623
Verizon Communications, Inc., 3.500%, due 11/1/21	A-		650		653
Lloyds Banking Group plc, 3.000%, due 1/11/22	A+		500		487
Vale Overseas, Ltd., 4.375%, due 1/11/22	BBB+		400		406
Embraer S.A., 5.150%, due 6/15/22	BBB		400		412
Bancolombia S.A., 5.125%, due 9/11/22	BBB-		400		411
Jones Lang LaSalle, Inc., 4.400%, due 11/15/22	Baa1		625		640
Toll Brothers Finance Corporation, 4.375%, due 4/15/23	BBB-		400		394
Ryder System, Inc., 3.750%, due 6/9/23	A-		500		500
Wells Fargo & Co., 4.480%, due 1/16/24	A		650		664
The Goldman Sachs Group, Inc., 4.000%, due 3/3/24	A		650		651
Grupo Bimbo S.A.B. de C.V.—144A, 3.875%, due 6/27/24	BBB		500		490
BNP Paribas S.A., 4.250%, due 10/15/24	A		650		642
AbbVie, Inc., 3.600%, due 5/14/25	A-		650		630
ERP Operating L.P., 3.375%, due 6/1/25	A		650		635
Intercontinental Exchange, Inc., 3.750%, due 12/1/25	A		650		646
Simon Property Group L.P., 3.300%, due 1/15/26	A		650		624
ConocoPhillips Co., 4.950%, due 3/15/26	A-		650		702
Brookfield Finance, Inc., 4.250%, due 6/2/26	A-		650		641
Amazon.com, Inc., 3.150%, due 8/22/27	AA-		650		624
Tencent Holdings, Ltd.—144A, 3.595%, due 1/19/28	A+		650		616
Motorola Solutions, Inc., 4.600%, due 2/23/28	BBB-		400		399
Anheuser-Busch InBev Worldwide, Inc., 4.000%, due 4/13/28	A-		650		650
Morgan Stanley, 3M USD LIBOR + 1.140%, 3.772%, due 1/24/29, VRN	A		650		627


Issuer	NRSRO Rating	Principal Amount			Value

Corporate Obligations—(continued)
The Kroger Co., 8.000%, due 9/15/29	Baa1	$	500		$	628
Total Corporate Obligations						22,211
Total Long-Term Investments—97.7% (cost $64,202)						62,661

Repurchase Agreement
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $690, collateralized by U.S. Treasury Note, 2.000%, due 4/30/24			690			690
Total Repurchase Agreement—1.1% (cost $690)						690

Commercial Paper
Societe Generale S.A., 1.815%, 7/2/18			600			600
Total Commercial Paper—0.9% (cost $600)						600
Total Investments—99.7% (cost $65,492)						63,951

Securities Sold, Not Yet Purchased

U.S. Government Agency—(7.6)%
Federal National Mortgage Association (FNMA)—(7.6)%
TBA, 2.500%, due 7/1/33			(5,000	)		(4,860	)
Total Securities Sold, Not Yet Purchased—(7.6)% (proceeds $4,834)						(4,860	)
Cash and other assets, less liabilities—7.9%						5,071
Net assets—100.0%					$	64,162

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

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.

TBA = To Be Announced—TBAs are mortgage-backed securities traded under delayed delivery commitments, settling after June 30, 2018. 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.

Semiannual Report

June 30, 2018

	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) posted a 0.30% increase, net of fees, for the six months ended June 30, 2018. By comparison, the Fund’s benchmark, the Bank of America/Merrill Lynch 1-Year U.S. Treasury Note Index, increased 0.65%. The Fund’s interest rate exposure hindered performance year-to-date, as the Fund had some exposure to short-term rates that rose higher than the Index. Positioning within mortgage-backed securities detracted from the Fund’s performance, as the Fund held positions in higher-coupon segments of the market that underperformed the Index. The Fund held positions in floating-rate corporate and asset-backed securities that contributed to results year-to-date. Please refer to the Fixed Income Market Review and Outlook relating to the Fund beginning on page 84 for additional information.

June 30, 2018

William Blair Funds

Low Duration Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception(a)
Class N		0.30	%		0.87	%		0.75	%		0.83	%		1.01	%
Class I		0.41			1.04			0.92			1.00			1.16
Institutional Class		0.44			0.97			0.96			1.05			1.27
Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index		0.65			0.92			0.64			0.49			0.47


(a)	Since inception is for the period from December 1, 2009 (Commencement of Operations) to June 30, 2018.

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 & 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.

Semiannual Report

June 30, 2018

Low Duration Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


	Principal
Issuer	Amount		Value

U.S. Government and U.S. Government Agency—47.7%

Federal Home Loan Mortgage Corp. (FHLMC)—13.7%
#E99684, 5.000%, due 10/1/18	$	9	$	9
#B11362, 5.500%, due 12/1/18		2		2
#B11849, 5.500%, due 1/1/19		5		5
#B13870, 4.500%, due 5/1/19		5		5
#G11604, 5.000%, due 7/1/19		5		5
#G11596, 5.500%, due 8/1/19		7		7
#B17294, 5.000%, due 11/1/19		27		27
#B19222, 4.500%, due 4/1/20		29		29
#J02537, 5.000%, due 9/1/20		14		15
#G11836, 5.500%, due 12/1/20		5		5
#G12113, 5.500%, due 5/1/21		41		42
#G12395, 6.000%, due 10/1/21		299		309
#E02322, 5.500%, due 5/1/22		17		18
#G12725, 6.000%, due 6/1/22		81		84
#G13124, 6.000%, due 12/1/22		187		194
#J06871, 5.500%, due 1/1/23		34		35
#J08450, 5.500%, due 7/1/23		26		26
#J08703, 5.500%, due 9/1/23		39		40
#C00351, 8.000%, due 7/1/24		37		40
#J11208, 5.000%, due 11/1/24		56		59
#G00363, 8.000%, due 6/1/25		54		57
#C80329, 8.000%, due 8/1/25		12		13
#G30348, 6.000%, due 7/1/27		739		808
#G04821, 8.500%, due 7/1/31		1,831		2,167
#G07837, 6.500%, due 2/1/38		1,195		1,354
#G04424, 6.000%, due 6/1/38		434		486
#G04641, 6.000%, due 6/1/38		1,383		1,532
#A81372, 6.000%, due 8/1/38		211		235
#G04687, 6.000%, due 9/1/38		58		64
#G04745, 6.000%, due 9/1/38		203		226
#A81799, 6.500%, due 9/1/38		186		207
#G06085, 6.500%, due 9/1/38		58		64
#G05723, 6.500%, due 11/1/38		1,016		1,147
#G07480, 6.000%, due 5/1/39		2,286		2,519
#G61450, 6.000%, due 4/1/40		10,000		11,251
#4122, Tranche FP, 1M LIBOR + 0.400%, 2.473%, due 10/15/42, VRN		705		706
Total FHLMC Mortgage Obligations				23,792

Federal National Mortgage Association (FNMA)—34.0%
#711991, 5.000%, due 8/1/18		1		1
#743183, 5.000%, due 10/1/18		1		1
#749596, 5.000%, due 11/1/18		6		6
#753866, 6.000%, due 12/1/18		7		7
#761246, 5.000%, due 1/1/19		10		10
#766059, 5.500%, due 2/1/19		9		9
#766276, 5.000%, due 3/1/19		28		28
#751313, 5.000%, due 3/1/19		7		7
#779363, 5.000%, due 6/1/19		3		3
#785259, 5.000%, due 8/1/19		18		19
#761530, 5.500%, due 8/1/19		28		28
#788424, 5.500%, due 9/1/19		12		12
#761489, 5.500%, due 9/1/19		12		12
#725953, 5.000%, due 10/1/19		7		7


	NRSRO	Principal
Issuer	Rating	Amount		Value

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

Federal National Mortgage Association (FNMA)—(continued)
#357865, 5.000%, due 7/1/20		$	23	$	23
#879607, 5.500%, due 4/1/21			16		16
#831497, 6.000%, due 4/1/21			68		70
#831525, 5.500%, due 6/1/21			20		20
#880993, 6.000%, due 1/1/22			4		4
#888982, 6.000%, due 12/1/22			84		87
#972934, 5.500%, due 2/1/23			108		111
#889670, 5.500%, due 6/1/23			24		25
#AE0011, 5.500%, due 9/1/23			28		29
#747339, 5.500%, due 10/1/23			122		131
#995395, 6.000%, due 12/1/23			72		74
#190988, 9.000%, due 6/1/24			17		18
#AL8529, 6.000%, due 11/1/24			15,563		16,276
#AL2853, 4.500%, due 6/1/26			2,003		2,093
#AL9730, 4.500%, due 2/1/27			4,665		4,873
#AL9857, 4.000%, due 2/1/29			3,956		4,075
#555933, 7.000%, due 6/1/32			481		538
#886762, 7.000%, due 9/1/36			259		303
#948637, 6.500%, due 8/1/37			271		303
#888703, 6.500%, due 8/1/37			2,615		2,979
#AL6411, 7.000%, due 12/1/37			3,183		3,570
#AD0100, 7.000%, due 12/1/38			693		786
#AD0315, 6.500%, due 8/1/39			420		474
#AE0934, 6.500%, due 10/1/39			2,194		2,487
#AL5815, 5.500%, due 4/1/41			2,649		2,941
#BM3525, 6.000%, due 4/1/41			5,172		5,839
#AL9226, 5.500%, due 12/1/41			5,609		6,227
#AL9225, 6.000%, due 1/1/42			4,182		4,713
Total FNMA Mortgage Obligations					59,235

Asset-Backed Securities—15.8%
Tesla Auto Lease Trust —144A, 2018-A, Tranche A, 2.320%, 12/20/19	Aaa		319		318
GM Financial Automobile Leasing Trust, 2017-3, Tranche A2B, 1M LIBOR + 0.240%, 2.324%, 1/21/20, VRN	Aaa		421		421
Ford Credit Auto Owner Trust, 2017-B, Tranche A2B, 1M USD LIBOR + 0.070%, 2.143%, 5/15/20, VRN	AAA		743		744
Chase Issuance Trust, 2016-A1, Tranche A, 1M LIBOR + 0.410%, 2.483%, 5/17/21, VRN	AAA		2,024		2,030
Bank of America Credit Card Trust, 2014-A1, Tranche A, 1M LIBOR + 0.380%, 2.453%, 6/15/21, VRN	AAA		2,000		2,003
MBNA Credit Card Master Note Trust, 2004-A3, Tranche A3, 1M LIBOR + 0.260%, 2.333%, 8/16/21, VRN	AAA		3,000		3,003

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

Low Duration Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


	NRSRO	Principal
Issuer	Rating	Amount		Value

Asset-Backed Securities—(continued)
Capital One Multi-Asset Execution Trust, 2014-A3, Tranche A3, 1M LIBOR + 0.380%, 2.453%, 1/18/22, VRN	AAA	$	1,110	$	1,112
Chase Issuance Trust, 2017-A1, Tranche A, 1M LIBOR + 0.300%, 2.373%, 1/18/22, VRN	AAA		1,000		1,004
Capital One Multi-Asset Execution Trust, 2016-A1, Tranche A1, 1M LIBOR + 0.450%, 2.523%, 2/15/22, VRN	AAA		3,212		3,221
PFS Financing Corporation—144A, 2018-A, Tranche A, 1M LIBOR + 0.400%, 2.319%, 2/15/22, VRN	AAA		1,500		1,499
Citibank Credit Card Issuance Trust, 2017-A4, Tranche A4, 1M LIBOR + 0.220%, 2.245%, 4/7/22, VRN	AAA		850		851
Verizon Owner Trust—144A, 2017-3A, Tranche A1B, 1M LIBOR + 0.270%, 2.354%, 4/20/22, VRN	AAA		3,500		3,506
Mercedes-Benz Master Owner Trust —144A, 2017-BA, Tranche A, 1M LIBOR + 0.420%, 2.493%, 5/16/22, VRN	Aaa		2,280		2,287
GMF Floorplan Owner Revolving Trust—144A, 2017-2, Tranche A2, 1M LIBOR + 0.430%, 2.503%, 7/15/22, VRN	Aaa		2,500		2,508
SLM Student Loan Trust, 2008-4, Tranche A4, 3M USD LIBOR + 1.650%, 4.010%, 7/25/22, VRN	A		746		762
SLM Private Education Loan Trust— 144A, 2011-A, Tranche A3, 1M USD LIBOR + 2.500%, 4.573%, 1/15/43, VRN	AAA		2,250		2,307
Total Asset-Backed Securities					27,576

Corporate Obligations—34.7%
PNC Bank NA, 3M USD LIBOR + 0.400%, 2.719%, due 12/7/18, VRN	A+		1,000		1,002
Morgan Stanley, 3M USD LIBOR + 1.375%, 3.733%, due 2/1/19, VRN	A		2,185		2,200
USAA Capital Corporation—144A, 3M USD LIBOR + 0.230%, 2.588%, due 2/1/19, VRN	Aa1		1,500		1,502
Toyota Motor Credit Corporation, 3M USD LIBOR + 0.820%, 3.151%, due 2/19/19, VRN	AA-		1,000		1,005
American Honda Finance Corporation, 3M USD LIBOR + 0.825%, 3.154%, due 2/22/19, VRN	A+		1,616		1,624


	NRSRO	Principal
Issuer	Rating	Amount		Value

Corporate Obligations—(continued)
Apple, Inc., 3M USD LIBOR + 0.820%, 3.150%, due 2/22/19, VRN	AA+	$	1,000	$	1,006
PepsiCo, Inc., 3M USD LIBOR + 0.590%, 2.919%, due 2/22/19, VRN	A+		1,000		1,004
Bank of America Corporation, 3M USD LIBOR + 0.870%, 3.207%, due 4/1/19, VRN	A+		2,000		2,012
Westpac Banking Corporation, 3M USD LIBOR + 0.710%, 3.065%, due 5/13/19, VRN	AA-		1,000		1,005
QUALCOMM, Inc., 3M USD LIBOR + 0.360%, 2.691%, due 5/20/19, VRN	A1		1,000		1,010
Bank of Montreal, 3M USD LIBOR + 0.650%, 3.005%, due 7/18/19, VRN	AA-		1,000		1,005
American Express Credit Corporation, 3M USD LIBOR + 0.490%, 2.833%, due 8/15/19, VRN	A2		1,000		1,004
Shell International Finance BV, 3M USD LIBOR + 0.350%, 2.676%, due 9/12/19, VRN	Aa2		1,000		1,004
Sumitomo Mitsui Trust Bank Ltd.— 144A, 3M USD LIBOR + 0.440%, 2.766%, due 9/19/19, VRN	A1		750		751
Gilead Sciences, Inc., 3M USD LIBOR + 0.250%, 2.575%, due 9/20/19, VRN	A		1,000		1,001
Mondelez International Holdings Netherlands BV—144A, 3M USD LIBOR + 0.610%, 2.969%, due 10/28/19, VRN	A3		3,000		3,012
Daimler Finance North America LLC —144A, 3M USD LIBOR + 0.620%, 2.979%, due 10/30/19, VRN	A		1,600		1,609
United Technologies Corporation, 3M USD LIBOR + 0.350%, 2.708%, due 11/1/19, VRN	A-		1,175		1,179
Citigroup, Inc., 3M USD LIBOR + 0.790%, 3.128%, due 1/10/20, VRN	A		2,000		2,014
Branch Banking & Trust Co., 3M USD LIBOR + 0.450%, 2.798%, due 1/15/20, VRN	A1		1,700		1,707
Capital One Financial Corporation, 3M USD LIBOR + 0.760%, 3.115%, due 5/12/20, VRN	A-		2,000		2,009
Diageo Capital plc, 3M USD LIBOR + 0.240%, 2.566%, due 5/18/20, VRN	A-		1,950		1,951
Harley-Davidson Financial Services, Inc. —144A, 3M USD LIBOR + 0.500%, 2.831%, due 5/21/20, VRN	A		1,000		1,002
National Australia Bank Ltd.—144A, 3M USD LIBOR + 0.510%, 2.839%, due 5/22/20, VRN	AA-		2,000		2,005

See accompanying Notes to Financial Statements.

Semiannual Report

June 30, 2018

Low Duration Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)


	NRSRO	Principal
Issuer	Rating	Amount		Value

Corporate Obligations—(continued)
John Deere Capital Corporation, 3M USD LIBOR + 0.290%, 2.622%, due 6/22/20, VRN	A	$	1,000	$	1,002
Nissan Motor Acceptance Corp.— 144A, 3M USD LIBOR + 0.390%, 2.732%, due 7/13/20, VRN	A		1,250		1,252
Caterpillar Financial Services Corporation, 3M USD LIBOR + 0.290%, 2.611%, due 9/4/20, VRN	A		2,000		2,006
IBM Credit LLC, 3M USD LIBOR + 0.260%, 2.619%, due 1/20/21, VRN	A+		2,000		2,010
JPMorgan Chase & Co., 3M USD LIBOR + 1.480%, 3.780%, due 3/1/21, VRN	AA-		3,000		3,084
Wells Fargo & Co., 3M USD LIBOR + 1.340%, 3.661%, due 3/4/21, VRN	A+		3,000		3,072
HSBC Holdings plc, 3M USD LIBOR + 2.240%, 4.561%, due 3/8/21, VRN	AA-		3,000		3,138
Bank of America Corporation, 3M USD LIBOR + 1.420%, 3.775%, due 4/19/21, VRN	A+		1,000		1,027
The Goldman Sachs Group, Inc., 3M USD LIBOR + 1.360%, 3.720%, due 4/23/21, VRN	A		1,000		1,022
PACCAR Financial Corporation, 3M USD LIBOR + 0.260%, 2.613%, due 5/10/21, VRN	A+		1,000		1,000
Westpac Banking Corporation, 3M USD LIBOR + 1.000%, 3.355%, due 5/13/21, VRN	AA-		2,000		2,035
The Charles Schwab Corporation, 3M USD LIBOR + 0.320%, 2.649%, due 5/21/21, VRN	A		1,000		1,005
The Toronto-Dominion Bank, 3M USD LIBOR + 0.430%, 2.756%, due 6/11/21, VRN	Aa2		1,000		1,000
Barclays plc, 3M USD LIBOR + 2.110%, 4.463%, due 8/10/21, VRN	A		3,000		3,115
Total Corporate Obligations					60,391
Total Long-Term Investments—98.2% (cost $173,321)					170,994


	Principal
Issuer	Amount			Value

Commercial Paper
Societe Generale S.A., 1.815%, due 7/2/18	$	2,750		$	2,750
Total Commercial Paper—1.6% (cost $2,750)					2,750
Total Investments—99.8% (cost $176,071)					173,744

Securities Sold, Not Yet Purchased

U.S. Government Agency Discount Note
Federal National Mortgage Association (FNMA)—(8.4)%
TBA, 2.500%, due 7/1/33		(15,000	)		(14,579	)
Total Securities Sold, Not Yet Purchased—(8.4)% (proceeds $14,503)					(14,579	)
Cash and other assets, less liabilities—8.6%					14,977
Net assets—100.0%				$	174,142

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, 2018. 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, 2018

William Blair Funds

	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 1.60% decrease, net of fees, for the six-month period ending June 30, 2018. By comparison, the Fund’s benchmark, the Bank of America/Merrill Lynch 3-Month U.S. Treasury Bill Index (the “Index”) increased 0.81%. The first half of 2018 began with a fairly benign risk environment but then was followed by a turbulent late January and early February with increased market volatility and short-term sharp down movements in equity markets. Global equities made modest gains in the second quarter and did not revisit the year’s low point from the end of the first quarter. Within developed equities, the U.S. and European markets were strong performers. From a sector perspective, Consumer Discretionary and Information Technology led the way within the U.S. while Europe saw strong performance from Energy and Information Technology. Within emerging markets, the equity space underperformed, specifically in Argentina, Indonesia, and Turkey. The fixed income markets’ performance was in most part characterized by lackluster performance in both rates and credit. U.S. bonds struggled relative to European bonds, while credit performed similarly with U.S. investment grade and high yield (the spread component, specifically) underperforming relative to global credit. Currencies were largely influenced by a general appreciation of the U.S. dollar against most other currencies. Top performers included the Colombian peso, Mexican peso, and Norwegian krone while the Argentine peso, Turkish lira, and Brazilian real depreciated significantly. During this six-month period, the Fund’s currency strategy positively contributed to the Fund’s performance. The currency strategy was particularly bolstered by short exposures to the euro, Thai Baht, New Zealand dollar, and Taiwan dollar. Negative contributors within the currency strategy were long exposures to the Turkish lira, Philippine peso, South African rand, and Indian rupee. The Fund’s market strategy was a detractor from the Fund’s performance in aggregate, mostly due to U.S. sector allocations and (generally) long exposures to emerging market equities such as Argentina and Brazil. Positive equity performance was driven from long exposures to UK, Italy and France equities. The contribution from fixed income was negative, driven in most part by long exposure to U.S. investment grade bonds and short exposure to high yield spreads. Trade disputes are one of the central headwinds to the macro environment, as uncertainties rise and risk is increased by the deliberate actions of the players, even though their encompassing best interests would be better served by not escalating the situation. For these reasons, we are negative on trade-sensitive markets and have reflected this in our portfolios-we are less long of Chinese equities and the Mexican peso than fundamentals (alone) suggest, and we are more short of Canadian equities than we would be without this elevated risk. We do not, however, expect a dramatic and negative trade war as a base case-this is due to the “best interests” noted above. In this vein, the dialing down of trade threats (U.S.-China) and/or delaying their implementation have been features of political maneuvers in recent months. However, the bottom line is that this aspect of global policy is producing increased uncertainty (a headwind) that was not present in recent years. Looking forward, it is our view that the challenge of navigating these risks continues to be among the most significant shifts in the investment landscape to have occurred in the last decade. However, we feel that our investment process, dialogue, and decision-making is well equipped to meet the challenges we now face. We remain vigilant as we assess new and relevant information to capture future investment opportunities in a timely manner, and we will continue balancing the relationship between risk taken and compensation expected.

100

Semiannual Report

June 30, 2018

Macro Allocation Fund

Performance Highlights (Unaudited)

Average Annual Total Return through 6/30/2018

	Year												Since
	to Date			1 Year			3 Year			5 Year			Inception
Class N(a)		(1.60	)%		0.63	%		(1.68	)%		2.00	%		4.60	%
Class I(a)		(1.52	)		0.97			(1.40	)		2.29			4.87
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index(a)		0.81			1.36			0.68			0.42			0.34
Institutional Class(b)		(1.43	)		1.07			(1.30	)		—			1.08
BofA Merrill Lynch 3-Month U.S. Treasury Bill Index(b)		0.81			1.36			0.68			—			0.45


(a)	Since inception is for the period from November 29, 2011 (Commencement of Operations) to June 30, 2018.

(b)	Since inception is for the period from October 21, 2013 (Commencement of Operations) to June 30, 2018.

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 & 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.

Portfolio Allocation (Unaudited)

The table below provides the allocation of the Fund’s holdings as a percent of net assets as of June 30, 2018.

	% of net
Category	assets
Equity Exchange-Traded Funds		63.5	%
Fixed Income Exchange-Traded Funds		4.2
Common Stocks		0.6
Foreign Government Bond		2.2
Repurchase Agreement		2.7
U.S. Government		25.9
Purchased Options		0.2
Cash and Other Assets, Less Liabilities		0.7
Net Assets		100.0	%

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

101

Macro Allocation Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



	Issuer	Shares		Value

	Exchange-Traded Funds—67.7%
	Equity Exchange-Traded Funds—63.5%
	Dragon Capital - Vietnam Enterprise
	Investments, Ltd. Class “C”		2,100,900	$	11,607
	Energy Select Sector SPDR Fund		188,300		14,299
	Financial Select Sector SPDR Fund		420,300		11,176
	Global X MSCI Argentina ETF		163,400		4,407
	Global X MSCI Greece ETF		2,084,800		19,034
	iShares Core MSCI Emerging Markets ETF .		470,800		24,722
	iShares Global Energy ETF		316,800		11,842
	iShares MSCI Brazil ETF		1,540,000		49,357
	iShares MSCI India ETF		1,150,000		38,283
	iShares MSCI Japan ETF		317,400		18,381
	iShares MSCI Malaysia ETF		390,100		12,163
	iShares Russell 1000 Value ETF		916,000		111,184
	SPDR S&P 500 ETF Trust		1,548,100		419,969
	Utilities Select Sector SPDR Fund		476,800		24,775
	VanEck Vectors Russia ETF		131,800		2,799
	Total Equity Exchange-Traded Funds				773,998
	Fixed Income Exchange-Traded Funds-4.2%
	iShares iBoxx $ Investment Grade Corporate Bond ETF		320,800		36,754
	SPDR Bloomberg Barclays High Yield Bond ETF		412,900		14,650
	Total Fixed Income Exchange-Traded Funds .				51,404
	Total Exchange-Traded Funds—67.7% (cost $761,376)				825,402

	Common Stocks—0.6%

	Emerging Latin America—0.6%

	Argentina—0.6%
*	Adecoagro S.A. (Food products)†		47,794		380
	Banco Macro S.A.—ADR (Banks)		6,259		368
	BBVA Banco Frances S.A.—ADR (Banks)		11,675		144
*	Cablevision Holding S.A.—GDR (Media)†§		125,367		1,308
	Cresud SACIF y A—ADR (Real estate management & development)		12,617		187
*	Empresa Distribuidora Y Comercializadora Norte—ADR (Electric utilities)		4,828		157
*	Globant S.A. (Software)†		4,718		268
	Grupo Clarin S.A. Class B,—GDR (Media)†**§		55,562		222
	Grupo Financiero Galicia S.A.—ADR (Banks)		23,429		773
	Grupo Supervielle S.A.—ADR (Banks)		15,357		163
	IRSA Inversiones y Representaciones S.A. —ADR (Real estate management & development)		8,512		147
	MercadoLibre, Inc. (Internet software & services)		1,906		570
*	Pampa Energia S.A.—ADR (Electric utilities)		21,258		760
	Telecom Argentina S.A.—ADR (Diversified telecommunication services)		15,615		277
	YPF S.A.—ADR (Oil, gas & consumable fuels)		79,580		1,081
	Total Argentina				6,805

	Shares or
	Principal
Issuer	Amount		Value

Common Stocks—(continued)

Emerging Latin America—(continued)

Uruguay—0.0%
Arcos Dorados Holdings, Inc. Class “A” (Hotels, restaurants & leisure)†		71,123	$	494
Total Common Stocks—0.6% (cost $13,405)				7,299

Foreign Government Bond—2.2%

Malaysia
Malaysia Government Bond, 3.580%, due 9/28/18	MYR	109,179		27,041
Total Foreign Government Bonds—2.2% (cost $24,697)				27,041

Repurchase Agreement—2.7%
Fixed Income Clearing Corporation, 0.350% dated 6/29/18, due 7/2/18, repurchase price $32,992, collateralized by U.S. Treasury Inflation Index Bond, 0.250%, due 1/15/25, and U.S. Treasury Notes, 2.000%, due 4/30/24	$	32,991		32,991
Total Repurchase Agreement—2.7% (cost $32,991)				32,991

U.S. Government—25.9%
U.S. Treasury Bill, 1.134%, due 7/19/18(a)		35,900		35,871
U.S. Treasury Bill, 1.218%, due 8/16/18(a)		38,500		38,413
U.S. Treasury Bill, 1.242%, due 9/13/18(a)(b)		20,000		19,924
U.S. Treasury Bill, 1.376%, due 10/11/18(a)		29,500		29,341
U.S. Treasury Bill, 1.642%, due 11/8/18		23,000		22,836
U.S. Treasury Bill, 1.688%, due 12/6/18(b)		23,000		22,797
U.S. Treasury Bill, 1.789%, due 1/3/19(b)		23,000		22,761
U.S. Treasury Bill, 1.868%, due 1/31/19		23,000		22,721
U.S. Treasury Bill, 2.055%, due 2/28/19		23,000		22,673
U.S. Treasury Bill, 2.093%, due 3/28/19		23,000		22,627
U.S. Treasury Bill, 2.250%, due 4/25/19		23,000		22,582
U.S. Treasury Bill, 2.325%, due 5/23/19		23,000		22,539
U.S. Treasury Bill, 2.330%, due 6/20/19		10,000		9,780
Total U.S. Government—25.9% (cost $315,122)				314,865

See accompanying Notes to Financial Statements.

102

Semiannual Report

June 30, 2018

Macro Allocation Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)



Issuer	Value

Total Purchased Options—0.2% (cost $3,371)	$	3,018
Total Investments in Securities—99.3% (cost $1,150,962)		1,210,616
Total Written Options—0.00% (premiums received $683)		(509	)
Cash and other assets, less liabilities—0.7%		9,241
Net assets—100.0%	$	1,219,348

* = Non-income producing security

† = U.S. listed foreign security

(a) Security, or portion of security, is segregated as collateral for centrally cleared swaps and to cover initial margin requirements on open futures contracts aggregating a total value of $56,256.

(b) Security, or portion of security, is pledged as collateral for OTC swap contracts and OTC options aggregating a total value of $5,629.

ADR = American Depository Receipt

GDR = Global Depository Receipt

** = Fair valued pursuant to Valuation Procedures approved by the Board of Trustees. This holding represents 0.02% of the Fund’s net assets at June 30, 2018.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. These holdings represent 0.13% of the Fund’s net assets at June 30, 2018.

Purchased Options Contracts

										Premiums
		Exercise								Paid			Unrealized
		Price/	Expiration	Number of	Notional		Market			(Received)			Appreciation/
Description	Counterparty	FX Rate	Date	Contracts	Amount		Value			by Fund			(Depreciation)
Calls
Call USD/Put INR	Citibank N.A.	70.34	09/28/18	60,781,319	$	60,781		$	492		$	363		$	129
Call USD/Put PHP	Citibank N.A.	55.35	09/28/18	59,284,661		59,285			192			324			(132	)
Call USD/Put CNY	Citibank N.A.	6.7525	09/28/18	59,326,768		59,327			428			316			112
								$	1,112		$	1,003		$	109
Puts
	Credit Suisse
STXE Small 200	International	281.00	09/21/18	183,277	EUR	51,501		$	833		$	1,231		$	(398	)
iShares iBoxx $ High Yield Bond	Citibank N.A.	82.00	09/21/18	14,987	$	122,893			1,073			1,137			(64	)
								$	1,906		$	2,368		$	(462	)
Total Purchased Options Contracts								$	3,018		$	3,371		$	(353	)

Written Options Contracts

Premiums

Paid

Unrealized

Exercise

Expiration

Number of

Notional

Market

(Received)

Appreciation/

Description

Counterparty

Price

Date

Contracts

Amount

Value

by Fund

(Depreciation)

Puts

iShares iBoxx $ Investment Grade

Citibank N.A.

112.00

09/21/18

(11,196)

(125,395

)

(509

)

(683

)

174

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

103

Macro Allocation Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

Forward Foreign Currency Contracts

				USD (Base)				Net Unrealized
Settlement			Local Currency	Purchased		Current		Appreciation
Date	Deliver/Receive	Counterparty	(in thousands)	or Sold		Value		(Depreciation)
Purchased
9/19/18	Argentinean Peso	Citibank N.A. London	273,796	$	9,178	$	8,758		$	(420	)
9/19/18	British Pound Sterling	Citibank N.A. London	65,065		87,068		86,166			(902	)
9/19/18	Chinese Yuan Renminbi	Citibank N.A. London	180,093		28,019		27,044			(975	)
9/19/18	Colombian Peso	Citibank N.A. London	147,634,739		51,344		50,195			(1,149	)
9/19/18	Euro	Citibank N.A. London	2,286		2,685		2,685			—
9/19/18	Indian Rupee	Citibank N.A. London	4,878,252		71,588		70,498			(1,090	)
9/19/18	Japanese Yen	Citibank N.A. London	6,505,743		59,628		59,078			(550	)
9/19/18	Mexican Peso	Citibank N.A. London	2,103,999		101,506		104,662			3,156
9/19/18	New Turkish Lira	Citibank N.A. London	581,173		123,434		122,387			(1,047	)
9/19/18	Philippine Peso	Citibank N.A. London	7,659,217		143,029		142,617			(412	)
9/19/18	Polish Zloty	Citibank N.A. London	138,021		38,273		36,894			(1,379	)
9/19/18	Russian Ruble	Citibank N.A. London	1,405,851		22,274		22,207			(67	)
9/19/18	Singapore Dollar	Citibank N.A. London	109,416		82,136		80,439			(1,697	)
9/19/18	South African Rand	Citibank N.A. London	483,425		36,266		34,889			(1,377	)
9/19/18	Swedish Krona	Citibank N.A. London	348,506		40,517		39,140			(1,377	)
9/19/18	Swiss Franc	Citibank N.A. London	4,074		4,141		4,141			—
9/19/18	Taiwan Dollar	Citibank N.A. London	80,102		2,645		2,641			(4	)
									$	(9,290	)
Sold
9/19/18	Argentinean Peso	Citibank N.A. London	623,009	$	22,458	$	19,929		$	2,529
9/19/18	Australian Dollar	Citibank N.A. London	68,103		51,868		50,412			1,456
9/19/18	Brazilian Real	Citibank N.A. London	53,255		14,328		13,631			697
9/19/18	Chinese Yuan Renminbi	Citibank N.A. London	232,594		35,097		34,928			169
9/19/18	Colombian Peso	Citibank N.A. London	38,812,879		13,148		13,196			(48	)
9/19/18	Czech Koruna	Citibank N.A. London	1,197,771		55,360		54,070			1,290
9/19/18	Euro	Citibank N.A. London	108,791		129,294		127,788			1,506
9/19/18	Hong Kong Dollar	Citibank N.A. London	306,968		39,175		39,176			(1	)
9/19/18	Hungarian Forint	Citibank N.A. London	6,938,658		25,841		24,718			1,123
9/19/18	Indonesian Rupiah	Citibank N.A. London	895,127,652		63,624		61,835			1,789
9/19/18	Japanese Yen	Citibank N.A. London	501,088		4,549		4,550			(1	)
9/19/18	New Zealand Dollar	Citibank N.A. London	165,451		116,651		112,068			4,583
9/19/18	South Korean Won	Citibank N.A. London	59,662,962		55,651		53,701			1,950
9/19/18	Swiss Franc	Citibank N.A. London	89,618		91,708		91,102			606
9/19/18	Taiwan Dollar	Citibank N.A. London	2,229,440		75,182		73,511			1,671
9/19/18	Thai Baht	Citibank N.A. London	4,889,107		151,738		147,907			3,831
9/20/18	Israeli Shekel	Citibank N.A. London	140,803		39,600		38,703			897
									$	24,047

See accompanying Notes to Financial Statements.

104

Semiannual Report

June 30, 2018

Macro Allocation Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

Futures Contracts

				Notional Amount	Notional		Notional		Net Unrealized
Number of				(Local,	Amount		Value		Appreciation
Contracts	Description	Expiration Date	Local Currency	in Thousands)	(USD)		(USD)		(Depreciation)
Long
652	CAC 40 Index	July 2018	Euro	34,690	$	41,531	$	40,511		$	(1,020	)
773	IBEX 35 Index	July 2018	Euro	74,222		88,369		86,676			(1,693	)
356	OMXS 30 Index	July 2018	Swedish Krona	55,572		6,185		6,204			19
115	HSCEI Future	July 2018	Hong Kong Dollar	62,497		8,006		7,966			(40	)
1,773	MSCI Singapore	July 2018	Singapore Dollar	64,892		47,565		47,627			62
13	EURO-BTP	September 2018	Euro	1,654		1,937		1,932			(5	)
261	KOSPI 200 Index	September 2018	South Korean Won	19,575,000		18,502		17,564			(938	)
8	SPI 200 Index	September 2018	Australian Dollar	1,230		901		910			9
3,981	EURO STOXX 600 Banks Index	September 2018	Euro	31,928		38,544		37,285			(1,259	)
699	FTSE 100 Index	September 2018	British Pound Sterling	53,134		70,354		70,124			(230	)
202	FTSE MIB Index	September 2018	Euro	21,784		25,065		25,439			374
										$	(4,721	)
Short
148	Amsterdam Index	July 2018	Euro	16,327	$	19,460	$	19,067		$	393
61	HANG SENG Index	July 2018	Hong Kong Dollar	87,614		11,122		11,167			(45	)
207	MSCI Taiwan Index	July 2018	U.S. Dollar	8,023		7,949		8,023			(74	)
368	NIKKEI 225 Index	September 2018	Japanese Yen	4,092,160		37,304		36,961			343
161	TOPIX Index	September 2018	Japanese Yen	2,786,105		25,773		25,165			608
141	10YR Can Bond	September 2018	Canadian Dollar	19,276		14,360		14,663			(303	)
814	FTSE/JSE Top 40 Index	September 2018	South African Rand	420,724		30,800		30,671			129
316	S&P TSX 60 Index	September 2018	Canadian Dollar	60,881		46,130		46,309			(179	)
34	DAX Index	September 2018	Euro	10,462		12,667		12,218			449
868	EURO STOXX 50 Index	September 2018	Euro	29,434		35,140		34,373			767
3,531	S&P 500 E Mini Index	September 2018	U.S. Dollar	480,498		490,262		480,498			9,764
699	XAK Technology	September 2018	U.S. Dollar	48,916		50,339		48,916			1,423
222	XAV Health Care	September 2018	U.S. Dollar	18,624		18,816		18,624			192
390	XAY Cons Discret	September 2018	U.S. Dollar	43,130		43,233		43,130			103
74	Long Gilt	September 2018	British Pound Sterling	9,106		11,892		12,018			(126	)
										$	13,444

Centrally Cleared Interest Rate Swap

Upfront

Pay/Receive

Notional

Payment

Unrealized

Floating Rate

Pay/Receive

Fixed

Payment

Maturity

Cleared

Amount

Paid

Appreciation

Reference

Floating Rate

Rate

Frequency

Date

Exchange

(in thousands)

(Received)

Value

(Depreciation)

3 Month STIBOR

Receive

1.350%

1YR/3M

March 2028

LCH

SEK 218,910

$(51)

$(691)

$(640

)

Centrally Cleared Credit Default Swap

Upfront

Notional

Payment

Unrealized

Reference

Buy/Sell

Fixed Deal

Payment

Maturity

Cleared

Amount

Paid

Appreciation

Entity

Protection

Pay Rate

Frequency

Date

Exchange

(in thousands)

(Received)

Value

(Depreciation)

iTRAXX Europe S29

Sell

1.000%

June 2023

Intercontinental Exchange

EUR 22,301

$622

$348

$(274

)

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

105

Macro Allocation Fund

Portfolio of Investments, June 30, 2018 (all dollar amounts in thousands) (unaudited)

Pay/

Receive

Notional

Unrealized

Reference

Floating

Maturity

Amount

Market

Appreciation

Entity

Rate

Floating Rates

Dates

Counterparty

(in thousands)

Value

(Depreciation)

Euro STOXX Bank Gross Return Index

Receive

3 Month EURIBOR plus 0 bp

Sep 2018

Goldman Sachs International

EUR 5,250

Swiss Market Index (Total Return)

Receive

3 Month CHF LIBOR minus 25 bp

Sep 2018

Goldman Sachs International

CHF 17,663

MSCI Daily Total Return Greece (Net)

Pay

3 Month LIBOR plus 95 bp

Sep 2018

Citibank N.A.

$6,011

153

MSCI Emerging Markets Mexico Net Total Return Index

Receive

3 Month LIBOR plus 17 bp

Sep 2018

Goldman Sachs International

25,209

(1,825

)

(1,825

)

Euro Bund Future

Receive

0 bp

Sep 2018

Credit Suisse International

EUR 50,881

(566

)

(566

)

10YR T-Note Future

Receive

0 bp

Sep 2018

Credit Suisse International

$72,869

(686

)

(686

)

5YR T-Note Future

Receive

0 bp

Sep 2018

Credit Suisse International

14,473

(70

)

(70

)

MSCI International Indonesia Gross Return Index

Pay

3 Month LIBOR plus 90 bp

Sep 2018

Citibank N.A.

11,725

(1,162

)

(1,162

)

(4,013

)

Total Net Unrealized Appreciation (Depreciation) on Swaps

(4,927

)

See accompanying Notes to Financial Statements.

106

Semiannual Report

June 30, 2018

Statements of Assets and Liabilities

As of June 30, 2018 (dollar amounts in thousands) (unaudited)

	Growth Fund			Large Cap Growth Fund			Mid Cap Growth Fund
*Assets*
Investments in securities, at cost	$	227,337			$	172,096		$	49,746
Investments in securities, at value	$	342,145			$	240,725		$	63,161
Receivable for securities sold		2,193				1,166			502
Receivable for fund shares sold		152				690			70
Receivable from Adviser		—				13			19
Dividend and interest receivable		40				58			12
Total assets		344,530				242,652			63,764
*Liabilities*
Payable for investment securities purchased		1,209				1,218			846
Payable for fund shares redeemed		73				40			3
Management fee payable		218				140			50
Distribution fee payable		10				8			1
Other payables and accrued expenses		117				35			64
Total liabilities		1,627				1,441			964
Net assets	$	342,903			$	241,211		$	62,800
*Capital*
Composition of net assets
Par value of shares of beneficial interest	$	27			$	15		$	5
Capital paid in excess of par value		186,503				159,018			37,947
Accumulated net investment income (loss)		(27	)			266			(95	)
Accumulated net realized gain (loss)		41,592				13,283			11,528
Net unrealized appreciation (depreciation) of investments and foreign currencies		114,808				68,629			13,415
Net assets	$	342,903			$	241,211		$	62,800

Class N shares
Net assets	$	45,879			$	39,594		$	6,006
Shares outstanding		3,960,679				2,641,461			492,899
Net asset value per share	$	11.58			$	14.99		$	12.19
Class I shares
Net assets	$	297,024			$	201,617		$	56,794
Shares outstanding		22,844,088				12,840,392			4,393,364
Net asset value per share	$	13.00			$	15.70		$	12.93

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

107

Statements of Operations

For the Period Ended June 30, 2018 (all amounts in thousands) (unaudited)

	Growth Fund			Large Cap Growth Fund				Mid Cap Growth Fund
*Investment income*
Dividends	$	1,605			$	1,038			$	251
Interest		4				2				1
Total income		1,609				1,040				252
*Expenses*
Investment advisory fees		1,318				779				318
Distribution fees		48				40				7
Custodian fees		16				13				21
Transfer agent fees		34				11				7
Sub-transfer agent fees
Class N		25				21				4
Class I		124				91				43
Professional fees		27				20				18
Registration fees		19				19				19
Shareholder reporting fees		12				6				1
Trustee fees		16				6				4
Other expenses		3				4				1
Total expenses before expense limitation		1,642				1,010				443
Expenses waived or reimbursed by the Adviser		—				(79	)			(96	)
Net expenses		1,642				931				347
Net investment income (loss)		(33	)			109				(95	)
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments in securities		33,130				11,307				9,905
Total net realized gain (loss)		33,130				11,307				9,905
Change in net unrealized appreciation (depreciation) of:
Investments in securities		10,664				14,100				(2,194	)
Change in net unrealized appreciation (depreciation)		10,664				14,100				(2,194	)
Net increase (decrease) in net assets resulting from operations	$	43,761			$	25,516			$	7,616

See accompanying Notes to Financial Statements.

108

Semiannual Report

June 30, 2018

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	Growth Fund						Large Cap Growth Fund						Mid Cap Growth Fund
	2018			2017			2018			2017			2018			2017
*Operations*
Net investment income (loss)	$	(33	)	$	372		$	109		$	157		$	(95	)	$	(455	)
Net realized gain (loss) on investments, and other assets and liabilities		33,130			93,613			11,307			3,192			9,905			20,258
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		10,664			4,895			14,100			40,329			(2,194	)		499
Net increase (decrease) in net assets resulting from operations		43,761			98,880			25,516			43,678			7,616			20,302
*Distributions to shareholders from*
Net investment income
Class N		—			—			—			—			—			—
Class I		—			(366	)		—			—			—			—
Net realized gain
Class N		—			(10,662	)		—			(146	)		—			(986	)
Class I		—			(83,448	)		—			(993	)		—			(10,476	)
Total distributions		—			(94,476	)		—			(1,139	)		—			(11,462	)
*Capital stock transactions*
Net proceeds from sale of shares		20,646			28,218			29,380			62,963			4,858			10,841
Shares issued in reinvestment of income dividends and capital gain distributions		—			91,558			—			1,030			—			11,050
Less cost of shares redeemed		(75,238	)		(348,252	)		(17,248	)		(25,304	)		(27,209	)		(88,854	)
Net increase (decrease) in net assets resulting from capital share transactions		(54,592	)		(228,476	)		12,132			38,689			(22,351	)		(66,963	)
Increase (decrease) in net assets		(10,831	)		(224,072	)		37,648			81,228			(14,735	)		(58,123	)
*Net assets*
Beginning of period		353,734			577,806			203,563			122,335			77,535			135,658
End of period	$	342,903		$	353,734		$	241,211		$	203,563		$	62,800		$	77,535
Accumulated net investment income (loss) at the end of the period	$	(27	)	$	6		$	266		$	157		$	(95	)	$	—

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

109

Statements of Assets and Liabilities

As of June 30, 2018 (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		$	2,027,306			$	1,720	$	470,810		$	495,684
Investments in securities, at value		$	2,426,050			$	2,063	$	622,854		$	652,501
Cash			—				44		—			—
Receivable for securities sold			7,849				26		86			1,278
Receivable for fund shares sold			26,887				4		5,445			272
Receivable from Adviser			106				7		—			19
Dividend and interest receivable			507	��			2		184			515
Total assets			2,461,399				2,146		628,569			654,585
*Liabilities*
Payable for investment securities purchased			—				42		1			5,976
Payable for fund shares redeemed			663				—		45			9,047
Management fee payable			1,996				2		558			595
Distribution fee payable			101				—		39			6
Other payables and accrued expenses			372				39		125			124
Total liabilities			3,132				83		768			15,748
Net assets		$	2,458,267			$	2,063	$	627,801		$	638,837
*Capital*
Composition of net assets
Par value of shares of beneficial interest		$	91			$	—	$	19		$	31
Capital paid in excess of par value			1,851,090				1,268		433,629			446,398
Accumulated net investment income (loss)			(5,485	)			10		(2,029	)		580
Accumulated net realized gain (loss)			213,827				442		44,138			35,011
Net unrealized appreciation (depreciation) of investments and foreign currencies			398,744				343		152,044			156,817
Net assets		$	2,458,267			$	2,063	$	627,801		$	638,837

Class N shares
Net assets		$	491,568			$	304	$	196,810		$	26,142
Shares outstanding			18,998,857				21,074		6,346,439			1,283,580
Net asset value per share		$	25.87			$	14.43	$	31.01		$	20.37
Class I shares
Net assets		$	1,966,699			$	1,759	$	430,991		$	612,695
Shares outstanding			72,433,384				122,342		12,594,934			29,250,191
Net asset value per share		$	27.15			$	14.38	$	34.22		$	20.95

See accompanying Notes to Financial Statements.

110

Semiannual Report

June 30, 2018

Statements of Operations

For the Period Ended June 30, 2018 (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		$	6,890			$	20		$	1,469		$	4,631
Less foreign tax withheld			(33	)			—			(18	)		—
Interest			76				—			19			11
Total income			6,933				20			1,470			4,642
*Expenses*
Investment advisory fees			10,818				12			2,937			3,544
Distribution fees			519				—			194			35
Custodian fees			20				16			17			18
Transfer agent fees			66				—			19			28
Sub-transfer agent fees
Class N			248				—			99			21
Class I			962				1			173			437
Professional fees			65				14			25			34
Registration fees			39				20			21			19
Shareholder reporting fees			120				1			4			31
Trustee fees			63				—			18			27
Other expenses			25				1			7			7
Total expenses before expense limitation			12,945				65			3,514			4,201
Expenses waived or reimbursed by the Adviser			(527	)			(53	)		(15	)		(139	)
Net expenses			12,418				12			3,499			4,062
Net investment income (loss)			(5,485	)			8			(2,029	)		580
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments in securities			148,199				462			35,636			34,356
Redemptions in-kind			11,209				—			2,300			—
Total net realized gain (loss)			159,408				462			37,936			34,356
Change in net unrealized appreciation (depreciation) of:
Investments in securities			58,345				(491	)		41,488			(27,859	)
Change in net unrealized appreciation (depreciation)			58,345				(491	)		41,488			(27,859	)
Net increase (decrease) in net assets resulting from operations		$	212,268			$	(21	)	$	77,395		$	7,077

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

111

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	Small-Mid Cap Growth Fund						Small-Mid Cap Value Fund						Small Cap Growth Fund						Small Cap Value Fund
	2018			2017			2018			2017			2018			2017			2018			2017
Operations
Net investment income (loss)	$	(5,485	)	$	(8,378	)	$	8		$	17		$	(2,029	)	$	(3,241	)	$	580		$	1,911
Net realized gain (loss) on investments, and other assets and liabilities		159,408			227,204			462			339			37,936			72,283			34,356			47,593
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		58,345			179,918			(491	)		(30	)		41,488			37,293			(27,859	)		2,493
Net increase (decrease) in net assets resulting from operations		212,268			398,744			(21	)		326			77,395			106,335			7,077			51,997
Distributions to shareholders from
Net investment income
Class N		—			—			—			—			—			—			—			—
Class I		—			—			—			(12	)		—			—			—			(1,332	)
Net realized gain
Class N		—			(11,906	)		—			(28	)		—			(23,520	)		—			(2,098	)
Class I		—			(81,736	)		—			(320	)		—			(49,518	)		—			(46,240	)
Total distributions		—			(93,642	)		—			(360	)		—			(73,038	)		—			(49,670	)
Capital stock transactions
Net proceeds from sale of shares		668,724			639,389			177			628			130,039			127,343			39,447			95,517
Shares issued in reinvestment of income dividends and capital gain distributions		—			92,785			—			360			—			72,609			—			47,791
Less cost of shares redeemed		(227,733	)		(494,845	)		(1,736	)		(764	)		(69,043	)		(132,737	)		(81,707	)		(180,246	)
Net increase (decrease) in net assets resulting from capital share transactions		440,991			237,329			(1,559	)		224			60,996			67,215			(42,260	)		(36,938	)
Increase (decrease) in net assets		653,259			542,431			(1,580	)		190			138,391			100,512			(35,183	)		(34,611	)
Net assets
Beginning of period		1,805,008			1,262,577			3,643			3,453			489,410			388,898			674,020			708,631
End of period	$	2,458,267		$	1,805,008		$	2,063		$	3,643		$	627,801		$	489,410		$	638,837		$	674,020
Accumulated net investment income (loss) at the end of the period	$	(5,485	)	$	—		$	10		$	2		$	(2,029	)	$	—		$	580		$	—

See accompanying Notes to Financial Statements.

112

Semiannual Report

June 30, 2018

Statements of Assets and Liabilities

As of June 30, 2018 (dollar amounts in thousands) (unaudited)

	Global Leaders Fund			International Leaders Fund			International Developed Plus Fund			Institutional International Developed Plus Fund
Assets
Investments in securities, at cost		$	149,860		$	337,090		$	94,988		$	15,641
Investments in securities, at value		$	207,193		$	419,610		$	112,505		$	18,810
Cash			2			—			—			—
Foreign currency, at value (cost $55; $267; $13; $2)			55			267			13			2
Receivable for securities sold			—			2,020			339			56
Receivable for fund shares sold			74			108			—			—
Receivable from Adviser			9			10			16			9
Dividend and interest receivable			347			1,280			303			57
Total assets			207,680			423,295			113,176			18,934
Liabilities
Payable for investment securities purchased			3,571			—			—			—
Payable for fund shares redeemed			—			2			—			—
Management fee payable			161			319			85			14
Distribution fee payable			2			2			1			—
Foreign capital gains tax liability			—			6			—			—
Other payables and accrued expenses			79			119			94			66
Total liabilities			3,813			448			180			80
Net assets		$	203,867		$	422,847		$	112,996		$	18,854
Capital
Composition of net assets
Par value of shares of beneficial interest		$	13		$	25		$	7		$	1
Capital paid in excess of par value			128,698			331,742			92,719			15,129
Accumulated net investment income (loss)			723			1,461			873			113
Accumulated net realized gain (loss)			17,103			7,116			1,883			443
Net unrealized appreciation (depreciation) of investments and foreign currencies			57,330			82,503			17,514			3,168
Net assets		$	203,867		$	422,847		$	112,996		$	18,854

Class N shares
Net assets		$	8,613		$	10,207		$	2,494			—
Shares outstanding			557,404			617,110			154,202			—
Net asset value per share		$	15.45		$	16.54		$	16.17			—
Class I shares
Net assets		$	70,116		$	76,666		$	110,502			—
Shares outstanding			4,523,373			4,609,352			6,758,141			—
Net asset value per share		$	15.50		$	16.63		$	16.35			—
Institutional Class shares
Net assets		$	125,138		$	335,974			—		$	18,854
Shares outstanding			8,068,733			20,196,211			—			1,308,158
Net asset value per share		$	15.51		$	16.63			—		$	14.41

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

113

Statements of Operations

For the Period Ended June 30, 2018 (all amounts in thousands) (unaudited)

	Global Leaders Fund				International Leaders Fund				International Developed Plus Fund				Institutional International Developed Plus Fund
Investment income
Dividends		$	1,877			$	6,664			$	2,007			$	331
Less foreign tax withheld			(117	)			(639	)			(211	)			(35	)
Interest			4				14				3				1
Total income			1,764				6,039				1,799				297
Expenses
Investment advisory fees			1,005				1,890				562				86
Distribution fees			10				13				4				—
Custodian fees			24				30				25				21
Transfer agent fees			7				7				2				—
Sub-transfer agent fees
Class N			5				7				2				—
Class I			22				30				59				—
Professional fees			28				36				31				29
Registration fees			24				31				19				11
Shareholder reporting fees			3				7				1				1
Trustee fees			8				12				4				1
Other expenses			4				7				2				1
Total expenses before expense limitation			1,140				2,070				711				150
Expenses waived or reimbursed by the Adviser			(82	)			(100	)			(108	)			(63	)
Net expenses			1,058				1,970				603				87
Net investment income (loss)			706				4,069				1,196				210
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign taxes, if applicable			16,233				3,253				2,053				688
Foreign currency transactions			(19	)			(87	)			(20	)			(4	)
Total net realized gain (loss)			16,214				3,166				2,033				684
Change in net unrealized appreciation (depreciation) of:
Investments in securities			(3,194	)			(3,233	)			(6,125	)			(1,080	)
Foreign currency translations			(5	)			3				(5	)			(1	)
Change in net unrealized appreciation (depreciation)			(3,199	)			(3,230	)			(6,130	)			(1,081	)
Net increase (decrease) in net assets resulting from operations		$	13,721			$	4,005			$	(2,901	)		$	(187	)

See accompanying Notes to Financial Statements.

114

Semiannual Report

June 30, 2018

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	Global Leaders Fund						International Leaders Fund						International Developed Plus Fund						Institutional International Developed Plus Fund
		2018			2017			2018			2017			2018			2017			2018			2017
Operations
Net investment income (loss)	$	706		$	1,399		$	4,069		$	3,738		$	1,196		$	964		$	210		$	206
Net realized gain (loss) on investments, and other assets and liabilities		16,214			10,326			3,166			7,160			2,033			3,974			684			679
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(3,199	)		40,729			(3,230	)		72,854			(6,130	)		16,673			(1,081	)		2,922
Net increase (decrease) in net assets resulting from operations		13,721			52,454			4,005			83,752			(2,901	)		21,611			(187	)		3,807
Distributions to shareholders from
Net investment income
Class N		—			(50	)		—			(117	)		—			(55	)		—			—
Class I		—			(566	)		—			(844	)		—			(2,202	)		—			—
Institutional Class		—			(1,427	)		—			(4,501	)		—			—			—			(212	)
Net realized gain
Class N		—			(236	)		—			(71	)		—			—			—			—
Class I		—			(1,911	)		—			(437	)		—			—			—			—
Institutional Class		—			(4,506	)		—			(2,201	)		—			—			—			—
Total distributions		—			(8,696	)		—			(8,171	)		—			(2,257	)		—			(212	)
Capital stock transactions
Net proceeds from sale of shares		11,442			8,432			57,732			70,308			764			22,611			—			150
Shares issued in reinvestment of income dividends and capital gain distributions		—			8,355			—			6,325			—			2,153			—			212
Less cost of shares redeemed		(32,645	)		(25,927	)		(17,718	)		(28,608	)		(5,606	)		(10,716	)		(49	)		(1,432	)
Net increase (decrease) in net assets resulting from capital share transactions		(21,203	)		(9,140	)		40,014			48,025			(4,842	)		14,048			(49	)		(1,070	)
Increase (decrease) in net assets		(7,482	)		34,618			44,019			123,606			(7,743	)		33,402			(236	)		2,525
Net assets
Beginning of period		211,349			176,731			378,828			255,222			120,739			87,337			19,090			16,565
End of period	$	203,867		$	211,349		$	422,847		$	378,828		$	112,996		$	120,739		$	18,854		$	19,090
Accumulated net investment income (loss) at the end of the period	$	723		$	17		$	1,461		$	(2,608	)	$	873		$	(323	)	$	113		$	(97	)

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

115

Statements of Assets and Liabilities

As of June 30, 2018 (dollar amounts in thousands) (unaudited)

	International Growth Fund			Institutional International Growth Fund			International Small Cap Growth Fund
Assets
Investments in securities, at cost		$	2,392,628		$	1,805,173		$	508,139
Investments in securities, at value		$	2,863,379		$	2,143,578		$	579,167
Cash			—			—			27
Foreign currency, at value (cost $1,929; $1,472; $297)			1,929			1,472			297
Receivable for securities sold			41,510			20,151			3,193
Receivable for fund shares sold			2,470			8,905			123
Dividend and interest receivable			9,584			6,727			1,192
Total assets			2,918,872			2,180,833			583,999
Liabilities
Payable for investment securities purchased			4,380			3,304			4,491
Payable for fund shares redeemed			1,899			223			285
Management fee payable			2,478			1,718			488
Distribution fee payable			148			—			1
Foreign capital gains tax liability			359			243			—
Other payables and accrued expenses			1,179			573			237
Total liabilities			10,443			6,061			5,502
Net assets		$	2,908,429		$	2,174,772		$	578,497
Capital
Composition of net assets
Par value of shares of beneficial interest		$	96		$	122		$	38
Capital paid in excess of par value			2,284,097			1,688,357			468,922
Accumulated net investment income (loss)			23,275			7,854			(7,107	)
Accumulated net realized gain (loss)			130,617			140,329			45,626
Net unrealized appreciation (depreciation) of investments and foreign currencies			470,344			338,110			71,018
Net assets		$	2,908,429		$	2,174,772		$	578,497

Class N shares
Net assets		$	701,999			—		$	5,695
Shares outstanding			23,504,008			—			384,004
Net asset value per share		$	29.87			—		$	14.83
Class I shares
Net assets		$	2,206,430			—		$	339,935
Shares outstanding			72,048,784			—			22,653,967
Net asset value per share		$	30.62			—		$	15.01
Institutional Class shares
Net assets			—		$	2,174,772		$	232,867
Shares outstanding			—			122,263,379			15,424,927
Net asset value per share			—		$	17.79		$	15.10

See accompanying Notes to Financial Statements.

116

Semiannual Report

June 30, 2018

Statements of Operations

For the Period Ended June 30, 2018 (all amounts in thousands) (unaudited)

	International Growth Fund				Institutional International Growth Fund				International Small Cap Growth Fund
Investment income
Dividends		$	47,672			$	35,931			$	7,313
Less foreign tax withheld			(4,877	)			(3,674	)			(680	)
Interest			46				41				18
Total income			42,841				32,298				6,651
Expenses
Investment advisory fees			15,298				10,759				2,992
Distribution fees			921				—				8
Custodian fees			189				138				67
Transfer agent fees			92				40				14
Sub-transfer agent fees
Class N			563				—				5
Class I			879				—				133
Professional fees			134				102				54
Registration fees			20				13				27
Shareholder reporting fees			124				1				19
Trustee fees			124				88				22
Other expenses			33				20				8
Total expenses before expense limitation			18,377				11,161				3,349
Expenses waived or reimbursed by the Adviser			(12	)			—				—
Net expenses			18,365				11,161				3,349
Net investment income (loss)			24,476				21,137				3,302
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign taxes, if applicable			134,842				104,410				29,826
Foreign currency transactions			(1,042	)			(909	)			(424	)
Total net realized gain (loss)			133,800				103,501				29,402
Change in net unrealized appreciation (depreciation) of:
Investments in securities			(206,943	)			(159,442	)			(57,073	)
Foreign currency translations			1,464				1,147				324
Change in net unrealized appreciation (depreciation)			(205,479	)			(158,295	)			(56,749	)
Net increase (decrease) in net assets resulting from operations		$	(47,203	)		$	(33,657	)		$	(24,045	)

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

117

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	International Growth Fund						Institutional International Growth Fund						International Small Cap Growth Fund
	2018			2017			2018			2017			2018			2017
Operations
Net investment income (loss)	$	24,476		$	31,589		$	21,137		$	27,430		$	3,302		$	5,395
Net realized gain (loss) on investments, and other assets and liabilities		133,800			302,999			103,501			175,181			29,402			58,596
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(205,479	)		473,662			(158,295	)		369,046			(56,749	)		95,412
Net increase (decrease) in net assets resulting from operations		(47,203	)		808,250			(33,657	)		571,657			(24,045	)		159,403
Distributions to shareholders from
Net investment income
Class N		—			(9,771	)		—			—			—			(118	)
Class I		—			(36,754	)		—			—			—			(8,043	)
Institutional Class		—			—			—			(54,743	)		—			(6,106	)
Net realized gain
Class N		—			—			—			—			—			(428	)
Class I		—			—			—			—			—			(23,404	)
Institutional Class		—			—			—			(39,224	)		—			(17,151	)
Total distributions		—			(46,525	)		—			(93,967	)		—			(55,250	)
Capital stock transactions
Net proceeds from sale of shares		145,156			246,035			156,011			192,850			72,259			58,793
Shares issued in reinvestment of income dividends and capital gain distributions		—			43,593			—			90,689			—			50,424
Less cost of shares redeemed		(328,590	)		(893,532	)		(277,881	)		(524,901	)		(71,470	)		(128,250	)
Net increase (decrease) in net assets resulting from capital share transactions		(183,434	)		(603,904	)		(121,870	)		(241,362	)		789			(19,033	)
Increase (decrease) in net assets		(230,637	)		157,821			(155,527	)		236,328			(23,256	)		85,120
Net assets
Beginning of period		3,139,066			2,981,245			2,330,299			2,093,971			601,753			516,633
End of period	$	2,908,429		$	3,139,066		$	2,174,772		$	2,330,299		$	578,497		$	601,753
Accumulated net investment income (loss) at the end of the period	$	23,275		$	(1,201	)	$	7,854		$	(13,283	)	$	(7,107	)	$	(10,409	)

See accompanying Notes to Financial Statements.

118

Semiannual Report

June 30, 2018

Statements of Assets and Liabilities

As of June 30, 2018 (dollar amounts in thousands) (unaudited)

	Emerging Markets Leaders Fund			Emerging Markets Growth Fund		Emerging Markets Small Cap Growth Fund
Assets
Investments in securities, at cost	$	375,699		$	870,493		$	455,109
Investments in securities, at value	$	435,394		$	1,068,027		$	469,682
Foreign currency, at value (cost $306; $2,009; $1,908)		306			2,008			1,908
Receivable for securities sold		3,249			19,762			5,353
Receivable for fund shares sold		112			74			632
Receivable from Adviser		—			—			26
Dividend and interest receivable		1,493			3,393			1,533
Total assets		440,554			1,093,264			479,134
Liabilities
Payable for investment securities purchased		3,918			7,542			4,978
Payable for fund shares redeemed		5			4,716			607
Management fee payable		407			1,039			444
Distribution fee payable		1			2			3
Foreign capital gains tax liability		460			2,191			728
Other payables and accrued expenses		325			847			423
Total liabilities		5,116			16,337			7,183
Net assets	$	435,438		$	1,076,927		$	471,951
Capital
Composition of net assets
Par value of shares of beneficial interest	$	42		$	70		$	28
Capital paid in excess of par value		355,336			794,271			433,688
Accumulated net investment income (loss)		(219	)		383			(9,617	)
Accumulated net realized gain (loss)		21,051			86,863			34,043
Net unrealized appreciation (depreciation) of investments and foreign currencies		59,228			195,340			13,809
Net assets	$	435,438		$	1,076,927		$	471,951
Class N shares
Net assets	$	2,471		$	9,977		$	11,892
Shares outstanding		240,110			664,868			704,122
Net asset value per share	$	10.29		$	15.01		$	16.89
Class I shares
Net assets	$	45,601		$	116,444		$	284,122
Shares outstanding		4,409,637			7,670,855			16,730,404
Net asset value per share	$	10.34		$	15.18		$	16.98
Institutional Class shares
Net assets	$	387,366		$	950,506		$	175,937
Shares outstanding		37,458,123			62,108,903			10,339,026
Net asset value per share	$	10.34		$	15.31		$	17.02

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

119

Statements of Operations

For the Period Ended June 30, 2018 (all amounts in thousands) (unaudited)

		Emerging Markets Leaders Fund				Emerging Markets Growth Fund				Emerging Markets Small Cap Growth Fund
Investment income
Dividends			$	5,836			$	13,440			$	4,251
Less foreign tax withheld				(631	)			(1,470	)			(344	)
Interest				3				8				10
Total income				5,208				11,978				3,917
Expenses
Investment advisory fees				2,625				7,075				2,686
Distribution fees				3				14				17
Custodian fees				78				208				166
Transfer agent fees				9				27				41
Sub-transfer agent fees
Class N				2				4				9
Class I				16				51				95
Professional fees				54				112				119
Registration fees				17				26				34
Shareholder reporting fees				5				1				25
Trustee fees				16				48				15
Other expenses				10				19				6
Total expenses before expense limitation				2,835				7,585				3,213
Expenses waived or reimbursed by the Adviser				(1	)			—				(55	)
Net expenses				2,834				7,585				3,158
Net investment income (loss)				2,374				4,393				759
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities, net of foreign taxes, if applicable				20,746				115,887				29,191
Foreign currency transactions				(228	)			(1,598	)			(669	)
Total net realized gain (loss)				20,518				114,289				28,522
Change in net unrealized appreciation (depreciation) of:
Investments in securities				(54,846	)			(210,331	)			(81,093	)
Foreign currency translations	��			(465	)			2,953				3,639
Change in net unrealized appreciation (depreciation)				(55,311	)			(207,378	)			(77,454	)
Net increase (decrease) in net assets resulting from operations			$	(32,419	)		$	(88,696	)		$	(48,173	)

See accompanying Notes to Financial Statements.

120

Semiannual Report

June 30, 2018

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	Emerging Markets Leaders Fund						Emerging Markets Growth Fund						Emerging Markets Small Cap Growth Fund
	2018			2017			2018			2017			2018			2017
Operations
Net investment income (loss)	$	2,374		$	1,292		$	4,393		$	1,937		$	759		$	1,951
Net realized gain (loss) on investments, and other assets and liabilities		20,518			26,835			114,289			119,365			28,522			46,298
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(55,311	)		108,551			(207,378	)		350,540			(77,454	)		77,357
Net increase (decrease) in net assets resulting from operations		(32,419	)		136,678			(88,696	)		471,842			(48,173	)		125,606
Distributions to shareholders from
Net investment income
Class N		—			(12	)		—			(77	)		—			(391	)
Class I		—			(327	)		—			(1,188	)		—			(8,028	)
Institutional Class		—			(3,069	)		—			(11,908	)		—			(4,880	)
Net realized gain
Class N		—			—			—			—			—			(35	)
Class I		—			—			—			—			—			(651	)
Institutional Class		—			—			—			—			—			(389	)
Total distributions		—			(3,408	)		—			(13,173	)		—			(14,374	)
Capital stock transactions
Net proceeds from sale of shares		33,688			77,729			113,083			320,170			105,111			130,660
Shares issued in reinvestment of income dividends and capital gain distributions		—			3,396			—			11,322			—			13,084
Less cost of shares redeemed		(43,743	)		(41,986	)		(266,273	)		(405,091	)		(49,616	)		(73,209	)
Net increase (decrease) in net assets resulting from capital share transactions		(10,055	)		39,139			(153,190	)		(73,599	)		55,495			70,535
Increase (decrease) in net assets		(42,474	)		172,409			(241,886	)		385,070			7,322			181,767
Net assets
Beginning of period		477,912			305,503			1,318,813			933,743			464,629			282,862
End of period	$	435,438		$	477,912		$	1,076,927		$	1,318,813		$	471,951		$	464,629
Accumulated net investment income (loss) at the end of the period	$	(219	)	$	(2,593	)	$	383		$	(4,010	)	$	(9,617	)	$	(10,376	)

See accompanying Notes to Financial Statements.

June 30, 2018

William Blair Funds

121

Statements of Assets and Liabilities

As of June 30, 2018 (dollar amounts in thousands) (unaudited)

	Bond Fund			Income Fund			Low Duration Fund			Macro Allocation Fund
Assets
Investments in securities, at cost	$	528,265		$	65,492		$	176,071			$	1,150,962
Investments in securities, at value	$	519,225		$	63,951		$	173,744			$	1,210,616
Cash		—			—			92				2,250
Receivable for securities sold		1,043			4,834			14,503				30,838
Receivable for fund shares sold		349			22			—				1,067
Receivable for variation margin on centrally cleared swaps		—			—			—				19
Receivable from Adviser		4			2			8				—
Dividend and interest receivable		4,498			396			662				2,268
Unrealized appreciation on forward foreign currency contracts		—			—			—				14,757
Total assets		525,119			69,205			189,009				1,261,815
Liabilities
Security sold, not yet purchased (proceeds $—; $4,834; $14,503; $—)		—			4,860			14,579				—
Options written, at value (proceeds $—; $—; $—; $683)		—			—			—				509
Payable for futures variation margin		—			—			—				236
Payable for variation margin on centrally cleared swaps		6			—			—				—
Payable for investment securities purchased		—			—			—				18,260
Payable for fund shares redeemed		1,219			89			126				1,505
Payable to custodian		269			—			—				—
Cash received as collateral, due to broker		—			—			—				16,840
Unrealized depreciation on swap contracts		—			—			—				4,013
Management fee payable		131			22			44				818
Distribution fee payable		11			3			—				7
Distributions payable to shareholders		92			3			48				—
Other payables and accrued expenses		87			66			70				279
Total liabilities		1,815			5,043			14,867				42,467
Net assets	$	523,304		$	64,162		$	174,142			$	1,219,348
Capital
Composition of net assets
Par value of shares of beneficial interest	$	53		$	8		$	20			$	104
Capital paid in excess of par value		548,095			70,813			201,042				1,341,655
Accumulated net investment income (loss)		(2,685	)		(478	)		(1,248	)			5,325
Accumulated net realized gain (loss)		(13,176	)		(4,614	)		(23,269	)			(206,126	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		(8,983	)		(1,567	)		(2,403	)			78,390
Net assets	$	523,304		$	64,162		$	174,142			$	1,219,348
Class N shares
Net assets	$	85,812		$	25,897		$	2,217			$	35,442
Shares outstanding		8,605,303			3,053,965			251,745				3,044,308
Net asset value per share	$	9.97		$	8.48		$	8.81			$	11.65
Class I shares
Net assets	$	354,249		$	38,265		$	71,877			$	724,578
Shares outstanding		35,894,933			4,544,379			8,166,830				61,953,047
Net asset value per share	$	9.87		$	8.42		$	8.80			$	11.70
Institutional Class shares
Net assets	$	83,243			—		$	100,048			$	459,328
Shares outstanding		8,441,339			—			11,363,866				39,208,747
Net asset value per share	$	9.86			—		$	8.80			$	11.72

See accompanying Notes to Financial Statements.

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Statements of Operations

For the Period Ended June 30, 2018 (all amounts in thousands) (unaudited)

	Bond Fund			Income Fund				Low Duration Fund				Macro Allocation Fund
Investment income
Dividends	$	—			$	—			$	—			$	7,815
Interest		10,005				1,124				2,276				2,792
Total income		10,005				1,124				2,276				10,607
Expenses
Investment advisory fees		814				154				285				5,151
Distribution fees		65				26				1				48
Custodian fees		35				20				33				72
Transfer agent fees		31				5				6				142
Sub-transfer agent fees
Class N		66				29				1				30
Class I		147				10				21				328
Professional fees		29				19				22				73
Registration fees		32				12				28				33
Shareholder reporting fees		27				6				3				40
Trustee fees		22				4				10				59
Other expenses		9				2				5				173
Total expenses before expense limitation		1,277				287				415				6,149
Expenses waived or reimbursed by the Adviser		(38	)			(7	)			(59	)			—
Net expenses		1,239				280				356				6,149
Net investment income (loss)		8,766				844				1,920				4,458
Realized and unrealized gain (loss)
Net realized gain (loss) on transactions from:
Investments in securities		(308	)			(528	)			(396	)			39,723
Options		—				—				—				(5,516	)
Futures contracts		—				—				—				(38,593	)
Swaps		(51	)			—				—				8,284
Forward foreign currency contracts		—				—				—				5,537
Foreign currency transactions		—				—				—				(75	)
Total net realized gain (loss)		(359	)			(528	)			(396	)			9,360
Change in net unrealized appreciation (depreciation) of:
Investments in securities		(20,757	)			(1,173	)			(673	)			(62,585	)
Options		—				—				—				311
Futures contracts		—				—				—				24,028
Swaps		102				—				—				(10,051	)
Forward foreign currency contracts		—				—				—				14,792
Foreign currency translations		—				—				—				169
Change in net unrealized appreciation (depreciation)		(20,655	)			(1,173	)			(673	)			(33,336	)
Net increase (decrease) in net assets resulting from operations	$	(12,248	)		$	(857	)		$	851			$	(19,518	)

See accompanying Notes to Financial Statements.

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123

Statements of Changes in Net Assets

For the Period Ended June 30, 2018 (unaudited) and the Year Ended December 31, 2017 (all amounts in thousands)

	Bond Fund						Income Fund						Low Duration Fund						Macro Allocation Fund
	2018			2017			2018			2017			2018			2017			2018			2017
*Operations*
Net investment income (loss)	$	8,766		$	15,301		$	844		$	1,994		$	1,920		$	3,799		$	4,458		$	14,153
Net realized gain (loss) on investments, and other assets and liabilities		(359	)		1,364			(528	)		81			(396	)		(343	)		9,360			17,469
Change in net unrealized appreciation (depreciation) on investments, and other assets and liabilities		(20,655	)		5,503			(1,173	)		(391	)		(673	)		(914	)		(33,336	)		48,676
Net increase (decrease) in net assets resulting from operations		(12,248	)		22,168			(857	)		1,684			851			2,542			(19,518	)		80,298
Distributions to shareholders from
Net investment income
Class N		(1,749	)		(3,978	)		(584	)		(1,426	)		(26	)		(96	)		—			(260	)
Class I		(7,849	)		(14,049	)		(749	)		(1,849	)		(1,469	)		(4,594	)		—			(8,252	)
Institutional Class		(1,896	)		(3,890	)		—			—			(1,682	)		(2,290	)		—			(6,654	)
Total distributions		(11,494	)		(21,917	)		(1,333	)		(3,275	)		(3,177	)		(6,980	)		—			(15,166	)
Capital stock transactions
Net proceeds from sale of shares		68,848			159,870			3,751			19,220			10,146			141,778			166,942			305,541
Shares issued in reinvestment of income dividends and capital gain distributions		10,521			20,161			1,274			3,136			2,797			6,334			—			13,878
Less cost of shares redeemed		(92,078	)		(163,783	)		(29,451	)		(40,857	)		(69,552	)		(190,670	)		(236,716	)		(656,829	)
Net increase (decrease) in net assets resulting from capital share transactions		(12,709	)		16,248			(24,426	)		(18,501	)		(56,609	)		(42,558	)		(69,774	)		(337,410	)
Increase (decrease) in net assets		(36,451	)		16,499			(26,616	)		(20,092	)		(58,935	)		(46,996	)		(89,292	)		(272,278	)
Net assets
Beginning of period		559,755			543,256			90,778			110,870			233,077			280,073			1,308,640			1,580,918
End of period	$	523,304		$	559,755		$	64,162		$	90,778		$	174,142		$	233,077		$	1,219,348		$	1,308,640
Accumulated net investment income (loss) at the end of the period	$	(2,685	)	$	43		$	(478	)	$	11		$	(1,248	)	$	9		$	5,325		$	867

See accompanying Notes to Financial Statements.

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(1) Organization

(a) Description of the Trust

William Blair Funds (the “Trust”) is a mutual fund registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Trust currently consists of the following twenty-one funds (the “Funds”), each with its own investment objective and policies. For each Fund, the number of shares authorized is unlimited.

Domestic Equity Funds

Growth

Large Cap Growth

Mid Cap Growth

Small-Mid Cap Growth

Small-Mid Cap Value

Small Cap Growth

Small Cap Value

Global Equity Fund

Global Leaders

Multi-Asset and Alternative Fund

Macro Allocation

International Equity Funds

International Leaders

International Developed Plus

Institutional International Developed Plus

International Growth

Institutional International Growth

International Small Cap Growth

Emerging Markets Leaders

Emerging Markets Growth

Emerging Markets Small Cap Growth

Fixed Income Funds

Bond

Income

Low Duration

William Blair Investment Management, LLC (the “Adviser”) serves as the Trust’s investment adviser. William Blair & Company, L.L.C. (“WBC” or the “Distributor”), an affiliate of the Adviser, serves as the Trust’s principal underwriter and distributor.

(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 at a fixed rate (0.25% for the Domestic Equity, Global Equity, International Equity and Multi-Asset and Alternative Funds and 0.15% for the Fixed Income Funds as discussed in Note 4(b) – Transactions with Affiliates – Underwriting Distribution Services and Shareholder Administration Agreements) and a sub-transfer agent fee that is not a fixed rate and may vary by Fund and class, as discussed below.

Class I shares are offered to a limited group of investors, either directly through the Trust’s distributor or through a select number of financial intermediaries. 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, as discussed below.

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 generally $5 million, subject to certain exceptions. Institutional Class shares do not carry any sales load, distribution fees or sub-transfer agents fees and generally have lower ongoing expenses than Class N and Class I shares.

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 of record are held in omnibus, other group accounts, retirement plans or accounts traded through registered securities clearing agents. These fees may vary based on, for example, the nature of services provided, but generally range up to 0.15% of the assets of the class serviced or maintained by the intermediary or up to $15 per sub-account maintained by the intermediary, depending on the method by which the intermediary charges for the services.

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125

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(c) Fund Objectives

The investment objectives of the Funds are as follows:

Domestic Equity Funds		Long-term capital appreciation.
Global Equity Funds		Long-term capital appreciation.
International Equity Funds		Long-term capital appreciation.
Bond Fund		Outperform the Bloomberg Barclays U.S. Aggregate Index by maximizing total return through a combination of income and capital appreciation.
Income Fund		High level of current income with relative stability of principal.
Low Duration Fund		Maximize total return. Total return includes both income and capital appreciation.
Macro Allocation Fund		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 (“US GAAP”), 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 expenses 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, 2018. 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, 2018, the Bond, Income and Low Duration Funds recognized a reduction of interest income and a corresponding increase in net realized gain of $2,852, $488 and $1,257, respectively (in thousands). This reclassification had no effect on the net asset value or the net assets of the Funds.

126

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

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 period end.

For financial reporting purposes, security and shareholder transactions are recorded on trade date in accordance with US GAAP. 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 Fixed Income 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 of 1986, as amended (the “Code”), in order to qualify as 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 in 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’ tax returns for the prior three years remains open and the returns are subject to examination.

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127

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

Adjustments to the cost of investments for tax purposes may be 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, including derivatives, for federal income tax purposes and related gross unrealized appreciation (depreciation) and net unrealized appreciation/(depreciation) at June 30, 2018, were as follows (in thousands):

				Net
		Gross	Gross	Unrealized
	Cost of	Unrealized	Unrealized	Appreciation/
Fund	Investments	Appreciation	Depreciation	(Depreciation)
Growth	$227,954	$118,156	$3,965	$114,191
Large Cap Growth	172,275	69,679	1,229	68,450
Mid Cap Growth	50,091	13,706	636	13,070
Small-Mid Cap Growth	2,035,659	463,125	72,734	390,391
Small-Mid Cap Value	1,739	346	22	324
Small Cap Growth	472,347	160,334	9,827	150,507
Small Cap Value	498,054	162,136	7,689	154,447
Global Leaders	151,359	58,554	2,720	55,834
International Leaders	340,158	81,911	2,459	79,452
International Developed Plus	95,608	18,517	1,620	16,897
Institutional International Developed Plus	15,767	3,290	247	3,043
International Growth	2,418,151	511,517	66,289	445,228
Institutional International Growth	1,824,062	368,331	48,815	319,516
International Small Cap Growth	521,036	73,157	15,026	58,131
Emerging Markets Leaders	379,636	70,973	15,215	55,758
Emerging Markets Growth	888,427	213,454	33,854	179,600
Emerging Markets Small Cap Growth	466,989	34,113	31,420	2,693
Bond	528,399	6,080	15,198	(9,118	)
Income	65,504	201	1,754	(1,553	)
Low Duration	176,071	260	2,587	(2,327	)
Macro Allocation	1,155,613	114,067	41,021	73,046

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 US GAAP. The reclassifications generally relate to the tax treatment of net operating losses, Section 988 currency gains and losses, PFIC gains and losses, expiration of capital loss carryforwards, paydown gains and losses, investments in real estate investment trusts and partnerships, redemptions in-kind, distribution reclassifications, income on derivatives, capital gain taxes, 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, 2017 (the Funds’ most recent fiscal year end), the following reclassifications were recorded (in thousands):

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

	Accumulated			Accumulated
	Undistributed			Undistributed			Capital Paid
	Net Investment			Net Realized			in Excess
Fund	Income (Loss)			Gain/(Loss)			of Par Value
Growth	$	—		$	(24,796	)	$	24,796
Large Cap Growth		—			—			—
Mid Cap Growth		455			(3,650	)		3,195
Small-Mid Cap Growth		8,378			(78,018	)		69,640
Small-Mid Cap Value		(3	)		3			—
Small Cap Growth		3,241			(3,241	)		—
Small Cap Value		(579	)		579			—
Global Leaders		173			(173	)		—
International Leaders		72			(72	)		—
International Developed Plus		154			73,341			(73,495	)
Institutional International Developed Plus		21			90,009			(90,030	)
International Growth		3,854			130,343			(134,197	)
Institutional International Growth		360			(360	)		—
International Small Cap Growth		1,197			(1,197	)		—
Emerging Markets Leaders		(87	)		87			—
Emerging Markets Growth		3,078			(3,078	)		—
Emerging Markets Small Cap Growth		8,754			(8,761	)		7
Bond		6,624			(6,624	)		—
Income		1,282			3,295			(4,577	)
Low Duration		3,170			(3,170	)		—
Macro Allocation		8,464			(8,053	)		(411	)

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 US GAAP. 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 2017 and 2016 was as follows (in thousands):

	Distributions Paid in 2017								Distributions Paid in 2016
	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	$	351	$	3,113	$	10,311	$	80,701	$	—	$	1,075	$	5,224	$	38,868
Large Cap Growth		—		—		146		993		8		313		99		884
Mid Cap Growth		—		—		986		10,476		—		—		912		6,417
Small-Mid Cap Growth		—		—		11,906		81,736		—		—		5,332		28,097
Small-Mid Cap Value		—		12		28		320		1		24		9		129
Small Cap Growth		4,158		8,754		19,362		40,764		—		—		6,573		14,099
Small Cap Value		46		2,095		2,057		45,472		105		3,363		1,287		25,920
Global Leaders		71		739		215		1,738		—		124		27		206
International Leaders		117		844		71		437		23		293		—		—
International Developed Plus		55		2,202		—		—		29		823		—		—
International Growth		9,771		36,754		—		—		10,938		40,501		—		—
International Small Cap Growth		121		8,233		425		23,214		5		1,063		2		57


June 30, 2018	William Blair Funds	129

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

	Distributions Paid in 2017								Distributions Paid in 2016
	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	$	12	$	327	$	—	$	—	$	—	$	41	$	—	$	—
Emerging Markets Growth		77		1,188		—		—		18		416		—		—
Emerging Markets Small Cap Growth		391		8,028		35		651		210		4,177		—		—
Bond		3,978		14,049		—		—		5,237		11,452		—		—
Income		1,426		1,849		—		—		1,079		1,868		—		—
Low Duration		96		4,594		—		—		149		3,331		—		—
Macro Allocation		260		8,252		—		—		1,182		21,809		—		—

	Distributions Paid in 2017			Distributions Paid in 2016
	Ordinary	Long-Term		Ordinary		Long-Term
	Income	Capital Gains		Income		Capital Gains
	Institutional	Institutional		Institutional		Institutional
Global Leaders	$ 1,836		$ 4,097		$ 403		$559
International Leaders	4,501		2,201		2,350		—
Institutional International
Developed Plus	212		—		336		—
Institutional International Growth	54,743		39,224		23,809		—
International Small Cap Growth	6,246		17,011		845		37
Emerging Markets Leaders	3,069		—		513		—
Emerging Markets Growth	11,908		—		4,354		—
Emerging Markets Small Cap Growth	4,880		389		3,339		—
Bond	3,890		—		3,903		—
Low Duration	2,290		—		694		—
Macro Allocation	6,654		—		13,553		—

As of December 31, 2017, 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	$	938	$	—		$	7,904	$	103,770
Large Cap Growth		158		—			2,522		53,982
Mid Cap Growth		—		—			2,258		14,974
Small-Mid Cap Growth		3,042		—			58,088		333,688
Small-Mid Cap Value		—		—			3		813
Small Cap Growth		1,275		—			7,217		108,266
Small Cap Value		—		(4,103	)		7,467		181,967
Global Leaders		293		—			2,002		59,140
International Leaders		33		—			4,318		82,724
International Developed Plus		151		—			—		23,020
Institutional International Developed Plus		3		(213	)		—		4,121
International Growth		21,442		—			—		649,997
Institutional International Growth		3,400		—			38,723		477,827
International Small Cap Growth		5,236		—			13,824		114,522
Emerging Markets Leaders		258		—			1,625		110,596
Emerging Markets Growth		10,202		(21,970	)		—		383,050
Emerging Markets Small Cap Growth		560		—			6,408		79,440
Bond		99		(12,682	)		—		11,575
Income		11		(4,066	)		—		(414	)
Low Duration		43		(22,873	)		—		(1,730	)
Macro Allocation		—		(218,413	)		—		115,520

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June 30, 2018

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

As of December 31, 2017, the Funds may have unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. Under current law, the Funds may carry forward net capital losses indefinitely to use to offset capital gains realized in future years. Previous law limited the carry forward of capital losses to the eight tax years following the year the capital loss was realized. If a Fund has capital losses that are subject to current law and also has capital losses subject to prior law, the losses realized under current law will be utilized to offset capital gains before any of the losses governed by prior law can be used. As a result of these ordering rules, capital losses realized under previous law may be more likely to expire unused. Capital losses realized under current law will carry forward retaining their classification as long-term or short-term losses; as compared to under prior law in which all capital losses were carried forward as short term capital losses.

The following table details the Funds’ available capital loss carryforwards as of December 31, 2017, the capital loss carryforwards utilized by the Funds in 2017, and the capital loss carryforwards that expired in 2017 (in thousands):

	Available Capital Loss Carryforwards									Capital Loss		Capital Loss
	Limited by Year of Expiration			Unlimited				Total		Carryforwards		Carryforwards
Fund		2018		Short Term		Long Term		Available		Utilized in 2017		Expired in 2017
Mid Cap Growth		$	—	$	—	$	—	$	—	$	2,038	$	—
Global Leaders			—		—		—		—		986		—
International Leaders			—		—		—		—		144		—
International Developed Plus			—		—		—		—		3,696		73,495
Institutional International Developed Plus			—		213		—		213		579		90,030
International Growth			—		—		—		—		294,238		134,197
Institutional International Growth			—		—		—		—		94,970		—
Emerging Markets Leaders			—		—		—		—		22,497		—
Emerging Markets Growth			—		21,970		—		21,970		94,493		—
Emerging Markets Small Cap Growth			—		—		—		—		19,850		—
Bond			—		7,985		4,697		12,682		—		—
Income			—		1,742		2,162		3,904		—		4,577
Low Duration			955		11,239		10,679		22,873		—		—
Macro Allocation			—		166,163		52,250		218,413		—		—

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, 2017. 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, 2017.

As of December 31, 2017, the following Funds deferred, on a tax basis, qualified late year losses of (in thousands):

	Qualified Late Year Losses
	Ordinary		Net
Fund	Income			Capital
Small Cap Value	$	—	$	4,103
Income		—		162

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(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, 2018, 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 in 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. 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. When a Fund sells TBAs, it incurs risks similar to those incurred in short sales. For example, when a Fund sells TBAs without owning or having the right to obtain the deliverable securities 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.

(g) Securities Sold, Not Yet Purchased

A Fund may sell a security it does not own (known as selling a security short) 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 acquire a security to terminate a short position except at a price substantially in excess of the price at which it sold the security short.

(h) Use of Estimates

The preparation of financial statements in conformity with US GAAP 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, 2018, the Small-Mid Cap Growth and Small Cap Growth Funds redeemed $34,789 and $6,298 (in thousands), respectively, of Fund shares in-kind rather than with cash and recognized net realized gains of $11,209 and $2,300 (in thousands), respectively, on the securities distributed to shareholders.

132

Semiannual Report

June 30, 2018

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(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 foreign security may be different from the last sale price (or the mean between the last reported bid and ask prices). As of June 30, 2018, fair valuation estimates for foreign equity securities were obtained.

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 for such securities, dealer quotes, transaction prices for other 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. If there were no sales that day or if no settlement price is available, such option contracts are valued at the mean between the last reported bid and ask prices. Option contracts traded in the Over-the-Counter (“OTC”) market shall be valued by an independent pricing service. Futures contracts are valued at the most recent settlement price on the exchange on which they are traded most extensively, or if no settlement price is available, at the last sale price as of the close of the exchange. 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.

Swaps that are centrally cleared through an exchange are valued at the most recent settlement price provided by the exchange on which they are cleared. Total return swaps on equities, equity baskets, indices and other financial instruments are valued by an independent pricing service, or if unavailable, based on the security’s or instrument’s underlying reference asset. All other 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.

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 these 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, 2018, there were securities held in the International Growth, Institutional International Growth, and Macro Allocation Funds for which a reliable market price was not available and that were fair valued pursuant to the Valuation Procedures approved by the Board of Trustees.

(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:

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133

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

•	Level 1—Quoted prices (unadjusted) in active markets for an identical security.

•	Level 2—Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. In addition, other observable inputs such as foreign exchange rates, benchmark securities indices and foreign futures contracts may be utilized in the valuation of certain foreign securities when significant events occur between the last sale on the foreign securities exchange and the time 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 are 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 methodologies applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis is 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 agency obligations, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities, asset-backed 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 for such securities, dealer quotes, transaction prices for other 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 and commercial paper 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, the 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.

134

Semiannual Report

June 30, 2018

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

As of June 30, 2018, the value of securities and other assets, segregated by their hierarchical input levels used in determining fair value and by security class or other financial instruments, are shown below (in thousands).

Investments in securities					Growth		Large Cap Growth		Mid Cap Growth
Level 1—Quoted prices
Common Stocks					$	339,586	$	238,842	$	61,755
Level 2—Other significant observable inputs
Short-Term Investments						2,559		1,883		1,406
Level 3—Significant unobservable inputs
None						—		—		—
Total investments in securities					$	342,145	$	240,725	$	63,161

Investments in securities			Small-Mid Cap Growth		Small-Mid Cap Value		Small Cap Growth		Small Cap Value
Level 1—Quoted prices
Common Stocks			$	2,408,793	$	2,001	$	607,518	$	633,981
Exchange-Traded Fund				—		62		5,776		6,464
Level 2—Other significant observable inputs
Short-Term Investments				17,257		—		9,560		12,056
Level 3—Significant unobservable inputs
None				—		—		—		—
Total investments in securities			$	2,426,050	$	2,063	$	622,854	$	652,501

Investments in securities	Global Leaders		International Leaders		International Developed Plus		Institutional International Developed Plus		International Growth
Level 1—Quoted prices
Common Stocks	$	133,981	$	70,810	$	26,078	$	4,321	$	369,538
Level 2—Other significant observable inputs
Common Stocks		69,157		342,945		83,590		13,865		2,478,292
Preferred Stocks		—		—		—		—		8,345
Short-Term Investments		4,055		5,855		2,837		624		7,204
Level 3—Significant unobservable inputs
Common Stocks		—		—		—		—		—
Total investments in securities	$	207,193	$	419,610	$	112,505	$	18,810	$	2,863,379

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	$	276,168	$	47,093	$	133,655	$	229,824	$	59,948
Preferred Stocks		—		—		9,539		10,209		4,777
Level 2—Other significant observable inputs
Common Stocks		1,853,119		510,384		286,456		801,715		395,113
Preferred Stocks		6,240		—		—		—		—
Short-Term Investments		8,051		21,690		5,744		26,279		9,844
Level 3—Significant unobservable inputs
Common Stocks		—		—		—		—		—
Total investments in securities	$	2,143,578	$	579,167	$	435,394	$	1,068,027	$	469,682

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

Investments in securities	Bond		Income			Low Duration			Macro Allocation
Assets
Level 1—Quoted Prices
Common Stocks	$	—	$	—		$	—		$	7,299
Exchange-Traded Funds		—		—			—			825,402
Level 2—Other significant observable inputs
Asset-Backed Securities		4,207		1,014			27,576			—
Commercial Paper		—		600			2,750			—
Corporate Obligation/Notes		248,728		22,211			60,391			—
Foreign Government		—		—			—			27,041
Purchased Options		—		—			—			3,018
Short-Term Investments		—		690			—			32,991
U.S. Government and U.S. Agency		266,290		39,436			83,027			314,865
Level 3—Significant unobservable inputs
None		—		—			—			—
Liabilities
Level 1—Quoted Prices
None		—		—			—			—
Level 2—Other significant observable inputs
Written Options		—		—			—			(509	)
Level 3—Significant unobservable inputs
None		—		—			—			—
Total investments in securities	$	519,225	$	63,951		$	173,744		$	1,210,107
Other financial instruments
Assets
Level 1—Quoted Prices
Futures Contracts	$	—	$	—		$	—		$	14,635
Level 2—Other significant observable inputs
Forward Foreign Currency Contracts		—		—			—			27,253
Swaps		56		—			—			296
Level 3—Significant unobservable inputs
None		—		—			—			—
Liabilities
Level 1—Quoted Prices
Futures Contracts		—		—			—			(5,912	)
Level 2—Other significant observable inputs
Forward Foreign Currency Contracts		—		—			—			(12,496	)
Swaps		—		—			—			(5,223	)
U.S. Government Agency		—		(4,860	)		(14,579	)		—
Level 3—Significant unobservable inputs
None		—		—			—			—
Total Other Financial Instruments	$	56	$	(4,860	)	$	(14,579	)	$	18,553

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 and Institutional International 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 these fair value determinations, 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, and analysis of the company’s performance and market trends that influence its performance. Level 3 securities represented 0.00% and 0.00% as a percentage of net assets in the International Growth and Institutional International Growth Funds, respectively. The change in net unrealized gain (loss) related to those securities held at June 30, 2018 is included in the Change in net unrealized appreciation (depreciation) of Investments in the Statements of Operations.

136

Semiannual Report

June 30, 2018

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(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 management fee, which is accrued daily and paid monthly, based on a specified percentage of the Fund’s average daily net assets. Each Fund’s annual management fee rate is as follows:

Domestic Equity Funds
Growth	0.75	%
Large Cap Growth	0.70	%
Mid Cap Growth	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 Leaders²	0.95	%

International Equity Funds
International Leaders³	0.90	%
International Developed Plus⁴	0.90	%
Institutional International Developed Plus:
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.
2	Prior to May 1, 2018, the Global Leaders Fund paid a management fee at a rate of 1.00% of the Fund’s average daily net assets. Effective May 1, 2018, the management fee paid to the Adviser was reduced to 0.95%.
3	Prior to May 1, 2018, the International Leaders Fund paid a management fee at a rate of 0.95% of the Fund’s average daily net assets. Effective May 1, 2018, the management fee paid to the Adviser was reduced to 0.90%.
4	Prior to May 1, 2018, the International Developed Plus Fund paid a management fee at a rate of 1.00% of the first $250 million of the Fund’s average daily net assets; plus 0.90% of the Fund’s average daily net assets over $250 million. Effective May 1, 2018, the management fee paid to the Adviser was reduced to 0.90% of the Fund’s average daily net assets.

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137

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

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 certain operating expenses, subject to certain excluded expenses, in excess of the agreed upon rate through April 30, 2019. The amount the Adviser owes a Fund as of the reporting date is recorded as Receivable from Adviser in the Statements of Assets and Liabilities. The Adviser reimburses the Funds on a monthly basis. The Adviser will waive fees and/or reimburse expenses to the extent that the total operating expenses for the stated class of the Funds, subject to certain excluded expenses, exceed the following rates (as a percentage of average daily net assets):

	Class N				Class I				Institutional Class
Fund	Effective May 1, 2018 through April 30, 2019		Effective May 1, 2017 through April 30, 2018		Effective May 1, 2018 through April 30, 2019		Effective May 1, 2017 through April 30, 2018		Effective May 1, 2018 through April 30, 2019		Effective May 1, 2017 through April 30, 2018
Growth	1.20	%	1.20	%	0.95	%	0.95	%	N/A		N/A
Large Cap Growth	1.05	%	1.05	%	0.80	%	0.80	%	N/A		N/A
Mid Cap Growth	1.20	%	1.30	%	0.95	%	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	1.25	%	1.35	%	1.00	%	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	1.30	%	1.40	%	1.05	%	1.15	%	1.00	%	1.00	%
International Leaders	1.25	%	1.35	%	1.00	%	1.10	%	0.95	%	0.95	%
International Developed Plus	1.25	%	1.30	%	1.00	%	1.05	%	N/A		N/A
Institutional International Developed Plus	N/A		N/A		N/A		N/A		0.90	%	0.90	%
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		1.05	%	1.05	%
International Small Cap Growth	1.55	%	1.65	%	1.30	%	1.40	%	1.25	%	1.25	%
Emerging Markets Leaders	1.55	%	1.65	%	1.30	%	1.40	%	1.25	%	1.25	%
Emerging Markets Growth	1.60	%	1.70	%	1.35	%	1.45	%	1.30	%	1.30	%
Emerging Markets Small Cap Growth	1.55	%	1.65	%	1.30	%	1.40	%	1.25	%	1.25	%
Bond	0.60	%	0.65	%	0.45	%	0.50	%	0.40	%	0.35	%
Income	0.85	%	0.85	%	0.70	%	0.70	%	N/A		N/A
Low Duration	0.55	%	0.65	%	0.40	%	0.50	%	0.35	%	0.35	%
Macro Allocation	1.25	%	1.35	%	1.00	%	1.10	%	0.95	%	0.95	%

138

Semiannual Report

June 30, 2018

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

For the period ended June 30, 2018, the fee waivers and/or expense reimbursements received by each Fund were as follows (in thousands):

Fund	Fund Level Waiver	Class N Specific Waiver	Class I Specific Waiver	Total Waiver
Growth	$ —	$ —	$ —	$ —
Large Cap Growth	—	16	63	79
Mid Cap Growth	49	4	43	96
Small-Mid Cap Growth	—	115	412	527
Small-Mid Cap Value	52	—	1	53
Small Cap Growth	—	15	—	15
Small Cap Value	—	8	131	139
Global Leaders	79	1	2	82
International Leaders	94	2	4	100
International Developed Plus	47	2	59	108
Institutional International Developed Plus	63	—	—	63
International Growth	—	12	—	12
Institutional International Growth	—	—	—	—
International Small Cap Growth	—	—	—	—
Emerging Markets Leaders	—	1	—	1
Emerging Markets Growth	—	—	—	—
Emerging Markets Small Cap Growth	40	2	13	55
Bond	3	16	19	38
Income	—	7	—	7
Low Duration	59	—	—	59
Macro Allocation	—	—	—	—

(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 Developed Plus 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 previously agreed to pay an annual fee, payable monthly, of 0.15% of average daily net assets attributable to each class, respectively, all of which had been waived by WBC since January 2015. Effective January 1, 2018, the fee was reduced to 0.00%. WBC has provided, and continues to provide, shareholder administration services pursuant to the Shareholder Administration Agreements.

June 30, 2018

William Blair Funds

139

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(5) Investment Transactions

Investment transactions, excluding U.S. government securities and securities whose maturities or expiration dates at the time of purchase were one year or less, for the period ended June 30, 2018, were as follows (in thousands):

Fund	Purchases		Sales
Growth	$	87,051	$	143,522
Large Cap Growth		53,788		43,413
Mid Cap Growth		19,185		42,357
Small-Mid Cap Growth		1,045,317		608,711
Small-Mid Cap Value		1,553		3,043
Small Cap Growth		240,311		186,508
Small Cap Value		232,862		277,528
Global Leaders		41,824		60,269
International Leaders		89,322		49,379
International Developed Plus		35,541		38,282
Institutional International Developed Plus		6,354		6,100
International Growth		1,083,922		1,250,858
Institutional International Growth		877,380		1,001,172
International Small Cap Growth		285,883		287,651
Emerging Markets Leaders		155,339		159,624
Emerging Markets Growth		695,040		863,591
Emerging Markets Small Cap Growth		492,953		445,425
Bond		100,844		87,982
Income		35,684		51,962
Low Duration		117,308		164,886
Macro Allocation		165,582		252,343

Investment transactions in U.S. government securities whose maturities at the time of purchase were greater than one year for the period ended June 30, 2018, were as follows (in thousands):

Fund	Purchases		Sales
Bond	$	—	$	712
Income		2,336		2,975
Low Duration		—		—

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(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, 2018, 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, 2018.

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. A futures contract can be closed out prior to delivery by entering into an offsetting transaction in a matching futures contract. Although the value of an index might be a function of the value of certain specified securities, no physical delivery of those securities is made. 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 each day. Gains or losses on futures contracts 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 in the Statement of Assets and Liabilities and are included in Investments in securities. Premiums received for written options are shown as a liability in the Statement of Assets and Liabilities. Realized gains and losses on the sale, expiration or assignment of an option are disclosed in 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

June 30, 2018

William Blair Funds

141

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

the forward rates at the reporting date, is included in the Statement of Assets and Liabilities as unrealized appreciation/depreciation on forward foreign currency contracts. 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.

Swap Contracts

Swap agreements may include total return, interest rate, securities index, commodity, security, currency exchange rate, credit default index, volatility and variance swaps. 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, for example, 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 the period end for which a Fund is the seller of protection are disclosed in the Fund’s 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 the same 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, typically 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 in the transaction, a Fund would receive a payment for a positive return and would make a payment for a negative return. As a payer in the transaction, 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, which is the variance strike price of the reference

142

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

entity, to the receiver for the floating rate, which is the 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 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 Fund and primary risk exposure, as of June 30, 2018 and their respective location in the Statements of Assets and Liabilities (in thousands):

Assets

Liabilities

Fund and
Primary Risk Exposure

Statements of Assets
and Liabilities

Value

Statements of Assets
and Liabilities

Value

Bond

Credit

Receivable for variation margin on centrally cleared swaps

Payable for variation margin on centrally cleared swaps

—

Macro Allocation

Credit

Receivable for variation margin on centrally cleared swaps

—

Payable for variation margin on centrally cleared swaps

274

Currency

Unrealized appreciation on forward foreign currency contracts

27,253

Unrealized depreciation on forward foreign currency contracts

12,496

Currency

Investments in securities, at value

1,112

Options written, at value

—

Equity

Receivable for variation margin on futures

14,635

Payable for variation margin on futures

5,478

Equity

Investments in securities, at value

833

Options written, at value

—

Equity

Unrealized appreciation on swap contracts

296

Unrealized depreciation on swap contracts

2,987

Interest rate

Investments in securities, at value

1,073

Options written, at value

509

Interest rate

Unrealized appreciation on swap contracts

—

Unrealized depreciation on swap contracts

1,322

Interest rate

Receivable for variation margin on futures

—

Payable for variation margin on futures

434

Interest rate

Receivable for variation margin on centrally cleared swaps

—

Payable for variation margin on centrally cleared swaps

640

The table above includes cumulative appreciation/(depreciation) on futures contracts and centrally cleared swaps as reported in the applicable Fund’s Portfolio of Investments. Variation margin receivable/payable on futures contracts and centrally cleared swaps is reported within the Statements of Assets and Liabilities.

June 30, 2018

William Blair Funds

143

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

The following table indicates the effect of derivatives, by Fund and primary risk exposure, in the Statements of Operations for the period ended June 30, 2018 (in thousands):

	Realized Gain (Loss)					Change in Net Unrealized Appreciation (Depreciation)
Fund and Primary Risk Exposure	Statements of Operations	Value				Statements of Operations	Value
Bond
Credit	Swaps		$	(51	)	Swaps		$	102
Macro Allocation
Credit	Swaps			176		Swaps			(397	)
Currency	Forward foreign currency contracts			5,537		Forward foreign currency contracts			14,792
Currency	Options			1,458		Options			109
Equity	Futures contracts			(39,047	)	Futures contracts			24,560
Equity	Options			(1,711	)	Options			(176	)
Equity	Swaps			5,644		Swaps			(7,264	)
Interest rate	Futures contracts			454		Futures contracts			(532	)
Interest rate	Options			(5,263	)	Options			378
Interest rate	Swaps			2,464		Swaps			(2,390	)

The following table is a summary by counterparty of the derivative instruments and collateral pledged/(received) included in the Macro Allocation Fund’s Statement of Assets and Liabilities at June 30, 2018 (in thousands):

	Financial Derivative Assets								Financial Derivative Liabilities
	Forward								Forward
	Foreign								Foreign												Net			Collateral
	Currency		Purchased						Currency			Written									Market			Pledged			Net
Counterparty	Contracts		Options		Swaps		Total		Contracts			Options			Swaps			Total			Value			(Received)			Exposure
Citibank N.A.		$27,253		$2,185		$153	$	29,591		$(12,496	)		$(509	)	$	(1,162	)	$	(14,167	)	$	15,424			$(16,840	)		$(1,416	)
Credit Suisse		—		833		—		833		—			—			(1,322	)		(1,322	)		(489	)		5,133			4,644
Goldman Sachs		—		—		143		143		—			—			(1,825	)		(1,825	)		(1,682	)		496			(1,186	)

The net exposure represents the amount due from/(due to) the counterparty in the event of default. Any net exposure is generally due to changes in market value of the underlying derivative instruments on the last day of the period as timing of collateral movement occurs the following day. For Credit Suisse, the exposure is due to initial margin requirements of approximately $4,555 (in thousands) for total return swaps on futures.

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

(7) Fund Share Transactions

The following tables summarize the activity in capital shares of each Fund for the period ended June 30, 2018 (in thousands):

	Class N
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	13,146	$	—	$	6,799	$	6,347			1,174		—		610		564
Large Cap Growth		15,388		—		4,887		10,501			1,063		—		339		724
Mid Cap Growth		396		—		1,172		(776	)		34		—		105		(71	)
Small-Mid Cap Growth		272,376		—		45,981		226,395			11,057		—		1,853		9,204
Small-Mid Cap Value		19		—		3		16			1		—		—		1
Small Cap Growth		57,697		—		29,622		28,075			1,951		—		1,050		901
Small Cap Value		1,438		—		4,829		(3,391	)		73		—		241		(168	)
Global Leaders		982		—		610		372			63		—		40		23
International Leaders		2,008		—		1,539		469			119		—		92		27
International Developed Plus		207		—		868		(661	)		12		—		52		(40	)
International Growth		33,030		—		83,026		(49,996	)		1,069		—		2,678		(1,609	)
International Small Cap Growth		45		—		373		(328	)		3		—		24		(21	)
Emerging Markets Leaders		1,944		—		2,085		(141	)		176		—		186		(10	)
Emerging Markets Growth		1,779		—		1,460		319			109		—		91		18
Emerging Markets Small Cap Growth		2,232		—		4,265		(2,033	)		121		—		225		(104	)
Bond		17,285		1,743		13,147		5,881			1,694		172		1,296		570
Income		1,478		577		14,794		(12,739	)		173		67		1,730		(1,490	)
Low Duration		1,134		25		898		261			128		3		101		30
Macro Allocation		4,916		—		10,343		(5,427	)		413		—		872		(459	)

	Class I
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	7,500	$	—	$	68,439	$	(60,939	)		599		—		5,451		(4,852	)
Large Cap Growth		13,992		—		12,361		1,631			924		—		822		102
Mid Cap Growth		4,462		—		26,037		(21,575	)		357		—		2,130		(1,773	)
Small-Mid Cap Growth		396,348		—		181,752		214,596			15,087		—		7,029		8,058
Small-Mid Cap Value		158		—		1,733		(1,575	)		11		—		125		(114	)
Small Cap Growth		72,342		—		39,421		32,921			2,256		—		1,249		1,007
Small Cap Value		38,009		—		76,878		(38,869	)		1,866		—		3,761		(1,895	)
Global Leaders		9,231		—		3,030		6,201			595		—		198		397
International Leaders		22,820		—		7,079		15,741			1,364		—		422		942
International Developed Plus		557		—		4,738		(4,181	)		33		—		285		(252	)
International Growth		112,126		—		245,564		(133,438	)		3,513		—		7,761		(4,248	)
International Small Cap Growth		61,841		—		47,124		14,717			3,941		—		2,949		992
Emerging Markets Leaders		7,155		—		5,918		1,237			640		—		526		114
Emerging Markets Growth		23,149		—		26,479		(3,330	)		1,393		—		1,635		(242	)
Emerging Markets Small Cap Growth		65,809		—		35,005		30,804			3,535		—		1,893		1,642
Bond		47,838		6,925		68,825		(14,062	)		4,756		691		6,860		(1,413	)
Income		2,273		697		14,657		(11,687	)		265		82		1,712		(1,365	)
Low Duration		5,197		1,421		64,853		(58,235	)		587		161		7,304		(6,556	)
Macro Allocation		127,338		—		171,359		(44,021	)		10,656		—		14,375		(3,719	)

June 30, 2018

William Blair Funds

145

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

	Institutional Class
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	1,229	$	—	$	29,005	$	(27,776	)		80		—		1,866		(1,786	)
International Leaders		32,904		—		9,100		23,804			1,941		—		543		1,398
Institutional International Developed Plus		—		—		49		(49	)		—		—		4		(4	)
Institutional International Growth		156,011		—		277,881		(121,870	)		8,551		—		15,168		(6,617	)
International Small Cap Growth		10,373		—		23,973		(13,600	)		649		—		1,529		(880	)
Emerging Markets Leaders		24,589		—		35,740		(11,151	)		2,183		—		3,268		(1,085	)
Emerging Markets Growth		88,155		—		238,334		(150,179	)		5,258		—		14,634		(9,376	)
Emerging Markets Small Cap Growth		37,070		—		10,346		26,724			1,993		—		550		1,443
Bond		3,725		1,853		10,106		(4,528	)		374		185		1,017		(458	)
Low Duration		3,815		1,351		3,801		1,365			430		153		429		154
Macro Allocation		34,688		—		55,014		(20,326	)		2,917		—		4,663		(1,746	)

	Net Change in Net Assets Relating to Fund Share Activity
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	20,646	$	—	$	75,238	$	(54,592	)		1,773		—		6,061		(4,288	)
Large Cap Growth		29,380		—		17,248		12,132			1,987		—		1,161		826
Mid Cap Growth		4,858		—		27,209		(22,351	)		391		—		2,235		(1,844	)
Small-Mid Cap Growth		668,724		—		227,733		440,991			26,144		—		8,882		17,262
Small-Mid Cap Value		177		—		1,736		(1,559	)		12		—		125		(113	)
Small Cap Growth		130,039		—		69,043		60,996			4,207		—		2,299		1,908
Small Cap Value		39,447		—		81,707		(42,260	)		1,939		—		4,002		(2,063	)
Global Leaders		11,442		—		32,645		(21,203	)		738		—		2,104		(1,366	)
International Leaders		57,732		—		17,718		40,014			3,424		—		1,057		2,367
International Developed Plus		764		—		5,606		(4,842	)		45		—		337		(292	)
Institutional International Developed Plus		—		—		49		(49	)		—		—		4		(4	)
International Growth		145,156		—		328,590		(183,434	)		4,582		—		10,439		(5,857	)
Institutional International Growth		156,011		—		277,881		(121,870	)		8,551		—		15,168		(6,617	)
International Small Cap Growth		72,259		—		71,470		789			4,593		—		4,502		91
Emerging Markets Leaders		33,688		—		43,743		(10,055	)		2,999		—		3,980		(981	)
Emerging Markets Growth		113,083		—		266,273		(153,190	)		6,760		—		16,360		(9,600	)
Emerging Markets Small Cap Growth		105,111		—		49,616		55,495			5,649		—		2,668		2,981
Bond		68,848		10,521		92,078		(12,709	)		6,824		1,048		9,173		(1,301	)
Income		3,751		1,274		29,451		(24,426	)		438		149		3,442		(2,855	)
Low Duration		10,146		2,797		69,552		(56,609	)		1,145		317		7,834		(6,372	)
Macro Allocation		166,942		—		236,716		(69,774	)		13,986		—		19,910		(5,924	)

146

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Notes to Financial Statements (information as of June 30, 2018 is unaudited)

The following tables summarize the activity in capital shares of each Fund for the year ended December 31, 2017 (in thousands):

	Class N
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	2,767	$	10,496	$	41,517	$	(28,254	)		220		1,026		3,364		(2,118	)
Large Cap Growth		12,606		146		3,699		9,053			1,059		11		309		761
Mid Cap Growth		1,284		919		13,722		(11,519	)		113		85		1,153		(955	)
Small-Mid Cap Growth		87,018		11,824		76,905		21,937			3,871		514		3,528		857
Small-Mid Cap Value		19		28		27		20			2		2		2		2
Small Cap Growth		66,284		23,270		69,840		19,714			2,362		884		2,439		807
Small Cap Value		4,125		2,069		10,395		(4,201	)		203		104		508		(201	)
Global Leaders		1,070		279		780		569			78		19		59		38
International Leaders		6,217		188		1,194		5,211			432		12		81		363
International Developed Plus		691		55		1,088		(342	)		45		3		70		(22	)
International Growth		50,070		9,669		210,605		(150,866	)		1,863		324		7,645		(5,458	)
International Small Cap Growth		708		513		7,355		(6,134	)		50		34		484		(400	)
Emerging Markets Leaders		2,641		12		3,440		(787	)		271		1		338		(66	)
Emerging Markets Growth		682		70		2,510		(1,758	)		49		4		179		(126	)
Emerging Markets Small Cap Growth		5,081		423		2,964		2,540			295		24		186		133
Bond		20,164		3,940		66,445		(42,341	)		1,934		378		6,372		(4,060	)
Income		8,700		1,377		22,470		(12,393	)		986		156		2,546		(1,404	)
Low Duration		786		85		6,068		(5,197	)		87		9		672		(576	)
Macro Allocation		8,704		257		31,131		(22,170	)		745		22		2,675		(1,908	)

	Class I
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	25,451	$	81,062	$	306,735	$	(200,222	)		1,915		7,067		22,849		(13,867	)
Large Cap Growth		50,357		884		21,605		29,636			4,124		63		1,774		2,413
Mid Cap Growth		9,557		10,131		75,132		(55,444	)		795		886		6,181		(4,500	)
Small-Mid Cap Growth		552,371		80,961		417,940		215,392			24,056		3,359		17,523		9,892
Small-Mid Cap Value		609		332		737		204			42		24		50		16
Small Cap Growth		61,059		49,339		62,897		47,501			2,010		1,702		2,068		1,644
Small Cap Value		91,392		45,722		169,851		(32,737	)		4,386		2,237		8,131		(1,508	)
Global Leaders		4,803		2,421		4,692		2,532			369		169		351		187
International Leaders		25,424		1,177		9,441		17,160			1,779		73		580		1,272
International Developed Plus		21,920		2,098		9,628		14,390			1,398		128		628		898
International Growth		195,965		33,924		682,927		(453,038	)		7,092		1,111		24,114		(15,911	)
International Small Cap Growth		49,384		26,655		104,367		(28,328	)		3,353		1,752		7,013		(1,908	)
Emerging Markets Leaders		12,824		317		8,364		4,777			1,302		30		893		439
Emerging Markets Growth		16,176		1,017		23,951		(6,758	)		1,115		65		1,707		(527	)
Emerging Markets Small Cap Growth		94,539		8,107		31,293		71,353			5,769		453		1,876		4,346
Bond		134,250		12,422		84,447		62,225			13,010		1,203		8,184		6,029
Income		10,520		1,759		18,387		(6,108	)		1,201		201		2,103		(701	)
Low Duration		84,636		4,341		174,620		(85,643	)		9,393		483		19,383		(9,507	)
Macro Allocation		214,907		7,674		417,802		(195,221	)		18,321		651		35,612		(16,640	)

June 30, 2018

William Blair Funds

147

Notes to Financial Statements (information as of June 30, 2018 is unaudited)

	Institutional Class
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Global Leaders	$	2,559		$ 5,655		$ 20,455	$	(12,241	)		198		394		1,511		(919	)
International Leaders		38,667		4,960		17,973		25,654			2,552		307		1,200		1,659
Institutional International Developed Plus		150		212		1,432		(1,070	)		10		15		112		(87	)
Institutional International Growth		192,850		90,689		524,901		(241,362	)		11,839		5,115		32,006		(15,052	)
International Small Cap Growth		8,701		23,256		16,528		15,429			558		1,520		1,054		1,024
Emerging Markets Leaders		62,264		3,067		30,182		35,149			6,513		288		2,936		3,865
Emerging Markets Growth		303,312		10,235		378,630		(65,083	)		22,768		645		26,296		(2,883	)
Emerging Markets Small Cap Growth		31,040		4,554		38,952		(3,358	)		1,822		254		2,289		(213	)
Bond		5,456		3,799		12,891		(3,636	)		530		368		1,251		(353	)
Low Duration		56,356		1,908		9,982		48,282			6,253		213		1,112		5,354
Macro Allocation		81,930		5,947		207,896		(120,019	)		6,962		504		17,587		(10,121	)

	Net Change in Net Assets Relating to Fund Share Activity
	Dollars									Shares
Fund	Sales		Reinvest		Redemptions		Total			Sales		Reinvest		Redemptions		Total
Growth	$	28,218		$91,558		$ 348,252	$	(228,476	)		2,135		8,093		26,213		(15,985	)
Large Cap Growth		62,963		1,030		25,304		38,689			5,183		74		2,083		3,174
Mid Cap Growth		10,841		11,050		88,854		(66,963	)		908		971		7,334		(5,455	)
Small-Mid Cap Growth		639,389		92,785		494,845		237,329			27,927		3,873		21,051		10,749
Small-Mid Cap Value		628		360		764		224			44		26		52		18
Small Cap Growth		127,343		72,609		132,737		67,215			4,372		2,586		4,507		2,451
Small Cap Value		95,517		47,791		180,246		(36,938	)		4,589		2,341		8,639		(1,709	)
Global Leaders		8,432		8,355		25,927		(9,140	)		645		582		1,921		(694	)
International Leaders		70,308		6,325		28,608		48,025			4,763		392		1,861		3,294
International Developed Plus		22,611		2,153		10,716		14,048			1,443		131		698		876
Institutional International Developed Plus		150		212		1,432		(1,070	)		10		15		112		(87	)
International Growth		246,035		43,593		893,532		(603,904	)		8,955		1,435		31,759		(21,369	)
Institutional International Growth		192,850		90,689		524,901		(241,362	)		11,839		5,115		32,006		(15,052	)
International Small Cap Growth		58,793		50,424		128,250		(19,033	)		3,961		3,306		8,551		(1,284	)
Emerging Markets Leaders		77,729		3,396		41,986		39,139			8,086		319		4,167		4,238
Emerging Markets Growth		320,170		11,322		405,091		(73,599	)		23,932		714		28,182		(3,536	)
Emerging Markets Small Cap Growth		130,660		13,084		73,209		70,535			7,886		731		4,351		4,266
Bond		159,870		20,161		163,783		16,248			15,474		1,949		15,807		1,616
Income		19,220		3,136		40,857		(18,501	)		2,187		357		4,649		(2,105	)
Low Duration		141,778		6,334		190,670		(42,558	)		15,733		705		21,167		(4,729	)
Macro Allocation		305,541		13,878		656,829		(337,410	)		26,028		1,177		55,874		(28,669	)

(8) Subsequent Events

The Funds have evaluated subsequent events through the date of issuance of the Funds’ financial statements and have determined there is no impact to the Funds’ financial statements.

148

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018				2017			2016			2015			2014			2013
Net asset value, beginning of year		$	10.27			$	11.41		$	12.52		$	13.55		$	14.79		$	12.05
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)			(0.02	)		(0.02	)		(0.04	)		(0.07	)		(0.07	)
Net realized and unrealized gain (loss) on investments			1.33				2.78			(0.08	)		0.75			1.03			4.25
Total from investment operations			1.31				2.76			(0.10	)		0.71			0.96			4.18
Less distributions from:
Net investment income			—				—			—			—			—			—
Net realized gain			—				3.90			1.01			1.74			2.20			1.44
Total distributions			—				3.90			1.01			1.74			2.20			1.44
Net asset value, end of year		$	11.58			$	10.27		$	11.41		$	12.52		$	13.55		$	14.79
Total return (%)*			12.76				24.35			(0.98	)		5.31			6.59			35.00
Ratios to average daily net assets (%)**:
Expenses			1.20				1.20			1.21			1.19			1.18			1.19
Net investment income (loss)			(0.28	)			(0.14	)		(0.15	)		(0.29	)		(0.50	)		(0.51	)
Class N net assets at the end of the year (in thousands)		$	45,879			$	34,886		$	62,936		$	149,754		$	272,765		$	291,326
Portfolio turnover rate (%)*			25				38			79			78			100			52

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018				2017			2016			2015			2014			2013
Net asset value, beginning of year		$	11.51			$	12.39		$	13.50		$	14.43		$	15.56		$	12.58
Income (loss) from investment operations:
Net investment income (loss)			0.00	^			0.02			0.03			0.01			(0.03	)		(0.03	)
Net realized and unrealized gain (loss) on investments			1.49				3.02			(0.10	)		0.80			1.10			4.45
Total from investment operations			1.49				3.04			(0.07	)		0.81			1.07			4.42
Less distributions from:
Net investment income			—				0.02			0.03			—			—			0.00	^
Net realized gain			—				3.90			1.01			1.74			2.20			1.44
Total distributions			—				3.92			1.04			1.74			2.20			1.44
Net asset value, end of year		$	13.00			$	11.51		$	12.39		$	13.50		$	14.43		$	15.56
Total return (%)*			12.95				24.64			(0.69	)		5.69			6.96			35.43
Ratios to average daily net assets (%)**:
Expenses			0.90				0.92			0.90			0.89			0.86			0.85
Net investment income (loss)			0.01				0.12			0.20			0.06			(0.20	)		(0.17	)
Class I net assets at the end of the year (in thousands)		$	297,024			$	318,848		$	514,870		$	696,744		$	688,038		$	623,225
Portfolio turnover rate (%)*			25				38			79			78			100			52

*	Rates are not annualized for periods less than a year.
**	Rates are 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.

June 30, 2018

William Blair Funds

149

Financial Highlights — For a share outstanding throughout each period

Large Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	13.35		$	10.26		$	10.15		$	10.46		$	10.03		$	8.14
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		(0.02	)		0.02			(0.02	)		(0.02	)		(0.03	)
Net realized and unrealized gain (loss) on investments			1.65			3.19			0.18			0.75			1.46			2.70
Total from investment operations			1.64			3.17			0.20			0.73			1.44			2.67
Less distributions from:
Net investment income			—			—			0.01			—			—			—
Net realized gain			—			0.08			0.08			1.04			1.01			0.78
Total distributions			—			0.08			0.09			1.04			1.01			0.78
Net asset value, end of year		$	14.99		$	13.35		$	10.26		$	10.15		$	10.46		$	10.03
Total return (%)*			12.28			30.88			1.97			7.04			14.29			33.00
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.05			1.05			1.05			1.07			1.13			1.20
Expenses, before waivers and reimbursements			1.15			1.19			1.23			1.28			1.31			1.46
Net investment income (loss), net of waivers and reimbursements			(0.12	)		(0.13	)		0.17			(0.22	)		(0.23	)		(0.36	)
Net investment income (loss), before waivers and reimbursements			(0.22	)		(0.27	)		(0.01	)		(0.43	)		(0.41	)		(0.62	)
Class N net assets at the end of the year (in thousands)		$	39,594		$	25,604		$	11,860		$	10,443		$	8,831		$	6,678
Portfolio turnover rate (%)*			19			29			44			38			50			48

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	13.97		$	10.70		$	10.58		$	10.84		$	10.33		$	8.35
Income (loss) from investment operations:
Net investment income (loss)			0.01			0.02			0.04			(0.00	)^		0.00	^		(0.01	)
Net realized and unrealized gain (loss) on investments			1.72			3.33			0.19			0.78			1.52			2.77
Total from investment operations			1.73			3.35			0.23			0.78			1.52			2.76
Less distributions from:
Net investment income			—			—			0.03			—			—			—
Net realized gain			—			0.08			0.08			1.04			1.01			0.78
Total distributions			—			0.08			0.11			1.04			1.01			0.78
Net asset value, end of year		$	15.70		$	13.97		$	10.70		$	10.58		$	10.84		$	10.33
Total return (%)*			12.38			31.29			2.22			7.26			14.65			33.24
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.80			0.80			0.80			0.82			0.88			0.95
Expenses, before waivers and reimbursements			0.87			0.90			0.91			0.95			1.00			1.11
Net investment income (loss), net of waivers and reimbursements			0.13			0.13			0.41			0.03			0.02			(0.11	)
Net investment income (loss), before waivers and reimbursements			0.06			0.03			0.30			(0.10	)		(0.10	)		(0.27	)
Class I net assets at the end of the year (in thousands)		$	201,617		$	177,959		$	110,475		$	59,038		$	50,778		$	40,513
Portfolio turnover rate (%)*			19			29			44			38			50			48

*	Rates are not annualized for periods less than a year.
**	Rates are 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.

150

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Mid Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	10.92		$	10.69		$	11.28		$	14.20		$	15.21		$	12.65
Income (loss) from investment operations:
Net investment income (loss)			(0.03	)		(0.08	)		(0.06	)		(0.09	)		(0.12	)		(0.13	)
Net realized and unrealized gain (loss) on investments			1.30			2.29			0.09			0.04			1.26			3.74
Total from investment operations			1.27			2.21			0.03			(0.05	)		1.14			3.61
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.98			0.62			2.87			2.15			1.05
Total distributions			—			1.98			0.62			2.87			2.15			1.05
Net asset value, end of year		$	12.19		$	10.92		$	10.69		$	11.28		$	14.20		$	15.21
Total return (%)*			11.63			20.88			0.23			(0.20	)		7.53			28.77
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.27			1.30			1.30			1.32			1.35			1.35
Expenses, before waivers and reimbursements			1.57			1.49			1.45			1.43			1.35			1.42
Net investment income (loss), net of waivers and reimbursements			(0.52	)		(0.65	)		(0.53	)		(0.65	)		(0.80	)		(0.90	)
Net investment income (loss), before waivers and reimbursements			(0.82	)		(0.84	)		(0.68	)		(0.76	)		(0.80	)		(0.97	)
Class N net assets at the end of the year (in thousands)		$	6,006		$	6,166		$	16,234		$	25,105		$	37,413		$	41,849
Portfolio turnover rate (%)*			30			59			60			65			81			83

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	11.57		$	11.20		$	11.76		$	14.65		$	15.58		$	12.91
Income (loss) from investment operations:
Net investment income (loss)			(0.02	)		(0.05	)		(0.03	)		(0.06	)		(0.09	)		(0.10	)
Net realized and unrealized gain (loss) on investments			1.38			2.40			0.09			0.04			1.31			3.82
Total from investment operations			1.36			2.35			0.06			(0.02	)		1.22			3.72
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.98			0.62			2.87			2.15			1.05
Total distributions			—			1.98			0.62			2.87			2.15			1.05
Net asset value, end of year		$	12.93		$	11.57		$	11.20		$	11.76		$	14.65		$	15.58
Total return (%)*			11.75			21.18			0.48			0.00			7.87			29.04
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.02			1.05			1.05			1.07			1.10			1.10
Expenses, before waivers and reimbursements			1.30			1.23			1.18			1.14			1.10			1.15
Net investment income (loss), net of waivers and reimbursements			(0.26	)		(0.40	)		(0.26	)		(0.41	)		(0.55	)		(0.65	)
Net investment income (loss), before waivers and reimbursements			(0.54	)		(0.58	)		(0.39	)		(0.48	)		(0.55	)		(0.70	)
Class I net assets at the end of the year (in thousands)		$	56,794		$	71,369		$	119,424		$	174,617		$	302,373		$	385,779
Portfolio turnover rate (%)*			30			59			60			65			81			83

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

151

Financial Highlights — For a share outstanding throughout each period

Small-Mid Cap Growth Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	23.36		$	19.20		$	18.53		$	18.72		$	18.80		$	14.21
Income (loss) from investment operations:
Net investment income (loss)			(0.09	)		(0.16	)		(0.09	)		(0.10	)		(0.12	)		(0.15	)
Net realized and unrealized gain (loss) on investments			2.60			5.62			1.29			0.93			1.68			6.01
Total from investment operations			2.51			5.46			1.20			0.83			1.56			5.86
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.30			0.53			1.02			1.64			1.27
Total distributions			—			1.30			0.53			1.02			1.64			1.27
Net asset value, end of year		$	25.87		$	23.36		$	19.20		$	18.53		$	18.72		$	18.80
Total return (%)*			10.74			28.57			6.45			4.47			8.33			41.49
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.			1.41			1.43			1.43			1.42			1.38			1.46
Net investment income (loss), net of waivers and reimbursements			(0.70	)		(0.74	)		(0.51	)		(0.51	)		(0.63	)		(0.88	)
Net investment income (loss), before waivers and reimbursements			(0.76	)		(0.82	)		(0.59	)		(0.58	)		(0.66	)		(0.99	)
Class N net assets at the end of the year (in thousands)		$	491,568		$	228,828		$	171,638		$	169,595		$	83,047		$	73,207
Portfolio turnover rate (%)*			28			64			66			44			49			53

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	24.48		$	20.02		$	19.25		$	19.36		$	19.34		$	14.55
Income (loss) from investment operations:
Net investment income (loss)			(0.06	)		(0.11	)		(0.05	)		(0.06	)		(0.08	)		(0.11	)
Net realized and unrealized gain (loss) on investments			2.73			5.87			1.35			0.97			1.74			6.17
Total from investment operations			2.67			5.76			1.30			0.91			1.66			6.06
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			1.30			0.53			1.02			1.64			1.27
Total distributions			—			1.30			0.53			1.02			1.64			1.27
Net asset value, end of year		$	27.15		$	24.48		$	20.02		$	19.25		$	19.36		$	19.34
Total return (%)*			10.91			28.90			6.72			4.74			8.62			41.89
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			1.15			1.16			1.16			1.15			1.15			1.10
Net investment income (loss), net of waivers and reimbursements			(0.46	)		(0.49	)		(0.28	)		(0.28	)		(0.38	)		(0.62	)
Net investment income (loss), before waivers and reimbursements			(0.51	)		(0.55	)		(0.34	)		(0.33	)		(0.43	)		(0.62	)
Class I net assets at the end of the year (in thousands)		$	1,966,699		$	1,576,180		$	1,090,939		$	1,019,544		$	793,789		$	617,374
Portfolio turnover rate (%)*			28			64			66			44			49			53

*	Rates are not annualized for periods less than a year.
**	Rates are annualized for periods less than a year.

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

152

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Small-Mid Cap Value Fund

	Class N
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	14.31		$	14.53		$	12.54		$	13.63		$	14.11		$	11.29
Income (loss) from investment operations:
Net investment income (loss)			0.03			0.04			0.04			0.04			0.00	^		0.00	^
Net realized and unrealized gain (loss) on investments			0.09			1.33			2.55			(0.47	)		0.64			4.06
Total from investment operations			0.12			1.37			2.59			(0.43	)		0.64			4.06
Less distributions from:
Net investment income			—			0.02			0.01			0.01			—			—
Net realized gain			—			1.57			0.59			0.65			1.12			1.24
Total distributions			—			1.59			0.60			0.66			1.12			1.24
Net asset value, end of year		$	14.43		$	14.31		$	14.53		$	12.54		$	13.63		$	14.11
Total return (%)*			0.84			9.59			20.69			(3.13	)		4.66			36.29
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.32			1.35			1.35			1.37			1.40			1.40
Expenses, before waivers and reimbursements			5.61			4.83			4.15			3.93			4.50			4.50
Net investment income (loss), net of waivers and reimbursements			0.41			0.27			0.29			0.27			0.02			(0.04	)
Net investment income (loss), before waivers and reimbursements			(3.88	)		(3.21	)		(2.51	)		(2.29	)		(3.08	)		(3.14	)
Class N net assets at the end of the year (in thousands)		$	304		$	284		$	267		$	855		$	946		$	1,205
Portfolio turnover rate (%)*			64			70			45			35			69			61

	Class I
	(unaudited)
	Period Ended
	June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	14.24		$	14.47		$	12.54		$	13.63		$	14.12		$	11.29
Income (loss) from investment operations:
Net investment income (loss)			0.04			0.07			0.08			0.07			0.05			0.03
Net realized and unrealized gain (loss) on investments			0.10			1.33			2.55			(0.47	)		0.63			4.07
Total from investment operations			0.14			1.40			2.63			(0.40	)		0.68			4.10
Less distributions from:
Net investment income			—			0.06			0.11			0.04			0.05			0.03
Net realized gain			—			1.57			0.59			0.65			1.12			1.24
Total distributions			—			1.63			0.70			0.69			1.17			1.27
Net asset value, end of year		$	14.38		$	14.24		$	14.47		$	12.54		$	13.63		$	14.12
Total return (%)*			0.98			9.84			21.00			(2.86	)		4.96			36.69
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.07			1.10			1.10			1.12			1.15			1.15
Expenses, before waivers and reimbursements			5.32			4.55			3.92			3.72			4.16			4.24
Net investment income (loss), net of waivers and reimbursements			0.55			0.51			0.62			0.52			0.36			0.21
Net investment income (loss), before waivers and reimbursements			(3.70	)		(2.94	)		(2.20	)		(2.08	)		(2.65	)		(2.88	)
Class I net assets at the end of the year (in thousands)		$	1,759		$	3,359		$	3,186		$	3,220		$	3,407		$	2,073
Portfolio turnover rate (%)*			64			70			45			35			69			61

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

153

Financial Highlights — For a share outstanding throughout each period

Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	26.87		$	25.24		$	22.47		$	25.61		$	30.02		$	23.68
Income (loss) from investment operations:
Net investment income (loss)			(0.14	)		(0.25	)		(0.18	)		(0.22	)		(0.30	)		(0.26	)
Net realized and unrealized gain (loss) on investments			4.28			6.88			4.43			(0.93	)		1.02			12.52
Total from investment operations			4.14			6.63			4.25			(1.15	)		0.72			12.26
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			5.00			1.48			1.99			5.13			5.92
Total distributions			—			5.00			1.48			1.99			5.13			5.92
Net asset value, end of year		$	31.01		$	26.87		$	25.24		$	22.47		$	25.61		$	30.02
Total return (%)*			15.41			26.70			18.89			(4.44	)		2.62			52.76
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			1.52			1.54			1.55			1.59			1.56			1.57
Net investment income (loss), net of waivers and reimbursements			(0.95	)		(0.89	)		(0.79	)		(0.85	)		(1.00	)		(0.87	)
Net investment income (loss), before waivers and reimbursements			(0.97	)		(0.93	)		(0.84	)		(0.94	)		(1.06	)		(0.94	)
Class N net assets at the end of the year (in thousands)		$	196,810		$	146,291		$	117,068		$	111,944		$	148,201		$	211,562
Portfolio turnover rate (%)*			35			81			90			91			82			91

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016			2015			2014			2013
Net asset value, beginning of year		$	29.61		$	27.34		$	24.17		$	27.32		$	31.61		$	24.66
Income (loss) from investment operations:
Net investment income (loss)			(0.11	)		(0.20	)		(0.13	)		(0.17	)		(0.23	)		(0.19	)
Net realized and unrealized gain (loss) on investments			4.72			7.47			4.78			(0.99	)		1.07			13.06
Total from investment operations			4.61			7.27			4.65			(1.16	)		0.84			12.87
Less distributions from:
Net investment income			—			—			—			—			—			—
Net realized gain			—			5.00			1.48			1.99			5.13			5.92
Total distributions			—			5.00			1.48			1.99			5.13			5.92
Net asset value, end of year		$	34.22		$	29.61		$	27.34		$	24.17		$	27.32		$	31.61
Total return (%)*			15.57			26.99			19.22			(4.20	)		2.87			53.13
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.23			1.25			1.25			1.25			1.25			1.25
Expenses, before waivers and reimbursements			1.23			1.25			1.27			1.30			1.30			1.27
Net investment income (loss), net of waivers and reimbursements			(0.68	)		(0.64	)		(0.54	)		(0.61	)		(0.75	)		(0.63	)
Net investment income (loss), before waivers and reimbursements			(0.68	)		(0.64	)		(0.56	)		(0.66	)		(0.80	)		(0.65	)
Class I net assets at the end of the year (in thousands)		$	430,991		$	343,119		$	271,830		$	261,269		$	364,241		$	415,797
Portfolio turnover rate (%)*			35			81			90			91			82			91

*	Rates are not annualized for periods less than a year.
**	Rates are annualized for periods less than a year.

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

154

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Small Cap Value Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016		2015			2014			2013
Net asset value, beginning of year		$	20.15		$	20.18		$	16.68	$	17.76		$	17.63		$	13.65
Income (loss) from investment operations:
Net investment income (loss)			(0.01	)		0.01			0.04		0.02			(0.03	)		(0.05	)
Net realized and unrealized gain (loss) on investments			0.23			1.50			4.34		(1.05	)		0.81			5.32
Total from investment operations			0.22			1.51			4.38		(1.03	)		0.78			5.27
Less distributions from:
Net investment income			—			—			0.04		—			—			—
Net realized gain			—			1.54			0.84		0.05			0.65			1.29
Total distributions			—			1.54			0.88		0.05			0.65			1.29
Net asset value, end of year		$	20.37		$	20.15		$	20.18	$	16.68		$	17.76		$	17.63
Total return (%)*			1.09			7.57			26.19		(5.77	)		4.49			38.91
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.50			1.50			1.50		1.50			1.50			1.49
Expenses, before waivers and reimbursements			1.55			1.55			1.53		1.54			1.53			1.55
Net investment income (loss), net of waivers and reimbursements			(0.06	)		0.04			0.22		0.14			(0.17	)		(0.33	)
Net investment income (loss), before waivers and reimbursements			(0.11	)		(0.01	)		0.19		0.10			(0.20	)		(0.39	)
Class N net assets at the end of the year (in thousands)		$	26,142		$	29,271		$	33,359	$	33,351		$	40,223		$	55,464
Portfolio turnover rate (%)*			37			38			33		30			39			51

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016		2015			2014			2013
Net asset value, beginning of year		$	20.70		$	20.68		$	17.08	$	18.17		$	18.00		$	13.88
Income (loss) from investment operations:
Net investment income (loss)			0.02			0.06			0.09		0.08			0.02			(0.01	)
Net realized and unrealized gain (loss) on investments			0.23			1.54			4.44		(1.08	)		0.82			5.42
Total from investment operations			0.25			1.60			4.53		(1.00	)		0.84			5.41
Less distributions from:
Net investment income			—			0.04			0.09		0.04			0.02			0.00	^
Net realized gain			—			1.54			0.84		0.05			0.65			1.29
Total distributions			—			1.58			0.93		0.09			0.67			1.29
Net asset value, end of year		$	20.95		$	20.70		$	20.68	$	17.08		$	18.17		$	18.00
Total return (%)*			1.21			7.85			26.46		(5.47	)		4.73			39.31
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.25			1.25			1.25		1.24			1.23			1.24
Expenses, before waivers and reimbursements			1.29			1.29			1.29		1.24			1.23			1.25
Net investment income (loss), net of waivers and reimbursements			0.19			0.29			0.47		0.43			0.12			(0.07	)
Net investment income (loss), before waivers and reimbursements			0.15			0.25			0.43		0.43			0.12			(0.08	)
Class I net assets at the end of the year (in thousands)		$	612,695		$	644,749		$	675,272	$	579,010		$	544,963		$	352,832
Portfolio turnover rate (%)*			37			38			33		30			39			51

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

155

Financial Highlights — For a share outstanding throughout each period

Global Leaders Fund

	Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016			2015			2014		2013
Net asset value, beginning of year		$	14.53	$	11.60	$	11.58		$	11.84		$	11.43	$	9.47
Income (loss) from investment operations:
Net investment income (loss)			0.03		0.05		0.03			0.02			0.02		0.02
Net realized and unrealized gain (loss) on investments			0.89		3.46		0.04			0.27			0.41		1.96
Total from investment operations			0.92		3.51		0.07			0.29			0.43		1.98
Less distributions from:
Net investment income			—		0.10		—			0.01			—		0.02
Net realized gain			—		0.48		0.05			0.54			0.02		—
Total distributions			—		0.58		0.05			0.55			0.02		0.02
Net asset value, end of year		$	15.45	$	14.53	$	11.60		$	11.58		$	11.84	$	11.43
Total return (%)*			6.33		30.31		0.62			2.49			3.76		20.86
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.35		1.37		1.36			1.39			1.50		1.50
Expenses, before waivers and reimbursements			1.45		1.63		1.62			1.61			1.62		1.63
Net investment income (loss), net of waivers and reimbursements			0.42		0.35		0.23			0.12			0.16		0.18
Net investment income (loss), before waivers and reimbursements			0.32		0.09		(0.03	)		(0.10	)		0.04		0.05
Class N net assets at the end of the year (in thousands)		$	8,613	$	7,761	$	5,760		$	5,588		$	5,007	$	6,403
Portfolio turnover rate (%)*			21		41		75			55			60		70

	Class I
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016			2015			2014		2013
Net asset value, beginning of year		$	14.56	$	11.62	$	11.59		$	11.85		$	11.42	$	9.47
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.09		0.06			0.06			0.04		0.04
Net realized and unrealized gain (loss) on investments			0.89		3.47		0.05			0.26			0.43		1.95
Total from investment operations			0.94		3.56		0.11			0.32			0.47		1.99
Less distributions from:
Net investment income			—		0.14		0.03			0.04			0.02		0.04
Net realized gain			—		0.48		0.05			0.54			0.02		—
Total distributions			—		0.62		0.08			0.58			0.04		0.04
Net asset value, end of year		$	15.50	$	14.56	$	11.62		$	11.59		$	11.85	$	11.42
Total return (%)*			6.46		30.69		0.98			2.77			4.08		21.05
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.06		1.07		1.05			1.10			1.25		1.25
Expenses, before waivers and reimbursements			1.14		1.33		1.31			1.32			1.33		1.35
Net investment income (loss), net of waivers and reimbursements			0.71		0.65		0.54			0.45			0.38		0.40
Net investment income (loss), before waivers and reimbursements			0.63		0.39		0.28			0.23			0.30		0.30
Class I net assets at the end of the year (in thousands)		$	70,116	$	60,067	$	45,772		$	45,853		$	52,090	$	53,562
Portfolio turnover rate (%)*			21		41		75			55			60		70

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Global Leaders Fund

	Institutional Class
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016		2015		2014		2013
Net asset value, beginning of year		$	14.56	$	11.62	$	11.59	$	11.85	$	11.42	$	9.47
Income (loss) from investment operations:
Net investment income (loss)			0.05		0.10		0.07		0.06		0.06		0.04
Net realized and unrealized gain (loss) on investments			0.90		3.47		0.05		0.27		0.43		1.97
Total from investment operations			0.95		3.57		0.12		0.33		0.49		2.01
Less distributions from:
Net investment income			—		0.15		0.04		0.05		0.04		0.06
Net realized gain			—		0.48		0.05		0.54		0.02		—
Total distributions			—		0.63		0.09		0.59		0.06		0.06
Net asset value, end of year		$	15.51	$	14.56	$	11.62	$	11.59	$	11.85	$	11.42
Total return (%)*			6.52		30.78		1.03		2.85		4.24		21.23
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.00		1.00		1.00		1.03		1.10		1.10
Expenses, before waivers and reimbursements			1.08		1.10		1.11		1.11		1.13		1.14
Net investment income (loss), net of waivers and reimbursements			0.70		0.75		0.59		0.47		0.51		0.37
Net investment income (loss), before waivers and reimbursements			0.62		0.65		0.48		0.39		0.48		0.33
Institutional Class net assets at the end of the year (in thousands)		$	125,138	$	143,521	$	125,199	$	137,527	$	106,565	$	87,118
Portfolio turnover rate (%)*			21		41		75		55		60		70

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

157

Financial Highlights — For a share outstanding throughout each period

International Leaders Fund

	Class N
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016			2015		2014			2013
Net asset value, beginning of year		$	16.37	$	12.88	$	12.89		$	12.25	$	12.65		$	10.81
Income (loss) from investment operations:
Net investment income (loss)			0.14		0.11		0.03			0.07		0.13			0.03
Net realized and unrealized gain (loss) on investments			0.03		3.70		0.08			0.66		(0.47	)		1.99
Total from investment operations			0.17		3.81		0.11			0.73		(0.34	)		2.02
Less distributions from:
Net investment income			—		0.20		0.12			0.02		0.06			0.18
Net realized gain			—		0.12		—			0.07		—			—
Total distributions			—		0.32		0.12			0.09		0.06			0.18
Net asset value, end of year		$	16.54	$	16.37	$	12.88		$	12.89	$	12.25		$	12.65
Total return (%)*			1.04		29.65		0.88			6.01		(2.67	)		18.75
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.31		1.35		1.30			1.24		1.45			1.45
Expenses, before waivers and reimbursements			1.39		1.59		1.56			1.56		1.59			1.73
Net investment income (loss), net of waivers and reimbursements			1.65		0.72		0.24			0.51		1.00			0.29
Net investment income (loss), before waivers and reimbursements			1.57		0.48		(0.02	)		0.19		0.86			0.01
Class N net assets at the end of the year (in thousands)		$	10,207	$	9,651	$	2,922		$	377	$	150		$	154
Portfolio turnover rate (%)*			12		41		59			29		79			73

	Class I
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016			2015		2014			2013
Net asset value, beginning of year		$	16.44	$	12.92	$	12.91		$	12.25	$	12.65		$	10.81
Income (loss) from investment operations:
Net investment income (loss)			0.17		0.16		0.10			0.10		0.16			0.12
Net realized and unrealized gain (loss) on investments			0.02		3.71		0.04			0.65		(0.47	)		1.94
Total from investment operations			0.19		3.87		0.14			0.75		(0.31	)		2.06
Less distributions from:
Net investment income			—		0.23		0.13			0.02		0.09			0.22
Net realized gain			—		0.12		—			0.07		—			—
Total distributions			—		0.35		0.13			0.09		0.09			0.22
Net asset value, end of year		$	16.63	$	16.44	$	12.92		$	12.91	$	12.25		$	12.65
Total return (%)*			1.16		30.05		1.10			6.18		(2.43	)		19.10
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.02		1.05		1.04			1.13		1.20			1.20
Expenses, before waivers and reimbursements			1.08		1.28		1.30			1.46		1.29			1.40
Net investment income (loss), net of waivers and reimbursements			2.05		1.09		0.74			0.75		1.25			1.06
Net investment income (loss), before waivers and reimbursements			1.99		0.86		0.48			0.42		1.16			0.86
Class I net assets at the end of the year (in thousands)		$	76,666	$	60,279	$	30,944		$	13,474	$	9,561		$	11,629
Portfolio turnover rate (%)*			12		41		59			29		79			73

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

International Leaders Fund

	Institutional Class
	(unaudited) Period Ended June 30,			Years Ended December 31,
		2018		2017		2016		2015		2014			2013
Net asset value, beginning of year		$	16.43	$	12.92	$	12.90	$	12.24	$	12.65		$	10.80
Income (loss) from investment operations:
Net investment income (loss)			0.17		0.18		0.12		0.11		0.17			0.15
Net realized and unrealized gain (loss) on investments			0.03		3.70		0.04		0.66		(0.47	)		1.94
Total from investment operations			0.20		3.88		0.16		0.77		(0.30	)		2.09
Less distributions from:
Net investment income			—		0.25		0.14		0.04		0.11			0.24
Net realized gain			—		0.12		—		0.07		—			—
Total distributions			—		0.37		0.14		0.11		0.11			0.24
Net asset value, end of year		$	16.63	$	16.43	$	12.92	$	12.90	$	12.24		$	12.65
Total return (%)*			1.22		30.08		1.25		6.33		(2.34	)		19.39
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.95		0.95		0.95		0.98		1.05			1.05
Expenses, before waivers and reimbursements			1.00		1.03		1.06		1.15		1.14			1.25
Net investment income (loss), net of waivers and reimbursements			2.01		1.18		0.92		0.88		1.33			1.31
Net investment income (loss), before waivers and reimbursements			1.96		1.10		0.81		0.71		1.24			1.11
Institutional Class net assets at the end of the year (in thousands)		$	335,974	$	308,898	$	221,356	$	102,227	$	78,251		$	56,991
Portfolio turnover rate (%)*			12		41		59		29		79			73

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

159

Financial Highlights — For a share outstanding throughout each period

International Developed Plus Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	16.60		$	13.68	$	13.85		$	13.76	$	14.28		$	12.05
Income (loss) from investment operations:
Net investment income (loss)			0.15			0.12		0.18			0.15		0.16			0.09
Net realized and unrealized gain (loss) on investments			(0.58	)		3.08		(0.22	)		0.06		(0.60	)		2.25
Total from investment operations			(0.43	)		3.20		(0.04	)		0.21		(0.44	)		2.34
Less distributions from:
Net investment income			—			0.28		0.13			0.12		0.08			0.11
Net realized gain			—			—		—			—		—			—
Total distributions			—			0.28		0.13			0.12		0.08			0.11
Net asset value, end of year		$	16.17		$	16.60	$	13.68		$	13.85	$	13.76		$	14.28
Total return (%)*			(2.59	)		23.43		(0.27	)		1.54		(3.09	)		19.47
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.29			1.30		1.30			1.32		1.38			1.45
Expenses, before waivers and reimbursements			1.50			1.54		1.60			1.60		1.56			1.65
Net investment income (loss), net of waivers and reimbursements			1.85			0.78		1.30			1.01		1.11			0.73
Net investment income (loss), before waivers and reimbursements			1.64			0.54		1.00			0.73		0.93			0.53
Class N net assets at the end of the year (in thousands)		$	2,494		$	3,219	$	2,954		$	3,020	$	3,497		$	4,307
Portfolio turnover rate (%)*			31			80		70			54		73			88

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	16.76		$	13.81	$	13.98		$	13.91	$	14.43		$	12.18
Income (loss) from investment operations:
Net investment income (loss)			0.17			0.15		0.21			0.18		0.19			0.14
Net realized and unrealized gain (loss) on investments			(0.58	)		3.12		(0.22	)		0.07		(0.59	)		2.26
Total from investment operations			(0.41	)		3.27		(0.01	)		0.25		(0.40	)		2.40
Less distributions from:
Net investment income			—			0.32		0.16			0.18		0.12			0.15
Net realized gain			—			—		—			—		—			—
Total distributions			—			0.32		0.16			0.18		0.12			0.15
Net asset value, end of year		$	16.35		$	16.76	$	13.81		$	13.98	$	13.91		$	14.43
Total return (%)*			(2.45	)		23.72		(0.02	)		1.80		(2.80	)		19.74
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.03			1.05		1.05			1.07		1.13			1.20
Expenses, before waivers and reimbursements			1.22			1.26		1.34			1.34		1.32			1.41
Net investment income (loss), net of waivers and reimbursements			2.06			0.93		1.52			1.26		1.35			1.07
Net investment income (loss), before waivers and reimbursements			1.87			0.72		1.23			0.99		1.16			0.86
Class I net assets at the end of the year (in thousands)		$	110,502		$	117,520	$	84,383		$	60,886	$	65,012		$	75,271
Portfolio turnover rate (%)*			31			80		70			54		73			88

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Institutional International Developed Plus Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	14.55		$	11.84	$	12.12		$	12.01	$	12.70		$	10.82
Income (loss) from investment operations:
Net investment income (loss)			0.16			0.16		0.20			0.15		0.21			0.13
Net realized and unrealized gain (loss) on investments			(0.30	)		2.71		(0.24	)		0.08		(0.65	)		2.00
Total from investment operations			(0.14	)		2.87		(0.04	)		0.23		(0.44	)		2.13
Less distributions from:
Net investment income			—			0.16		0.24			0.12		0.25			0.25
Net realized gain			—			—		—			—		—			—
Total distributions			—			0.16		0.24			0.12		0.25			0.25
Net asset value, end of year		$	14.41		$	14.55	$	11.84		$	12.12	$	12.01		$	12.70
Total return (%)*			(0.96	)		24.28		(0.27	)		1.91		(3.50	)		19.78
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.90			0.93		1.00			1.00		1.03			1.10
Expenses, before waivers and reimbursements			1.55			1.68		1.77			1.76		1.63			1.12
Net investment income (loss), net of waivers and reimbursements			2.19			1.16		1.69			1.23		1.61			1.12
Net investment income (loss), before waivers and reimbursements			1.54			0.41		0.92			0.47		1.01			1.10
Institutional Class net assets at the end of the year (in thousands)		$	18,854		$	19,090	$	16,565		$	16,030	$	14,574		$	100,805
Portfolio turnover rate (%)*			33			73		75			54		61			84

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

161

Financial Highlights — For a share outstanding throughout each period

International Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015			2014			2013
Net asset value, beginning of year		$	30.41		$	23.86	$	24.94		$	25.24		$	26.30		$	22.43
Income (loss) from investment operations:
Net investment income (loss)			0.21			0.21		0.20			0.18			0.31			0.27
Net realized and unrealized gain (loss) on investments			(0.75	)		6.73		(0.92	)		(0.25	)		(1.15	)		3.89
Total from investment operations			(0.54	)		6.94		(0.72	)		(0.07	)		(0.84	)		4.16
Less distributions from:
Net investment income			—			0.39		0.36			0.23			0.22			0.29
Net realized gain			—			—		—			—			—			—
Total distributions			—			0.39		0.36			0.23			0.22			0.29
Net asset value, end of year		$	29.87		$	30.41	$	23.86		$	24.94		$	25.24		$	26.30
Total return (%)*			(1.78	)		29.11		(2.88	)		(0.27	)		(3.19	)		18.57
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.45			1.45		1.43			1.42			1.44			1.44
Expenses, before waivers and reimbursements			1.45			1.47		1.43			1.42			1.44			1.44
Net investment income (loss), net of waivers and reimbursements			1.36			0.78		0.84			0.71			1.17			1.13
Net investment income (loss), before waivers and reimbursements			1.36			0.76		0.84			0.71			1.17			1.13
Class N net assets at the end of the year (in thousands)		$	701,999		$	763,740	$	729,544		$	1,023,588		$	978,433		$	1,418,083
Portfolio turnover rate (%)*			36			82		101			70			79			97

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015			2014			2013
Net asset value, beginning of year		$	31.13		$	24.42	$	25.51		$	25.82		$	26.91		$	22.94
Income (loss) from investment operations:
Net investment income (loss)			0.26			0.30		0.29			0.27			0.36			0.35
Net realized and unrealized gain (loss) on investments			(0.77	)		6.89		(0.94	)		(0.28	)		(1.13	)		3.99
Total from investment operations			(0.51	)		7.19		(0.65	)		(0.01	)		(0.77	)		4.34
Less distributions from:
Net investment income			—			0.48		0.44			0.30			0.32			0.37
Net realized gain			—			—		—			—			—			—
Total distributions			—			0.48		0.44			0.30			0.32			0.37
Net asset value, end of year		$	30.62		$	31.13	$	24.42		$	25.51		$	25.82		$	26.91
Total return (%)*			(1.64	)		29.49		(2.54	)		(0.03	)		(2.86	)		18.96
Ratios to average daily net assets (%)**:
Expenses			1.13			1.14		1.13			1.14			1.14			1.11
Net investment income (loss)			1.68			1.08		1.16			1.02			1.36			1.43
Class I net assets at the end of the year (in thousands)		$	2,206,430		$	2,375,326	$	2,251,701		$	2,655,156		$	2,705,054		$	2,877,541
Portfolio turnover rate (%)*			36			82		101			70			79			97

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Institutional International Growth Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015			2014			2013
Net asset value, beginning of year		$	18.08		$	14.55	$	15.08		$	15.26		$	17.40		$	14.89
Income (loss) from investment operations:
Net investment income (loss)			0.17			0.21		0.18			0.19			0.26			0.25
Net realized and unrealized gain (loss) on investments			(0.46	)		4.07		(0.54	)		(0.18	)		(0.71	)		2.56
Total from investment operations			(0.29	)		4.28		(0.36	)		0.01			(0.45	)		2.81
Less distributions from:
Net investment income			—			0.44		0.17			0.09			0.32			0.30
Net realized gain			—			0.31		—			0.10			1.37			—
Total distributions			—			0.75		0.17			0.19			1.69			0.30
Net asset value, end of year		$	17.79		$	18.08	$	14.55		$	15.08		$	15.26		$	17.40
Total return (%)*			(1.60	)		29.53		(2.40	)		0.09			(2.66	)		18.90
Ratios to average daily net assets (%)**:
Expenses			0.97			0.97		0.98			0.96			0.97			0.97
Net investment income (loss)			1.83			1.22		1.25			1.18			1.50			1.58
Institutional Class net assets at the end of the year (in thousands)		$	2,174,772		$	2,330,299	$	2,093,971		$	2,335,632		$	2,339,169		$	2,440,149
Portfolio turnover rate (%)*			39			84		105			70			83			97

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

163

Financial Highlights — For a share outstanding throughout each period

International Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	15.49		$	12.87	$	13.50		$	12.56	$	16.08		$	13.46
Income (loss) from investment operations:
Net investment income (loss)			0.06			0.12		0.10			0.05		0.03			0.10
Net realized and unrealized gain (loss) on investments			(0.72	)		3.98		(0.72	)		1.16		(1.38	)		3.35
Total from investment operations			(0.66	)		4.10		(0.62	)		1.21		(1.35	)		3.45
Less distributions from:
Net investment income			—			0.32		0.01			0.24		0.18			0.16
Net realized gain			—			1.16		0.00	^		0.03		1.99			0.67
Total distributions			—			1.48		0.01			0.27		2.17			0.83
Net asset value, end of year		$	14.83		$	15.49	$	12.87		$	13.50	$	12.56		$	16.08
Total return (%)*			(4.26	)		32.17		(4.60	)		9.67		(8.43	)		25.80
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.47			1.47		1.44			1.47		1.58			1.59
Expenses, before waivers and reimbursements			1.47			1.62		1.59			1.62		1.58			1.59
Net investment income (loss), net of waivers and reimbursements			0.73			0.85		0.77			0.34		0.20			0.67
Net investment income (loss), before waivers and reimbursements			0.73			0.70		0.62			0.19		0.20			0.67
Class N net assets at the end of the year (in thousands)		$	5,695		$	6,275	$	10,361		$	11,350	$	13,676		$	18,910
Portfolio turnover rate (%)*			49			64		73			90		127			111

	Class I
	(unaudited) Period Ended June 30,					Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	15.65		$	13.00	$	13.65		$	12.70	$	16.23		$	13.58
Income (loss) from investment operations:
Net investment income (loss)			0.09			0.14		0.14			0.09		0.09			0.15
Net realized and unrealized gain (loss) on investments			(0.73	)		4.07		(0.75	)		1.18		(1.40	)		3.37
Total from investment operations			(0.64	)		4.21		(0.61	)		1.27		(1.31	)		3.52
Less distributions from:
Net investment income			—			0.40		0.04			0.29		0.23			0.20
Net realized gain			—			1.16		0.00	^		0.03		1.99			0.67
Total distributions			—			1.56		0.04			0.32		2.22			0.87
Net asset value, end of year		$	15.01		$	15.65	$	13.00		$	13.65	$	12.70		$	16.23
Total return (%)*			(4.09	)		32.70		(4.41	)		10.00		(8.10	)		26.11
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.15			1.16		1.15			1.16		1.28			1.30
Expenses, before waivers and reimbursements			1.15			1.31		1.30			1.31		1.28			1.30
Net investment income (loss), net of waivers and reimbursements			1.10			0.92		1.06			0.66		0.56			0.96
Net investment income (loss), before waivers and reimbursements			1.10			0.77		0.91			0.51		0.56			0.96
Class I net assets at the end of the year (in thousands)		$	339,935		$	338,920	$	306,526		$	342,232	$	364,161		$	508,758
Portfolio turnover rate (%)*			49			64		73			90		127			111

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

International Small Cap Growth Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016			2015		2014			2013
Net asset value, beginning of year		$	15.73		$	13.07	$	13.72		$	12.77	$	16.32		$	13.64
Income (loss) from investment operations:
Net investment income (loss)			0.09			0.15		0.15			0.10		0.12			0.18
Net realized and unrealized gain (loss) on investments			(0.72	)		4.08		(0.74	)		1.18		(1.41	)		3.41
Total from investment operations			(0.63	)		4.23		(0.59	)		1.28		(1.29	)		3.59
Less distributions from:
Net investment income			—			0.41		0.06			0.30		0.27			0.24
Net realized gain			—			1.16		0.00	^		0.03		1.99			0.67
Total distributions			—			1.57		0.06			0.33		2.26			0.91
Net asset value, end of year		$	15.10		$	15.73	$	13.07		$	13.72	$	12.77		$	16.32
Total return (%)*			(4.01	)		32.70		(4.31	)		10.03		(7.91	)		26.49
Ratios to average daily net assets (%)**:
Expenses			1.07			1.08		1.07			1.08		1.06			1.06
Net investment income (loss)			1.12			0.99		1.13			0.76		0.74			1.20
Institutional Class net assets at the end of the year (in thousands)		$	232,867		$	256,558	$	199,746		$	221,018	$	245,103		$	408,524
Portfolio turnover rate (%)*			49			64		73			90		127			111

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

165

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Leaders Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016		2015			2014			2013
Net asset value, beginning of year		$	11.06		$	7.84		$	7.73	$	9.06		$	9.10		$	9.20
Income (loss) from investment operations:
Net investment income (loss)			0.04			0.01			0.02		0.02			0.05			(0.02	)
Net realized and unrealized gain (loss) on investments			(0.81	)		3.26			0.09		(1.34	)		0.14			(0.05	)
Total from investment operations			(0.77	)		3.27			0.11		(1.32	)		0.19			(0.07	)
Less distributions from:
Net investment income			—			0.05			—		—			0.00	^		0.03
Net realized gain			—			—			—		0.01			0.23			—
Total distributions			—			0.05			—		0.01			0.23			0.03
Net asset value, end of year		$	10.29		$	11.06		$	7.84	$	7.73		$	9.06		$	9.10
Total return (%)*			(6.96	)		41.68			1.42		(14.56	)		2.17			(0.74	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.56			1.47			1.57		1.64			1.65			1.65
Expenses, before waivers and reimbursements			1.58			1.62			1.81		1.89			1.82			1.83
Net investment income (loss), net of waivers and reimbursements			0.66			0.14			0.29		0.18			0.51			(0.23	)
Net investment income (loss), before waivers and reimbursements			0.64			(0.01	)		0.05		(0.07	)		0.34			(0.41	)
Class N net assets at the end of the year (in thousands)		$	2,471		$	2,766		$	2,479	$	1,599		$	1,832		$	1,959
Portfolio turnover rate (%)*			33			59			135		110			131			131

	Class I
	(unaudited) Period Ended June 30,					Years Ended December 31,
		2018			2017			2016		2015			2014			2013
Net asset value, beginning of year		$	11.09		$	7.87		$	7.74	$	9.08		$	9.10		$	9.18
Income (loss) from investment operations:
Net investment income (loss)			0.05			0.02			0.04		0.05			0.08			0.05
Net realized and unrealized gain (loss) on investments			(0.80	)		3.27			0.10		(1.36	)		0.15			(0.10	)
Total from investment operations			(0.75	)		3.29			0.14		(1.31	)		0.23			(0.05	)
Less distributions from:
Net investment income			—			0.07			0.01		0.02			0.02			0.03
Net realized gain			—			—			—		0.01			0.23			—
Total distributions			—			0.07			0.01		0.03			0.25			0.03
Net asset value, end of year		$	10.34		$	11.09		$	7.87	$	7.74		$	9.08		$	9.10
Total return (%)*			(6.76	)		41.89			1.82		(14.37	)		2.62			(0.60	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.24			1.25			1.30		1.29			1.40			1.40
Expenses, before waivers and reimbursements			1.24			1.40			1.54		1.54			1.60			1.58
Net investment income (loss), net of waivers and reimbursements			0.96			0.24			0.52		0.53			0.84			0.51
Net investment income (loss), before waivers and reimbursements			0.96			0.09			0.28		0.28			0.64			0.33
Class I net assets at the end of the year (in thousands)		$	45,601		$	47,666		$	30,346	$	32,862		$	28,475		$	34,590
Portfolio turnover rate (%)*			33			59			135		110			131			131

*	Rates are not annualized for periods less than a year.
**	Rates are 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.

166

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Leaders Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016		2015			2014		2013
Net asset value, beginning of year		$	11.09		$	7.86	$	7.74	$	9.07		$	9.10	$	9.18
Income (loss) from investment operations:
Net investment income (loss)			0.06			0.03		0.03		0.04			0.08		0.06
Net realized and unrealized gain (loss) on investments			(0.81	)		3.28		0.10		(1.33	)		0.16		(0.10	)
Total from investment operations			(0.75	)		3.31		0.13		(1.29	)		0.24		(0.04	)
Less distributions from:
Net investment income			—			0.08		0.01		0.03			0.04		0.04
Net realized gain			—			—		—		0.01			0.23		—
Total distributions			—			0.08		0.01		0.04			0.27		0.04
Net asset value, end of year		$	10.34		$	11.09	$	7.86	$	7.74		$	9.07	$	9.10
Total return (%)*			(6.76	)		42.15		1.74		(14.24	)		2.68		(0.46	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.18			1.19		1.25		1.25			1.25		1.25
Expenses, before waivers and reimbursements			1.18			1.19		1.34		1.35			1.42		1.42
Net investment income (loss), net of waivers and reimbursements			1.00			0.33		0.39		0.49			0.83		0.68
Net investment income (loss), before waivers and reimbursements			1.00			0.33		0.30		0.39			0.66		0.51
Institutional Class net assets at the end of the year (in thousands)		$	387,366		$	427,480	$	272,678	$	93,217		$	75,875	$	36,509
Portfolio turnover rate (%)*			33			59		135		110			131		131

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

167

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017			2016		2015			2014		2013
Net asset value, beginning of year		$	16.20		$	10.99		$	10.85	$	12.91		$	13.28	$	13.40
Income (loss) from investment operations:
Net investment income (loss)			0.03			(0.02	)		0.03		0.04			0.08		0.05
Net realized and unrealized gain (loss) on investments			(1.22	)		5.35			0.13		(1.98	)		0.37		0.09
Total from investment operations			(1.19	)		5.33			0.16		(1.94	)		0.45		0.14
Less distributions from:
Net investment income			—			0.12			0.02		—			0.08		0.01
Net realized gain			—			—			—		0.12			0.74		0.25
Total distributions			—			0.12			0.02		0.12			0.82		0.26
Net asset value, end of year		$	15.01		$	16.20		$	10.99	$	10.85		$	12.91	$	13.28
Total return (%)*			(7.35	)		48.53			1.49		(15.03	)		3.40		1.05
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.50			1.50			1.50		1.50			1.64		1.68
Expenses, before waivers and reimbursements			1.50			1.65			1.65		1.65			1.64		1.68
Net investment income (loss), net of waivers and reimbursements			0.40			(0.14	)		0.28		0.33			0.55		0.39
Net investment income (loss), before waivers and reimbursements			0.40			(0.29	)		0.13		0.18			0.55		0.39
Class N net assets at the end of the year (in thousands)		$	9,977		$	10,479		$	8,488	$	9,367		$	12,638	$	13,723
Portfolio turnover rate (%)*			55			91			105		121			101		118

	Class I
	(unaudited) Period Ended June 30,					Years Ended December 31,
		2018			2017			2016		2015			2014		2013
Net asset value, beginning of year		$	16.36		$	11.10		$	10.96	$	13.01		$	13.38	$	13.50
Income (loss) from investment operations:
Net investment income (loss)			0.05			0.01			0.06		0.07			0.11		0.08
Net realized and unrealized gain (loss) on investments			(1.23	)		5.40			0.13		(2.00	)		0.37		0.10
Total from investment operations			(1.18	)		5.41			0.19		(1.93	)		0.48		0.18
Less distributions from:
Net investment income			—			0.15			0.05		—			0.11		0.05
Net realized gain			—			—			—		0.12			0.74		0.25
Total distributions			—			0.15			0.05		0.12			0.85		0.30
Net asset value, end of year		$	15.18		$	16.36		$	11.10	$	10.96		$	13.01	$	13.38
Total return (%)*			(7.21	)		48.83			1.73		(14.83	)		3.65		1.36
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.25			1.27			1.26		1.25			1.40		1.41
Expenses, before waivers and reimbursements			1.25			1.42			1.41		1.40			1.40		1.41
Net investment income (loss), net of waivers and reimbursements			0.65			0.08			0.53		0.58			0.79		0.62
Net investment income (loss), before waivers and reimbursements			0.65			(0.07	)		0.38		0.43			0.79		0.62
Class I net assets at the end of the year (in thousands)		$	116,444		$	129,481		$	93,668	$	130,491		$	166,488	$	152,588
Portfolio turnover rate (%)*			55			91			105		121			101		118

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Growth Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018			2017		2016		2015			2014		2013
Net asset value, beginning of year		$	16.49		$	11.18	$	11.05	$	13.09		$	13.46	$	13.59
Income (loss) from investment operations:
Net investment income (loss)			0.06			0.02		0.07		0.08			0.14		0.12
Net realized and unrealized gain (loss) on investments			(1.24	)		5.46		0.12		(2.00	)		0.37		0.08
Total from investment operations			(1.18	)		5.48		0.19		(1.92	)		0.51		0.20
Less distributions from:
Net investment income			—			0.17		0.06		—			0.14		0.08
Net realized gain			—			—		—		0.12			0.74		0.25
Total distributions			—			0.17		0.06		0.12			0.88		0.33
Net asset value, end of year		$	15.31		$	16.49	$	11.18	$	11.05		$	13.09	$	13.46
Total return (%)*			(7.16	)		49.06		1.71		(14.67	)		3.85		1.49
Ratios to average daily net assets (%)**:
Expenses			1.17			1.17		1.19		1.17			1.18		1.19
Net investment income (loss)			0.69			0.17		0.60		0.61			1.00		0.87
Institutional Class net assets at the end of the year (in thousands)		$	950,506		$	1,178,853	$	831,587	$	739,253		$	806,708	$	833,711
Portfolio turnover rate (%)*			55			91		105		121			101		118

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

169

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Small Cap Growth Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016			2015			2014		2013
Net asset value, beginning of year		$	18.66			$	13.73		$	14.84		$	16.52		$	15.12	$	12.99
Income (loss) from investment operations:
Net investment income (loss)			(0.00	)^			0.01			0.09			(0.01	)		0.04		0.05
Net realized and unrealized gain (loss) on investments			(1.77	)			5.46			(0.88	)		(1.05	)		2.13		2.08
Total from investment operations			(1.77	)			5.47			(0.79	)		(1.06	)		2.17		2.13
Less distributions from:
Net investment income			—				0.50			0.32			—			0.03		—
Net realized gain			—				0.04			—			0.62			0.74		0.00	^
Total distributions			—				0.54			0.32			0.62			0.77		0.00	^
Net asset value, end of year		$	16.89			$	18.66		$	13.73		$	14.84		$	16.52	$	15.12
Total return (%)*			(9.49	)			40.09			(5.33	)		(6.40	)		14.41		16.42
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.61				1.64			1.61			1.65			1.65		1.65
Expenses, before waivers and reimbursements			1.66				1.83			1.82			1.94			1.74		2.19
Net investment income (loss), net of waivers and reimbursements			(0.05	)			0.08			0.62			(0.06	)		0.21		0.38
Net investment income (loss), before waivers and reimbursements			(0.10	)			(0.11	)		0.41			(0.35	)		0.12		(0.16	)
Class N net assets at the end of the year (in thousands)		$	11,892			$	15,082		$	9,263		$	11,306		$	10,745	$	9,313
Portfolio turnover rate (%)*			92				183			157			167			124		138

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016			2015			2014		2013
Net asset value, beginning of year		$	18.73			$	13.77		$	14.90		$	16.52		$	15.13	$	12.99
Income (loss) from investment operations:
Net investment income (loss)			0.03				0.08			0.13			0.05			0.02		0.05
Net realized and unrealized gain (loss) on investments			(1.78	)			5.47			(0.89	)		(1.05	)		2.20		2.12
Total from investment operations			(1.75	)			5.55			(0.76	)		(1.00	)		2.22		2.17
Less distributions from:
Net investment income			—				0.55			0.37			—			0.09		0.03
Net realized gain			—				0.04			—			0.62			0.74		0.00	^
Total distributions			—				0.59			0.37			0.62			0.83		0.03
Net asset value, end of year		$	16.98			$	18.73		$	13.77		$	14.90		$	16.52	$	15.13
Total return (%)*			(9.34	)			40.53			(5.11	)		(6.03	)		14.73		16.70
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			1.31				1.31			1.30			1.31			1.40		1.40
Expenses, before waivers and reimbursements			1.33				1.50			1.51			1.52			1.49		1.72
Net investment income (loss), net of waivers and reimbursements			0.29				0.49			0.87			0.30			0.15		0.35
Net investment income (loss), before waivers and reimbursements			0.27				0.30			0.66			0.09			0.06		0.03
Class I net assets at the end of the year (in thousands)		$	284,122			$	282,620		$	147,949		$	162,375		$	119,662	$	58,123
Portfolio turnover rate (%)*			92				183			157			167			124		138

*	Rates are not annualized for periods less than a year.
**	Rates are 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.

170

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Emerging Markets Small Cap Growth Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017		2016			2015			2014		2013
Net asset value, beginning of year		$	18.76			$	13.79	$	14.92		$	16.53		$	15.14	$	13.00
Income (loss) from investment operations:
Net investment income (loss)			0.03				0.10		0.14			0.06			0.06		0.07
Net realized and unrealized gain (loss) on investments			(1.77	)			5.47		(0.89	)		(1.05	)		2.18		2.11
Total from investment operations			(1.74	)			5.57		(0.75	)		(0.99	)		2.24		2.18
Less distributions from:
Net investment income			—				0.56		0.38			0.00	^		0.11		0.04
Net realized gain			—				0.04		—			0.62			0.74		0.00	^
Total distributions			—				0.60		0.38			0.62			0.85		0.04
Net asset value, end of year		$	17.02			$	18.76	$	13.79		$	14.92		$	16.53	$	15.14
Total return (%)*			(9.28	)			40.62		(5.05	)		(5.97	)		14.85		16.80
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			1.27				1.29		1.31			1.31			1.34		1.56
Net investment income (loss), net of waivers and reimbursements			0.37				0.57		0.94			0.34			0.37		0.47
Net investment income (loss), before waivers and reimbursements			0.35				0.53		0.88			0.28			0.28		0.16
Institutional Class net assets at the end of the year (in thousands)		$	175,937			$	166,927	$	125,650		$	123,160		$	123,496	$	91,663
Portfolio turnover rate (%)*			92				183		157			167			124		138

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

171

Financial Highlights — For a share outstanding throughout each period

Bond Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017		2016		2015			2014			2013
Net asset value, beginning of year		$	10.41			$	10.41	$	10.34	$	10.74		$	10.60		$	11.28
Income (loss) from investment operations:
Net investment income (loss)			0.15				0.27		0.27		0.27			0.31			0.32
Net realized and unrealized gain (loss) on investments			(0.39	)			0.12		0.18		(0.29	)		0.23			(0.47	)
Total from investment operations			(0.24	)			0.39		0.45		(0.02	)		0.54			(0.15	)
Less distributions from:
Net investment income			0.20				0.39		0.38		0.38			0.40			0.42
Net realized gain			—				—		—		—			0.00	^		0.11
Total distributions			0.20				0.39		0.38		0.38			0.40			0.53
Net asset value, end of year		$	9.97			$	10.41	$	10.41	$	10.34		$	10.74		$	10.60
Total return (%)*			(2.28	)			3.83		4.40		(0.23	)		5.10			(1.37	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.63				0.65		0.65		0.61			0.65			0.65
Expenses, before waivers and reimbursements			0.67				0.82		0.82		0.79			0.85			0.82
Net investment income (loss), net of waivers and reimbursements			3.05				2.57		2.60		2.60			2.90			2.89
Net investment income (loss), before waivers and reimbursements			3.01				2.40		2.43		2.42			2.70			2.72
Class N net assets at the end of the year (in thousands)		$	85,812			$	83,662	$	125,866	$	139,303		$	16,720		$	11,389
Portfolio turnover rate (%)*			16				17		17		32			35			41

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017		2016		2015			2014			2013
Net asset value, beginning of year		$	10.31			$	10.30	$	10.24	$	10.64		$	10.49		$	11.17
Income (loss) from investment operations:
Net investment income (loss)			0.16				0.29		0.30		0.31			0.33			0.33
Net realized and unrealized gain (loss) on investments			(0.39	)			0.13		0.16		(0.31	)		0.23			(0.48	)
Total from investment operations			(0.23	)			0.42		0.46		—			0.56			(0.15	)
Less distributions from:
Net investment income			0.21				0.41		0.40		0.40			0.41			0.42
Net realized gain			—				—		—		—			0.00	^		0.11
Total distributions			0.21				0.41		0.40		0.40			0.41			0.53
Net asset value, end of year		$	9.87			$	10.31	$	10.30	$	10.24		$	10.64		$	10.49
Total return (%)*			(2.22	)			4.16		4.55		(0.05	)		5.37			(1.28	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.44				0.43		0.41		0.41			0.50			0.50
Expenses, before waivers and reimbursements			0.45				0.60		0.58		0.59			0.60			0.58
Net investment income (loss), net of waivers and reimbursements			3.25				2.79		2.83		2.93			3.07			3.05
Net investment income (loss), before waivers and reimbursements			3.24				2.62		2.66		2.75			2.97			2.97
Class I net assets at the end of the year (in thousands)		$	354,249			$	384,464	$	322,174	$	237,587		$	149,466		$	145,939
Portfolio turnover rate (%)*			16				17		17		32			35			41

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Bond Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017		2016		2015			2014			2013
Net asset value, beginning of year		$	10.30			$	10.29	$	10.23	$	10.63		$	10.48		$	11.16
Income (loss) from investment operations:
Net investment income (loss)			0.17				0.30		0.30		0.32			0.34			0.35
Net realized and unrealized gain (loss) on investments			(0.39	)			0.13		0.17		(0.31	)		0.23			(0.48	)
Total from investment operations			(0.22	)			0.43		0.47		0.01			0.57			(0.13	)
Less distributions from:
Net investment income			0.22				0.42		0.41		0.41			0.42			0.44
Net realized gain			—				—		—		—			0.00	^		0.11
Total distributions			0.22				0.42		0.41		0.41			0.42			0.55
Net asset value, end of year		$	9.86			$	10.30	$	10.29	$	10.23		$	10.63		$	10.48
Total return (%)*			(2.19	)			4.24		4.61		0.01			5.53			(1.13	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.37				0.35		0.35		0.35			0.35			0.35
Expenses, before waivers and reimbursements			0.37				0.37		0.37		0.38			0.41			0.39
Net investment income (loss), net of waivers and reimbursements			3.32				2.87		2.90		3.01			3.23			3.19
Net investment income (loss), before waivers and reimbursements			3.32				2.85		2.88		2.98			3.17			3.15
Institutional Class net assets at the end of the year (in thousands)		$	83,243			$	91,629	$	95,216	$	103,904		$	97,341		$	87,527
Portfolio turnover rate (%)*			16				17		17		32			35			41

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

173

Financial Highlights — For a share outstanding throughout each period

Income Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016		2015			2014		2013
Net asset value, beginning of year		$	8.72			$	8.86		$	8.90	$	9.12		$	9.11	$	9.55
Income (loss) from investment operations:
Net investment income (loss)			0.09				0.16			0.16		0.15			0.18		0.20
Net realized and unrealized gain (loss) on investments			(0.19	)			(0.03	)		0.06		(0.11	)		0.10		(0.35	)
Total from investment operations			(0.10	)			0.13			0.22		0.04			0.28		(0.15	)
Less distributions from:
Net investment income			0.14				0.27			0.26		0.26			0.27		0.29
Net realized gain			—				—			—		—			—		—
Total distributions			0.14				0.27			0.26		0.26			0.27		0.29
Net asset value, end of year		$	8.48			$	8.72		$	8.86	$	8.90		$	9.12	$	9.11
Total return (%)*			(1.12	)			1.46			2.44		0.39			3.06		(1.61	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.85				0.85			0.79		0.81			0.84		0.85
Expenses, before waivers and reimbursements			0.89				0.88			0.79		0.81			0.84		1.03
Net investment income (loss), net of waivers and reimbursements			2.07				1.80			1.80		1.71			1.99		2.13
Net investment income (loss), before waivers and reimbursements			2.03				1.77			1.80		1.71			1.99		1.95
Class N net assets at the end of the year (in thousands)		$	25,897			$	39,625		$	52,710	$	32,942		$	34,020	$	41,662
Portfolio turnover rate (%)*			47				37			22		21			30		41

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016		2015			2014		2013
Net asset value, beginning of year		$	8.66			$	8.80		$	8.83	$	9.05		$	9.05	$	9.48
Income (loss) from investment operations:
Net investment income (loss)			0.10				0.18			0.18		0.18			0.20		0.21
Net realized and unrealized gain (loss) on investments			(0.19	)			(0.03	)		0.06		(0.12	)		0.09		(0.34	)
Total from investment operations			(0.09	)			0.15			0.24		0.06			0.29		(0.13	)
Less distributions from:
Net investment income			0.15				0.29			0.27		0.28			0.29		0.30
Net realized gain			—				—			—		—			—		—
Total distributions			0.15				0.29			0.27		0.28			0.29		0.30
Net asset value, end of year		$	8.42			$	8.66		$	8.80	$	8.83		$	9.05	$	9.05
Total return (%)*			(1.03	)			1.68			2.78		0.63			3.20		(1.41	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.62				0.62			0.57		0.55			0.59		0.70
Expenses, before waivers and reimbursements			0.62				0.62			0.57		0.55			0.59		0.77
Net investment income (loss), net of waivers and reimbursements			2.30				2.03			2.05		1.97			2.24		2.30
Net investment income (loss), before waivers and reimbursements			2.30				2.03			2.05		1.97			2.24		2.23
Class I net assets at the end of the year (in thousands)		$	38,265			$	51,153		$	58,160	$	62,722		$	64,834	$	64,152
Portfolio turnover rate (%)*			47				37			22		21			30		41

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

Financial Highlights — For a share outstanding throughout each period

Low Duration Fund

	Class N
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016		2015			2014			2013
Net asset value, beginning of year		$	8.92			$	9.07		$	9.16	$	9.38		$	9.52		$	9.83
Income (loss) from investment operations:
Net investment income (loss)			0.08				0.11			0.09		0.07			0.11			0.10
Net realized and unrealized gain (loss) on investments			(0.05	)			(0.04	)		0.02		(0.07	)		(0.00	)^		(0.16	)
Total from investment operations			0.03				0.07			0.11		—			0.11			(0.06	)
Less distributions from:
Net investment income			0.14				0.22			0.20		0.22			0.25			0.25
Net realized gain			—				—			—		—			—			—
Total distributions			0.14				0.22			0.20		0.22			0.25			0.25
Net asset value, end of year		$	8.81			$	8.92		$	9.07	$	9.16		$	9.38		$	9.52
Total return (%)*			0.30				0.84			1.16		0.01			1.20			(0.62	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.62				0.61			0.68		0.60			0.70			0.70
Expenses, before waivers and reimbursements			0.72				0.79			0.83		0.77			0.75			0.71
Net investment income (loss), net of waivers and reimbursements			1.77				1.22			0.98		0.71			1.19			1.06
Net investment income (loss), before waivers and reimbursements			1.67				1.04			0.83		0.54			1.14			1.05
Class N net assets at the end of the year (in thousands)		$	2,217			$	1,979		$	7,237	$	2,712		$	4,969		$	5,158
Portfolio turnover rate (%)*			59				109			81		106			83			56

	Class I
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016		2015			2014			2013
Net asset value, beginning of year		$	8.91			$	9.07		$	9.16	$	9.37		$	9.52		$	9.83
Income (loss) from investment operations:
Net investment income (loss)			0.09				0.13			0.11		0.08			0.13			0.12
Net realized and unrealized gain (loss) on investments			(0.05	)			(0.05	)		0.02		(0.05	)		(0.01	)		(0.17	)
Total from investment operations			0.04				0.08			0.13		0.03			0.12			(0.05	)
Less distributions from:
Net investment income			0.15				0.24			0.22		0.24			0.27			0.26
Net realized gain			—				—			—		—			—			—
Total distributions			0.15				0.24			0.22		0.24			0.27			0.26
Net asset value, end of year		$	8.80			$	8.91		$	9.07	$	9.16		$	9.37		$	9.52
Total return (%)*			0.41				0.91			1.40		0.30			1.24			(0.47	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.40				0.41			0.44		0.42			0.55			0.55
Expenses, before waivers and reimbursements			0.46				0.59			0.59		0.59			0.60			0.56
Net investment income (loss), net of waivers and reimbursements			1.98				1.45			1.20		0.87			1.35			1.24
Net investment income (loss), before waivers and reimbursements			1.92				1.27			1.05		0.70			1.30			1.23
Class I net assets at the end of the year (in thousands)		$	71,877			$	131,186		$	219,714	$	107,137		$	104,433		$	122,583
Portfolio turnover rate (%)*			59				109			81		106			83			56

*	Rates are not annualized for periods less than a year.
**	Rates are 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, 2018

William Blair Funds

175

Financial Highlights — For a share outstanding throughout each period

Low Duration Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Years Ended December 31,
		2018				2017			2016		2015			2014			2013
Net asset value, beginning of year		$	8.91			$	9.07		$	9.16	$	9.38		$	9.53		$	9.83
Income (loss) from investment operations:
Net investment income (loss)			0.09				0.14			0.11		0.09			0.14			0.13
Net realized and unrealized gain (loss) on investments			(0.05	)			(0.05	)		0.02		(0.07	)		(0.01	)		(0.15	)
Total from investment operations			0.04				0.09			0.13		0.02			0.13			(0.02	)
Less distributions from:
Net investment income			0.15				0.25			0.22		0.24			0.28			0.28
Net realized gain			—				—			—		—			—			—
Total distributions			0.15				0.25			0.22		0.24			0.28			0.28
Net asset value, end of year		$	8.80			$	8.91		$	9.07	$	9.16		$	9.38		$	9.53
Total return (%)*			0.44				0.96			1.43		0.22			1.40			(0.20	)
Ratios to average daily net assets (%)**:
Expenses, net of waivers and reimbursements			0.35				0.37			0.40		0.40			0.40			0.39
Expenses, before waivers and reimbursements			0.41				0.40			0.40		0.42			0.43			0.39
Net investment income (loss), net of waivers and reimbursements			2.06				1.51			1.25		0.94			1.45			1.37
Net investment income (loss), before waivers and reimbursements			2.00				1.48			1.25		0.92			1.42			1.37
Institutional Class net assets at the end of the year (in thousands)		$	100,048			$	99,912		$	53,122	$	21,863		$	68,095		$	46,485
Portfolio turnover rate (%)*			59				109			81		106			83			56

*	Rates are not annualized for periods less than a year.
**	Rates are annualized for periods less than a year.

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

176

Semiannual Report

June 30, 2018

Financial Highlights — For a share outstanding throughout each period

Macro Allocation Fund

	Class N
	(unaudited) Period Ended June 30,				Periods Ended December 31,											Years Ended October 31,
			2018				2017		2016		2015			2014(a)			2014		2013
Net asset value, beginning of year		$	11.84			$	11.34	$	11.32	$	12.14		$	13.07		$	12.61	$	11.28
Income (loss) from investment operations:
Net investment income (loss)			0.02				0.06		0.04		0.04			0.04			0.02		0.05
Net realized and unrealized gain (loss) on investments			(0.21	)			0.51		0.19		(0.80	)		(0.31	)		0.76		1.59
Total from investment operations			(0.19	)			0.57		0.23		(0.76	)		(0.27	)		0.78		1.64
Less distributions from:
Net investment income			—				0.07		0.21		0.06			0.66			0.09		0.11
Net realized gain			—				—		—		—			—			0.23		0.20
Total distributions			—				0.07		0.21		0.06			0.66			0.32		0.31
Net asset value, end of year		$	11.65			$	11.84	$	11.34	$	11.32		$	12.14		$	13.07	$	12.61
Total return (%)*			(1.60	)			5.06		2.01		(6.24	)		(2.00	)		6.34		14.87
Ratios to average daily net assets (%)**:
Expenses (excluding interest or short dividend expense), net of waivers and reimbursements			1.28				1.31		1.23		1.27			1.35			1.35		1.35
Expenses, net of waivers and reimbursements			1.30				1.37		1.23		1.27			1.38			1.47		1.49
Expenses, before waivers and reimbursements			1.30				1.52		1.38		1.42			1.46			1.60		1.78
Net investment income (loss), net of waivers and reimbursements			0.32				0.50		0.32		0.32			2.06			0.20		0.37
Net investment income (loss), before waivers and reimbursements			0.32				0.35		0.17		0.17			1.98			0.07		0.08
Class N net assets at the end of the year (in thousands)		$	35,442			$	41,483	$	61,376	$	150,606		$	150,778		$	150,785	$	97,498
Portfolio turnover rate (%)*			18				43		50		34			17			59		10

	Class I
	(unaudited) Period Ended June 30,				Periods Ended December 31,											Years Ended October 31,
			2018				2017		2016		2015			2014(a)			2014		2013
Net asset value, beginning of year		$	11.88			$	11.38	$	11.38	$	12.22		$	13.15		$	12.66	$	11.31
Income (loss) from investment operations:
Net investment income (loss)			0.04				0.11		0.08		0.09			0.05			0.04		0.07
Net realized and unrealized gain (loss) on investments			(0.22	)			0.51		0.18		(0.82	)		(0.31	)		0.78		1.60
Total from investment operations			(0.18	)			0.62		0.26		(0.73	)		(0.26	)		0.82		1.67
Less distributions from:
Net investment income			—				0.12		0.26		0.11			0.67			0.10		0.12
Net realized gain			—				—		—		—			—			0.23		0.20
Total distributions			—				0.12		0.26		0.11			0.67			0.33		0.32
Net asset value, end of year		$	11.70			$	11.88	$	11.38	$	11.38		$	12.22		$	13.15	$	12.66
Total return (%)*			(1.52	)			5.50		2.26		(6.00	)		(1.94	)		6.60		15.06
Ratios to average daily net assets (%)**:
Expenses (excluding interest or short dividend expense), net of waivers and reimbursements			0.96				0.96		0.97		0.98			1.07			1.10		1.10
Expenses, net of waivers and reimbursements			0.98				1.02		0.97		0.99			1.10			1.22		1.24
Expenses, before waivers and reimbursements			0.98				1.17		1.12		1.14			1.10			1.27		1.41
Net investment income (loss), net of waivers and reimbursements			0.66				0.90		0.67		0.73			2.33			0.32		0.62
Net investment income (loss), before waivers and reimbursements			0.66				0.75		0.52		0.58			2.33			0.27		0.45
Class I net assets at the end of the year (in thousands)		$	724,578			$	780,075	$	937,244	$	1,155,051		$	649,756		$	617,531	$	224,860
Portfolio turnover rate (%)*			18				43		50		34			17			59		10

(a)	For the period November 1, 2014 to December 31, 2014.
*	Rates are not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.

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

June 30, 2018

William Blair Funds

177

Financial Highlights — For a share outstanding throughout each period

Macro Allocation Fund

	Institutional Class
	(unaudited) Period Ended June 30,				Periods Ended December 31,											Years Ended October 31,
			2018				2017		2016		2015			2014(b)			2014	2013(a)
Net asset value, beginning of year		$	11.89			$	11.40	$	11.39	$	12.23		$	13.16		$	12.66	$	12.63
Income (loss) from investment operations:
Net investment income (loss)			0.05				0.12		0.09		0.12			0.05			0.04		0.00	^
Net realized and unrealized gain (loss) on investments			(0.22	)			0.51		0.19		(0.84	)		(0.31	)		0.79		0.03
Total from investment operations			(0.17	)			0.63		0.28		(0.72	)		(0.26	)		0.83		0.03
Less distributions from:
Net investment income			—				0.14		0.27		0.12			0.67			0.10		—
Net realized gain			—				—		—		—			—			0.23		—
Total distributions			—				0.14		0.27		0.12			0.67			0.33		—
Net asset value, end of year		$	11.72			$	11.89	$	11.40	$	11.39		$	12.23		$	13.16	$	12.66
Total return (%)*			(1.43	)			5.51		2.44		(5.92	)		(1.91	)		6.71		0.24
Ratios to average daily net assets (%)**:
Expenses (excluding interest or short dividend expense), net of waivers and reimbursements			0.87				0.86		0.89		0.90			0.88			0.93		0.95
Expenses, net of waivers and reimbursements			0.89				0.92		0.89		0.90			0.91			1.05		1.00
Expenses, before waivers and reimbursements			0.89				0.92		0.89		0.90			0.91			1.05		1.11
Net investment income (loss), net of waivers and reimbursements			0.77				1.04		0.81		0.95			2.54			0.32		(0.99	)
Net investment income (loss), before waivers and reimbursements			0.77				1.04		0.81		0.95			2.54			0.32		(1.10	)
Institutional Class net assets at the end of the year (in thousands)		$	459,328			$	487,082	$	582,298	$	426,230		$	158,152		$	150,447	$	5,014
Portfolio turnover rate (%)*			18				43		50		34			17			59		10

(a)	For the period October 21, 2013 (Commencement of Operations) to October 31, 2013.
(b)	For the period November 1, 2014 to December 31, 2014.
*	Rates are not annualized for periods that are less than a year.
**	Rates are annualized for periods that are less than a year.
^	Amount is less than $0.005 per share.

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

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Renewal of the Management Agreement

On April 24, 2018, 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 Management Agreement; the investment performance of each Fund and the Adviser; 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 fallout 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 24, 2018 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 Board also received a memorandum from legal counsel advising it 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. The Independent Trustees also considered supplemental comparative performance for each Fund based on a peer group of comparable funds prepared by FUSE Research Network (“Fuse”) based on each Fund’s investment strategy and portfolio attributes prepared from parameters provided by the Adviser. 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,” and collectively with the Adviser, “William Blair”), resulting from their 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, including the Independent Trustees, 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.

Based on this, 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, Fuse 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 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 manages the Funds and knowing the management fees. The Board considered biographical information about the Trust’s officers, other Adviser personnel and the

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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, risk management activities, compliance program and the expense limitations proposed for each of the Funds’ share classes. The Board also considered the nature, quality and extent of services that the Adviser provides to the Funds compared to the services that the Adviser provides to other clients. The Board noted that the Adviser pays the 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 each share class of the Funds for the one-, three-, five- and ten-year periods ended December 31, 2017, as applicable, along with annualized total return information for a Morningstar performance peer universe of funds and one or more benchmark securities indexes. The Morningstar performance peer universe for each Fund included all funds in the same Morningstar category as the Fund. The Board also reviewed the performance of a peer group of comparable funds prepared by Fuse. For purposes of this report, Class N shares were used for comparison purposes as the Board noted that Class N shares have additional costs related to distribution and shareholder services provided and therefore provide a more conservative representation of Fund performance.

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. 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 below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Russell 3000^®Growth Index) for the one-, three- and five-year periods. The Board considered the Adviser’s report noting that negative stock selection in certain sectors and underperforming mid-cap stocks detracted from the Fund’s performance. The Board considered that the Adviser had added analysts and made other investment team modifications over the past three years to align coverage by sector and market capitalization within the broader U.S. Growth team, which the Adviser believes will improve relative performance.

Large Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Russell 1000^®Growth Index) for the three- and five-year periods and outperformed the benchmark for the one-year period ended December 31, 2017.

Mid Cap Growth Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Russell Midcap^®Growth Index) for the one-, three- and five-year periods ended December 31, 2017. The Board considered the Adviser’s report that the investment strategy of the Fund’s investment team has historically added substantial value (outperformed) in down markets and performed well in normal markets, but that it has historically struggled in speculative up markets such as the ones experienced in recent years. The Adviser’s report also noted that negative stock selection in certain sectors and an underweight in an industry that had strong performance detracted from the Fund’s performance. The Board considered that the Adviser had added a portfolio manager, added analysts to the investment team and made other investment team modifications over the past three years to align coverage by sector and market capitalization within the broader U.S. Growth team, which the Adviser believes will improve relative performance.

Small-Mid Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe and the benchmark (Russell 2500^TMGrowth Index) for the one-, three- and five-year periods ended December 31, 2017.

Small-Mid Cap Value Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one- and five-year periods and was in line with the Morningstar performance peer universe for the three-year period ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Russell 2500^TMValue Index) for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Class I shares outperformed the Morningstar peer universe for the three- and five-year periods ended December 31, 2017.

Small Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe and the benchmark (Russell 2000^®Growth Index) for the one-, three- and five-year periods ended December 31, 2017.

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Small Cap Value Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one- and three-year periods and was above the average of its Morningstar performance peer universe for the five-year period ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Russell 2000^®Value Index) for the one- and three-year periods and outperformed the benchmark for the five-year period ended December 31, 2017.

Global Leaders Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World IMI (net) Index) for the one- and three-year periods and performed the same as the benchmark for the five-year period ended December 31, 2017.

International Leaders Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the three- and five-year periods and was below the average of its Morningstar performance peer universe for the one-year period ended December 31, 2017. 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 period ended December 31, 2017.

International Developed Plus Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI World Ex-U.S. (net) Index) for the three- and five-year periods and underperformed the benchmark for the one-year period ended December 31, 2017. The Board considered the Adviser’s report that weak stock selection in certain sectors and countries detracted from performance in 2016. The Adviser’s report noted that the Adviser remains confident that the Fund’s emphasis on high quality growth and low earnings volatility will generate favorable risk-adjusted returns.

Institutional International Developed Plus Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund performed in line with the benchmark (MSCI World Ex-U.S. (net) Index) for the one-year period and outperformed the benchmark for the three- and five-year periods ended December 31, 2017. The Board considered the Adviser’s report that weak stock selection in certain sectors and countries detracted from performance in 2016. The Adviser’s report noted that the Adviser remains confident that the Fund’s emphasis on high quality growth and low earnings volatility will generate favorable risk-adjusted returns.

International Growth Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World Ex-U.S. IMI (net) Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017. The Board considered the Adviser’s report that weak stock selection in certain sectors and countries detracted from performance in 2016. The Adviser’s report noted that portfolio repositioning, which was accomplished without compromising the Fund’s high quality growth orientation, contributed to outperformance of the benchmark during 2017.

Institutional International Growth Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World Ex-U.S. IMI (net) Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017. The Board considered the Adviser’s report that weak stock selection in certain sectors and countries in 2016 detracted from performance. The Adviser’s report noted that portfolio repositioning, which was accomplished without compromising the Fund’s high quality growth orientation, contributed to outperformance of the benchmark during 2017.

International Small Cap Growth Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI All Country World Ex-U.S. Small Cap (net) Index) for the one-year period and underperformed the benchmark for the three- and five-year periods ended December 31, 2017. The Board considered the Adviser’s report that the Fund’s underperformance was driven by relative weakness in calendar years 2016 and 2014 attributable to weak stock selection in certain sectors, offsetting the positive effects of 2015 and 2017 outperformance. The Adviser reported that the Fund’s investment team reduced valuation risk in the Fund through selective positioning adjustments, which were implemented without compromising the Adviser’s quality growth orientation, and which contributed to outperformance versus the benchmark in 2017. The Adviser also reported that the Fund’s investment team is confident that its focus on strong corporate performance will return to favor and contribute to improved relative performance.

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Emerging Markets Leaders Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the one- and five-year periods and was below the average of its Morningstar performance peer universe for the three-year period ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI Emerging Markets (net) Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017.

Emerging Markets Growth Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI Emerging Markets IMI (net) Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017.

Emerging Markets Small Cap Growth Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe for the one- and five-year periods and below the average of its Morningstar performance peer universe for the three-year period ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (MSCI Emerging Markets Small Cap (net) Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017.

Bond Fund. The Board considered that the Fund’s total return was above the average of its Morningstar performance peer universe and the benchmark (Bloomberg Barclays U.S. Aggregate Bond Index) for the one-, three- and five-year periods ended December 31, 2017.

Income Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-year period and in line with its Morningstar performance peer universe for the three- and five-year periods ended December 31, 2017. The Board also considered that the Fund underperformed the benchmark (Bloomberg Barclays Intermediate Government/Credit Bond Index) for the one-, three- and five-year periods ended December 31, 2017.

Low Duration Fund. The Board considered that the Fund’s total return was below the average of its Morningstar performance peer universe for the one-, three- and five-year periods ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (Bank of America Merrill Lynch 1-Year U.S. Treasury Note Index) for the one-, three- and five-year periods ended December 31, 2017. The Board considered the Adviser’s report that the Fund has a high-quality orientation and restricts its investments to highly rated debt securities, whereas other funds in the peer group hold high yield securities which outperformed over recent years.

Macro Allocation Fund. The Board considered that the Fund’s total return was in line with its Morningstar performance peer universe for the one-year period, below the average of its Morningstar performance peer universe for the three-year period and above the average of its Morningstar performance peer universe for the five-year period ended December 31, 2017. The Board also considered that the Fund outperformed the benchmark (Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index) for the one- and five-year periods and underperformed the benchmark for the three-year period ended December 31, 2017.

Management Fees. The Board reviewed each Fund’s management fee and reviewed information comparing the management fee to those of an expense peer group and an expense peer universe of funds provided by Broadridge for each share class of the Funds. The Broadridge expense peer group for Class N shares of each Fund (“Class N Broadridge Expense Group”) consisted of a group of retail no-load funds with a similar investment strategy and asset size, as classified by Broadridge. The Broadridge expense peer group for Class I and the Institutional Class of each Fund (“Class I Broadridge Expense Group” and “Institutional Class Broadridge Expense Group,” respectively) consisted of a group of institutional funds with a similar investment strategy and asset size, as classified by Broadridge. The Broadridge expense peer universe for each share class of each Fund consisted of the Fund’s Broadridge expense peer group and all other no-load funds with an investment strategy as classified by Broadridge similar to the Fund’s. In considering the Broadridge information and giving effect to the contractual management fee reductions proposed by the Adviser, the Board noted that the contractual management fees for the Growth Fund, the Large Cap Growth Fund, the Small-Mid Cap Value Fund, the International Leaders Fund, the International Small Cap Growth Fund, the Bond Fund, the Income Fund, the Low Duration Fund and the Macro Allocation Fund were below the average contractual management fee of their Class I Broadridge Expense Group and that the contractual management fees for the Emerging Market Leaders Fund was the same as the average contractual management fee of the Class I Broadridge Expense Group. The Board also noted that the contractual management fees for the Mid Cap Growth Fund, the Small-Mid Cap Growth Fund, the Small Cap Growth Fund, the Small Cap Value Fund, the Global Leaders Fund, the International Developed Plus Fund, the International Growth Fund, the Emerging Markets Growth Fund and the Emerging Markets Small Cap Growth Fund were above the average contractual management fee of their Class I Broadridge Expense Group.

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In considering the management fee for the Institutional International Developed Plus Fund and the Institutional International Growth Fund, which do not have Class I shares, the Board noted that the contractual management fees for each Fund were above the average contractual management fee of their Institutional Class Broadridge Expense Group.

The Board noted the current and proposed contractual expense limitations for the Funds and further noted that the Adviser proposed reducing the contractual limit on operating expenses for certain Funds. The Board considered that the Adviser proposed to contractually limit operating expenses until April 30, 2019 for each Fund. The Board considered the amount of management fees waived and other expenses reimbursed by the Adviser on behalf of the Funds in 2017, noting that the Adviser waived its entire management fee for and reimbursed other expenses to the Small-Mid Cap Value Fund. The Board also considered that the shareholder administration fee applicable to certain Funds was waived by William Blair in 2017 and that William Blair proposed to contractually reduce the shareholder administration fee to zero.

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 statements to the effect that the level of services provided to the Funds and the 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 statements to the effect 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 the 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 statements to the effect that the resources required for the Adviser’s fundamental investment process typically increase as a Fund increases in size and certain investment strategies have limited capacity which limits 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, management fee breakpoints for applicable Funds, the expense limitations in place for each Fund and the proposed reduction in management fees and/or expense limits for certain Funds and each Fund’s expense ratios. The Board concluded that in the aggregate the Funds’ fee levels reasonably reflect appropriate recognition of 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) fees from Class N shares of the Funds to the Distributor pursuant to the Rule 12b-1 Plan, nearly all of which are paid to third parties; and (5) favorable media coverage. The Board determined that management fees were 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.

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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 their other significant affiliations are set forth below. The address of each officer and trustee is 150 North Riverside Plaza, Chicago, Illinois 60606.

				Number of
		Term of		Portfolios
		Office⁽¹⁾and		in Trust
	Position(s)	Length of	Principal	Complex
	Held with	Time	Occupation(s)	Overseen	Other Directorships
Name and Year of Birth	Trust	Served	During Past 5 Years	by Trustee	Held by Trustee
Interested Trustees
Stephanie G. Braming, 1970⁽²⁾	Chairman of the Board and President, previously Senior Vice President	Chairman of the Board and President since 2018, and Senior Vice President 2014-2018	Global Head of Investment Management since 2017, portfolio manager (2014– 2017) and Partner, William Blair	21	Chairman, William Blair SICAV; Director, William Blair MAS Ltd.

Arthur J. Simon, 1954⁽²⁾	Trustee	Since 2018	General Counsel and Partner, William Blair	21	Director, William Blair SICAV; Director, William Blair MAS Ltd.

Non-Interested Trustees
Vann A. Avedisian, 1964⁽³⁾	Trustee	Since 2012	Principal, Highgate Holdings (hotel investments) (since 2009); formerly, co-founder and Managing Director, Oxford Capital Partners Inc. (1994 to 2006)	21	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) (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) (2003 to 2010)	21	Council Member, Independent Directors Council; AmericaFirst Quantitative Funds (5 portfolios) (2012 to 2016)

†

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’).

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Name and Year of Birth	Position(s) Held with Trust	Term of Office⁽¹⁾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
Daniel N. Leib, 1966⁽⁴⁾	Trustee	Since 2016	Chief Executive Officer, Donnelley Financial Solutions, Inc. (since 2016); formerly, Executive Vice President and Chief Financial Officer, (2011 to 2016) and Group Chief Financial Officer (2009 to 2011), R.R. Donnelley & Sons Company	21	None

Donald J. Reaves, 1946⁽⁵⁾	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)	21	American Student Assistance Corp., guarantor of student loans; Amica Mutual Insurance Company

Thomas J. Skelly, 1951	Trustee	Since 2007	Advisory Board Member for various U.S. companies (since 2005); formerly, Managing Partner of various divisions at Accenture (1994-2004)	21	Mutual Trust Financial Group, provider of insurance and investment products

Steven R. Zenz, 1954	Trustee	Since 2018	Consultant, Steven R. Zenz Consulting LLC (merger and acquisition transactions and SEC reporting and filings) (since 2011); formerly, Partner, KPMG LLP (1987-2010)⁽⁶⁾	21	Frankly Inc. (technology products and services for media industry) (since 2016); RedBrick Health Corporation (health care technology for employee wellness) (since 2015); Insignia Systems, Inc. (in-store advertising services for consumer packaged goods manufacturers) (since 2013)

(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)	Ms. Braming and Mr. Simon are interested persons of the Trust because they are partners of William Blair, and with respect to Ms. Braming also due to her position as an officer of the Trust.
(3)	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 two entities affiliated with William Blair.
(4)	The Funds and William Blair use Donnelley Financial Solutions, Inc. (“DFS”), formerly a company of R.R. Donnelley & Sons Company (“RRD”), for financial printing and other services. DFS was formed as a spin-off from RRD in October 2016 and is a public company. The Funds and William Blair in the aggregate paid DFS approximately $11,000 for the period from spin-off through December 31, 2016 and $172,000 in 2017 for the services provided. DFS’s revenue was $221 million for the period from spin-off through December 31, 2016 and was $1 billion in 2017. Mr. Leib, as the Chief Executive Officer of DFS, is not directly involved in any of the services provided to the Funds or William Blair and his compensation is not materially affected by the fees DFS receives from the Funds and William Blair. The Funds and William Blair in the aggregate paid RRD approximately $129,000 and $919 in 2016 through the date of the DFS spin-off and 2017, respectively, for the services provided. RRD’s revenue was over $8 billion in 2016 for the period from January 1 to September 30, 2016 was $6.9 billion in 2017. Mr. Leib, as former Executive Vice President and Chief Financial Officer of RRD, was not directly involved in any of the services provided to the Funds or William Blair and his compensation was not materially affected by the fees RRD received from the Funds and William Blair.
(5)	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.
(6)	The Funds engage KPMG to provide foreign tax services in Taiwan. KPMG does not provide audit or audit-related services to the Funds. Mr. Zenz is a former partner of KPMG and receives pension/retirement funds from KPMG.

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Name and Year of Birth	Position(s) Held with Trust	Term of Office⁽¹⁾ and Length of Time Served	Principal Occupation(s) During Past 5 Years
Officers
Michael P. Balkin, 1959	Senior Vice President	Since 2008	Partner, William Blair

Thomas Clarke, 1968	Senior Vice President	Since 2011	Partner, William Blair (since 2014); formerly, Associate, William Blair (2011-2014)

Daniel Crowe, 1972	Senior Vice President	Since 2016	Partner, William Blair (since 2015); formerly, Associate, William Blair

Simon Fennell, 1969	Senior Vice President	Since 2013	Partner, William Blair (since 2013); formerly, Associate, William Blair (2011-2013)

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

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

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Name and Year of Birth	Position(s) Held with Trust	Term of Office⁽¹⁾ and Length of Time Served	Principal Occupation(s) During Past 5 Years
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

David P. Ricci, 1958	Senior Vice President	Since 2006	Partner, William Blair

Ward D. Sexton, 1974	Senior Vice President	Since 2016	Partner, William Blair

Brian D. Singer, 1960	Senior Vice President	Since 2011	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

Robert J. Toner, 1967	Assistant Secretary	Since 2016	Associate, William Blair (since 2015); formerly, Managing Director and Counsel, Wellington Management & Company LLP (2007-2015)

(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.

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187

(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 Funds’ 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.

Shareholder Meeting Results

A Special Meeting of Shareholders (the “Meeting”) of William Blair Funds (the “Trust”) was held on March 23, 2018 in the 46th Floor Conference Room 4606A at 150 North Riverside Plaza, Chicago, Illinois, 60606. At the Meeting, the following matter was voted upon by shareholders (the resulting votes are presented below).

1. Election of Trustees to the Board of Trustees of the Trust. (“Number of Votes” represents all series of the Trust.)

	Number of Votes:
Nominee	For	Against	Withheld	Abstentions
Vann A. Avedisian	437,811,287.729	1,100,486.008	N/A	4,164,225.412
Kathleen T. Barr	438,054,883.158	1,020,007.648	N/A	4,001,108.343
Stephanie G. Braming	438,018,961.847	N/A	5,057,037.302	N/A
Daniel N. Leib	437,762,330.411	1,106,934.741	N/A	4,206,733.997
Donald J. Reaves	436,331,108.397	2,556,990.999	N/A	4,187,899.753
Arthur J. Simon	439,249,821.204	N/A	3,826,177.945	N/A
Thomas J. Skelly	436,597,233.774	2,315,767.841	N/A	4,162,997.534
Steven R. Zenz	437,580,552.945	1,272,687.184	N/A	4,222,759.020

Each Nominee was elected by shareholders to the Board of Trustees at the Meeting.

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, 2017 (in thousands):

Fund	Capital Gain Dividend
Growth	$	115,809
Large Cap Growth		1,139
Mid Cap Growth		15,134
Small-Mid Cap Growth		111,007
Small-Mid Cap Value		348
Small Cap Growth		60,126
Small Cap Value		47,529
Global Leaders		6,050
International Leaders		2,709
Institutional International Growth		39,224
International Small Cap Growth		40,650
Emerging Markets Small Cap Growth		1,075

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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 Developed Plus 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, 2018 to June 30, 2018.

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 your actual ending account balance or the expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund to the costs of investing in 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 administration fees. These fees are discussed 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.

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189

Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2018	Ending Account Value 6/30/2018	Expenses Paid During the Period (a)	Annualized Expense Ratio
Growth Fund
Class N-actual return	$1,000.00	$1,127.56	$6.33	1.20
Class N-hypothetical 5% return	$1,000.00	$1,044.05	$6.08	1.20
Class I-actual return	$1,000.00	$1,129.45	$4.75	0.90
Class I-hypothetical 5% return	$1,000.00	$1,045.54	$4.56	0.90
Large Cap Growth Fund
Class N-actual return	$1,000.00	$1,122.85	$5.53	1.05
Class N-hypothetical 5% return	$1,000.00	$1,044.79	$5.32	1.05
Class I-actual return	$1,000.00	$1,123.84	$4.21	0.80
Class I-hypothetical 5% return	$1,000.00	$1,046.03	$4.06	0.80
Mid Cap Growth Fund
Class N-actual return	$1,000.00	$1,116.30	$6.66	1.27
Class N-hypothetical 5% return	$1,000.00	$1,043.70	$6.44	1.27
Class I-actual return	$1,000.00	$1,117.55	$5.36	1.02
Class I-hypothetical 5% return	$1,000.00	$1,044.94	$5.17	1.02
Small-Mid Cap Growth Fund
Class N-actual return	$1,000.00	$1,107.45	$7.05	1.35
Class N-hypothetical 5% return	$1,000.00	$1,043.31	$6.84	1.35
Class I-actual return	$1,000.00	$1,109.07	$5.75	1.10
Class I-hypothetical 5% return	$1,000.00	$1,044.55	$5.58	1.10
Small-Mid Cap Value Fund
Class N-actual return	$1,000.00	$1,008.39	$6.57	1.32
Class N-hypothetical 5% return	$1,000.00	$1,043.45	$6.69	1.32
Class I-actual return	$1,000.00	$1,009.83	$5.33	1.07
Class I-hypothetical 5% return	$1,000.00	$1,044.69	$5.42	1.07
Small Cap Growth Fund
Class N-actual return	$1,000.00	$1,154.08	$8.01	1.50
Class N-hypothetical 5% return	$1,000.00	$1,042.56	$7.60	1.50
Class I-actual return	$1,000.00	$1,155.69	$6.57	1.23
Class I-hypothetical 5% return	$1,000.00	$1,043.90	$6.23	1.23
Small Cap Value Fund
Class N-actual return	$1,000.00	$1,010.92	$7.48	1.50
Class N-hypothetical 5% return	$1,000.00	$1,042.56	$7.60	1.50
Class I-actual return	$1,000.00	$1,012.08	$6.24	1.25
Class I-hypothetical 5% return	$1,000.00	$1,043.80	$6.33	1.25
Global Leaders Fund
Class N-actual return	$1,000.00	$1,063.32	$6.91	1.35
Class N-hypothetical 5% return	$1,000.00	$1,043.31	$6.84	1.35
Class I-actual return	$1,000.00	$1,064.56	$5.43	1.06
Class I-hypothetical 5% return	$1,000.00	$1,044.74	$5.37	1.06
Institutional Class-actual return	$1,000.00	$1,065.25	$5.12	1.00
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.04	$5.07	1.00
International Leaders Fund
Class N-actual return	$1,000.00	$1,010.38	$6.53	1.31
Class N-hypothetical 5% return	$1,000.00	$1,043.50	$6.64	1.31
Class I-actual return	$1,000.00	$1,011.56	$5.09	1.02
Class I-hypothetical 5% return	$1,000.00	$1,044.94	$5.17	1.02
Institutional Class-actual return	$1,000.00	$1,012.17	$4.74	0.95
Institutional Class-hypothetical 5% return	$1,000.00	$1,045.29	$4.82	0.95
International Developed Plus Fund
Class N-actual return	$1,000.00	$ 974.10	$6.31	1.29
Class N-hypothetical 5% return	$1,000.00	$1,043.60	$6.54	1.29
Class I-actual return	$1,000.00	$ 975.54	$5.05	1.03
Class I-hypothetical 5% return	$1,000.00	$1,044.89	$5.22	1.03

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Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2018	Ending Account Value 6/30/2018		Expenses Paid During the Period (a)	Annualized Expense Ratio
Institutional International Developed Plus Fund
Institutional Class-actual return	$1,000.00	$	990.38	$4.44	0.90
Institutional Class-hypothetical 5% return	$1,000.00	$	1,045.54	$4.56	0.90
International Growth Fund
Class N-actual return	$1,000.00	$	982.24	$7.13	1.45
Class N-hypothetical 5% return	$1,000.00	$	1,042.81	$7.34	1.45
Class I-actual return	$1,000.00	$	983.62	$5.56	1.13
Class I-hypothetical 5% return	$1,000.00	$	1,044.40	$5.73	1.13
Institutional International Growth Fund
Institutional Class-actual return	$1,000.00	$	983.96	$4.77	0.97
Institutional Class-hypothetical 5% return	$1,000.00	$	1,045.19	$4.92	0.97
International Small Cap Growth Fund
Class N-actual return	$1,000.00	$	957.39	$7.13	1.47
Class N-hypothetical 5% return	$1,000.00	$	1,042.71	$7.45	1.47
Class I-actual return	$1,000.00	$	959.11	$5.59	1.15
Class I-hypothetical 5% return	$1,000.00	$	1,044.30	$5.83	1.15
Institutional Class-actual return	$1,000.00	$	959.95	$5.20	1.07
Institutional Class-hypothetical 5% return	$1,000.00	$	1,044.69	$5.42	1.07
Emerging Markets Leaders Fund
Class N-actual return	$1,000.00	$	930.38	$7.47	1.56
Class N-hypothetical 5% return	$1,000.00	$	1,042.26	$7.90	1.56
Class I-actual return	$1,000.00	$	932.37	$5.94	1.24
Class I-hypothetical 5% return	$1,000.00	$	1,043.85	$6.28	1.24
Institutional Class-actual return	$1,000.00	$	932.37	$5.65	1.18
Institutional Class-hypothetical 5% return	$1,000.00	$	1,044.15	$5.98	1.18
Emerging Markets Growth Fund
Class N-actual return	$1,000.00	$	926.54	$7.17	1.50
Class N-hypothetical 5% return	$1,000.00	$	1,042.56	$7.60	1.50
Class I-actual return	$1,000.00	$	927.87	$5.98	1.25
Class I-hypothetical 5% return	$1,000.00	$	1,043.80	$6.33	1.25
Institutional Class-actual return	$1,000.00	$	928.44	$5.59	1.17
Institutional Class-hypothetical 5% return	$1,000.00	$	1,044.20	$5.93	1.17
Emerging Markets Small Cap Growth Fund
Class N-actual return	$1,000.00	$	905.14	$7.61	1.61
Class N-hypothetical 5% return	$1,000.00	$	1,042.02	$8.15	1.61
Class I-actual return	$1,000.00	$	906.57	$6.19	1.31
Class I-hypothetical 5% return	$1,000.00	$	1,043.50	$6.64	1.31
Institutional Class-actual return	$1,000.00	$	907.25	$5.91	1.25
Institutional Class-hypothetical 5% return	$1,000.00	$	1,043.80	$6.33	1.25
Bond Fund
Class N-actual return	$1,000.00	$	977.25	$3.09	0.63
Class N-hypothetical 5% return	$1,000.00	$	1,046.88	$3.20	0.63
Class I-actual return	$1,000.00	$	977.79	$2.16	0.44
Class I-hypothetical 5% return	$1,000.00	$	1,047.82	$2.23	0.44
Institutional Class-actual return	$1,000.00	$	978.08	$1.81	0.37
Institutional Class-hypothetical 5% return	$1,000.00	$	1,048.17	$1.88	0.37
Income Fund
Class N-actual return	$1,000.00	$	988.78	$4.19	0.85
Class N-hypothetical 5% return	$1,000.00	$	1,045.78	$4.31	0.85
Class I-actual return	$1,000.00	$	989.71	$3.06	0.62
Class I-hypothetical 5% return	$1,000.00	$	1,046.93	$3.15	0.62
Low Duration Fund
Class N-actual return	$1,000.00	$	1,003.04	$3.08	0.62
Class N-hypothetical 5%	$1,000.00	$	1,046.93	$3.15	0.62
Class I-actual return	$1,000.00	$	1,004.14	$1.99	0.40
Class I-hypothetical 5%	$1,000.00	$	1,048.02	$2.03	0.40
Institutional Class-actual return	$1,000.00	$	1,004.37	$1.74	0.35
Institutional Class-hypothetical 5% return	$1,000.00	$	1,048.26	$1.78	0.35

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Fund Expenses (Unaudited)

Expense Example	Beginning Account Value 1/1/2018	Ending Account Value 6/30/2018		Expenses Paid During the Period (a)	Annualized Expense Ratio
Macro Allocation Fund
Class N-actual return	$1,000.00	$	983.95	$6.39	1.30
Class N-hypothetical 5%	$1,000.00	$	1,043.55	$6.59	1.30
Class I-actual return	$1,000.00	$	984.85	$4.82	0.98
Class I-hypothetical 5%	$1,000.00	$	1,045.14	$4.97	0.98
Institutional Class-actual return	$1,000.00	$	985.70	$4.38	0.89
Institutional Class-hypothetical 5% return	$1,000.00	$	1,045.59	$4.51	0.89


(a)	Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period, 181, and divided by 365 (to reflect the one-half year period).

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	BOARD OF TRUSTEES
	Vann A. Avedisian
	Principal, Highgate Holdings
	Kathleen T. Barr
	Retired Senior Managing Director, PNC Capital Advisors, LLC
	Stephanie G. Braming, Chairman and President
	Partner, William Blair
	Daniel N. Leib
	Chief Executive Officer, Donnelley Financial Solutions, Inc.
	Donald J. Reaves
	Retired Chancellor, Winston-Salem State University
	Arthur J. Simon
	Partner, William Blair
	Thomas J. Skelly
	Retired Managing Partner, Accenture
	Steven R. Zenz
	Retired Partner, KPMG LLP
	Officers
	Michael P. Balkin, 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
	Ward D. Sexton, Senior Vice President
	Brian D. Singer, 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
	Robert J. Toner, 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
	DST Asset Manager Solutions, Inc.
	(formerly known as Boston Financial Data Services, Inc.)
	For customer assistance, call 1-800-635-2886
	Through August 31, 2018
	P.O. Box 8506
	Boston, Massachusetts 02266-8506
	Effective September 1, 2018
	P.O. Box 219137
	Kansas City, Missouri 64121-9137

June 30, 2018

William Blair Funds

193


	William Blair Funds

DOMESTIC EQUITY

Growth Fund

Large Cap Growth Fund

Mid Cap Growth Fund

Small-Mid Cap Growth Fund

Small-Mid Cap Value Fund

Small Cap Growth Fund

Small Cap Value Fund

GLOBAL EQUITY

Global Leaders Fund

INTERNATIONAL EQUITY

International Leaders Fund

International Developed Plus Fund

Institutional International

Developed Plus Fund

International Growth Fund

Institutional International Growth Fund

International Small Cap Growth Fund

Emerging Markets Leaders Fund

Emerging Markets Growth Fund

Emerging Markets Small Cap Growth Fund

FIXED INCOME

Bond Fund

Income Fund

Low Duration Fund

MULTI-ASSET AND
ALTERNATIVE

Macro Allocation Fund

	©William Blair & Company, L.L.C., distributor
+1 800 742 7272	150 North Riverside Plaza
williamblairfunds.com	Chicago, Illinois 60606	00103188

Item 2.

Code of Ethics

Not applicable to this filing.

Item 3.

Audit Committee Financial Expert

Not applicable to this filing.

Item 4.

Principal Accountant Fees and Services

Not applicable to this filing.

Item 5.

Audit Committee of Listed Registrants

Not Applicable to this Registrant, insofar as the Registrant is not a listed company.

Item 6.

Schedule of Investments

See Schedule of Investments in Item 1.

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 8.

Portfolio Managers of Closed Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 9.

Purchase of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 10.

Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees since the Registrant last provided disclosure in response to this item.

Item 11.

Controls and Procedures

(a) The Registrant’s principal executive and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s Disclosure Controls and Procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3 (b) under the 1940 Act (17 CFR 270.30a-3(b) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the final quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12.

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

Item 13.

Exhibits

13. (a) (1) Code of Ethics

Not applicable to this filing.

13. (a) (2) (1)

Certification of Principal Executive Officer Required by Rule 30a-2(a) of the Investment Company Act is filed as an exhibit hereto.

13. (a) (2) (2)

Certification of Principal Financial Officer Required by Rule 30a-2(a) of the Investment Company Act is filed as an exhibit hereto.

13. (a) (3)

Not applicable to this Registrant.

13. (b)

Certifications of the Principal Executive Officer and Principal Financial Officer of the issuer as required by Rule 30a-2(b) of the Investment Company Act of 1940 are filed as exhibits hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		William Blair Funds

		/s/ Stephanie G. Braming
By:		Stephanie G. Braming
		President (Principal Executive Officer)

Date: August 28, 2018

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/ Stephanie G. Braming

By:

Stephanie G. Braming

President

(Principal Executive Officer)

Date: August 28, 2018

/s/ Colette M. Garavalia

By:

Colette M. Garavalia

Treasurer

(Principal Financial Officer)

Date: August 28, 2018

William Blair Growth N (WBGSX) N-CSRSCertified semi-annual shareholder report (management investment company)