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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number 811-5344

William Blair Funds

(Exact name of registrant as specified in charter)


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

Michelle R. Seitz

William Blair Funds

222 West Adams Street, Chicago, IL 60606

(Name and address of agent for service)

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

Date of fiscal year end: December 31

Date of reporting period: June 30, 2011

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, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. (ss) 3507.

Item 1.

June 30, 2011 Annual Reports transmitted to shareholders.

LOGO

SEMI-ANNUAL REPORT

JUNE 30, 2011

Table of Contents



Growth Fund
An Overview from the Portfolio Managers			5
Portfolio of Investments			9

Large Cap Growth Fund
An Overview from the Portfolio Managers			10
Portfolio of Investments			14

Small Cap Growth Fund
An Overview from the Portfolio Managers			15
Portfolio of Investments			19

Mid Cap Growth Fund
An Overview from the Portfolio Managers			21
Portfolio of Investments			24

Small-Mid Cap Growth Fund
An Overview from the Portfolio Managers			25
Portfolio of Investments			28

Global Markets Overview			29

Global Growth Fund
An Overview from the Portfolio Managers			31
Portfolio of Investments			33

International Growth Fund
An Overview from the Portfolio Manager			35
Portfolio of Investments			37

International Equity Fund
An Overview from the Portfolio Manager			43
Portfolio of Investments			45

International Small Cap Growth Fund
An Overview from the Portfolio Manager			48
Portfolio of Investments			50

Emerging Markets Growth Fund
An Overview from the Portfolio Managers			54
Portfolio of Investments			56

Emerging Leaders Growth Fund
An Overview from the Portfolio Managers			59
Portfolio of Investments			61

Small Cap Value Fund
An Overview from the Portfolio Managers			63
Portfolio of Investments			66

Mid Cap Value Fund
An Overview from the Portfolio Managers			68
Portfolio of Investments			71

Fixed-Income Overview			72

Bond Fund
An Overview from the Portfolio Managers			73
Portfolio of Investments			76

Income Fund
An Overview from the Portfolio Manager			79
Portfolio of Investments			81

Low Duration Fund
An Overview from the Portfolio Managers			84
Portfolio of Investments			86

Ready Reserves Fund
An Overview from the Portfolio Managers			90
Portfolio of Investments			92

Financial Statements			94

Notes to Financial Statements			109

Financial Highlights			126

Board of Trustees and Officers			143

Fund Expenses			151

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

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

June 30, 2011

William Blair Funds 1

PERFORMANCE AS OF JUNE 30, 2011—CLASS N SHARES (unaudited)


	Year To Date		1 Yr.		3 Yr.			5 Yr.		10 Yr (or since inception)			Inception Date	Overall Morningstar Rating
Growth Fund
Class N		5.67		31.13		3.99			5.36		3.31		3/20/1946	«««« Among 1,476 Large Growth Funds
Morningstar Large Growth		5.65		33.08		3.02			4.07		2.24
Russell 3000^® Growth		6.98		35.68		5.28			5.36		2.43
Standard & Poor’s 500		6.02		30.69		3.34			2.94		2.72

Large Cap Growth Fund
Class N		3.64		31.21		2.46			2.91		0.43		12/27/1999	««« Among 1,476 Large Growth Funds
Morningstar Large Growth		5.65		33.08		3.02			4.07		2.24
Russell 1000^® Growth		6.83		35.01		5.01			5.33		2.24

Small Cap Growth Fund
Class N		1.38		22.22		8.25			2.28		7.96		12/27/1999	««« Among 666 Small Growth Funds
Morningstar Small Growth		9.35		42.52		7.81			5.08		5.05
Russell 2000^® Growth		8.59		43.50		8.35			5.79		4.63
Russell 2000^®		6.21		37.41		7.77			4.08		6.27

Mid Cap Growth Fund
Class N		12.00		42.57		10.06			8.20		7.50		2/1/2006	«««« Among 681 Mid-Cap Growth Funds
Morningstar Mid-Cap Growth		8.08		39.49		5.18	��		5.59		—
Russell MidCap^® Growth		9.59		43.25		6.58			6.28		5.11

Small-Mid Cap Growth Fund
Class N		11.53		41.25		11.84			7.53		8.83		12/29/2003	«««« Among 681 Mid-Cap Growth Funds
Morningstar Mid-Cap Growth		8.08		39.49		5.18			5.59		—
Russell 2500^TM Growth		10.25		44.71		8.51			6.67		8.01

Global Growth Fund
Class N		6.19		35.77		(0.52	)		—		(2.86	)	10/15/2007	«« Among 683 World Stock Funds
Morningstar World Stock		4.72		30.18		1.70			—		—
MSCI All Country World IMI (net)		4.66		31.00		1.74			—		(2.81	)

International Growth Fund
Class N		1.97		27.83		(2.04	)		2.65		7.06		10/1/1992	««« Among 209 Foreign Large Growth Funds
Morningstar Foreign Large Growth		4.05		31.68		(0.10	)		3.49		6.09
MSCI All Country World Ex-U.S. IMI (net)		3.52		30.26		0.31			3.96		8.05

International Equity Fund
Class N		3.22		26.11		(4.36	)		0.98		4.99		5/24/2004	«« Among 209 Foreign Large Growth Funds
Morningstar Foreign Large Growth		4.05		31.68		(0.10	)		3.49		—
MSCI World Ex-U.S. (net)		4.72		30.33		(1.56	)		2.02		7.63
MSCI All Country World Ex-U.S. IMI (net)		3.52		30.26		0.31			3.96		9.54

International Small Cap Growth Fund
Class N		5.43		35.85		2.71			4.72		7.74		11/1/2005	««« Among 129 Foreign Small/Mid Growth Funds
Morningstar Foreign Small/Mid Growth		3.47		36.50		2.30			4.02		—
MSCI All Country World Ex-U.S. Small Cap (net)		1.51		34.24		5.56			5.92		8.57

Please see the next page for important disclosure information.

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June 30, 2011

PERFORMANCE AS OF JUNE 30, 2011—CLASS N SHARES—CONTINUED (unaudited)


	Year To Date			1 Yr.		3 Yr.			5 Yr.		10 Yr (or since inception)		Inception Date	Overall Morningstar Rating
Emerging Markets Growth Fund
Class N		(0.70	)		28.05		(1.15	)		7.92		13.95	6/6/2005	«« Among 291 Diversified Emerging Markets Funds
Morningstar Diversified Emerging Markets		(0.42	)		26.76		1.97			9.54		—
MSCI Emerging Markets IMI (net)		0.32			27.53		5.13			11.90		15.43

Emerging Leaders Growth Fund
Class N		(2.42	)		23.12		—			—		13.20	5/3/2010	Not rated.
Morningstar Diversified Emerging Markets		(0.42	)		26.76		—			—		—
MSCI Emerging Markets Large Cap (net)		0.97			27.87		—			—		14.22

Small Cap Value
Class N		2.19			33.30		9.91			5.83		7.36	12/23/1996	«««« Among 305 Small Value Funds
Morningstar Small Value		4.58			32.28		8.73			3.49		8.31
Russell 2000^® Value		3.77			31.35		7.09			2.24		7.53

Mid Cap Value Fund
Class N		5.86			32.15		—			—		12.47	5/3/2010	Not rated.
Morningstar Short-term Bond		6.16			32.92		—			—		—
Russell Midcap^® Value Index		6.69			34.28		—			—		12.17

Bond Fund
Class N		2.90			5.43		7.51			—		6.41	5/1/2007	«««« Among 1,017 Intermediate-Term Bond Funds
Morningstar Intermediate-term Bond		2.84			5.33		6.69			—		—
Barclays Capital U.S. Aggregate Bond Index		2.72			3.90		6.46			—		6.07

Income Fund
Class N		2.48			4.56		5.26			4.13		4.03	10/1/1990	«««« Among 376 Short-Term Bond Funds
Morningstar Short-term Bond		1.42			3.02		3.93			3.98		3.67
Barclays Capital Intermediate Govt./Credit Bond Index		2.47			3.77		5.76			6.08		5.35

Low Duration Fund
Class N		1.13			1.56		—			—		1.51	12/1/2009	Not rated.
Morningstar Ultra Short Bond		0.62			1.63		—			—		—
Merrill Lynch 1-Year U.S. Treasury Note Index		0.35			0.67		—			—		0.65

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

June 30, 2011

William Blair Funds 3

PERFORMANCE AS OF JUNE 30, 2011—CLASS N SHARES—CONTINUED (unaudited)

Morningstar RatingsTM are as of 6/30/2011 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 1,476/1,276/803 large growth funds; Small Cap Growth Fund «««/««/««««, out of 666/565/358 small growth funds; Mid Cap Growth Fund «««««/««««/NA and Small-Mid Cap Growth Fund «««««/««««/NA out of 681/609/NA mid cap growth funds; Global Growth Fund ««/NA/NA out of 683/NA/NA world stocks; International Growth Fund «««/«««/««« and International Equity Fund ««/««/NA out of 209/168/103 foreign large growth funds; International Small Cap Growth Fund «««/«««/NA out of 129/104/NA foreign small/mid growth funds; Emerging Markets Growth Fund ««/««/NA out of 291/225/NA diversified emerging markets growth funds; Small Cap Value Fund ««««/««««/««« out of 305/255/141 small value funds; Income Fund ««««/«««/«««« out of 376/323/189 short-term bond funds; Bond Fund ««««/NA/NA out of 1,017/NA/NA intermediate-term bond fund.

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

See accompanying Notes to Financial Statements.

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LOGO

David C. Fording

LOGO

John F. Jostrand

GROWTH FUND

The Growth Fund seeks long-term capital appreciation.

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Growth Fund posted an 5.67% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell 3000^® Growth Index, gained 6.98%.

Our quality growth approach assisted during May and June when the market declined, but stock picking challenges in both Energy and Information Technology have held back year-to-date relative returns.

Overcoming several major shocks, the U.S. equity markets finished with solid gains in the first half of 2011. Most of these gains occurred in the first quarter on better-than-expected corporate earnings and positive economic reports including unemployment, which dropped below 9% for the first time in almost two years. The Russell 3000^® Growth climbed 6.3%. Generally, investors had a growing level of confidence that the economic recovery had become self-sustaining. In fact, the upward market momentum could not be deterred by the political turmoil in the Middle East and North Africa (MENA), the natural disasters in Japan, and re-emergence of the debt crisis in Europe. In the second quarter, U.S. stocks retracted and market volatility picked up, as investors reacted to several concerns. First, U.S. and global economic growth saw some deceleration driven by China’s monetary tightening and sluggish developed market consumer spending due to continued deleveraging and inflationary pressures such as high gas prices and food costs. Helping to slow global economic growth further, Japan’s economic output slipped for several months due to the earthquake and tsunami, which caused supply chain disruptions throughout the world. We view this event as temporary. Sovereign debt issues in Europe flared up as well, particularly in Greece. Also, QE2 (the second round of U.S. quantitative easing) ended in June, which increased speculation about a potential rise in rates and the need for QE3. Lastly, investors were worried over the slow recovery in employment as initial claims increased and job growth decelerated. Surprisingly, the Russell 3000^® Growth Index gained ground at 0.64% in the second quarter, after being down nearly 8% intra-quarter.

Given the uncertainty, the markets returned to a familiar risk on/risk off pattern with investor confidence bolstered only by the last macro data point or political resolution announced. Year-to-date, the more defensive sectors benefited including Utilities and Health Care. Despite the weakness in the second quarter, Energy stocks were strong due to high oil prices, continued demand, and potential supply issues with the turmoil in the MENA region. Conversely, the weaker relative performers were Telecommunication, Materials and Information Technology. In terms of capitalization, mid capitalization stocks were best followed by small caps and then large caps. The Russell Mid Cap Growth Index increased 9.59%, the Russell 2000^® Growth Index rose 8.59%, and the Russell 1000^® Growth climbed 6.83%.

The Fund’s greatest sector detractor to performance was Energy due to both stock selection and an underweight in a strong performing group. Most of the difficulty occurred in the first quarter. We did not own Exxon Mobil, the largest benchmark stock, which performed well and hurt relative results. Also, we held E&P (exploration and production) companies that had exposure to the Middle East and North Africa; as a result, Occidental Petroleum and Apache had more muted relative results. Lastly, Weatherford struggled as it announced plans to restate taxes, a near term issue. Another sector with weak relative results was Information Technology due to primarily stock selection and to a lesser extent, an overweight in a poor

June 30, 2011

William Blair Funds 5

performing group. Notably, a few of our large cap stocks trailed the group average. Google, one of our top positions, declined after reporting better than expected revenues, which were offset by higher operating costs. Its management set a more aggressive tone on pursuing growth opportunities such as mobile, social and local advertising by increasing its investments, primarily in people. In our view, the company continues to have a strong market position, and is well positioned to benefit from an increase in ad spending as the economy recovers. Microsoft was a relative laggard as well despite its attractive earnings reports that beat analyst expectations driven by its business division (Office 2010) and entertainment and devices group (Xbox 360 console and Kinect). While Microsoft has nicely exceeded street expectations since the Fund bought the stock in mid-2009, on very strong product cycles and disciplined cost management, we believed there were signs of waning financial discipline as well as questionable strategic moves (e.g. Skype purchase) in the second quarter. As a result, the Fund eliminated the stock in June. Also, Dolby came under pressure on reduced 2011 revenue guidance due to weakness in the PC end market. The Fund has added to its position in Dolby as its valuation has become much more attractive.

Turning to the portfolio’s strengths, consumer sectors were standouts among the contributors. The best performing stock overall was Green Mountain Coffee Roasters, Inc., a specialty coffee company and leader in the single-serve segment through its Keurig brand. This staples stock rallied on an announcement that Starbucks plans to make its coffee and Tazo tea available as single-serve K-Cup portion packs for use in the Keurig brewing system. Starbucks will be their exclusive super premium licensed coffee brand. In Consumer Discretionary, Tempur-Pedic International, Inc. and McDonald’s Corporation also showed strength. Tempur-Pedic benefited from strong sales momentum and margin leverage. In our view, the company should see further upside to earnings as a result of its differentiated products, increasing brand awareness, strong channel relationships, and recent launch of new products including the Cloud line in Europe and the Contour line in the U.S. McDonald’s stock rose due to better-than-expected quarterly sales in both the U.S. and Europe. The company continues to drive traffic with strong execution, advertising, and broad price selections on its menu, which helps offset macroeconomic headwinds of rising commodity prices and austerity in Europe. Select Information Technology stocks were additive to results as well. Atheros Communications, a leading innovator in Wi-Fi connectivity, announced it would be acquired by Qualcomm. The stock rallied substantially, and the Fund sold the stock. Also, we did not own shares of Cisco, which declined in the quarter and helped relative results. Lastly, in Industrials, TransDigm Group rose on continued strength in the commercial aircraft aftermarket, as well as the continued execution of its acquisition strategy.

On the outlook for the U.S. economy, we are cautiously optimistic. As the year progresses, we expect to see acceleration in economic growth, driven by Japan coming back on-line with lessening of supply chain disruptions and the growing likelihood of China halting its monetary tightening, thus moderating an existing headwind to global economic activity. In addition, some lessening of commodity cost inflationary pressures should be a positive for spending while a low interest rate environment in the developed markets should continue to assist businesses and consumers. Also, the increased clarity of regulatory framework in the banking system is another positive and we have already seen modest year-over-year growth in banking loans. In combination, these trends should be good for equity markets as well.

However, macro uncertainty remains and volatility may continue as investors seek resolution of outstanding concerns. On sovereign debt, we may have continued flare-ups, but European government officials are likely to respond adequately in order to avoid a crisis. In regard to U.S. employment, it is not a surprise that a return to more normal trends has been slow given the greater efficiency in corporate America and the changing skill set required for America’s workforce. Further recovery will be important for improvements in consumer spending and the housing market. Moreover, the price of gas may stay at elevated levels due to global demand, especially from emerging markets, which may temper consumer discretionary purchases. Finally, political events remain at the forefront of investor’s minds. Given the fragile state of both consumer and business confidence, the resolution of important issues such as the Greek debt crisis and the U.S. debt ceiling negotiations (to name a few) are

6 Semi-Annual Report

June 30, 2011

critical to averting the much feared double dip recession. Handicapping such political outcomes is more difficult and, as such, uncertainty is likely to persist for some time.

In a slower growth environment, our quality growth investment discipline should benefit in our view. Leading companies with superior and sustainable earnings growth and strong management teams will be able to navigate the market challenges and be rewarded while less attractive firms wane. Our focus will continue to be intensive fundamental research seeking quality companies, which have durable business franchises with sustainable competitive advantages, strong management teams, healthy cash flows and balance sheets, as well as outstanding execution; these companies should be exceptional investment opportunities over time in our view.

June 30, 2011

William Blair Funds 7

Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			10 Year
Class N		5.67	%		31.13	%		3.99	%		5.36	%		3.31	%
Class I		5.89			31.64			4.36			5.70			3.61
Russell 3000^® Growth Index		6.98			35.68			5.28			5.36			2.43
S&P 500 Index		6.02			30.69			3.34			2.94			2.72

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, 2011. 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)

LOGO

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

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June 30, 2011

Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Information Technology—31.0%
*Apple, Inc.		89,685	$	30,105
*Broadcom Corporation Class “A”		288,000		9,688
*Dolby Laboratories, Inc. Class “A”		225,000		9,553
FLIR Systems, Inc.		269,000		9,068
*Fusion-io, Inc.		15,007		452
*Genpact, Ltd.†		636,518		10,974
*Google, Inc. Class “A”		51,805		26,233
*Juniper Networks, Inc.		242,800		7,648
*Monolithic Power Systems, Inc.		649,400		10,014
QUALCOMM, Inc.		307,740		17,476
*RightNow Technologies, Inc.		193,156		6,258
*Silicon Laboratories, Inc.		320,840		13,238
Solera Holdings, Inc.		159,300		9,424
TE Connectivity, Ltd.†		362,600		13,329
*Trimble Navigation, Ltd.		323,300		12,816
VeriSign, Inc.		306,000		10,239

				196,515

Industrials—17.8%
CH Robinson Worldwide, Inc.		113,800		8,972
*Corrections Corporation of America		242,700		5,254
Fastenal Co.		331,858		11,943
Flowserve Corporation		66,300		7,286
Goodrich Corporation		95,300		9,101
*IHS, Inc. Class “A”		222,720		18,579
*Jacobs Engineering Group, Inc.		318,200		13,762
Manpower, Inc.		161,000		8,638
The Corporate Executive Board Co.		291,339		12,717
*TransDigm Group, Inc.		109,580		9,993
*Trimas Corporation		279,781		6,925

				113,170

Health Care—15.6%
*Align Technology, Inc.		271,300		6,186
Allergan, Inc.		122,600		10,206
*Celgene Corporation		156,380		9,433
*Cerner Corporation		163,600		9,997
*DaVita, Inc.		146,700		12,706
*Gilead Sciences, Inc.		213,035		8,822
*Haemonetics Corporation		117,000		7,531
*Hologic, Inc.		298,300		6,017
*IDEXX Laboratories, Inc.		130,230		10,101
*Illumina, Inc.		133,100		10,002
*NxStage Medical, Inc.		393,915		8,201

				99,202

Consumer Discretionary—14.6%
Harley-Davidson, Inc.		162,999		6,678
Johnson Controls, Inc.		435,900		18,159
*K12, Inc.		227,788		7,549
McDonald’s Corporation		352,064		29,686
*Tempur-Pedic International, Inc.		182,700		12,391
*Urban Outfitters, Inc.		213,000		5,996
*Valassis Communications, Inc.		400,800		12,144

				92,603

*Non-income producing securities

† = U.S. listed foreign security


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
Energy—9.5%
*Cameron International Corporation		122,147	$	6,143
Occidental Petroleum Corporation		165,300		17,198
Schlumberger, Ltd.†		235,400		20,339
Suncor Energy, Inc.†		255,100		9,974
*Weatherford International, Ltd.†		343,800		6,446

				60,100

Materials—4.1%
Airgas, Inc.		94,500		6,619
Ecolab, Inc.		256,320		14,451
*Stillwater Mining Co.		227,900		5,016

				26,086

Consumer Staples—2.8%
*Green Mountain Coffee Roasters, Inc.		197,659		17,643

Financials—2.7%
*IntercontinentalExchange, Inc.		95,800		11,947
The Charles Schwab Corporation		336,075		5,529

				17,476

Total Common Stocks—98.1% (cost $514,813)				622,795


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $10,350, collateralized by FHLMC, 2.000%, due 12/3/15	$	10,350		10,350

Total Repurchase Agreement—1.6% (cost $10,350)				10,350

Total Investments—99.7% (cost $525,163)				633,145
Cash and other assets, less liabilities—0.3%				1,636

Net assets—100.0%			$	634,781

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 9

LOGO

James S. Golan

LOGO

Tracy McCormick

LARGE CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Large Cap Growth Fund posted a 3.64% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell 1000^® Growth Index, increased 6.83%.

In the first six months of 2011, the William Blair Large Cap Growth Fund trailed its benchmark primarily due to results in the first quarter; major cross currents in the marketplace were a headwind. Notably, our quality growth approach assisted during May and June when the market declined.

Overcoming several major shocks, the U.S. equity markets finished with solid gains in the first half of 2011. Most of these gains occurred in the first quarter on better-than-expected corporate earnings and positive economic reports including unemployment, which dropped below 9% for the first time in almost two years. The Russell 1000^® Growth climbed 6.0%. Generally, investors had a growing level of confidence that the economic recovery had become self-sustaining. In fact, the upward market momentum could not be deterred by the political turmoil in the Middle East and North Africa (MENA), the natural disasters in Japan, and re-emergence of the debt crisis in Europe. In the second quarter, U.S. stocks retracted and market volatility picked up, as investors reacted to several concerns. First, U.S. and global economic growth saw some deceleration driven by China’s monetary tightening and sluggish developed market consumer spending due to continued deleveraging and inflationary pressures such as high gas prices and food costs. Helping to slow global economic growth further, Japan’s economic output slipped for several months due to the earthquake and tsunami, which caused supply chain disruptions throughout the world. We view this event as temporary. Sovereign debt issues in Europe flared up as well, particularly in Greece. Also, QE2 (the second round of U.S. quantitative easing) ended in June, which increased speculation about a potential rise in rates and the need for QE3. Lastly, investors were worried over the slow recovery in employment as initial claims increased and job growth decelerated. Surprisingly, the Russell 1000^® Growth Index gained ground at 0.76% in the second quarter, after being down more than 7% intra-quarter.

Given the uncertainty, the markets returned to a familiar risk on/risk off pattern with investor confidence bolstered only by the last macro data point or political resolution announced. Year-to-date, the more defensive sectors benefited including Utilities and Health Care. Despite the weakness in the second quarter, Energy stocks were strong due to high oil prices, continued demand, and potential supply issues with the turmoil in the MENA region. Conversely, the weaker relative performers were Telecommunication Services, Materials and Information Technology (IT). In terms of capitalization, mid capitalization stocks were best followed by small caps and then large caps. The Russell Mid Cap^® Growth Index increased 9.59% while the Russell 2000^® Growth Index rose 8.59%.

We were disappointed with the portfolio results in the semi-annual period. Headwinds were challenging for active managers as investors relied more heavily on the macroeconomic environment, especially in the first quarter, and had less of a commitment to underlying fundamentals. However, we were encouraged by the relative outperformance from our stock positions in the second quarter as the macro influences subsided to a lesser degree.

The Fund’s greatest sector laggard was Consumer Discretionary where Marriott International, Inc. came under pressure on softness in North America revenue per available room (RevPAR); we view this as a near-term issue. The Energy sector was also challenging. Most

10 Semi-Annual Report

June 30, 2011

of the difficulty occurred in the first quarter. The Fund did not own Exxon Mobil Corporation, the largest benchmark stock at 5.1%, which performed well and hurt results. Also, we held E&P (exploration and production) companies that had exposure to the Middle East and North Africa; as a result, Occidental Petroleum Corporation and Apache Corporation had more muted relative results. The Fund continues to own Occidental due to its attractive long-term growth profile, but the Fund sold Apache on its higher exposure to this region. Lastly, Information Technology stock performance was mixed. Some of our large cap technology holdings lagged such as Microsoft Corporation and Google, Inc. Microsoft was a relative laggard despite its attractive earnings reports that beat analyst expectations driven by its business division (Office 2010) and entertainment and devices group (Xbox 360 console and Kinect). From a research perspective, we had the earnings view correct; however, the market was unwilling to reward the stock due to concerns over slowing PC sales especially in consumer and competition from tablets (i.e. iPads). As a result, the Fund sold the stock in May. Google, one of the Fund’s top positions, declined after reporting better than expected revenues, which were offset by higher operating costs. Its management set a more aggressive tone on pursuing growth opportunities such as mobile, social and local advertising by increasing its investments, primarily in people. In our view, the company continues to have a strong market position, and is well positioned to benefit from an increase in ad spend as the economy recovers. Also, Dolby Laboratories, Inc. came under pressure on reduced 2011 revenue guidance due to weakness in the PC end market. We believe the longer-term thesis remains unchanged. The consumption of entertainment from a variety of consumer electronics devices is beneficial for Dolby’s license streams.

Turning to the portfolio’s strengths, Materials and Health Care were standouts among the sector contributors. In Materials, the portfolio benefited from good stock selection with more defensive companies such as Praxair, Inc., and lacked any exposure to metals and mining stocks, which performed poorly as global growth showed signs of slowing. In Health Care, Agilent Technologies, Inc., a leading global provider of measurement tools and services to the bioanalytical and electronic marketplaces, was best. It had a strong above expectation earnings report and significantly raised guidance for fiscal year 2011. The Electronic Measurement Group had impressive revenues that were up 18% organically; it benefited from share gains as well as market adoption of smart phones and 3G networks. In our view, demand from its end markets remains attractive and it should continue to benefit from a cyclical recovery, exposure to growing Asian economies, and potential for additional acquisition activity. Notably, select stocks in other sectors also were strong contributors. In Industrials, Rockwell Automation, Inc. shined with the continued recovery in industrial activity. In Information Technology, Accenture plc, a leading global IT consulting firm, reported robust demand for its services as corporations continued to upgrade IT systems with new technology in order to improve business efficiency and find new avenues for growth. Also, the Fund did not own shares of Cisco Systems, Inc. and Hewlett-Packard Co., which declined and helped relative results. Lastly, in Financials, American Express Co. performed well as credit trends and business spending continued to improve.

June 30, 2011

William Blair Funds 11

workforce. Further recovery will be important for improvements in consumer spending and the housing market. Moreover, the price of gas may stay at elevated levels due to global demand, especially from emerging markets, which may temper consumer discretionary purchases. Finally, political events remain at the forefront of investor’s minds. Given the fragile state of both consumer and business confidence, the resolution of important issues such as the Greek debt crisis and the U.S. debt ceiling negotiations (to name a few) are critical to averting the much feared double dip recession. Handicapping such political outcomes is more difficult and, as such, uncertainty is likely to persist for some time.

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June 30, 2011

Large Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			10 Year
Class N		3.64	%		31.21	%		2.46	%		2.91	%		0.43	%
Class I		3.84			31.77			2.76			3.18			0.65
Russell 1000^® Growth Index		6.83			35.01			5.01			5.33			2.24

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)

LOGO

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

June 30, 2011

William Blair Funds 13

Large Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Information Technology—28.1%
Accenture plc Class “A”†		15,200	$	918
*Apple, Inc.		4,275		1,435
*Citrix Systems, Inc.		7,250		580
*Dolby Laboratories, Inc. Class “A”		7,050		299
*eBay, Inc.		26,800		865
*EMC Corporation		19,750		544
*Google, Inc. Class “A”		1,633		827
*Juniper Networks, Inc.		10,850		342
QUALCOMM, Inc.		17,765		1,009
TE Connectivity, Ltd.†		19,140		704
*Trimble Navigation, Ltd.		9,850		390

				7,913

Industrials—15.3%
CH Robinson Worldwide, Inc.		5,580		440
Danaher Corporation		13,544		718
Goodrich Corporation		6,200		592
*Jacobs Engineering Group, Inc.		13,850		599
Rockwell Automation, Inc.		5,100		442
*Stericycle, Inc.		4,370		389
United Parcel Service, Inc. Class “B”		8,620		629
W.W. Grainger, Inc.		3,160		486

				4,295

Consumer Discretionary—14.7%
*Discovery Communications, Inc.		6,100		250
Harley-Davidson, Inc.		15,652		641
Johnson Controls, Inc.		18,650		777
Marriott International, Inc. Class “A”		20,300		721
NIKE, Inc. Class “B”		8,350		751
Scripps Networks Interactive, Inc. Class “A”		8,735		427
Starbucks Corporation		14,330		566

				4,133

Health Care—12.5%
*Agilent Technologies, Inc.		13,450		688
Allergan, Inc.		5,815		484
Cardinal Health, Inc.		16,950		770
Covidien plc†		9,900		527
*DaVita, Inc.		7,150		619
*Gilead Sciences, Inc.		10,100		418

				3,506

Energy—12.3%
National Oilwell Varco, Inc.		8,550		669
Occidental Petroleum Corporation		9,750		1,014
Schlumberger, Ltd.†		13,930		1,203
Suncor Energy, Inc.†		14,850		581

				3,467

Financials—6.2%
*Affiliated Managers Group, Inc.		2,750		279
American Express Co.		15,300		791

*Non-income producing securities

ADR = American Depository Receipt

† = U.S. listed foreign security


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
Financials—(continued)
CME Group, Inc.		2,250	$	656

				1,726

Materials—4.6%
Praxair, Inc.		7,325		794
Syngenta AG—ADR		7,530		509

				1,303

Consumer Staples—4.6%
Anheuser-Busch InBev N.V.—ADR		10,750		624
Mead Johnson Nutrition Co.		9,850		665

				1,289

Total Common Stocks—98.3% (cost $21,536)				27,632


*Repurchase Agreement*
State Street Bank and Trust Company, 0.010% dated 6/30/11, due 7/1/11, repurchase price $659, collateralized by U.S. Treasury Bill, 0.020%, due 8/11/11	$	659		659

Total Repurchase Agreement—2.3% (cost $659)				659

Total Investments—100.6% (cost $22,195)				28,291
Liabilities, plus cash and other assets—(0.6)%				(158	)

Net assets—100.0%			$	28,133

See accompanying Notes to Financial Statements.

14 Semi-Annual Report

June 30, 2011

LOGO

Michael P. Balkin

LOGO

Karl W. Brewer

SMALL CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Small Cap Growth Fund posted a 1.38% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell 2000^® Growth Index, gained 8.59%.

After a near-uninterrupted rally since last August, U.S. equities stumbled during May and June. Small cap growth stocks, as measured by the Russell 2000^® Growth Index, corrected over 10% during that period, but rallied in late-June to close the quarter near breakeven and to remain solidly in positive territory for the year-to-date period. The Fund finished just behind its Russell 2000^® Growth benchmark during the second quarter. For the first half of the year, the strategy has underperformed given poor relative performance in the first quarter.

The first four months of 2011 witnessed a continuation of the upward trend in stock prices. This was primarily driven by solid corporate fundamentals and reasonable stock valuations. But 2011 to date has mirrored 2010: a strong start to the year followed by a mid-year correction primarily due to disappointing economic data and European sovereign debt woes. Specifically, the most recent correction came on the heels of heightened Greek sovereign debt concerns, sluggish jobs data in the U.S., a potential Chinese housing market downturn, the U.S. government debt ceiling negotiations, uncertainty around the end of the Federal Reserves’ quantitative easing (QE2) and a U.S. housing market that remains on life support. While the negatives are plentiful, the market’s ability to remain relatively flat in the second quarter and up over 8% as measured by the Russell 2000^® Growth for the year is telling. Investors continue to focus on healthy corporate fundamentals and on an economy that is slowly recovering, albeit in fits and starts.

From a style perspective during the first half of the year, the small cap growth market witnessed outperformance by larger market cap, higher price momentum and more expensive stocks, primarily due to the magnitude of these dynamics in the first quarter. From a sector perspective, there was little disparity in performance during the first half of the year. Most sectors returned 7-9% during the period including Financials, Materials, Consumer Discretionary, Information Technology (IT) and Energy. Two of the more defensive sectors, Health Care (+10.60 %) and Consumer Staples (+14.93%), outperformed, while Industrials (+4.97%) narrowly trailed the overall small cap growth market during the six-month period.

The Fund’s underperformance over the first half of the year was due to a combination of style factors and stock selection. The vast majority of the negative year-to-date performance occurred in the first quarter. During the first quarter, some of the largest individual stock detractors and the style headwinds during that period, namely our contrarian bias, valuation sensitivity and smaller market cap bias. Information Technology and Consumer Discretionary stock selection have been the most troublesome, while Industrials and Energy stock selection has helped relative results.

In the second quarter specifically, style factors were muted and somewhat offsetting stock picks translated into modest underperformance relative to our benchmark. Favorable stock picks in Industrials, Energy and Information Technology were outweighed by disappointing stock performances in Financials and Consumer Discretionary.

June 30, 2011

William Blair Funds 15

and those that benefitted primarily from the initial economic recovery. Investors already may be making this distinction as stock correlations have fallen from the elevated levels seen over the past few years. This should bode well for our style of investing and for active management in general. While we factor various economic scenarios into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of great companies with solid competitive positions whose stocks are at attractive valuations compared to the growth and consistency of their business.

Detractors from Return during the Second Quarter:

Demand Media, Inc. develops and acquires professional content to help its clients place more targeted advertisements. Two of the company’s largest online properties are eHow.com and livestrong.com. Reason for underperformance: Recent changes by Google to its search algorithms have decreased traffic to Demand Media’s content sites, and therefore has the potential to impact the company’s value proposition to advertisers. Action: The Fund continues to hold a position in the stock.

Horsehead Holding Corporation is a leading producer of specialty zinc and a manufacturer of value-added zinc products including zinc oxide and zinc powder. The company is a low-cost producer in the industry as much of its raw materials come from recycled sources such as electric arc furnace dust created in the steel manufacturing process. Reason for underperformance: Given the company benefits from increased steel production (lower raw materials cost) and rising zinc pricing (top line benefit), global growth concerns and falling commodity prices sank investor confidence in Horsehead’s fundamental outlook. Action: The Fund maintained its position in the stock given the company’s competitive position and longer-term growth outlook.

National Financial Partners Corporation is a financial services firm that offers high net worth individuals and corporations a variety of financial services such as life insurance and wealth transfer, corporate and executive benefits, and investment advisory. Reason for underperformance: The company announced disappointing earnings during the quarter in part due to weakness in their Individual Client Group. More generally, during the second quarter market correction, the stock likely underperformed given National Financial Partners exposure to individual life insurance sales which has been more discretionary than other financial services over past few years. Action: The Fund maintained its position in the stock as we believe the long-term growth opportunity for the company remains intact despite the near term selloff in the stock.

ChinaCast Education Corporation is a post-secondary and e-Learning services provider. Reason for underperformance: The stock underperformed primarily due to reduced investor confidence in US-listed Chinese companies given accounting concerns at other US-listed Chinese companies unrelated to ChinaCast Education. Action: The Fund liquidated its shares given the increased uncertainty.

QuinStreet, Inc. is an online direct marketing firm, primarily focused on lead generation for the education and financial services industries. Reason for underperformance: The company is experiencing significant pricing pressure from its auto insurance clients as evolving consumer behavior on the internet puts into question the amount an auto insurer client is willing to pay QuinStreet for an online lead. Action: The Fund exited its position as the company’s value proposition is more unknown, causing us to question the total market opportunity for QuinStreet given the importance of its auto insurance clients to the company’s diversification and growth strategy.

Contributors to Return during the Second Quarter:

ICF International, Inc. provides management, technology and policy consulting and implementation services to government and commercial entities. Its key consulting practices

16 Semi-Annual Report

June 30, 2011

include: defense and homeland security, energy, environmental and infrastructure and health and human services. Reason for outperformance: In April, the company reiterated its forward earnings guidance, easing investor concerns from the first quarter over the potential impact from government budget cuts and delays. In addition, another government consulting firm was purchased by a private equity firm during the quarter at an attractive valuation, representing the second such transaction in the industry in the past year and giving support to ICF International’s valuation. Action: The Fund continues to hold the stock as we believe the company is exposed to high priority government initiatives such as energy efficiency, education, climate change, healthcare, infrastructure and housing. In addition, we believe these areas of expertise represent a large international opportunity for the company and that the market also underestimates the growth potential of ICF International’s commercial (non-government) business.

TriMas Corporation manufacturers and distributes a diversified portfolio of products for the commercial, industrial and consumer markets. Reason for outperformance: The company reported better-than-expected earnings and increased forward earnings guidance, in part a reflection of the new management team’s efforts to more effectively manage and deploy capital between TriMas’s five segments. Action: The Fund continues to hold a position in the stock as we believe investors still underestimate the management team and earnings power of the company.

Quidel Corporation is a leading provider of point of care diagnostic tests primarily for infectious diseases, women’s health and gastrointestinal diseases. Reason for outperformance: The company reported solid earnings as the business continues to reaccelerate. More importantly, management outlined several new products that it expects to launch both domestically and abroad. Action: The Fund continues to hold a position in the stock as we believe Quidel’s pipeline of products will drive earnings growth and diversify the business beyond its historical dependence on flu tests, thereby supporting a higher valuation as well.

ValueClick, Inc. is a leading online marketing services firm. Reason for outperformance: The company’s growth is reaccelerating faster than expected due to management execution, a rebound in advertising generally and advertising increasing appetite for digital advertising. Action: The Fund continues to hold as we believe ValueClick’s service offering continues to expand, enabling it to serve the increasingly complex needs of advertisers and ad agencies.

Steven Madden, Ltd. designs and markets handbags and accessories, as well as footwear for women, men and children. Reason for outperformance: Business trends continue to surprise investors as demand for Steven Madden’s shoes and accessories increases. In addition, the company’s recently announced acquisitions give investors confidence in the duration of growth given multiple brands and products available for distribution in the US and abroad. Action: The Fund maintained its position in the stock as we believe management execution will continue to be strong as it integrates recent acquisitions and expands sales of its core brands.

June 30, 2011

William Blair Funds 17

Small Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			10 Year
Class N		1.38	%		22.22	%		8.25	%		2.28	%		7.96	%
Class I		1.45			22.59			8.58			2.58			8.26
Russell 2000^® Growth Index		8.59			43.50			8.35			5.79			4.63

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 total returns, which assume reinvestment of dividends and capital gains. Investment returns and principal will fluctuate and you may have a gain or loss when you sell shares. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Investing in smaller companies involves special risks, including higher volatility and lower liquidity. Smaller Capitalization stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial condition. From time to time, the investment advisor may waive fees or reimburse expenses for the Fund. Without these waivers, performance would be lower. Class N shares are available to the general public without a sales load. Class I shares are available to certain institutional investors and advisory clients of William Blair & Company, L.L.C., without a sales load or distribution (12b-1) or service fees.

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

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

Sector Diversification (unaudited)

LOGO

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

18 Semi-Annual Report

June 30, 2011

Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Information Technology—22.4%
*Cavium, Inc.		237,210	$	10,340
*Demand Media, Inc.		467,620		6,336
*ExlService Holdings, Inc.		384,140		8,874
iGate Corporation		409,390		6,681
*Inuvo, Inc.		861,747		1,810
*j2 Global Communications, Inc.		332,408		9,384
*KIT Digital, Inc.		608,766		7,269
*MaxLinear, Inc. Class “A”		669,331		5,796
*Monolithic Power Systems, Inc.		765,980		11,811
*RealD, Inc.		192,140		4,494
*RightNow Technologies, Inc.		395,230		12,805
*Silicon Laboratories, Inc.		422,707		17,441
Syntel, Inc.		131,690		7,786
*TeleTech Holdings, Inc.		726,680		15,318
*Ultimate Software Group, Inc.		127,876		6,960
United Online, Inc.		1,183,275		7,135
*ValueClick, Inc.		990,110		16,436
*Vertro, Inc.		847,343		1,907
*Volterra Semiconductor Corporation		498,530		12,294

				170,877

Industrials—18.9%
*Cenveo, Inc.		2,371,622		15,178
*Clean Harbors, Inc.		81,490		8,414
*CoStar Group, Inc.		103,643		6,144
*Dolan Media Co.		93,004		788
*Franklin Covey Co.		891,660		8,631
*GrafTech International, Ltd.		352,760		7,150
Healthcare Services Group, Inc.		537,220		8,730
*Heritage-Crystal Clean, Inc.		96,032		1,842
*Higher One Holdings, Inc.		299,130		5,659
*Huron Consulting Group, Inc.		342,663		10,352
*ICF International, Inc.		521,296		13,230
*Navigant Consulting, Inc.		227,933		2,391
*On Assignment, Inc.		1,296,309		12,743
*Polypore International, Inc.		124,280		8,431
The Corporate Executive Board Co.		133,530		5,829
*TransDigm Group, Inc.		133,224		12,149
*Trimas Corporation		665,163		16,463

				144,124

Health Care—18.5%
*Air Methods Corporation		149,351		11,162
*Align Technology, Inc.		337,802		7,702
*Brookdale Senior Living, Inc.		567,790		13,769
*ExamWorks Group, Inc.		437,994		11,121
*Haemonetics Corporation		112,055		7,213
*HealthSouth Corporation		431,580		11,329
*Integra LifeSciences Holdings Corporation		257,918		12,331
*Kensey Nash Corporation		460,668		11,623
*Natus Medical, Inc.		363,690		5,510
*NxStage Medical, Inc.		431,917		8,992
*Quidel Corporation		678,886		10,285
*SXC Health Solutions Corporation†		128,540		7,574
*Team Health Holdings, Inc.		181,100		4,076
*The Providence Service Corporation		490,903		6,210
Trinity Biotech plc—ADR		1,290,428		12,827

				141,724


Issuer	Shares		Value

*Common Stocks—(continued)*
Consumer Discretionary—18.1%
*Amerigon, Inc.		779,240	$	13,543
*Career Education Corporation		505,196		10,685
DeVry, Inc.		140,761		8,323
*Dreams, Inc.		2,811,849		7,311
*Genesco, Inc.		139,752		7,281
*Grand Canyon Education, Inc.		289,606		4,106
Jarden Corporation		320,547		11,062
*Kona Grill, Inc.		1,019,792		5,731
MDC Partners, Inc. Class “A”†		661,756		11,951
*Office Depot, Inc.		2,514,870		10,613
*ReachLocal, Inc.		203,304		4,235
*Steven Madden, Ltd.		258,255		9,687
*U.S. Auto Parts Network, Inc.		1,340,459		10,268
*Valassis Communications, Inc.		426,000		12,908
*Vitacost.com, Inc.		406,139		1,966
*WMS Industries, Inc.		275,480		8,463

				138,133

Financials—9.8%
*Cowen Group, Inc.		3,435,800		12,919
*Financial Engines, Inc.		265,451		6,880
*First Cash Financial Services, Inc.		241,040		10,121
*FirstService Corporation†		475,041		16,408
*ICG Group, Inc.		1,224,755		14,979
*Marlin Business Services Corporation		359,465		4,547
*National Financial Partners Corporation		787,246		9,085

				74,939

Energy—5.1%
*Dresser-Rand Group, Inc.		107,719		5,790
*Dril-Quip, Inc.		56,280		3,818
*Goodrich Petroleum Corporation		390,545		7,190
*Northern Oil and Gas, Inc.		204,790		4,536
*Oasis Petroleum, Inc.		131,770		3,911
*Oil States International, Inc.		173,700		13,880

				39,125

Materials—3.3%
*Horsehead Holding Corporation		730,430		9,730
PolyOne Corporation		379,390		5,869
*Stillwater Mining Co.		438,850		9,659

				25,258

Total Common Stocks—96.1% (cost $615,106)				734,180


*Exchange-Traded Fund*
iShares Russell 2000 Growth Index Fund		239,830		22,748

Total Exchange-Traded Fund—3.0% (cost $22,478)				22,748


*Investment in Warrants*
*Motorcar Parts of American, Inc. 2010, $0.00		111,575		1

Total Warrants—0.0% (cost $0)				1

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 19

Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $5,126, collateralized by FHLMC, 2.000%, due 12/3/15	$	5,126		5,126

Total Repurchase Agreement—0.7% (cost $5,126)				5,126

Total Investments—99.8% (cost $642,710)				762,055
Cash and other assets, less liabilities—0.2%				1,422

Net assets—100.0%			$	763,477

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

If the Fund’s portfolio holdings represent ownership of 5% or more of the voting securities of a company, the company is deemed to be an affiliate as defined in the Investment Company Act of 1940. The Small Cap Growth Fund had the following transactions during the period ended June 30, 2011 with companies deemed affiliated during the period or at June 30, 2011.


	Share Activity								Period Ended June 30, 2011
									(in thousands)
Security Name	Balance 12/31/2010		Purchases		Sales		Balance 6/30/2011		Value		Dividends Included in Income
pDreams, Inc.		3,285,457		126,038		599,646		2,811,849	$	7,311	$	—
Duckwall-ALCO Stores, Inc.		429,693		—		429,693		—		—		—
pFranklin Covey, Co		758,841		132,819		—		891,660		8,631		—
Gaiam, Inc. Class “A”		1,050,272		—		1,050,272		—		—		—
pInuvo, Inc.		861,747		—		—		861,747		1,810		—
pKensey Nash Corporation		424,466		55,292		19,090		460,668		11,623		—
pKona Grill, Inc.		1,019,792		—		—		1,019,792		5,731		—
Marlin Business Services Corporation		718,870		—		359,405		359,465		4,547		—
On Assignment Inc		2,248,382		61,860		1,013,933		1,296,309		12,743		—
Princeton Review, Inc.		3,519,896		—		3,519,896		—		—		—
pTrinity Biotech plc		1,903,563		—		613,135		1,290,428		12,827		144
United Western Bancorp, Inc.		2,290,015		—		2,290,015		—		—		—
U.S. Autoparts Network, Inc.		1,448,391		170,447		278,379		1,340,459		10,268		—
pVertro, Inc.		847,343		—		—		847,343		1,907		—

									$	77,398	$	144

p Affiliated company at June 30, 2011. The Small Cap Growth Fund’s total value in companies deemed to be affiliated at June 30, 2011 was $49,840 (thousands).

See accompanying Notes to Financial Statements.

20 Semi-Annual Report

June 30, 2011

LOGO

Robert C. Lanphier, IV

LOGO

David P. Ricci

MID CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Mid Cap Growth Fund posted a 12.00% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell Midcap^® Growth Index, gained 9.59%.

After a near-uninterrupted rally since last August, US equities stumbled during May and June. Mid cap growth stocks, as measured by the Russell Midcap^® Growth Index, corrected nearly 8% during that period, but rallied in late-June to close the quarter near breakeven and to remain solidly in positive territory for the year-to-date period. The Fund outperformed its Russell Midcap^® Growth benchmark during the second quarter and for the first half of the year.

The first four months of 2011 witnessed a continuation of the upward trend in the stock prices, primarily driven by solid corporate fundamentals and reasonable stock valuations. But 2011 to date has mirrored 2010: a strong start to the year followed by a mid-year correction primarily due to sluggish economic data and European sovereign debt woes. Specifically, the most recent correction came on the heels of slowing GDP growth, heightened Greek sovereign debt concerns, sluggish jobs data in the U.S., a potential Chinese housing market downturn, the US government debt ceiling negotiations, uncertainty around the end of the Federal Reserve’s quantitative easing (QE2) and a US housing market that remains on life support. While the negatives are plentiful, the market’s ability to remain relatively flat in the second quarter and up over 9% for the year is telling. Investors continue to focus on healthy corporate profitability and on an economy that is slowly recovering, albeit in fits and starts.

From a style perspective during the first half of the year, the mid cap growth market was characterized by higher quality and lower beta stocks outperforming, primarily driven by the second quarter market environment. Lower market cap stocks also outperformed, stemming from their strong outperformance during the first quarter. From a sector perspective, some of the more defensive sectors outperformed during the second quarter and the year-to-date period. Consumer Staples (+22.79%) and Health Care (+15.15%) were the two strongest sectors during the first half of the year. Consumer Discretionary also performed well, (+13.55%). After Energy’s second quarter correction (–9.81%) on falling crude oil prices, the sector returned 5.15% for the first half of the year. Information Technology and Industrials, two of the largest sectors in the Russell Midcap^® Growth Index, underperformed given their 5.50% and 5.15% returns for the half-year period, respectively.

The Fund’s outperformance during the first half of the year was primarily attributable to solid stock selection. The Fund’s bias toward smaller market cap stocks relative to the Russell Midcap Growth^® Index and our typical lower beta, especially in the second quarter, modestly helped relative performance as well. Green Mountain Coffee Roasters, Inc. within Consumer Staples was the leading contributor to return over the six month period, but solid picks in Health Care (e.g., American Medical Systems Holdings, Inc.), Industrials (e.g., Transdigm Group, Inc.) and Information Technology (e.g., Atheros Communications, Inc.) contributed positively as well. The main areas of weakness were in Consumer Discretionary (e.g., WMS Industries) and Financials (e.g., Greenhill & Co., Inc).

For the second quarter specifically, the Fund’s outperformance was driven by stock selection and our typical bias to lower beta stocks. Consumer Staples stock selection, namely Green Mountain Coffee Roasters, Inc., was the largest contributor to relative performance during the quarter. Fastenal Co. within Industrials and Ecolab, Inc. within Materials were also positive contributors. Holding back relative performance was stock selection in Consumer Discretionary (e.g., Dick’s Sporting Goods, Inc.) and Financials (e.g., Invesco, Ltd.).

June 30, 2011

William Blair Funds 21

The second quarter correction has kept the broad equity market valuation in check while corporate fundamentals continue to improve. Because of this and despite the obvious macroeconomic and geopolitical headwinds, we believe the market remains relatively balanced. We believe investors will continue to differentiate between true growth businesses and those that benefitted primarily from the initial economic recovery. It appears investors are making this distinction as stock correlations have fallen from the elevated levels seen over the past few years. This should bode well for our style of investing and for active management generally. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of well-managed companies with solid competitive positions whose stocks are at attractive valuations compared to the growth and consistency of their business.

22 Semi-Annual Report

June 30, 2011

Mid Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		12.00	%		42.57	%		10.06	%		8.20	%		7.50	%
Class I		12.07			42.81			10.33			8.50			7.79
Russell MidCap^® Growth Index		9.59			43.25			6.58			6.28			5.11

(a)

For the period from February 1, 2006 (Commencement of Operations) to June 30, 2011.

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

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

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

Sector Diversification (unaudited)

LOGO

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

June 30, 2011

William Blair Funds 23

Mid Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Information Technology—22.3%
Amphenol Corporation Class “A”		35,100	$	1,895
*Cavium, Inc.		69,400		3,025
*Citrix Systems, Inc.		28,500		2,280
*Concur Technologies, Inc.		29,030		1,453
*Dolby Laboratories, Inc. Class “A”		30,370		1,289
FLIR Systems, Inc.		79,400		2,677
*Genpact, Ltd.†		176,288		3,039
*Informatica Corporation		29,400		1,718
*Silicon Laboratories, Inc.		81,110		3,347
Solera Holdings, Inc.		54,692		3,236
TE Connectivity, Ltd.†		56,000		2,059
*Trimble Navigation, Ltd.		89,000		3,528
VeriSign, Inc.		76,000		2,543

				32,089

Industrials—19.5%
CH Robinson Worldwide, Inc.		21,500		1,695
Dover Corporation		26,700		1,810
Expeditors International of Washington, Inc.		31,700		1,623
Fastenal Co.		131,050		4,717
Gardner Denver, Inc.		28,900		2,429
*Jacobs Engineering Group, Inc.		39,900		1,726
Manpower, Inc.		34,090		1,829
*MSC Industrial Direct Co. Class “A”		31,200		2,069
*Polypore International, Inc.		11,200		760
Ritchie Bros. Auctioneers, Inc.†		24,165		664
Rockwell Automation, Inc.		43,100		3,739
*Stericycle, Inc.		16,330		1,455
*TransDigm Group, Inc.		39,450		3,597

				28,113

Consumer Discretionary—15.8%
*Bed Bath & Beyond, Inc.		39,660		2,315
*CarMax, Inc.		158,670		5,247
*Chipotle Mexican Grill, Inc.		2,750		847
DeVry, Inc.		38,510		2,277
*Dick’s Sporting Goods, Inc.		72,629		2,793
Gentex Corporation		101,080		3,056
Harman International Industries, Inc.		27,706		1,262
*O’Reilly Automotive, Inc.		57,380		3,759
Scripps Networks Interactive, Inc. Class “A”		24,200		1,183

				22,739

Health Care—13.3%
*CareFusion Corporation		55,239		1,501
*Cerner Corporation		49,400		3,019
*DaVita, Inc.		24,300		2,105
*HMS Holdings Corporation		38,800		2,982
*IDEXX Laboratories, Inc.		38,172		2,961
*Illumina, Inc.		39,020		2,932
Perrigo Co.		26,300		2,311

*Non-income producing securities

† = U.S. listed foreign security


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
Health Care—(continued)
*ResMed, Inc.		44,000	$	1,362

				19,173

Consumer Staples—7.9%
Church & Dwight Co., Inc.		33,600		1,362
*Green Mountain Coffee Roasters, Inc.		64,746		5,779
McCormick & Co., Inc.		41,800		2,072
Mead Johnson Nutrition Co.		31,900		2,155

				11,368

Financials—6.4%
*Affiliated Managers Group, Inc.		19,175		1,945
*IntercontinentalExchange, Inc.		15,750		1,964
Invesco, Ltd.†		93,300		2,183
*LPL Investment Holdings, Inc.		40,800		1,396
TD Ameritrade Holding Corporation		92,300		1,801

				9,289

Energy—5.7%
*Cameron International Corporation		32,500		1,635
*Denbury Resources, Inc.		98,770		1,975
*Newfield Exploration Co.		32,230		2,192
Range Resources Corporation		23,000		1,277
*Southwestern Energy Co.		25,470		1,092

				8,171

Materials—5.0%
Airgas, Inc.		48,000		3,362
Ecolab, Inc.		67,000		3,777

				7,139

Telecommunication Services—1.5%
*SBA Communications Corporation Class “A”		56,400		2,154

Total Common Stocks—97.4% (cost $111,102)				140,235


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 07/01/2011, repurchase price $3,499, collateralized by FHLMC, 2.000%, due 12/3/15	$	3,499		3,499

Total Repurchase Agreement—2.4% (cost $3,499)				3,499

Total Investments—99.8% (cost $114,601)				143,734
Cash and other assets, less liabilities—0.2%				300

Net assets—100.0%			$	144,034

See accompanying Notes to Financial Statements.

24 Semi-Annual Report

June 30, 2011

LOGO

Karl W. Brewer

LOGO

Robert C. Lanphier, IV

LOGO

Matthew A. Litfin

SMALL-MID CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Small-Mid Cap Growth Fund posted an 11.53% gain (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell 2500^™ Growth Index, increased 10.25% for the same period.

After a near-uninterrupted rally since last August, U.S. equities stumbled during May and June. Small and mid cap growth stocks, as measured by the Russell 2500^™ Growth Index, corrected over 9% during that period, but rallied in late-June to close the quarter near breakeven and to remain solidly in positive territory for the year-to-date period. The Fund outperformed its Russell 2500^™ Growth benchmark during the second quarter and for the first half of the year.

The first four months of 2011 witnessed a continuation of the upward trend in stock prices. This was primarily driven by solid corporate fundamentals and reasonable stock valuations. But 2011 to date has mirrored 2010: a strong start to the year followed by a mid-year correction primarily due to disappointing economic data and European sovereign debt woes. Specifically, the most recent correction came on the heels of heightened Greek sovereign debt concerns, sluggish jobs data in the U.S., a potential Chinese housing market downturn, the U.S. government debt ceiling negotiations, uncertainty around the end of the Federal Reserve’s quantitative easing (QE2) and a U.S. housing market that remains on life support. While the negatives are plentiful, the market’s ability to remain relatively flat in the second quarter and up over 10% for the year is telling. Investors continue to focus on healthy corporate fundamentals and on an economy that is slowly recovering, albeit in fits and starts.

From a style perspective during the first half of the year, the small-mid cap growth market was characterized by higher quality and lower beta stocks outperforming, primarily driven by the second quarter market environment. From a sector perspective, there was little disparity in performance during the first half of the year. Most sectors returned 8-10% during the period including Information Technology, Health Care, Materials and Energy. Consumer Discretionary narrowly outperformed (+11.98 %) while Industrials (+6.75%) and Financials (+4.87%) modestly underperformed.

The Fund’s outperformance during the first six months of 2011 was primarily driven by strong stock selection. Relative performance was also helped on the margin by the Fund’s bias to higher quality, higher growth and larger market cap stocks. Consumer Staples (Green Mountain Coffee Roasters, Inc.), Materials (Celanese Corporation) and Health Care (Perrigo Co. and SXC Health Solutions Corporation) were the biggest contributors to positive stock selection. On the other hand, Consumer Discretionary (Urban Outfitters, Inc.) which the Fund sold during the period, and Information Technology (QuinStreet, Inc.) stock selection detracted from relative performance.

For the second quarter specifically, the Fund’s outperformance is attributable to positive stock selection and our biases to higher quality and lower beta stocks. Stock selection in Industrials (TriMas Corporation and ICF International, Inc.) and Materials (Celanese Corporation) were the largest positive contributors, while certain stocks in Financials (First Horizon National Corporation) and Health Care (Brookdale Senior Living, Inc.) offset some of the outperformance. The Fund sold its position in First Horizon during the period.

The second quarter correction has kept the broad equity market valuation in check while corporate fundamentals continue to improve. Because of this and despite the macroeconomic

June 30, 2011

William Blair Funds 25

and geopolitical headwinds, we believe the market remains relatively balanced looking forward. We believe investors will continue to differentiate between true growth businesses and those that benefitted primarily from the initial economic recovery. Investors already may be making this distinction as stock correlations have fallen from the elevated levels seen over the past few years. This should bode well for our style of investing and for active management generally. In the end, while we factor various economic scenarios into our stock picking, we focus our time on constructing the portfolio from a bottom-up perspective. We continue to find good ideas across sectors, and are confident the Fund consists of great companies with solid competitive positions whose stocks are at attractive valuations compared to the growth and consistency of their business.

26 Semi-Annual Report

June 30, 2011

Small-Mid Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		11.53	%		41.25	%		11.84	%		7.53	%		8.83	%
Class I		11.72			41.62			12.17			7.83			9.11
Russell 2500^™ Growth Index		10.25			44.71			8.51			6.67			8.01

(a)

For the period from December 29, 2003 (Commencement of Operations) to June 30, 2011.

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

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

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

Sector Diversification (unaudited)

LOGO

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

June 30, 2011

William Blair Funds 27

Small-Mid Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Industrials—24.1%
*Allegiant Travel Co.		48,865	$	2,419
*BE Aerospace, Inc.		90,953		3,712
*Corrections Corporation of America		113,455		2,456
*CoStar Group, Inc.		60,058		3,560
Fastenal Co.		141,670		5,099
*GrafTech International, Ltd.		235,906		4,782
Healthcare Services Group, Inc.		144,400		2,346
*Huron Consulting Group, Inc.		112,600		3,402
*ICF International, Inc.		124,269		3,154
*Korn/Ferry International		162,500		3,573
Manpower, Inc.		64,950		3,484
Ritchie Bros. Auctioneers, Inc.†		125,600		3,453
Robert Half International, Inc.		140,095		3,787
Roper Industries, Inc.		50,300		4,190
*Stericycle, Inc.		54,070		4,819
The Corporate Executive Board Co.		65,877		2,875
*TransDigm Group, Inc.		26,008		2,372
*Trimas Corporation		179,788		4,450

				63,933

Information Technology—19.3%
*Aruba Networks, Inc.		92,000		2,718
Blackbaud, Inc.		59,798		1,658
*Booz Allen Hamilton Holding Corporation		220,865		4,221
*Cavium, Inc.		85,373		3,721
*Concur Technologies, Inc.		42,800		2,143
*Informatica Corporation		63,300		3,699
*j2 Global Communications, Inc.		65,575		1,851
*MICROS Systems, Inc.		59,100		2,938
Molex, Inc.		100,928		2,601
NIC, Inc.		219,600		2,956
*Polycom, Inc.		48,700		3,131
*RealPage, Inc.		116,200		3,076
*RightNow Technologies, Inc.		127,313		4,125
*Silicon Laboratories, Inc.		84,160		3,472
*Trimble Navigation, Ltd.		83,800		3,322
*Ultimate Software Group, Inc.		36,225		1,972
*VistaPrint N.V.†		73,157		3,500

				51,104

Consumer Discretionary—18.7%
*CarMax, Inc.		90,900		3,006
DeVry, Inc.		55,097		3,258
*Dick’s Sporting Goods, Inc.		94,890		3,649
*Education Management Corporation		137,055		3,281
Gentex Corporation		120,300		3,637
Jarden Corporation		119,700		4,131
*K12, Inc.		109,850		3,640
*Life Time Fitness, Inc.		69,400		2,770
*O’Reilly Automotive, Inc.		65,150		4,268
*Steiner Leisure, Ltd.†		19,976		913
Strayer Education, Inc.		26,500		3,349
*Tempur-Pedic International, Inc.		40,600		2,753
Tractor Supply Co.		52,900		3,538
*Under Armour, Inc. Class “A”		53,060		4,102
*Urban Outfitters, Inc.		116,800		3,288

				49,583

* Non-income producing securities

† = U.S. listed foreign security


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
Health Care—15.3%
*athenahealth, Inc.		63,240	$	2,599
*Brookdale Senior Living, Inc.		140,576		3,409
*Cerner Corporation		62,400		3,813
*Covance, Inc.		60,600		3,598
*HealthSouth Corporation		139,900		3,672
*HMS Holdings Corporation		44,600		3,429
*Hologic, Inc.		200,100		4,036
*IDEXX Laboratories, Inc.		33,505		2,599
*Illumina, Inc.		57,100		4,291
Perrigo Co.		49,400		4,341
*SXC Health Solutions Corporation†		80,297		4,731

				40,518

Energy—7.9%
Cabot Oil & Gas Corporation		44,500		2,951
Core Laboratories N.V.†		27,500		3,067
*Dresser-Rand Group, Inc.		53,100		2,854
*KiOR, Inc. Class “A”		138,899		2,104
Oceaneering International, Inc.		75,200		3,046
*Oil States International, Inc.		48,700		3,892
*Petrohawk Energy Corporation		121,300		2,992

				20,906

Financials—6.3%
*Affiliated Managers Group, Inc.		46,130		4,680
*Financial Engines, Inc.		130,908		3,393
*FirstService Corporation†		81,075		2,800
Invesco, Ltd.†		92,200		2,158
Jones Lang LaSalle, Inc.		38,000		3,583

				16,614

Materials—4.4%
Airgas, Inc.		40,000		2,801
Celanese Corporation		87,200		4,649
*Rockwood Holdings, Inc.		78,800		4,357

				11,807

Consumer Staples—2.0%
*Green Mountain Coffee Roasters, Inc.		58,526		5,224

Telecommunication Services—1.2%
*SBA Communications Corporation Class “A”		80,800		3,086

Total Common Stocks—99.2% (cost $208,256)				262,775


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $2,120, collateralized by FHLMC, 2.000%, due 12/3/15	$	2,120		2,120

Total Repurchase Agreement—0.8% (cost $2,120)				2,120

Total Investments—100.0% (cost $210,376)				264,895
Cash and other assets, less liabilities—0.0%				18

Net assets—100.0%			$	264,913

See accompanying Notes to Financial Statements.

28 Semi-Annual Report

June 30, 2011

GLOBAL MARKETS OVERVIEW

Summary

Despite rallying earlier in the second quarter, the global market fell in June on concerns about the sustainability of the recovery as many developed economies hit a “soft patch.” This growth slowdown was exacerbated by supply chain disruptions and reduced growth expectations following the Japanese earthquake and tsunami, resurfacing European sovereign debt concerns, U.S. debt ceiling worries, and continued inflationary pressures in emerging markets. As a result, the global equity market was virtually flat during the second quarter, returning 0.13%, with developed markets up 0.33% as measured by the MSCI World IMI (the “World Index”), while emerging markets fell 1.13%.

During the second quarter the World Index return benefited from U.S. dollar weakness versus most developed market currencies, coupled with strength in Europe and the U.K. In particular, Germany and France performed well, benefiting from strong export demand coupled with improved consumer confidence and spending. These positives more than offset market weakness in a number of the peripheral European countries on debt concerns. Canada also underperformed, falling 4.96%, as Energy prices eased. Within emerging markets, Asia outperformed, falling 0.16%, as Indonesia, Korea, and Taiwan rallied, offsetting negative returns in China and India on inflation and growth concerns. Emerging Latin America and Emerging Europe Middle East and Asia each fell over 2% during the quarter, hampered by concerns about rising interest rates and inflationary pressures in Brazil, along with weakness in Turkey and a weakening Russian ruble. Healthcare was the strongest sector globally during the second quarter, up approximately 7%, followed by Consumer Discretionary. Conversely, Energy fell over 5% after prices subsided following spikes earlier in the year.

Year to date the global equity market rose 4.66%, led by Continental Europe and the U.S., which were particularly strong during the first quarter, on reduced European debt concerns and an improving outlook at the outset of 2011. Japan was the worst performing developed market, falling nearly 4%, due largely to concerns arising from the March earthquake. Emerging markets eked out a 0.32% return during the first half, led by approximately 8% and 9% returns in Korea and Russia, respectively, which somewhat offset weakness in India, Turkey, Brazil, and South Africa. Year to date, non-U.S. developed small cap stocks trailed their larger cap counterparts, due to second quarter relative weakness in Canada and Continental Europe. All sectors had positive returns during the first half of 2011, led by strength in Healthcare, which rose over 12%, along with Consumer, Energy, and Telecommunication Services, which were each up approximately 7%. Conversely, Information Technology returned 0.6%, while Financials and Materials each rose just over 1%.

Outlook

Over the last several months, the global investment agenda has been plagued by macroeconomic concerns of perceived threats to global growth and/or financial stability. Specifically, there are increasing concerns regarding the sustainability of Chinese growth, an increased potential for the slowdown to transition to a harder landing, and the implication for asset quality within the Financials sector. We believe that China’s development is the most important input into global economic growth and any slowdown in that economy would have significant effects on sustainable growth in this cycle.

Europe is facing more clear cut challenges regarding public sector fiscal sustainability. This is what the market has been focused on—peripheral European public sector debt and the attendant risks on the Financial system and, by implication, global growth. Despite these fears, core European economies have been relatively strong and corporate performance has been sound. The details surrounding a deal for peripheral European public sector debt will continue to be debated and we expect that these questions will be more elongated than investors would like. The U.S. is facing similar public sector finance issues as Europe, which

June 30, 2011

William Blair Funds 29

will be noisier over the short term, but will likely be resolved more quickly, given a more straightforward set of tradeoffs.

Global growth has been led by emerging markets post the 2008 financial crisis. There are now clear signs of a global growth plateau, as the global growth impulse is not feeding through the economy. As a result, economic growth and earnings growth expectations no longer are increasing, which has been exemplified in negative earnings revisions across regions and sectors. However, macroeconomic concerns have depressed equity valuations globally relative to historic norms and interest rates. The European uncertainly in particular may extend through the third quarter before there is a satisfactory outcome. This will be an opportunity for market appreciation particularly during the latter part of the year.

We believe this framework suggests a market environment favoring high quality companies that can deliver strong performance in a weaker growth environment where there are no longer cyclical tailwinds creating earnings surprises quarterly. The companies that outperform in even a sluggish environment will be rewarded with better valuations. From a short term strategy perspective, the less cyclical regions have outperformed more recently—U.S. and Japan. We believe that if there is a resolution to the European financial crisis and moderating Chinese inflation, these areas could outperform at the expense of the U.S. and Japan.

Long Term Strategy Considerations

In terms of long term strategy, equities remain attractive versus fixed income. The trade towards safe government bonds and money market instruments has led investors to neglect alternative income and growth investment opportunities in favor of fixed value and fixed income opportunities. This has created significant opportunities for equities and other income producing assets, as the prospective return and yield differentials have increased. Secondly, following a cycle that favored small cap companies over larger cap, we believe that we may be at a point where large cap equities are poised to do better, particularly if the financial outlook stabilizes. Our portfolio strategies generally reflect this trend, with a higher allocation than normal to large cap companies at the expense of smaller cap holdings. Finally, we believe there is a favorable outlook for developed markets versus emerging markets over the long term. Emerging markets have outperformed consistently over the last decade or so. As a result, emerging markets are currently at a similar peak in relative performance as they were in 1993, after the late 1980s-early 1990s emerging markets bubble. Clearly, emerging markets are in a significantly different position in the world than in the early 1990s given improved corporate returns and significant growth; however, there are underlying structural risks in emerging markets that continue to this day. Over the long term, these risks will need to be addressed, which may result in underperformance vis-à-vis developed markets over a period of several years.

30 Semi-Annual Report

June 30, 2011

LOGO

W. George Greig

LOGO

Kenneth J. McAtamney

GLOBAL GROWTH FUND

The Global Growth Fund seeks long-term capital appreciation.

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Global Growth Fund posted a 6.19% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI All Country World IMI Index (net) gained 4.66%.

Year to date outperformance was driven by strong stock selection across most sectors and regions. Particular value added came from the Fund’s focus in auto-related and luxury holdings amidst strong fundamental results, coupled with strong performance in the U.S. Information Technology (IT) stock selection was also a key alpha driver during the period, due to strong results by Japanese social media holdings, coupled with good stock selection in U.S. and Asian tech. Somewhat offsetting these positive effects was Energy stock selection, along with Emerging Europe, Mid-East, Africa and Latin American performance. Energy stock selection was hampered by underperformance in the U.S., as well as a lack of Russian Energy holdings, which outperformed. Turkiye Garanti Bankasi A.S., the leading Turkish bank, was also a drag on results in the first part of the year as its stock price was impaired due to increasing interest rate concerns. We sold the company in the first quarter on a slower growth outlook. Latin America stock selection was hampered by underperformance in Consumer Staples on increased pricing pressure, coupled with weakness in Industrials.

The Global Growth Fund maintained its focus on Consumer Discretionary holdings during the six month period, although the weighting moderated from 22% to 15%. Within Discretionary, the Fund was focused on auto-related holdings and luxury retailers, as well as select specialty retailers, with the most significant exposure in the U.S. Conversely, the Fund’s Financials weighting approximated 16% during the period, below the 21% market weighting on lower developed market bank exposure. Financials weightings were focused on asset management and, to some extent, insurance companies. Industrials approximated 17% during the period, due to higher exposure in machinery/capital equipment and transport names, while the higher IT exposure reflected solid fundamentals due to improved corporate spending, social media gains, and consumer demand for smartphones and tablets. Conversely, the Energy and Materials sectors were underweighted on lower exploration and production and mining exposure. During the period, U.S. holdings increased from approximately 30% of the Fund to near market weight on improving economic and company fundamentals, while emerging markets decreased from 20% to 13% on inflationary and growth concerns and the impact on corporate margins and earnings growth outlook.

June 30, 2011

William Blair Funds 31

Global Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			Since Inception(a)
Class N		6.19	%		35.77	%		(0.52	)%		(2.86	)%
Class I		6.31			35.96			(0.30	)		(2.59	)
MSCI All Country World IMI (net)		4.66			31.00			1.74			(2.81	)

(a)

For the period from October 15, 2007 (Commencement of Operations) to June 30, 2011.

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

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 Investable Market Index (IMI) (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market of developed and emerging markets. This series approximates the minimum possible dividend reinvestment.

Sector Diversification (unaudited)

LOGO

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

32 Semi-Annual Report

June 30, 2011

Global Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Western Hemisphere—44.0%*
Canada—2.9%
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		19,832	$	658
Saputo, Inc. (Food products)		14,974		722

				1,380

United States—41.1%
*Affiliated Managers Group, Inc. (Capital markets)		5,027		510
American Express Co. (Consumer finance)		16,173		836
AMETEK, Inc. (Electrical equipment)		11,017		495
*Apple, Inc. (Computers & peripherals)		3,638		1,221
*Bed Bath & Beyond, Inc. (Specialty retail)		9,484		554
*Cerner Corporation (Health care technology)		9,202		562
CH Robinson Worldwide, Inc. (Air freight & logistics)		7,386		582
*Citrix Systems, Inc. (Software)		7,778		622
*Clean Harbors, Inc. (Commercial services & supplies)		2,354		243
CR Bard, Inc. (Health care equipment & supplies)		4,986		548
*DaVita, Inc. (Health care providers & services)		7,015		608
Exxon Mobil Corporation (Oil, gas & consumable fuels)		11,200		911
*Google, Inc. Class “A” (Internet software & services)		1,513		766
*Hansen Natural Corporation (Beverages)		8,216		665
*IDEXX Laboratories, Inc. (Health care equipment & supplies)		7,105		551
International Business Machines Corporation (IT services)		5,085		872
*j2 Global Communications, Inc. (Internet software & services)		8,240		233
JPMorgan Chase & Co. (Diversified financial services)		19,315		791
Marriott International, Inc. Class “A” (Hotels, restaurants & leisure)		17,474		620
McCormick & Co., Inc. (Food products)		9,742		483
*Newfield Exploration Co. (Oil, gas & consumable fuels)		7,183		489
NIKE, Inc. Class “B” (Textiles, apparel & luxury goods)		8,100		729
*O’Reilly Automotive, Inc. (Specialty retail)		7,259		475
QUALCOMM, Inc. (Communications equipment)		12,847		730
Starbucks Corporation (Hotels, restaurants & leisure)		20,859		824
*Tempur-Pedic International, Inc. (Household durables)		8,176		554
The Walt Disney Co. (Media)		16,713		652
*Thermo Fisher Scientific, Inc. (Life sciences tools & services)		11,330		730
United Parcel Service, Inc. Class “B” (Air freight & logistics)		10,607		774
W.W. Grainger, Inc. (Trading companies & distributors)		3,400		522
Yum! Brands, Inc. (Hotels, restaurants & leisure)		13,712		757

				19,909


Issuer	Shares		Value

*Europe—17.6%*
Belgium—1.2%
Anheuser-Busch InBev N.V. (Beverages)		9,557	$	555

Denmark—3.0%
Coloplast A/S (Health care equipment & supplies)		1,662		252
Novo Nordisk A/S (Pharmaceuticals)		6,300		791
Novozymes A/S (Chemicals)		2,372		386

				1,429

France—1.2%
Essilor International S.A. (Health care equipment & supplies)		7,253		588

Germany—4.4%
Aixtron AG (Semiconductors & semiconductor equipment)		6,288		215
BASF SE (Chemicals)		9,788		959
SAP AG (Software)		16,070		973

				2,147

Italy—2.6%
Saipem SpA (Energy equipment & services)		17,660		912
Tod’s SpA (Textiles, apparel & luxury goods)		2,627		351

				1,263

Sweden—2.9%
Atlas Copco AB (Machinery)		29,541		778
*Hexagon AB (Machinery)		25,757		634

				1,412

Switzerland—2.3%
Partners Group Holding AG (Capital markets)		3,147		557
*Syngenta AG (Chemicals)		1,701		574

				1,131

*United Kingdom—13.8%*
Abcam plc (Biotechnology)		36,073		241
Amlin plc (Insurance)		52,980		345
Ashmore Group plc (Capital markets)		67,482		432
*Autonomy Corporation plc (Software)		12,123		332
Babcock International Group plc (Commercial services & supplies)		27,755		317
BG Group plc (Oil, gas & consumable fuels)		32,675		742
BHP Billiton plc (Metals & mining)		25,590		1,007
Burberry Group plc (Textiles, apparel & luxury goods)		16,375		381
Hargreaves Lansdown plc (Capital markets)		28,898		282
Michael Page International plc (Professional services)		30,678		263
*Rolls-Royce Holdings plc (Aerospace & defense)		67,353		697
Standard Chartered plc (Commercial banks)		25,813		679
The Weir Group plc (Machinery)		13,357		456
Vodafone Group plc (Wireless telecommunication services)		194,397		516

				6,690


*Emerging Asia—8.7%*
China—4.0%
China Vanke Co., Ltd. (Real estate management & development)		399,900		539

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 33

Global Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—(continued)*

*Emerging Asia—8.7%—(continued)*
China—4.0%—(continued)
CNOOC, Ltd. (Oil, gas & consumable fuels)		207,000	$	483
Haitian International Holdings, Ltd. (Machinery)		154,000		199
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		931,185		707

				1,928

Indonesia—1.1%
PT Bank Rakyat Indonesia (Commercial banks)		730,500		554

South Korea—2.4%
Hyundai Motor Co. (Automobiles)		5,205		1,155

Taiwan—1.2%
HTC Corporation (Communications equipment)		17,000		572

*Japan—8.4%*
Dena Co., Ltd. (Internet & catalog retail)		13,700		588
Exedy Corporation (Auto components)		5,900		201
Fanuc, Ltd. (Machinery)		5,100		848
Gree, Inc. (Internet software & services)		20,000		435
Komatsu, Ltd. (Machinery)		15,400		478
Makita Corporation (Machinery)		10,000		463
Miraca Holdings, Inc. (Health care providers & services)		5,700		230
Softbank Corporation (Wireless telecommunication services)		21,200		798

				4,041


*Emerging Latin America—3.2%*
Brazil—1.1%
BR Malls Participacoes S.A. (Real estate management & development)		45,200		517

Chile—0.7%
Banco Santander Chile—ADR (Commercial banks)		3,445		323

Mexico—1.4%
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		211,400		698


*Asia—1.1%*
Singapore—1.1%
Keppel Corporation, Ltd. (Industrial conglomerates)		60,500		546


*Emerging Europe, Mid-East, Africa—1.0%*
South Africa—1.0%
Sasol, Ltd. (Oil, gas & consumable fuels)		9,579		504

Total Common Stocks—97.8% (cost $38,230)				47,342


Issuer	Shares or Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $450, collateralized by FHLMC, 2.000%, due 12/3/15	$	450	$	450

Total Repurchase Agreement—0.9% (cost $450)				450

Total Investments—98.7% (cost $38,680)				47,792
Cash and other assets, less liabilities—1.3%				643

Net assets—100.0%			$	48,435

*Non-income producing securities

† = U.S. listed foreign security

ADR = American Depository Receipt

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, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Industrials			17.5%
Financials			16.3%
Information Technology			16.0%
Consumer Discretionary			15.3%
Health Care			10.8%
Energy			8.5%
Materials			7.7%
Consumer Staples			5.1%
Telecommunication Services			2.8%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


U.S. Dollar			44.1%
British Pound Sterling			14.1%
Euro			9.6%
Japanese Yen			8.5%
Hong Kong Dollar			4.1%
Danish Krone			3.0%
Swedish Krona			3.0%
South Korean Won			2.4%
Swiss Franc			2.4%
Canadian Dollar			1.5%
Mexican Peso			1.5%
New Taiwan Dollar			1.2%
Indonesian Rupiah			1.2%
Singapore Dollar			1.2%
Brazilian Real			1.1%
South African Rand			1.1%

Total			100.0%

See accompanying Notes to Financial Statements.

34 Semi-Annual Report

June 30, 2011

LOGO

W. George Greig

INTERNATIONAL GROWTH FUND

The International Growth Fund seeks long-term capital appreciation.

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The International Growth Fund posted a 1.97% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI All Country World ex-U.S. IMI Index (net), gained 3.52%.

Despite strong results the majority of the year, the Fund underperformed the Index year to date due to weakness in January and February, coupled with the Fund’s currency hedges, as the USD depreciated versus most currencies year to date. Key detractors from return included the Fund’s U.K. Consumer Staples holdings, which underperformed during the first quarter on rising raw materials costs and slower than expected revenue growth. Emerging Latin America also detracted from results on pricing pressure. Energy stock selection was negative due to a focus on services holdings, lack of European and Russian integrated oil exposure, and Latin American stock selection. Financials stock selection detracted from performance during the first two months of the year and, therefore, year to date due to weakness in Singaporean real estate holdings, overweighted Japanese Financials exposure, and residual Egyptian and Turkish bank exposure. Somewhat offsetting these negative relative results were the overweighting and stock selection in Consumer Discretionary, along with Industrials, Information Technology, Materials and Utilities stock selection. Regionally, stock selection was additive in Japan, Europe Ex-U.K., Canada and Emerging Asia, but was offset by weakness in Pacific Ex-Japan, the U.K. and Emerging Europe, Middle-East, and Africa.

Over the six month period the emerging markets weighting was reduced from approximately 25% as of year end to 19% as of June 30, due largely to a decline in Latin America near the beginning of the year on inflationary and growth concerns. Conversely Japanese exposure, which totaled approximately 14.6% as of year end, increased during the first quarter on growth and valuation opportunities, and then after the March earthquake on opportunistic valuation opportunities. Subsequent to first quarter end, we reduced Japanese Financial and Industrials exposure on a valuation recovery, coupled with lower growth expectations as the reconstruction began. From a sector perspective, the Fund maintained its focus in the Discretionary and Industrials sectors as of June 30, albeit at lower weightings than December 31. Within Consumer Discretionary the focus remained on auto-related and luxury holdings, while Industrials positioning was largely the result of capital equipment and machinery names. The Fund remained underweighted in Financials during the period, approximating 20% of the Fund, although European exposure was reduced during the period in favor of emerging Asian financials following a series of interest rate hikes. Energy and Materials exposures remained underweighted during the six month period, due to lower energy exploration and production and mining exposures, and despite a focus on energy services and chemicals. From a capitalization perspective, the Fund was at the lower end of its small capitalization range, as growth expectations and valuations favored larger cap peers.

June 30, 2011

William Blair Funds 35

International Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			10 Year
Class N		1.97	%		27.82	%		(2.04	)%		2.65	%		7.06	%
Class I		2.10			28.14			(1.76	)		2.95			7.35
MSCI All Country World Ex-U.S. IMI (net)		3.52			30.26			0.31			3.96			8.05

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

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

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

Sector Diversification (unaudited)

LOGO

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

36 Semi-Annual Report

June 30, 2011

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe, Mid-East—30.9%*
Austria—0.1%
Schoeller-Bleckmann Oilfield Equipment AG (Energy equipment & services)		78,889	$	6,833

Belgium—1.4%
Anheuser-Busch InBev N.V. (Beverages)		825,930		47,909
Colruyt S.A. (Food & staples retailing)		368,611		18,442

				66,351

Denmark—1.4%
Coloplast A/S (Health care equipment & supplies)		157,883		23,974
Novo Nordisk A/S (Pharmaceuticals)		268,550		33,703
SimCorp A/S (Software)		38,510		7,599

				65,276

Finland—1.5%
Kone Oyj (Machinery)		473,589		29,758
Nokian Renkaat Oyj (Auto components)		381,983		19,166
UPM-Kymmene Oyj (Paper & forest products)		1,276,417		23,341

				72,265

France—7.0%
Air Liquide S.A. (Chemicals)		183,301		26,273
*Arkema S.A. (Chemicals)		190,964		19,659
AXA S.A. (Insurance)		2,173,465		49,389
BNP Paribas (Commercial banks)		775,946		59,896
Essilor International S.A. (Health care equipment & supplies)		584,741		47,427
L’Oreal S.A. (Personal products)		487,996		63,379
Schneider Electric S.A. (Electrical equipment)		234,276		39,138
SEB S.A. (Household durables)		122,591		12,844
Suez Environnement Co. (Multi-utilities)		953,974		19,029

				337,034

Germany—7.2%
Aixtron AG (Semiconductors & semiconductor equipment)		326,505		11,141
BASF SE (Chemicals)		718,444		70,398
Bayer AG (Pharmaceuticals)		854,378		68,689
*Bayerische Motoren Werke AG (Automobiles)		548,417		54,724
Gerry Weber International AG (Textiles, apparel & luxury goods)		130,592		8,574
Infineon Technologies AG (Semiconductors & semiconductor equipment)		2,762,025		31,049
Lanxess AG (Chemicals)		251,461		20,639
MTU Aero Engines Holding AG (Aerospace & defense)		220,862		17,641
SAP AG (Software)		771,571		46,714
Wincor Nixdorf AG (Computers & peripherals)		178,069		12,869

				342,438

Ireland—0.5%
Paddy Power plc (Hotels, restaurants & leisure)		238,079		12,944


Issuer	Shares		Value

*Common Stocks—Europe, Mid-East—30.9%—(continued)*
Ireland—(continued)
Shire plc (Pharmaceuticals)		274,511	$	8,569

				21,513

Israel—1.7%
*Check Point Software Technologies, Ltd. (Software)†		367,919		20,916
Israel Chemicals, Ltd. (Chemicals)		1,684,687		26,741
Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		659,708		31,811

				79,468

Italy—1.2%
Ansaldo STS SpA (Transportation infrastructure)		731,533		10,253
DiaSorin SpA (Health care equipment & supplies)		244,818		11,751
Saipem SpA (Energy equipment & services)		704,041		36,347

				58,351

Luxembourg—0.0%
*L’Occitane International S.A. (Specialty retail)		600,250		1,604

Netherlands—0.6%
*ASML Holding N.V. (Semiconductors & semiconductor equipment)		804,229		29,623

Norway—0.2%
*Norwegian Air Shuttle ASA (Airlines)		393,500		7,257
Opera Software ASA (Internet software & services)		617,811		3,882

				11,139

Spain—1.4%
Banco Santander S.A. (Commercial banks)		3,529,707		40,759
Prosegur Cia de Seguridad S.A. (Commercial services & supplies)		205,994		10,954
Tecnicas Reunidas S.A. (Energy equipment & services)		81,289		4,171
*Viscofan S.A. (Food products)		212,089		8,443

				64,327

Sweden—2.3%
Atlas Copco AB (Machinery)		1,458,534		38,393
Elekta AB (Health care equipment & supplies)		358,396		16,976
*Hexagon AB (Machinery)		1,525,262		37,570
JM AB (Household durables)		377,995		8,919
Mekonomen AB (Specialty retail)		72,223		2,501
NIBE Industrier AB (Building products)		285,607		4,944

				109,303

Switzerland—4.4%
*ABB, Ltd. (Electrical equipment)		1,850,611		47,985
Cie Financiere Richemont S.A. (Textiles, apparel & luxury goods)		323,597		21,188
*Glencore International plc (Metals & mining)		686,807		5,412
*Julius Baer Group, Ltd. (Capital markets)		390,344		16,125
*Meyer Burger Technology AG (Machinery)		173,871		7,683

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 37

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks— Europe, Mid-East—30.9%—(continued)*
Switzerland—(continued)
*Orascom Development Holding AG (Hotels, restaurants & leisure)		205,113	$	6,758
Partners Group Holding AG (Capital markets)		110,185		19,501
SGS S.A. (Professional services)		13,710		26,026
Sika AG (Chemicals)		6,783		16,353
Xstrata plc (Metals & mining)		1,994,156		43,895

				210,926

*United Kingdom—20.6%*
Abcam plc (Biotechnology)		2,100,667		14,051
Admiral Group plc (Insurance)		727,725		19,400
Aggreko plc (Commercial services & supplies)		581,501		18,003
AMEC plc (Energy equipment & services)		1,612,007		28,149
Amlin plc (Insurance)		2,578,148		16,804
Antofagasta plc (Metals & mining)		790,892		17,695
Ashmore Group plc (Capital markets)		1,938,785		12,397
*Autonomy Corporation plc (Software)		637,846		17,475
Babcock International Group plc (Commercial services & supplies)		2,582,246		29,508
BG Group plc (Oil, gas & consumable fuels)		2,144,277		48,662
BHP Billiton plc (Metals & mining)		2,059,165		81,035
Britvic plc (Beverages)		1,546,151		9,789
Burberry Group plc (Textiles, apparel & luxury goods)		848,815		19,753
*Cairn Energy plc (Oil, gas & consumable fuels)		1,663,632		11,075
*Carphone Warehouse Group plc (Specialty retail)		2,855,984		19,389
Centrica plc (Multi-utilities)		13,476,310		69,926
Diageo plc (Beverages)		3,058,620		62,491
Dunelm Group plc (Specialty retail)		1,412,965		8,821
*EnQuest plc (Oil, gas & consumable fuels)		2,224,301		4,391
Halma plc (Electronic equipment, instruments & components)		1,405,039		9,343
Hargreaves Lansdown plc (Capital markets)		938,617		9,152
Hiscox, Ltd. (Insurance)		1,303,179		8,761
IG Group Holdings plc (Diversified financial services)		1,728,502		12,106
*John Wood Group plc (Energy equipment & services)		1,439,780		14,962
Johnson Matthey plc (Chemicals)		1,175,981		37,106
Jupiter Fund Management plc (Capital markets)		1,542,958		6,263
Lancashire Holdings, Ltd. (Insurance)		1,288,590		13,494
Meggitt plc (Aerospace & defense)		1,890,704		11,577
Michael Page International plc (Professional services)		889,678		7,639
Next plc (Multiline retail)		752,593		28,083
*Ocado Group plc (Internet & catalog retail)		2,662,532		7,790
Petrofac, Ltd. (Energy equipment & services)		1,904,175		46,269
Restaurant Group plc (Hotels, restaurants & leisure)		975,441		4,603
*Rolls-Royce Holdings plc (Aerospace & defense)		3,409,856		35,299
Rotork plc (Machinery)		557,718		15,092
RPS Group plc (Commercial services & supplies)		2,323,241		9,143


Issuer	Shares		Value

*Common Stocks—United Kingdom—20.6%—(continued)*
United Kingdom—(continued)
Scottish & Southern Energy plc (Electric utilities)		2,107,530	$	47,118
Spirax-Sarco Engineering plc (Machinery)		470,319		15,104
St James’s Place plc (Insurance)		1,184,677		6,465
*Telecity Group plc (Internet software & services)		1,371,660		12,196
*The Berkeley Group Holdings plc (Household durables)		1,019,861		21,082
The Weir Group plc (Machinery)		826,729		28,222
Tullow Oil plc (Oil, gas & consumable fuels)		719,644		14,322
Ultra Electronics Holdings plc (Aerospace & defense)		169,863		4,678
Victrex plc (Chemicals)		514,437		12,385
Vodafone Group plc (Wireless telecommunication services)		6,792,065		18,019
Whitbread plc (Hotels, restaurants & leisure)		797,840		20,680

				985,767

*Japan—16.7%*
Asics Corporation (Textiles, apparel & luxury goods)		799,000		11,880
CyberAgent, Inc. (Media)		4,817		16,808
Daito Trust Construction Co., Ltd. (Real estate management & development)		258,900		21,901
Dena Co., Ltd. (Internet & catalog retail)		674,700		28,956
Dr Ci:Labo Co., Ltd. (Personal products)		1,168		5,963
Exedy Corporation (Auto components)		443,400		15,146
F.C.C. Co., Ltd. (Auto components)		318,303		7,615
Fanuc, Ltd. (Machinery)		308,400		51,256
Fast Retailing Co., Ltd. (Specialty retail)		238,100		38,360
Gree, Inc. (Internet software & services)		1,264,100		27,494
K’s Holdings Corporation (Specialty retail)		501,100		21,630
Kakaku.com, Inc. (Internet software & services)		2,203		15,461
Kaken Pharmaceutical Co., Ltd. (Pharmaceuticals)		533,000		7,462
Keyence Corporation (Electronic equipment, instruments & components)		178,000		50,279
Komatsu, Ltd. (Machinery)		1,525,800		47,325
Makita Corporation (Machinery)		575,600		26,669
Miraca Holdings, Inc. (Health care providers & services)		263,900		10,670
MISUMI Group, Inc. (Trading companies & distributors)		499,800		12,895
Murata Manufacturing Co., Ltd. (Electronic equipment, instruments & components)		418,600		27,818
Nitori Co., Ltd. (Specialty retail)		347,420		32,927
Nitto Denko Corporation (Chemicals)		369,800		18,673
ORIX Corporation (Diversified financial services)		417,200		40,370
Osaka Securities Exchange Co., Ltd. (Diversified financial services)		991		4,413
Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		97,700		10,279
SMC Corporation (Machinery)		182,700		32,770
Softbank Corporation (Wireless telecommunication services)		2,090,200		78,670
Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		1,809,300		55,467

See accompanying Notes to Financial Statements.

38 Semi-Annual Report

June 30, 2011

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares			Value

*Common Stocks—Japan—16.7%—(continued)*
Japan—(continued)
United Arrows, Ltd. (Specialty retail)		41,600		$	878
Yahoo! Japan Corporation (Internet software & services)		156,368			53,609
Yamada Denki Co., Ltd. (Specialty retail)		339,830			27,565

					801,209


*Emerging Asia—11.7%*
China—4.4%
AAC Technologies Holdings, Inc. (Communications equipment)		2,630,000			6,124
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		3,516,000			7,284
*China Minzhong Food Corporation, Ltd. (Food products)		2,752,000			3,361
China Overseas Land & Investment, Ltd. (Real estate management & development)		15,614,000			33,469
China Shenhua Energy Co., Ltd. (Oil, gas & consumable fuels)		5,549,000			26,455
CNOOC, Ltd. (Oil, gas & consumable fuels)		19,600,000			45,740
Haitian International Holdings, Ltd. (Machinery)		5,537,000			7,172
*Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		396,788			3,698
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		91,981,000			69,857
Lonking Holdings, Ltd. (Machinery)		16,117,000			8,802

					211,962

India—1.4%
Axis Bank, Ltd. (Commercial banks)		491,466			14,178
HDFC Bank, Ltd. (Commercial banks)		224,856			12,653
Infosys Technologies, Ltd. (IT services)		194,420			12,658
Shriram Transport Finance Co., Ltd. (Consumer finance)		590,882			8,151
Tata Consultancy Services, Ltd. (IT services)		754,521			19,988

					67,628

Indonesia—2.1%			��
PT Bank Rakyat Indonesia (Commercial banks)		26,892,000			20,383
PT Indo Tambangraya Megah (Oil, gas & consumable fuels)		2,726,500			14,228
PT Indofood Sukses Makmur Tbk (Food products)		32,072,000			21,505
PT Kalbe Farma Tbk (Pharmaceuticals)		28,556,000			11,238
PT United Tractors Tbk (Machinery)		11,671,606			33,890

					101,244

Philippines—0.2%
Alliance Global Group, Inc. (Industrial conglomerates)		45,713,800			11,541

South Korea—2.3%
Halla Climate Control Corporation (Auto components)		251,762			6,060
Hyundai Mobis (Auto components)		63,371			23,742
Hyundai Motor Co. (Automobiles)		157,984			35,070


Issuer	Shares		Value

*Common Stocks—Emerging Asia—11.7%—(continued)*
South Korea—(continued)
Samsung Engineering Co., Ltd. (Construction & engineering)		97,275	$	23,233
Samsung Fire & Marine Insurance Co., Ltd. (Insurance)		98,398		22,857

				110,962

Taiwan—0.8%
HTC Corporation (Communications equipment)		574,000		19,304
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		2,088,000		7,007
*TPK Holding Co., Ltd. (Electronic equipment, instruments & components)		306,000		9,322

				35,633

Thailand—0.5%
Bangkok Dusit Medical Services PCL (Health care providers & services)		2,617,500		4,494
Kasikornbank PCL (Commercial banks)		4,347,700		17,688

				22,182

*Canada—6.3%*
Alimentation Couche Tard, Inc. (Food & staples retailing)		853,194		24,876
*Bankers Petroleum, Ltd. (Oil, gas & consumable fuels)		929,116		6,628
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		1,967,019		65,246
Canadian Western Bank (Commercial banks)		404,532		12,919
CI Financial Corporation (Capital markets)		626,649		14,879
Crescent Point Energy Corporation (Oil, gas & consumable fuels)		412,841		19,079
Gildan Activewear, Inc. (Textiles, apparel & luxury goods)		490,000		17,269
Home Capital Group, Inc. (Thrifts & mortgage finance)		92,807		4,980
Intact Financial Corporation (Insurance)		289,733		16,609
Laurentian Bank of Canada (Commercial banks)		126,017		5,822
National Bank of Canada (Commercial banks)		347,573		28,189
PetroBakken Energy, Ltd. Class “A” (Oil, gas & consumable fuels)		860,850		11,818
Petrominerales, Ltd. (Oil, gas & consumable fuels)		309,190		9,076
Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		575,412		12,827
Saputo, Inc. (Food products)		510,358		24,612
Tim Hortons, Inc. (Hotels, restaurants & leisure)		492,843		24,063

				298,892


*Emerging Latin America—4.4%*
Brazil—2.3%
BM&F BOVESPA S.A. (Diversified financial services)		64,100		424
BR Malls Participacoes S.A. (Real estate management & development)		1,270,100		14,527

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 39

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Latin America—4.4%—(continued)*
Brazil—(continued)
BR Properties S.A. (Real estate management & development)		701,400	$	7,865
Cia de Concessoes Rodoviarias (Transportation infrastructure)		634,700		18,891
Cia Hering (Specialty retail)		542,800		12,486
Drogasil S.A. (Food & staples retailing)		448,300		3,059
Iochpe-Maxion S.A. (Machinery)		506,900		6,918
Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		420,042		6,056
Natura Cosmeticos S.A. (Personal products)		232,500		5,810
OdontoPrev S.A. (Health care providers & services)		695,100		11,580
*OGX Petroleo e Gas Participacoes S.A. (Oil, gas & consumable fuels)		1,386,600		12,963
Sul America S.A. (Insurance)		794,700		9,981
*T4F Entretenimento S.A. (Media)		99,900		899

				111,459

Chile—0.7%
Banco Santander Chile—ADR (Commercial banks)		189,303		17,758
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		29,062,823		7,898
Parque Arauco S.A. (Real estate management & development)		3,256,624		7,282

				32,938

Colombia—0.5%
Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		809,517		21,697

Mexico—0.5%
Compartamos S.A.B. de C.V. (Consumer finance)		6,401,900		11,619
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		3,375,256		8,590
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		525,700		1,736

				21,945

Peru—0.4%
Credicorp, Ltd. (Commercial banks)†		231,109		19,899


*Asia—2.8%*
Australia—0.2%
Iluka Resources, Ltd. (Metals & mining)		579,618		10,432

Hong Kong—1.1%
China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)		4,031,000		3,155
Hutchison Telecommunications Hong Kong Holdings, Ltd. (Diversified telecommunication services)		26,454,000		8,159
Noble Group, Ltd. (Trading companies & distributors)		16,221,000		26,016
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		2,922,000		4,348
Value Partners Group, Ltd. (Capital markets)		11,196,000		9,582

				51,260


Issuer	Shares or Principal Amount		Value

*Common Stocks—Asia—2.8%—(continued)*
Singapore—1.5%
CapitaMalls Asia, Ltd. (Real estate management & development)		14,672,000	$	17,559
*Global Logistic Properties, Ltd. (Real estate management & development)		14,782,000		24,791
Keppel Corporation, Ltd. (Industrial conglomerates)		3,349,300		30,213
Midas Holdings, Ltd. (Metals & mining)		849,000		449

				73,012


*Emerging Europe, Mid-East, Africa—2.5%*
Egypt—0.3%
Commercial International Bank Egypt S.A.E. (Commercial banks)		1,442,921		7,195
Egyptian Financial Group-Hermes Holding (Capital markets)		1,977,640		6,660

				13,855

South Africa—1.8%
Clicks Group, Ltd. (Multiline retail)		1,847,256		11,542
Life Healthcare Group Holdings, Ltd. (Health care providers & services)		4,043,077		10,518
Sasol, Ltd. (Oil, gas & consumable fuels)		401,853		21,156
Shoprite Holdings, Ltd. (Food & staples retailing)		1,205,696		18,152
*The Foschini Group, Ltd. (Specialty retail)		1,114,973		14,545
Wilson Bayly Holmes-Ovcon, Ltd. (Construction & engineering)		500,516		8,142

				84,055

Turkey—0.4%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		1,597,643		7,284
Turkiye Halk Bankasi A.S. (Commercial banks)		1,779,477		13,322

				20,606

Total Common Stocks—95.9% (cost $3,804,430)				4,584,629


*Convertible Bond*
Brazil—0.0%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§	$	2,875		1,893

Total Convertible Bond—0.0% (cost $1,491)				1,893


*Exchange-Traded Fund*
China—0.8%
iShares FTSE/Xinhua A50 China Index		23,133,000		38,468

Total Exchange-Traded Fund—0.8% (cost $38,838)				38,468

See accompanying Notes to Financial Statements.

40 Semi-Annual Report

June 30, 2011

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $68,519, collateralized by FHLMC, 2.000%, due 12/3/15	$	68,519	$	68,519

Total Repurchase Agreement—1.4% (cost $68,519)				68,519

Total Investments—98.1% (cost $3,913,278)				4,693,509
Cash and other assets, less liabilities—1.9%				91,114

Net assets—100.0%			$	4,784,623

* Non-income producing securities

ADR = American Depository Receipt

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.04% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.04% of the net assets at June 30, 2011.

June 30, 2011

William Blair Funds 41

International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials			20.1%
Industrials			17.4%
Consumer Discretionary			13.2%
Information Technology			10.5%
Materials			9.4%
Energy			9.0%
Health Care			7.4%
Consumer Staples			6.9%
Utilities			2.9%
Telecommunication Services			2.4%
Exchange-Traded Funds			0.8%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


British Pound Sterling			22.6%
Euro			21.4%
Japanese Yen			17.3%
Hong Kong Dollar			5.8%
Canadian Dollar			5.5%
Swiss Franc			3.5%
U.S. Dollar			3.4%
Brazilian Real			2.5%
South Korean Won			2.4%
Swedish Krona			2.4%
Singapore Dollar			2.2%
Indonesian Rupiah			2.2%
South African Rand			1.8%
Indian Rupee			1.5%
Danish Krone			1.4%
All Other Currencies			4.1%

Total			100.0%

See accompanying Notes to Financial Statements.

42 Semi-Annual Report

June 30, 2011

LOGO

David Merjan

INTERNATIONAL EQUITY FUND

The International Equity Fund seeks long-term capital appreciation.

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The International Equity Fund posted a 3.22% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI World Ex-U.S. (net) Index, increased 4.72%.

Year to date, the Fund trailed the MSCI World Ex-U.S. (net) Index, due primarily to the Fund’s emerging markets exposure, which detracted approximately 1% from relative results. The other primary detractor from performance during the six month period was Healthcare stock selection, as Sonova Holding AG underperformed on concerns about lower demand prospectively, while Terumo Corporation underperformed on production delays; as a result, we sold these stocks. Teva Pharmaceutical Industries, Ltd. also underperformed on concerns about slowing revenue growth and concerns about potential generic competition to its blockbuster drug, Copaxone. Somewhat offsetting these effects were strong stock selection in Japan and Canada, coupled with outperformance in European Industrials holdings.

Over the six month period the Fund’s emerging markets exposure was reduced from 19.3% to 15.8%, largely through a reduction in Latin America early in the year on interest rate and growth concerns. This decrease was invested in European and Canadian holdings. European exposure increased particularly in Financials, Information Technology and Materials, which more than offset a reduction in Consumer Discretionary and Industrials. From a sector perspective, Industrials remained the most overweighted throughout the six month period, approximating 22%, well ahead of the 12% Index weighting, due to a focus in capital equipment and machinery names, as well as holdings in low-cost airlines. Financials was underweighted during the entire period, although developed markets increased at the expense of emerging markets. The Fund was underweighted in the Materials sector for the entire six month period on lower mining exposure, despite exposure in chemicals and fertilizer.

June 30, 2011

William Blair Funds 43

International Equity Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		3.22	%		26.11	%		(4.36	)%		0.98	%		4.99	%
Class I		3.36			26.35			(4.12	)		1.22			5.27
MSCI World Ex-U.S. (net)		4.72			30.33			(1.56	)		2.02			7.63
MSCI All Country World Ex-U.S. IMI (net)		3.52			30.26			0.31			3.96			9.54

(a)

For the period from May 24, 2004 (Commencement of Operations) to June 30, 2011.

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

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

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

On May 1, 2011, the Fund’s benchmark changed from the MSCI All Country World Ex-U.S. IMI (net) to the MSCI World Ex-U.S. (net). The primary reason for this change is to compare the Fund to a benchmark that more closely reflects the market capitalization focus the Fund uses in its investment strategy.

Sector Diversification (unaudited)

LOGO

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

44 Semi-Annual Report

June 30, 2011

International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe, Mid-East—32.4%*
Belgium—1.8%
Anheuser-Busch InBev N.V. (Beverages)		34,499	$	2,001

Denmark—1.6%
Novo Nordisk A/S (Pharmaceuticals)		14,589		1,831

Finland—0.5%
Kone Oyj (Machinery)		8,480		533

France—7.5%
Air Liquide S.A. (Chemicals)		3,090		443
AXA S.A. (Insurance)		63,886		1,452
BNP Paribas (Commercial banks)		31,525		2,433
Cie Generale des Etablissements Michelin (Auto components)		12,188		1,192
L’Oreal S.A. (Personal products)		13,248		1,721
Schneider Electric S.A. (Electrical equipment)		7,204		1,203

				8,444

Germany—8.6%
BASF SE (Chemicals)		7,339		719
Bayer AG (Pharmaceuticals)		26,282		2,113
Fresenius Medical Care AG & Co. KGaA (Health care providers & services)		25,693		1,921
Infineon Technologies AG (Semiconductors & semiconductor equipment)		81,439		915
MAN SE (Machinery)		8,322		1,110
Muenchener Rueckversicherungs AG (Insurance)		9,159		1,401
SAP AG (Software)		26,219		1,587

				9,766

Ireland—1.3%
Ryanair Holdings plc—ADR (Airlines)		49,326		1,447

Israel—2.3%
*Check Point Software Technologies, Ltd. (Software)†		20,258		1,152
Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		31,003		1,495

				2,647

Italy—2.1%
Saipem SpA (Energy equipment & services)		46,310		2,391

Spain—1.1%
Banco Santander S.A. (Commercial banks)		103,539		1,195

Sweden—1.7%
Atlas Copco AB (Machinery)		44,390		1,169
*Hexagon AB (Machinery)		33,216		818

				1,987

Switzerland—3.9%
*ABB, Ltd. (Electrical equipment)		55,902		1,450
*Julius Baer Group, Ltd. (Capital markets)		24,386		1,007
*Syngenta AG (Chemicals)		4,745		1,602
Xstrata plc (Metals & mining)		17,501		385

				4,444


Issuer	Shares		Value

*Common Stocks—(continued)*
*United Kingdom—21.7%*
Amlin plc (Insurance)		88,205	$	575
*Autonomy Corporation plc (Software)		42,462		1,163
Barclays plc (Commercial banks)		205,396		845
BG Group plc (Oil, gas & consumable fuels)		91,174		2,069
British Sky Broadcasting Group plc (Media)		87,940		1,195
Burberry Group plc (Textiles, apparel & luxury goods)		67,920		1,581
Centrica plc (Multi-utilities)		272,242		1,413
Compass Group plc (Hotels, restaurants & leisure)		116,001		1,119
Experian plc (Professional services)		95,552		1,217
HSBC Holdings plc (Commercial banks)		128,903		1,276
Johnson Matthey plc (Chemicals)		35,413		1,117
Pearson plc (Media)		61,473		1,160
Petrofac, Ltd. (Energy equipment & services)		55,697		1,353
Prudential plc (Insurance)		195,579		2,260
*Rolls-Royce Holdings plc (Aerospace & defense)		166,753		1,726
Rotork plc (Machinery)		17,653		478
Scottish & Southern Energy plc (Electric utilities)		51,192		1,145
Standard Chartered plc (Commercial banks)		56,163		1,476
Tullow Oil plc (Oil, gas & consumable fuels)		67,166		1,337

				24,505

*Canada—12.5%*
Agrium, Inc. (Chemicals)†		12,029		1,056
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		51,025		1,692
Canadian National Railway Co. (Road & rail)†		28,885		2,308
Goldcorp, Inc. (Metals & mining)†		30,920		1,493
National Bank of Canada (Commercial banks)		17,138		1,390
Potash Corporation of Saskatchewan, Inc. (Chemicals)†		12,780		728
Saputo, Inc. (Food products)		20,285		978
The Toronto-Dominion Bank (Commercial banks)		26,958		2,286
Thomson Reuters Corporation (Media)		23,068		866
Tim Hortons, Inc. (Hotels, restaurants & leisure)		28,715		1,402

				14,199

*Japan—12.4%*
Chiyoda Corporation (Construction & engineering)		57,000		654
Fanuc, Ltd. (Machinery)		9,800		1,629
Keyence Corporation (Electronic equipment, instruments & components)		5,500		1,554
Komatsu, Ltd. (Machinery)		53,200		1,650
Mitsubishi Corporation (Trading companies & distributors)		65,700		1,632
Mitsubishi Electric Corporation (Electrical equipment)		94,000		1,086
Mitsubishi UFJ Financial Group, Inc. (Commercial banks)		355,700		1,723
Nitori Co., Ltd. (Specialty retail)		6,450		611
Nitto Denko Corporation (Chemicals)		17,000		858
Softbank Corporation (Wireless telecommunication services)		50,000		1,882
Sony Financial Holdings, Inc. (Insurance)		44,900		808

				14,087

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 45

International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—(continued)*
*Emerging Asia—10.1%*
China—3.0%
China Overseas Land & Investment, Ltd. (Real estate management & development)		416,000	$	891
China Shenhua Energy Co., Ltd. (Oil, gas & consumable fuels)		225,000		1,073
CNOOC, Ltd. (Oil, gas & consumable fuels)		596,000		1,391

				3,355

India—1.4%
Infosys Technologies, Ltd. (IT services)		23,688		1,542

Indonesia—0.8%
PT Bank Rakyat Indonesia (Commercial banks)		1,194,000		905

South Korea—4.0%
Hyundai Motor Co. (Automobiles)		7,639		1,696
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		1,772		1,371
Samsung Engineering Co., Ltd. (Construction & engineering)		5,940		1,419

				4,486

Taiwan—0.9%
HTC Corporation (Communications equipment)		29,000		975

*Emerging Latin America—3.6%*
Brazil—1.9%
BM&F BOVESPA S.A. (Diversified financial services)		28,700		190
Embraer S.A.—ADR (Aerospace & defense)		27,578		849
Petroleo Brasileiro S.A.—ADR (Oil, gas & consumable fuels)		26,510		898
Weg S.A. (Machinery)		18,500		211

				2,148

Mexico—1.1%
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		435,400		1,292

Panama—0.6%
Copa Holdings S.A. Class “A” (Airlines)†		9,984		666

*Asia—2.2%*
Australia—1.5%
BHP Billiton, Ltd.—ADR (Metals & mining)		18,225		1,725

Hong Kong—0.7%
Noble Group, Ltd. (Trading companies & distributors)		528,727		848

*Emerging Europe, Mid-East, Africa—0.9%*
South Africa—0.9%
Sasol, Ltd. (Oil, gas & consumable fuels)		18,803		990

Total Common Stocks—95.8% (cost $88,430)				108,409


Issuer	Shares or Principal Amount		Value

*Preferred Stock*
Brazil—1.2%
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		85,493	$	1,299

Total Preferred Stock—1.2% (cost $1,180)				1,299


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $6,708, collateralized by FHLMC, 2.000%, due 12/03/15	$	6,708		6,708

Total Repurchase Agreement—5.9% (cost $6,708)				6,708

Total Investments—102.9% (cost $96,318)				116,416
Liabilities, plus cash and other assets—(2.9)%				(3,277	)

Net assets—100.0%			$	113,139

ADR = American Depository Receipt

*Non-income producing securities

† = U.S. listed foreign security

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Industrials			22.0%
Financials			21.7%
Energy			11.7%
Consumer Discretionary			9.9%
Information Technology			9.3%
Materials			9.2%
Health Care			6.7%
Consumer Staples			5.5%
Utilities			2.3%
Telecommunication Services			1.7%

Total			100.0%

See accompanying Notes to Financial Statements.

46 Semi-Annual Report

June 30, 2011

International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


Euro			22.2%
British Pound Sterling			21.5%
U.S. Dollar			14.1%
Japanese Yen			12.8%
Canadian Dollar			6.3%
Hong Kong Dollar			4.2%
South Korean Won			4.1%
Swiss Franc			3.7%
Swedish Krona			1.8%
Danish Krone			1.7%
Brazilian Real			1.6%
Indian Rupee			1.4%
Mexican Peso			1.2%
All Other Currencies			3.4%

Total			100.0%

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 47

LOGO

Jeffrey A. Urbina

INTERNATIONAL SMALL CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The International Small Cap Growth Fund increased 5.43% (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI All Country World Ex-U.S. Small Cap Index (net), gained 1.51%.

Year to date performance was augmented by strong Discretionary, Industrials, Information Technology (IT) and Materials performance. Japanese Discretionary holdings performed particularly well, with social media and retailers rallying strongly. Auto-related and luxury holdings also performed well on strong operational results and IPO activity within the luxury arena. Industrials stock selection was bolstered by strong testing, defense and transportation performance. IT stock selection was strong across regions, with particular value added in Japan, as the Fund’s IT stocks were up over 50%, compared to the -2.46% Index return. U.K. and Emerging Asian stock selection was strong within Materials during the first half of the year. Somewhat detracting from year to date results was Pacific Ex-Japan performance, coupled with underperformance by the Fund’s European Financials holdings.

The Fund maintained its significant focus on Consumer Discretionary holdings during the six month period, averaging 25% invested across auto-related companies, luxury and specialty retailers, and approximately 40% of the sector weighting invested directly in emerging markets. IT was also significantly overweighted at approximately 17% on average during the period, due to a focus on suppliers to smartphone and tablet manufacturers, social networking and business services companies. Healthcare was another area of focus versus the market, while Financials and Materials were significantly underweighted throughout the period: Financials due to the lower Japan and European banking exposure and Materials due to a lack of mining opportunities. Portfolio positioning did not change substantially at a regional level, with emerging markets averaging 26% over the period, above the market weighting. The U.K. at 20% was significantly overweighted due largely to U.K. Industrials holdings, while Pacific Ex-Japan had minimal exposure throughout the period.

48 Semi-Annual Report

June 30, 2011

International Small Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		5.43	%		35.85	%		2.71	%		4.72	%		7.74	%
Class I		5.69			36.41			3.11			5.08			8.09
MSCI AC World Ex-U.S. Small Cap Index (net)		1.51			34.24			5.56			5.92			8.57

(a)

For the period from November 1, 2005 (Commencement of Operations) to June 30, 2011.

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

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

Sector Diversification (unaudited)

LOGO

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

June 30, 2011

William Blair Funds 49

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe—24.6%*
Finland—1.3%
Nokian Renkaat Oyj (Auto components)		202,154	$	10,143

Germany—6.3%
Aixtron AG (Semiconductors & semiconductor equipment)		395,468		13,494
Gerry Weber International AG (Textiles, apparel & luxury goods)		75,381		4,949
MTU Aero Engines Holding AG (Aerospace & defense)		190,585		15,223
Wincor Nixdorf AG (Computers & peripherals)		144,441		10,439
Wirecard AG (IT services)		262,235		4,687

				48,792

Ireland—1.9%
Paddy Power plc (Hotels, restaurants & leisure)		269,904		14,674

Italy—3.6%
De’Longhi SpA (Household durables)		288,832		3,365
DiaSorin SpA (Health care equipment & supplies)		145,433		6,981
*Salvatore Ferragamo Italia SpA		380,979		5,691
Tod’s SpA (Textiles, apparel & luxury goods)		85,472		11,434

				27,471

Luxembourg—0.9%
*L’Occitane International S.A. (Specialty retail)		2,733,000		7,305

Netherlands—1.1%
BinckBank N.V. (Capital markets)		142,650		1,956
Gemalto N.V. (Computers & peripherals)		139,461		6,669

				8,625

Norway—0.2%
Opera Software ASA (Internet software & services)		187,687		1,179

Spain—2.7%
Prosegur Cia de Seguridad S.A. (Commercial services & supplies)		120,842		6,426
*Viscofan S.A. (Food products)		362,597		14,434

				20,860

Sweden—3.6%
Elekta AB (Health care equipment & supplies)		197,373		9,349
JM AB (Household durables)		409,940		9,673
Mekonomen AB (Specialty retail)		78,944		2,733
NIBE Industrier AB (Building products)		322,100		5,576

				27,331

Switzerland—3.0%
*Meyer Burger Technology AG (Machinery)		168,546		7,447
*Orascom Development Holding AG (Hotels, restaurants & leisure)		11,402		376
Partners Group Holding AG (Capital markets)		85,024		15,048

				22,871


Issuer	Shares		Value

*Common Stocks—(continued)*

*United Kingdom—19.8%*
Abcam plc (Biotechnology)		1,010,249	$	6,757
Aveva Group plc (Software)		274,468		7,546
Babcock International Group plc (Commercial services & supplies)		1,505,734		17,206
*Blinkx plc (Internet software & services)		1,381,166		2,660
*Carphone Warehouse Group plc (Specialty retail)		874,590		5,938
Dunelm Group plc (Specialty retail)		474,514		2,963
*EnQuest plc (Oil, gas & consumable fuels)		1,883,379		3,718
Fenner plc (Machinery)		785,623		5,062
Fidessa Group plc (Software)		103,193		3,208
Halma plc (Electronic equipment, instruments & components)		561,801		3,736
Hargreaves Lansdown plc (Capital markets)		489,823		4,776
Hikma Pharmaceuticals plc (Pharmaceuticals)		303,744		3,705
IG Group Holdings plc (Diversified financial services)		427,893		2,997
*Imagination Technologies Group plc (Computers & peripherals)		543,044		3,287
Intertek Group plc (Professional services)		131,284		4,157
Lancashire Holdings, Ltd. (Insurance)		1,147,411		12,016
Meggitt plc (Aerospace & defense)		1,091,027		6,680
Michael Page International plc (Professional services)		440,010		3,778
Moneysupermarket.com Group plc (Internet software & services)		2,199,545		3,590
*Ocado Group plc (Internet & catalog retail)		382,267		1,118
Restaurant Group plc (Hotels, restaurants & leisure)		716,015		3,379
*Salamander Energy plc (Oil, gas & consumable fuels)		172,514		777
Serco Group plc (Commercial services & supplies)		797,509		7,072
Spirax-Sarco Engineering plc (Machinery)		294,154		9,447
*Sports Direct International plc (Specialty retail)		1,052,913		3,993
St James’s Place plc (Insurance)		996,070		5,435
*Telecity Group plc (Internet software & services)		434,970		3,868
Ultra Electronics Holdings plc (Aerospace & defense)		281,141		7,743
Victrex plc (Chemicals)		238,318		5,737

				152,349


*Emerging Asia—17.5%*

China—8.8%
AAC Technologies Holdings, Inc. (Communications equipment)		3,409,559		7,939
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		4,434,429		9,186
China Shanshui Cement Group, Ltd. (Construction materials)		4,109,000		4,747
Comba Telecom Systems Holdings, Ltd. (Communications equipment)		2,717,526		2,864
Great Wall Motor Co., Ltd. (Automobiles)		4,394,250		7,228
Haitian International Holdings, Ltd. (Machinery)		6,451,496		8,357
Hengdeli Holdings, Ltd. (Specialty retail)		13,632,000		7,200

See accompanying Notes to Financial Statements.

50 Semi-Annual Report

June 30, 2011

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—17.5%—(continued)*
China—(continued)
*Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		217,113	$	2,024
Lonking Holdings, Ltd. (Machinery)		15,078,000		8,235
Minth Group, Ltd. (Auto components)		3,241,384		5,240
*Noah Holdings, Ltd.—ADR (Capital markets)		106,979		1,202
*Simcere Pharmaceutical Group—ADR (Pharmaceuticals)		82,832		809
*WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		153,713		2,699

				67,730

India—2.6%
eClerx Services, Ltd. (Professional services)		257,570		4,864
Ipca Laboratories, Ltd. (Pharmaceuticals)		565,748		4,357
*Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		253,570		5,406
Motherson Sumi Systems, Ltd. (Auto components)		752,786		3,797
Oberoi Realty, Ltd. (Real estate management & development)		294,587		1,583

				20,007

Indonesia—2.7%
PT Harum Energy Tbk (Oil, gas & consumable fuels)		6,983,000		7,777
PT Indofood CBP Sukses Makmur Tbk (Food products)		4,792,000		3,017
PT Kalbe Farma Tbk (Pharmaceuticals)		15,742,500		6,196
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk (Food products)		14,399,500		3,904

				20,894

South Korea—0.5%
Daum Communications Corporation (Internet software & services)		39,833		4,141

Taiwan—2.5%
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		1,690,000		5,672
Simplo Technology Co., Ltd. (Computers & peripherals)		375,000		3,022
Tripod Technology Corporation (Electronic equipment, instruments & components)		313,000		1,297
TSRC Corporation (Chemicals)		2,224,000		6,542
TXC Corporation (Electronic equipment, instruments & components)		1,362,269		2,381

				18,914

Thailand—0.4%
Bangkok Dusit Medical Services PCL (Health care providers & services)		1,588,700		2,728

*Japan—15.7%*
Ain Pharmaciez, Inc. (Food & staples retailing)		119,900		4,915
Asics Corporation (Textiles, apparel & luxury goods)		384,000		5,709
CyberAgent, Inc. (Media)		2,802		9,777


Issuer	Shares		Value

*Common Stocks—Japan—15.7% —(continued)*
Japan—(continued)
Dr Ci:Labo Co., Ltd. (Personal products)		1,011	$	5,161
Exedy Corporation (Auto components)		496,800		16,970
F.C.C. Co., Ltd. (Auto components)		346,509		8,290
Gree, Inc. (Internet software & services)		723,430		15,735
K’s Holdings Corporation (Specialty retail)		206,500		8,914
Kakaku.com, Inc. (Internet software & services)		780		5,474
Miraca Holdings, Inc. (Health care providers & services)		398,600		16,116
Nabtesco Corporation (Machinery)		173,000		4,165
Nitori Co., Ltd. (Specialty retail)		59,950		5,682
Osaka Securities Exchange Co., Ltd. (Diversified financial services)		585		2,605
Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		83,800		8,817
United Arrows, Ltd. (Specialty retail)		101,100		2,135

				120,465

*Emerging Europe, Mid-East, Africa—5.5%*
Poland—0.5%
* Lubelski Wegiel Bogdanka S.A. (Oil, gas & consumable fuels)		84,808		3,553

Russia—0.3%
* Etalon Group Ltd.—144A—GDR (Real estate management & development)†		366,337		2,524

South Africa—3.2%
Capitec Bank Holdings, Ltd. (Commercial banks)		135,119		3,617
Clicks Group, Ltd. (Multiline retail)		1,606,486		10,038
Coronation Fund Managers, Ltd. (Capital markets)		941,647		2,687
Mr Price Group, Ltd. (Specialty retail)		791,515		7,983

				24,325

Turkey—1.1%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		992,081		4,523
Turkiye Sinai Kalkinma Bankasi A.S. (Commercial banks)		2,300,672		3,686

				8,209

United Arab Emirates—0.4%
Aramex Co. (Air freight & logistics)		7,033,580		3,370

*Canada—4.9%*
Canadian Western Bank (Commercial banks)		381,300		12,177
Dollarama, Inc. (Multiline retail)		61,408		2,080
Home Capital Group, Inc. (Thrifts & mortgage finance)		94,036		5,046
* Legacy Oil + Gas, Inc. (Oil, gas & consumable fuels)		360,301		4,375
Petrominerales, Ltd. (Oil, gas & consumable fuels)		240,600		7,062
Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		293,282		6,538

				37,278

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 51

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*

*Emerging Latin America—4.6%*
Brazil—3.1%
*Arezzo Industria e Comercio S.A. (Textiles, apparel & luxury goods)		246,596	$	3,453
CETIP S.A. - Balcao Organizado de Ativos e Derivativos (Capital markets)		333,400		5,159
Drogasil S.A. (Food & staples retailing)		423,500		2,890
OdontoPrev S.A. (Health care providers & services)		362,500		6,039
Restoque Comercio e Confeccoes de Roupas S.A. (Textiles, apparel & luxury goods)		201,200		2,578
*T4F Entretenimento S.A. (Media)		146,500		1,319
Tegma Gestao Logistica S.A. (Road & rail)		147,300		2,383

				23,821

Chile—0.5%
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		14,325,161		3,893

Mexico—1.0%
Compartamos S.A.B. de C.V. (Consumer finance)		665,828		1,208
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		1,830,020		4,658
Grupo Comercial Chedraui S.A. de C.V. (Food & staples retailing)		626,187		1,965

				7,831


*Asia—3.2%*
Australia—1.4%
Cochlear, Ltd. (Health care equipment & supplies)		68,660		5,302
Iress Market Technology, Ltd. (IT services)		547,781		5,294

				10,596

Hong Kong—1.6%
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		6,073,000		9,037
Value Partners Group, Ltd. (Capital markets)		3,943,000		3,375

				12,412

Singapore—0.2%
Goodpack, Ltd. (Air freight & logistics)		1,228,000		1,829

Total Common Stocks—95.8% (cost $619,128)				736,120


*Rights*
Brazil—0.0%
*CETIP S.A. - Balcao Organizado de Ativos e Derivativos (Capital markets)		2,455		37

Total Rights—0.0% (cost $34)				37


Issuer	Shares or Principal Amount		Value



*Convertible Bond*
Brazil—0.1%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§	$	959	$	632

Total Convertible Bond—0.1% (cost $497)				632


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $21,114, collateralized by FHLMC, 2.000%, due 12/3/15		21,114		21,114

Total Repurchase Agreement—2.7% (cost $21,114)				21,114

Total Investments—98.6% (cost $640,773)				757,903
Cash and other assets, less liabilities—1.4%				10,696

Net assets—100.0%			$	768,599

*Non-income producing securities

ADR = American Depository Receipt

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.08% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.08% of the net assets at June 30, 2011.

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Consumer Discretionary			28.2%
Industrials			17.6%
Information Technology			16.3%
Health Care			12.0%
Financials			11.9%
Consumer Staples			5.9%
Energy			4.6%
Materials			2.3%
Telecommunication Services			1.2%

Total			100.0%

See accompanying Notes to Financial Statements.

52 Semi-Annual Report

June 30, 2011

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


British Pound Sterling			20.7%
Euro			17.7%
Japanese Yen			16.3%
Hong Kong Dollar			11.0%
Canadian Dollar			5.1%
Swedish Krona			3.7%
Brazilian Real			3.3%
South African Rand			3.3%
Swiss Franc			3.1%
Indonesian Rupiah			2.8%
Indian Rupee			2.7%
New Taiwan Dollar			2.6%
Australian Dollar			1.4%
U.S. Dollar			1.3%
Turkish Lira			1.1%
Mexican Peso			1.1%
All Other Currencies			2.8%

Total			100.0%

June 30, 2011

William Blair Funds 53

LOGO

Todd M. McClone

LOGO

Jeffrey A. Urbina

EMERGING MARKETS GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Emerging Markets Growth Fund posted a 0.70% decrease (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI Emerging Markets IMI Index (net), increased 0.32%.

Despite strong second quarter results, the Fund slightly trailed the Index year to date, due to underperformance in January and February. In particular, the Fund’s lack of Russian energy holdings detracted approximately 0.50% from relative results year to date, while a focus on higher growth exploration companies also detracted from results, as lower growth integrated oils outperformed. Moreover, Pacific Rubiales Energy Corp., the Colombian oil and gas company, lagged on production delays. In addition, the Fund’s investment in Commercial International Bank in Egypt detracted from results as the government was overthrown, along with Turkish Banks, which underperformed the broader market on monetary policy tightening. Somewhat offsetting these effects was the Fund’s weighting and stock selection in Consumer Discretionary, on auto-related and retail strength, coupled with strong Emerging Asian Financial performance on positive commercial bank, real estate and insurance stock selection. Information Technology (IT) and Materials also outperformed on strong performance by Baidu, Inc., the Chinese web search company, on good results and a positive outlook, coupled with a focus on chemicals.

Over the six month period, the Fund maintained its significant exposure to Consumer stocks, well ahead of the Index weighting, due largely to auto-related exposure and a higher Consumer Staples weighting. Conversely, the Energy and Materials sectors were significantly underweighted as the Fund had lower exposure in mining shares as well as Energy exploration and production companies. Financials were also underweighted during the period, given the increasing interest rate environment amidst inflationary concerns, and the impact on net interest margins and profitability. Information Technology increased during the period from approximately 11% to 17% as corporate fundamentals improved, given increased smart phone and tablet demand and a positive product cycle. Regionally, the Fund had a higher exposure than the Index in Latin America holdings, due largely to Brazil, at the expense of Emerging Europe, Middle East, and Africa, where there was no exposure in Resources and limited Russian and Eastern European holdings. Emerging Asia, while underweighted during the entire period, increased as the Fund invested in additional Korean companies on improving outlooks, Taiwanese tech on improving demand, and incrementally in China as its central bank moved further along in the tightening cycle.

54 Semi-Annual Report

June 30, 2011

Emerging Markets Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Class N		(0.70	)%		28.05	%		(1.15	)%		7.92	%		13.95	%
Class I		(0.57	)		28.32			(0.92	)		8.17			14.22
MSCI Emerging Markets IMI (net)		0.32			27.53			5.13			11.90			15.43

(a)

For the period from June 6, 2005 (Commencement of Operations) to June 30, 2011.

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

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

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

Sector Diversification (unaudited)

LOGO

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

June 30, 2011

William Blair Funds 55

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—57.3%*
China—15.5%
AAC Technologies Holdings, Inc. (Communications equipment)		1,205,949	$	2,808
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		1,500,078		3,107
Anhui Conch Cement Co., Ltd. (Construction materials)		2,124,500		9,938
Anta Sports Products, Ltd. (Textiles, apparel & luxury goods)		1,306,000		2,333
*Baidu, Inc.—ADR (Internet software & services)		106,759		14,960
Belle International Holdings, Ltd. (Specialty retail)		4,757,000		10,025
China Shanshui Cement Group, Ltd. (Construction materials)		1,909,000		2,205
China Vanke Co., Ltd. (Real estate management & development)		5,594,249		7,534
China Yurun Food Group, Ltd. (Food products)		1,232,000		3,467
CNOOC, Ltd. (Oil, gas & consumable fuels)		7,413,000		17,300
Comba Telecom Systems Holdings, Ltd. (Communications equipment)		2,084,496		2,197
Dongfeng Motor Group Co., Ltd. (Automobiles)		5,748,000		10,858
Great Wall Motor Co., Ltd. (Automobiles)		1,620,500		2,666
Haitian International Holdings, Ltd. (Machinery)		1,460,185		1,891
Hengdeli Holdings, Ltd. (Specialty retail)		5,724,000		3,023
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		22,936,580		17,420
Lonking Holdings, Ltd. (Machinery)		5,675,000		3,099
Minth Group, Ltd. (Auto components)		724,000		1,170
Tencent Holdings, Ltd. (Internet software & services)		166,600		4,522
Want Want China Holdings, Ltd. (Food products)		4,894,000		4,748
Weichai Power Co., Ltd. (Machinery)		578,088		3,373
*WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		96,496		1,695
*Youku.com, Inc.—ADR (Internet software & services)		102,085		3,507
Zhuzhou CSR Times Electric Co., Ltd. (Electrical equipment)		658,861		2,223

				136,069

India—9.4%
Asian Paints, Ltd. (Chemicals)		70,630		5,033
Axis Bank, Ltd. (Commercial banks)		222,205		6,410
Bajaj Auto, Ltd. (Automobiles)		116,007		3,652
Bharat Heavy Electricals, Ltd. (Electrical equipment)		148,377		6,806
Dabur India, Ltd. (Personal products)		867,230		2,212
Housing Development Finance Corporation (Thrifts & mortgage finance)		272,951		4,313
IndusInd Bank, Ltd. (Commercial banks)		346,602		2,109
Infosys Technologies, Ltd. (IT services)		310,940		20,244
ITC, Ltd. (Tobacco)		1,602,902		7,277
*Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		157,714		3,362


Issuer	Shares		Value

*Common Stocks— Emerging Asia—57.3%—(continued)*
India—9.4%—(continued)
Lupin, Ltd. (Pharmaceuticals)		301,509	$	3,030
Motherson Sumi Systems, Ltd. (Auto components)		467,205		2,356
Nestle India, Ltd. (Food products)		59,028		5,425
Shriram Transport Finance Co., Ltd. (Consumer finance)		92,800		1,280
Tata Consultancy Services, Ltd. (IT services)		191,892		5,083
Tata Motors, Ltd. (Machinery)		191,020		4,248

				82,840

Indonesia—6.2%
PT Astra International Tbk (Automobiles)		2,169,000		16,074
PT Bank Rakyat Indonesia (Commercial banks)		13,474,500		10,213
PT Indo Tambangraya Megah (Oil, gas & consumable fuels)		1,376,500		7,183
PT Indofood Sukses Makmur Tbk (Food products)		6,788,000		4,551
PT Kalbe Farma Tbk (Pharmaceuticals)		8,234,500		3,241
PT Perusahaan Gas Negara (Gas utilities)		9,405,500		4,415
PT Unilever Indonesia Tbk (Household products)		2,572,000		4,469
PT United Tractors Tbk (Machinery)		967,257		2,808
PT XL Axiata Tbk (Diversified telecommunication services)		2,409,500		1,728

				54,682

Malaysia—3.5%
Axiata Group Bhd (Wireless telecommunication services)		5,319,900		8,827
CIMB Group Holdings Bhd (Commercial banks)		4,764,300		14,090
Genting Bhd (Hotels, restaurants & leisure)		1,154,300		4,289
Kuala Lumpur Kepong Bhd (Food products)		450,800		3,309

				30,515

Papua New Guinea—1.2%
Oil Search, Ltd. (Oil, gas & consumable fuels)		1,479,460		10,552

Philippines—0.2%
Alliance Global Group, Inc. (Industrial conglomerates)		8,233,100		2,078

South Korea—11.2%
Honam Petrochemical Corporation (Chemicals)		12,098		4,482
Hyundai Mobis (Auto components)		45,849		17,178
Hyundai Motor Co. (Automobiles)		79,477		17,642
LG Household & Health Care, Ltd. (Household products)		19,445		8,360
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		33,315		25,775
Samsung Engineering Co., Ltd. (Construction & engineering)		64,433		15,389
Samsung Fire & Marine Insurance Co., Ltd. (Insurance)		31,780		7,382
Samsung Heavy Industries Co., Ltd. (Machinery)		54,491		2,429

				98,637

See accompanying Notes to Financial Statements.

56 Semi-Annual Report

June 30, 2011

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks— Emerging Asia—57.3%—(continued)*
Taiwan—7.8%
Hon Hai Precision Industry Co., Ltd. (Electronic equipment, instruments & components)		5,860,992	$	20,099
HTC Corporation (Communications equipment)		580,000		19,506
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		1,080,000		3,625
Simplo Technology Co., Ltd. (Computers & peripherals)		793,000		6,391
*TPK Holding Co., Ltd. (Electronic equipment, instruments & components)		241,000		7,341
Tripod Technology Corporation (Electronic equipment, instruments & components)		190,000		787
TSRC Corporation (Chemicals)		1,324,000		3,895
Yuanta Financial Holding Co., Ltd. (Capital markets)		9,877,000		6,843

				68,487

Thailand—2.3%
CP ALL PCL (Food & staples retailing)		7,411,100		10,673
Kasikornbank PCL (Commercial banks)		2,192,700		8,921
Minor International PCL (Hotels, restaurants & leisure)		1,966,700		730

				20,324


*Emerging Latin America—24.1%*
Brazil—13.7%
BR Malls Participacoes S.A. (Real estate management & development)		602,300		6,889
BR Properties S.A. (Real estate management & development)		187,345		2,101
CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		299,600		4,636
Cia de Bebidas das Americas—ADR (Beverages)		811,836		27,383
Cia de Concessoes Rodoviarias (Transportation infrastructure)		229,300		6,825
Cia Hering (Specialty retail)		234,400		5,392
CPFL Energia S.A.—ADR (Electric utilities)		101,881		8,853
Drogasil S.A. (Food & staples retailing)		261,600		1,785
Embraer S.A.—ADR (Aerospace & defense)		311,752		9,596
Lojas Renner S.A. (Multiline retail)		201,300		7,675
Natura Cosmeticos S.A. (Personal products)		29,100		727
OdontoPrev S.A. (Health care providers & services)		142,900		2,381
*OGX Petroleo e Gas Participacoes S.A. (Oil, gas & consumable fuels)		410,900		3,841
Sul America S.A. (Insurance)		197,257		2,477
Totvs S.A. (Software)		198,000		3,654
Tractebel Energia S.A. (Independent power producers & energy traders)		565,300		9,961
Vale S.A.—ADR (Metals & mining)		500,156		15,980

				120,156

Chile—2.8%
Banco Santander Chile—ADR (Commercial banks)		154,427		14,487
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		8,816,489		2,396
Sociedad Quimica y Minera de Chile S.A.—ADR (Chemicals)		71,213		4,609


Issuer	Shares		Value

*Common Stocks— Emerging Latin America—24.1%—(continued)*
Chile—2.8%—(continued)
Sonda S.A. (IT services)		1,079,025	$	2,976

				24,468

Colombia—0.6%
Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		215,522		5,777

Mexico—6.5%
America Movil S.A.B. de C.V. (Wireless telecommunication services)		16,570,500		22,347
Coca-Cola Femsa S.A.B. de C.V.—ADR (Beverages)		65,200		6,064
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		1,266,134		3,222
Grupo Comercial Chedraui S.A. de C.V. (Food & staples retailing)		360,966		1,133
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		1,763,228		5,822
Mexichem S.A.B. de C.V. (Chemicals)		398,400		1,614
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		5,621,700		16,685

				56,887

Peru—0.5%
Credicorp, Ltd. (Commercial banks)†		49,504		4,262


*Emerging Europe, Mid-East, Africa—14.2%*
Poland—0.4%
Eurocash S.A. (Food & staples retailing)		388,230		4,176

Qatar—1.7%
Industries Qatar QSC (Industrial conglomerates)		229,427		8,581
Qatar National Bank S.A.Q. (Commercial banks)		162,184		6,280

				14,861

Russia—1.9%
*Etalon Group Ltd.—144A—GDR (Real estate management & development)		328,708		2,265
Magnit OAO (Food & staples retailing)†		73,220		9,858
*X5 Retail Group N.V.—GDR (Food & staples retailing)		113,593		4,441

				16,564

South Africa—8.9%
Clicks Group, Ltd. (Multiline retail)		956,170		5,974
Life Healthcare Group Holdings, Ltd. (Health care providers & services)		1,256,331		3,268
Mr Price Group, Ltd. (Specialty retail)		466,397		4,704
MTN Group, Ltd. (Wireless telecommunication services)		915,239		19,478
Naspers, Ltd. (Media)		118,109		6,672
Sasol, Ltd. (Oil, gas & consumable fuels)		293,110		15,431
Shoprite Holdings, Ltd. (Food & staples retailing)		348,941		5,253
Standard Bank Group, Ltd. (Commercial banks)		451,232		6,671
*The Foschini Group, Ltd. (Specialty retail)		353,142		4,607

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 57

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares or Principal Amount		Value

Common Stocks— Emerging Europe, Mid-East, Africa—14.2%—(continued)
South Africa—8.9%—(continued)
Truworths International, Ltd. (Specialty retail)		579,601	$	6,282

				78,340

Turkey—1.3%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		630,894		2,877
Turkiye Halk Bankasi A.S. (Commercial banks)		1,121,029		8,392

				11,269

Total Common Stocks—95.6% (cost $719,150)				840,944


*Preferred Stocks*
Brazil—3.1%
Itau Unibanco Holding S.A. (Commercial banks)		393,254		9,185
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		1,178,615		17,913

				27,098

Total Preferred Stocks—3.1% (cost $26,521)				27,098


*Rights*
Brazil—0.0%
*CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		2,889		43

Total Rights—0.0% (cost $40)				43


*Convertible Bond*
Brazil—0.1%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§	$	1,602		1,055

Total Convertible Bond—0.1% (cost $831)				1,055

Total Investments—98.8% (cost $746,542)				869,140
Cash and other assets, less liabilities—1.2%				10,449

Net assets—100.0%			$	879,589

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.12% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.12% of the net assets at June 30, 2011.

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials			17.7%
Information Technology			16.5%
Consumer Discretionary			16.4%
Consumer Staples			15.2%
Energy			9.0%
Industrials			8.1%
Materials			6.2%
Telecommunication Services			6.0%
Utilities			2.7%
Health Care			2.2%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


U.S. Dollar			14.7%
Hong Kong Dollar			13.3%
South Korean Won			11.4%
Brazilian Real			10.0%
Indian Rupee			9.5%
South African Rand			9.0%
New Taiwan Dollar			7.9%
Indonesian Rupiah			6.3%
Mexican Peso			5.9%
Malaysian Ringgit			3.5%
Thai Baht			2.3%
Qatari Rial			1.7%
Turkish Lira			1.3%
Australian Dollar			1.2%
All Other Currencies			2.0%

Total			100.0%

See accompanying Notes to Financial Statements.

58 Semi-Annual Report

June 30, 2011

LOGO

Todd M. McClone

LOGO

Jeffrey A. Urbina

EMERGING LEADERS GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Emerging Leaders Growth Fund posted a 2.42% decrease (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI Emerging Markets Large Cap Index (net) increased by 0.97%.

Despite second quarter outperformance, the Emerging Leaders Growth Fund trailed the Index year to date, due to underperformance at the outset of 2011. Underperformance was largely driven by Energy and Financials stock selection. Within Energy, the Fund’s lack of Russian Energy exposure during the first quarter was a key detractor, costing approximately 0.65% in relative performance year to date. In addition, production delays by Pacific Rubiales Energy Corporation, one of the top holdings of the Fund, also contributed approximately 0.55% to underperformance during the period. The Fund sold the company in the second quarter on an uncertain production growth outlook. Financials underperformed across regions.

Over the six month period, the Fund maintained significant exposure in Consumer stocks, well ahead of the Index weighting, due largely to auto-related exposure and Consumer Staples weightings, in addition to select specialty retailers, as these companies benefited from increased disposable income as wages increased. Conversely, the Fund was underweighted in Financials, given tightening monetary policy on inflationary concerns and the impact on net interest margins and profitability. During the six month period, we reduced Energy and Materials holdings. The Energy reduction followed the spike in energy prices earlier in the year and as valuations increased, while Materials was reduced largely due to individual company issues, although also resulting from moderating commodity prices. Conversely, Information Technology (IT) increased from approximately 10% as of year end to 16% mid year, as corporate fundamentals improved given increased smart phone and tablet demand and a consumer driven product cycle. Regionally, the Fund remained overweighted in Latin America throughout the six month period, with a lower exposure in Emerging Europe, Middle East, and Africa as there were no Energy and Materials holdings in the region, coupled with lower Eastern European and Russian weightings. Emerging Asia increased during the period due to higher IT weightings.

June 30, 2011

William Blair Funds 59

Emerging Leaders Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			Since Inception
Class N		(2.42	)%		23.12	%		N/A			13.20	%(a)
MSCI Emerging Markets Large Cap Index (net)		0.97			27.87			N/A			14.22	(a)
Class I		(2.42	)		23.19			2.32	%		0.96	(b)
MSCI Emerging Markets Large Cap Index (net)		0.97			27.87			3.41			3.19	(b)

(a)

For the period from May 3, 2010 (Commencement of Operations) to June 30, 2011.

(b)

For the period from March 26, 2008 (Commencement of Operations) to June 30, 2011.

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

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

Sector Diversification (unaudited)

LOGO

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

60 Semi-Annual Report

June 30, 2011

Emerging Leaders Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—55.6%*
China—16.6%
*Baidu, Inc.—ADR (Internet software & services)		21,584	$	3,025
Belle International Holdings, Ltd. (Specialty retail)		921,973		1,943
China Vanke Co., Ltd. (Real estate management & development)		633,771		853
CNOOC, Ltd. (Oil, gas & consumable fuels)		811,000		1,893
Dongfeng Motor Group Co., Ltd. (Automobiles)		1,018,790		1,924
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		2,513,000		1,909
Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		145,609		1,503
Shandong Weigao Group Medical Polymer Co., Ltd. (Health care equipment & supplies)		280,000		404
Tencent Holdings, Ltd. (Internet software & services)		68,905		1,870
Want Want China Holdings, Ltd. (Food products)		1,428,948		1,386

				16,710

India—13.6%
Bajaj Auto, Ltd. (Automobiles)		15,628		492
HDFC Bank, Ltd. (Commercial banks)		26,533		1,493
Housing Development Finance Corporation (Thrifts & mortgage finance)		64,930		1,026
Infosys Technologies, Ltd. (IT services)		28,535		1,858
ITC, Ltd. (Tobacco)		437,650		1,987
Larsen & Toubro, Ltd. (Construction & engineering)		37,647		1,536
Nestle India, Ltd. (Food products)		5,046		463
Sun Pharmaceutical Industries, Ltd. (Pharmaceuticals)		128,025		1,426
Tata Consultancy Services, Ltd. (IT services)		74,018		1,961
Tata Motors, Ltd. (Machinery)		64,514		1,435

				13,677

Indonesia—5.9%
PT Astra International Tbk (Automobiles)		387,500		2,872
PT Bank Rakyat Indonesia (Commercial banks)		2,470,000		1,872
PT Indofood Sukses Makmur Tbk (Food products)		1,707,500		1,145

				5,889

Malaysia—1.9%
CIMB Group Holdings Bhd (Commercial banks)		646,457		1,912

South Korea—11.6%
Hyundai Mobis (Auto components)		7,009		2,626
Hyundai Motor Co. (Automobiles)		12,804		2,842
LG Household & Health Care, Ltd. (Household products)		3,331		1,432
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		3,601		2,786
Samsung Engineering Co., Ltd. (Construction & engineering)		8,192		1,957

				11,643


Issuer	Shares		Value

*Common Stocks— Emerging Asia—55.6%—(continued)*
Taiwan—4.6%
Hon Hai Precision Industry Co., Ltd. (Electronic equipment, instruments & components)		605,000	$	2,075
HTC Corporation (Communications equipment)		76,000		2,556

				4,631

Thailand—1.4%
CP ALL PCL (Food & staples retailing)		959,300		1,381


*Emerging Latin America—22.9%*
Brazil—10.4%
BR Malls Participacoes S.A. (Real estate management & development)		127,800		1,462
Cia de Bebidas das Americas—ADR (Beverages)		95,253		3,213
Cia de Concessoes Rodoviarias (Transportation infrastructure)		32,100		955
CPFL Energia S.A.—ADR (Electric utilities)		11,178		971
Embraer S.A.—ADR (Aerospace & defense)		31,129		958
Natura Cosmeticos S.A. (Personal products)		3,000		75
Tractebel Energia S.A. (Independent power producers & energy traders)		73,600		1,297
Vale S.A.—ADR (Metals & mining)		46,249		1,478

				10,409

Chile—4.1%
Banco Santander Chile—ADR (Commercial banks)		20,583		1,931
S.A.C.I. Falabella (Multiline retail)		115,302		1,214
Sociedad Quimica y Minera de Chile S.A.—ADR (Chemicals)		15,360		994

				4,139

Mexico—7.9%
America Movil S.A.B. de C.V.—ADR (Wireless telecommunication services)		54,908		2,958
Grupo Financiero Banorte S.A.B. de C.V. (Commercial banks)		425,200		1,931
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		329,626		1,088
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		668,500		1,984

				7,961

Peru—0.5%
Credicorp, Ltd. (Commercial banks)†		5,443		469


*Emerging Europe, Mid-East, Africa—15.2%*
Qatar—1.0%
Industries Qatar QSC (Industrial conglomerates)		28,493		1,066

Russia—3.1%
Magnit OJSC—144A—GDR (Food & staples retailing)†		44,538		1,200
Sberbank of Russian Federation (Commercial banks)†		272,972		1,004
*X5 Retail Group N.V.—GDR (Food & staples retailing)		23,074		902

				3,106

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 61

Emerging Leaders Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Europe, Mid-East, Africa—15.2%—(continued)*
South Africa—9.4%
MTN Group, Ltd. (Wireless telecommunication services)		135,628	$	2,886
Naspers, Ltd. (Media)		44,803		2,531
Sasol, Ltd. (Oil, gas & consumable fuels)		29,140		1,534
Shoprite Holdings, Ltd. (Food & staples retailing)		95,140		1,432
Truworths International, Ltd. (Specialty retail)		96,000		1,041

				9,424

Turkey—1.7%
Turkiye Garanti Bankasi A.S. (Commercial banks)		379,052		1,719

Total Common Stocks—93.7% (cost $84,854)				94,136


*Preferred Stocks*
Brazil—4.1%
Itau Unibanco Holding S.A. (Commercial banks)		84,485		1,973
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		141,655		2,153

				4,126

Total Preferred Stocks—4.1% (cost $3,865)				4,126


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $174, collateralized by FHLMC, 2.000%, due 12/3/15	$	174	$	174

Total Repurchase Agreement—0.2% (cost $174)				174

Total Investments—98.0% (cost $88,893)				98,436
Cash and other assets, less liabilities—2.0%				1,966

Net assets—100.0%			$	100,402

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials			21.4%
Consumer Discretionary			17.8%
Consumer Staples			16.9%
Information Technology			16.4%
Industrials			8.1%
Telecommunication Services			5.9%
Energy			5.7%
Materials			3.6%
Utilities			2.3%
Health Care			1.9%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


U.S. Dollar			19.4%
Hong Kong Dollar			13.9%
Indian Rupee			13.9%
South Korean Won			11.9%
South African Rand			9.6%
Brazilian Real			8.1%
Indonesian Rupiah			6.0%
Mexican Peso			5.1%
New Taiwan Dollar			4.7%
Malaysian Ringgit			1.9%
Turkish Lira			1.8%
Thai Baht			1.4%
Chilean Peso			1.2%
Qatari Rial			1.1%

Total			100.0%

See accompanying Notes to Financial Statements.

62 Semi-Annual Report

June 30, 2011

LOGO

Chad M. Kilmer

LOGO

Mark T. Leslie

LOGO

David S. Mitchell

SMALL CAP VALUE FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Small Cap Value Fund posted a 2.19% increase (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell 2000^® Value Index, gained 3.77%.

The Fund outperformed its Russell 2000^® Value benchmark during the second quarter, but finished slightly behind the benchmark for the year-to-date period. After a near-uninterrupted rally since August of last year, US equities stumbled during May and June. Small cap value stocks, as measured by the Russell 2000^® Value Index, corrected over 9% during that period, but rallied in late-June to close the quarter down modestly and to remain in positive territory for the year-to-date period.

The first four months of 2011 witnessed a continuation of the upward trend in stock prices, primarily driven by solid corporate fundamentals and reasonable stock valuations. But 2011 to date has mirrored 2010: a strong start to the year followed by a mid-year correction primarily due to disappointing economic data and European sovereign debt woes. Specifically, the most recent correction came on the heels of heightened Greek sovereign debt concerns, sluggish jobs data in the US, a potential Chinese housing market downturn, the US government debt ceiling negotiations, uncertainty around the end of the Federal Reserve’s quantitative easing (QE2) and a US housing market that remains on life support. While the negatives are plentiful, the market’s ability to produce positive returns for the year is telling. Investors continue to focus on healthy corporate fundamentals and on an economy that is slowly recovering, albeit in fits and starts.

From a sector perspective during the first half of the year, the typically defensive Health Care sector was the standout performer, up 21.94%. Energy was the next strongest sector 11.17% year-to-date, despite its 7% selloff during the second quarter. Utilities also outperformed 9.18%. Financials, the largest weight in the Russell 2000^® Value, was the weakest performer with a –0.16% return. Industrials 1.61%, Information Technology 3.35%, Consumer Discretionary 1.21% and Materials 4.23% performed basically in-line with the small cap value market during the six-month period.

The Small Cap Value Fund’s underperformance for the first half of the year is attributable to stock selection (both stocks we did own and some we did not). Health Care was the sector detracting the most from relative performance, which was entirely the result of not owning the sector’s strongest performers in our benchmark, the Russell 2000^® Value Index. Consumer Discretionary, partly due to Pacific Sunwear, and Financials, partly due to The Hanover Group, also detracted from relative results. On the other hand, positive stock selection in Industrials (e.g., Robbins & Myers, Inc.) and Materials (e.g., RTI International Metals, Inc.) helped buoy relative performance.

For the second quarter specifically, the Fund’s outperformance was the result of positive stock selection. This was most prevalent in Materials (e.g., RTI International Metals, Inc.), Industrials (e.g., Kadant, Inc.) and Consumer Staples (e.g., Spartan Stores, Inc.). Financial sector stock selection detracted modestly in part due to underperformance by The Hanover Group.

June 30, 2011

William Blair Funds 63

forward. We believe investors will continue to differentiate between quality businesses and those that benefitted primarily from the initial economic recovery. Investors already may be making this distinction as stock correlations have fallen from the elevated levels seen over the past few years. This should bode well for our style of investing and for active management generally. In the end, however, while we factor various economic scenarios into our stock picking, we devote our time on constructing the portfolio from a bottom-up perspective. As always, we remain focused on finding quality companies at discount prices and corporate transformation opportunities. We believe building a portfolio with these types of companies should produce solid investment results over the long term.

64 Semi-Annual Report

June 30, 2011

Small Cap Value Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			10 Year
Class N		2.19	%		33.30	%		9.91	%		5.83	%		7.36	%
Class I		2.37			33.63			10.13			6.05			7.59
Russell 2000^® Value		3.77			31.35			7.09			2.24			7.53

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)

LOGO

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

June 30, 2011

William Blair Funds 65

Small Cap Value Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Financials—32.1%
Associated Banc-Corp		122,660	$	1,705
Berkshire Hills Bancorp, Inc.		108,015		2,418
BioMed Realty Trust, Inc.		158,225		3,044
Brandywine Realty Trust		189,150		2,192
CoBiz Financial, Inc.		360,515		2,358
DuPont Fabros Technology, Inc.		122,320		3,082
*Eagle Bancorp, Inc.		200,282		2,664
Education Realty Trust, Inc.		385,255		3,302
Excel Trust, Inc.		250,650		2,765
First Potomac Realty Trust		141,132		2,161
FirstMerit Corporation		195,557		3,229
Hancock Holding Co.		105,955		3,282
Highwoods Properties, Inc.		66,615		2,207
LaSalle Hotel Properties		107,972		2,844
Meadowbrook Insurance Group, Inc.		261,560		2,592
Mid-America Apartment Communities, Inc.		37,410		2,524
*National Financial Partners Corporation		163,980		1,892
National Retail Properties, Inc.		105,610		2,589
Old National Bancorp		255,717		2,762
Platinum Underwriters Holdings, Ltd.†		58,540		1,946
*ProAssurance Corporation		40,460		2,832
Prosperity Bancshares, Inc.		66,015		2,893
*Safeguard Scientifics, Inc.		181,625		3,429
Sandy Spring Bancorp, Inc.		155,390		2,795
*SVB Financial Group		41,830		2,498
The Hanover Insurance Group, Inc.		74,775		2,820
Webster Financial Corporation		126,870		2,667
WSFS Financial Corporation		55,492		2,200

				73,692

Industrials—16.9%
Ameron International Corporation		34,224		2,248
Belden, Inc.		60,045		2,093
Cubic Corporation		46,125		2,352
*EMCOR Group, Inc.		112,261		3,290
ESCO Technologies, Inc.		98,055		3,608
G&K Services, Inc. Class “A”		114,375		3,873
*Hawaiian Holdings, Inc.		323,365		1,843
*Kadant, Inc.		103,189		3,252
Kaydon Corporation		93,070		3,473
L.B. Foster Co. Class “A”		60,045		1,976
Marten Transport, Ltd.		82,035		1,772
Quanex Building Products Corporation		108,490		1,778
Robbins & Myers, Inc.		66,960		3,539
*School Specialty, Inc.		83,795		1,206
TAL International Group, Inc.		75,590		2,610

				38,913

Consumer Discretionary—10.7%
*AFC Enterprises, Inc.		128,486		2,114
Ameristar Casinos, Inc.		102,182		2,423
Chico’s FAS, Inc.		169,475		2,581
*Core-Mark Holding Co., Inc.		45,955		1,641
*Gaylord Entertainment Co.		51,540		1,546
Meredith Corporation		60,815		1,893
PEP Boys-Manny Moe & Jack		255,477		2,792
*Pinnacle Entertainment, Inc.		172,010		2,563
Regis Corporation		94,559		1,449
Ryland Group, Inc.		82,805		1,369
The Jones Group, Inc.		176,820		1,918



Issuer	Shares		Value

*Common Stocks—(continued)*
Consumer Discretionary—(continued)
The Men’s Wearhouse, Inc.		66,470	$	2,240

				24,529

Information Technology—10.2%
ADTRAN, Inc.		63,555		2,460
*Avid Technology, Inc.		148,812		2,804
*Digital River, Inc.		90,965		2,925
Earthlink, Inc.		375,805		2,892
*Integrated Device Technology, Inc.		347,845		2,734
*j2 Global Communications, Inc.		103,505		2,922
*Monolithic Power Systems, Inc.		162,705		2,509
*Parametric Technology Corporation		107,570		2,466
*Ultra Clean Holdings		185,876		1,688

				23,400

Materials—6.4%
Minerals Technologies, Inc.		45,055		2,987
PolyOne Corporation		223,655		3,460
*RTI International Metals, Inc.		79,885		3,065
Sensient Technologies Corporation		66,140		2,452
Silgan Holdings, Inc.		66,315		2,717

				14,681

Utilities—6.1%
Chesapeake Utilities Corporation		59,270		2,373
El Paso Electric Co.		91,620		2,959
Portland General Electric Co.		118,495		2,996
UIL Holdings Corporation		87,185		2,820
WGL Holdings, Inc.		74,300		2,860

				14,008

Energy—6.0%
Berry Petroleum Co. Class “A”		44,794		2,380
*Complete Production Services, Inc.		72,285		2,411
*Forest Oil Corporation		89,128		2,381
*Key Energy Services, Inc.		131,980		2,376
*Magnum Hunter Resources Corporation		366,931		2,480
*Northern Oil and Gas, Inc.		80,923		1,792

				13,820

Health Care—5.9%
*CONMED Corporation		81,345		2,316
*Greatbatch, Inc.		84,780		2,274
Invacare Corporation		82,765		2,747
*Magellan Health Services, Inc.		64,980		3,557
*Mednax, Inc.		35,348		2,552

				13,446

Consumer Staples—2.4%
J&J Snack Foods Corporation		35,817		1,786
Spartan Stores, Inc.		192,025		3,750

				5,536

Total Common Stocks—96.7% (cost $201,516)				222,025

See accompanying Notes to Financial Statements.

66 Semi-Annual Report

June 30, 2011

Small Cap Value Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $5,922, collateralized by FHLMC, 2.000%, due 12/3/15	$	5,922	$	5,922

Total Repurchase Agreement—2.6% (cost $5,922)				5,922

Total Investments—99.3% (cost $207,438)				227,947
Cash and other assets, less liabilities—0.7%				1,496

Net assets—100.0%			$	229,443

*Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 67

LOGO

Chad M. Kilmer

LOGO

Mark T. Leslie

LOGO

David S. Mitchell

MID CAP VALUE FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Mid Cap Value Fund posted a 5.86% increase for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Russell Midcap^® Value Index, gained 6.69%.

The Fund narrowly trailed its Russell Midcap^® Value benchmark during the year-to-date period. After a near-uninterrupted rally since August of last year, U.S. equities stumbled during May and June. Mid cap value stocks, as measured by the Russell Midcap^® Value Index, corrected 7% during that period, but rallied in late-June to close the quarter down modestly and to remain in positive territory for the year-to-date period.

The first four months of 2011 witnessed a continuation of the upward trend in stock prices, primarily driven by solid corporate fundamentals and reasonable stock valuations. But 2011 to date has mirrored 2010: a strong start to the year followed by a mid-year correction primarily due to disappointing economic data and European sovereign debt woes. Specifically, the most recent correction came on the heels of heightened Greek sovereign debt concerns, sluggish jobs data in the U.S., a potential Chinese housing market downturn, the U.S. government debt ceiling negotiations, uncertainty around the end of the Federal Reserve’s quantitative easing (QE2) and a U.S. housing market that remains on life support. While the negatives are plentiful, the market’s ability to produce positive returns for the year is telling. Investors continue to focus on healthy corporate fundamentals and on an economy that is slowly recovering, albeit in fits and starts.

From a sector perspective during the first half of the year, the typically defensive Health Care sector was the standout performer, up 19.43%. Consumer Discretionary (+10.17%), Consumer Staples (+11.80%) and Utilities (+11.47%) also outperformed. Energy modestly outperformed (+8.46%) year-to-date, despite its 7% selloff during the second quarter. Financials, the largest weight in the Russell Midcap^® Value Index, returned only 2.92%, while Information Technology was the weakest performer with a -0.78% return.

The Fund’s modest underperformance for the first half of the year is attributable to stock selection. The Financials sector pulled down relative results with underperformance by Fifth Third Bancorp and The Hanover Insurance Group, Inc. Industrials stock selection also lagged due to Oshkosh Corporation. On the upside, Materials stock selection boosted relative performance with both Carpenter Technology Corporation and Lubrizol Corporation outperforming.

For the second quarter specifically, the Fund’s narrow underperformance was the result of somewhat offsetting stock selection dynamics across sectors. Specifically, we had positive stock selection in Materials (e.g., Carpenter Technology Corporation) and Health Care (e.g., Hill-Rom Holdings, Inc.). Information Technology stock selection was also positive as we did not own some of the sector’s biggest underperformers during the quarter. However, Energy (e.g., Forest Oil Corporation) and Financials (e.g., The Hanover Group) stock selection pulled our relative return into the red.

The second quarter correction has kept the broad equity market valuation in check while corporate fundamentals continue to improve. Because of this and despite the macroeconomic and geopolitical headwinds, we believe the market remains relatively balanced looking forward. We believe investors will continue to differentiate between quality businesses and those that benefitted primarily from the initial economic recovery. Investors already may be making this distinction as stock correlations have fallen from the elevated levels seen over the

68 Semi-Annual Report

June 30, 2011

past few years. This should bode well for our style of investing and for active management generally. In the end, however, while we factor various economic scenarios into our stock picking, we devote our time on constructing the portfolio from a bottom-up perspective. As always, we remain focused on finding quality companies at discount prices and corporate transformation opportunities. We believe building a portfolio with these types of companies should produce solid investment results over the long term.

June 30, 2011

William Blair Funds 69

Mid Cap Value Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Yr			Since Inception(a)
Class N		5.86	%		32.15	%		12.47	%
Class I		5.86			32.36			12.74
Russell Midcap^® Value Index		6.69			34.28			12.17

(a)

For the period May 3, 2010 (Commencement of Operations) to June 30, 2011.

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

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

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

Sector Diversification (unaudited)

LOGO

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

70 Semi-Annual Report

June 30, 2011

Mid Cap Value Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*
Financials—28.1%
Alexandria Real Estate Equities, Inc.		715	$	55
Allied World Assurance Co. Holdings, Ltd.†		960		55
Ameriprise Financial, Inc.		1,425		82
Apartment Investment & Management Co.		2,150		55
Brandywine Realty Trust		5,075		59
Discover Financial Services		3,605		97
Fifth Third Bancorp		7,615		97
*Forest City Enterprises, Inc. Class “A”		3,395		64
Hancock Holding Co.		1,915		59
Host Hotels & Resorts, Inc.		3,000		51
New York Community Bancorp, Inc.		3,210		48
PartnerRe, Ltd.†		595		41
People’s United Financial, Inc.		5,880		79
Realty Income Corporation		1,560		52
SL Green Realty Corporation		690		57
The Hanover Insurance Group, Inc.		1,400		53
Unum Group		2,600		66
Validus Holdings, Ltd.†		1,640		51
Ventas, Inc.		790		42

				1,163

Industrials—12.8%
Cintas Corporation		2,260		75
Eaton Corporation		1,115		57
*Oshkosh Corporation		1,065		31
Parker Hannifin Corporation		710		64
Republic Services, Inc.		2,675		82
Rockwell Collins, Inc.		1,080		66
Snap-On, Inc.		685		43
Southwest Airlines Co.		4,195		48
*URS Corporation		1,390		62

				528

Consumer Discretionary—12.3%
Autoliv, Inc.		520		41
Chico’s FAS, Inc.		3,790		58
*DISH Network Corporation		1,710		52
Genuine Parts Co.		1,280		70
International Game Technology		3,585		63
Meredith Corporation		1,240		38
Newell Rubbermaid, Inc.		4,045		64
VF Corporation		610		66
Wyndham Worldwide Corporation		1,700		57

				509

Utilities—10.1%
DTE Energy Co.		1,210		60
Northeast Utilities		1,610		57
PPL Corporation		2,485		69
TECO Energy, Inc.		2,890		54
WGL Holdings, Inc.		1,265		49
Wisconsin Energy Corporation		1,935		61
Xcel Energy, Inc.		2,795		68

				418

† = U.S. listed foreign security

*Non-income producing securities


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
Information Technology—7.3%
*Atmel Corporation		2,090	$	29
*Ingram Micro, Inc. Class “A”		2,705		49
TE Connectivity, Ltd.†		1,840		68
VeriSign, Inc.		2,195		73
Xerox Corporation		8,035		84

				303

Energy—7.0%
Patterson-UTI Energy, Inc.		1,675		53
*Petrohawk Energy Corporation		1,355		33
Pioneer Natural Resources Co.		625		56
*Rowan Cos., Inc.		1,095		43
SM Energy Co.		755		56
*Whiting Petroleum Corporation		885		50

				291

Health Care—6.3%
CIGNA Corporation		1,320		68
Hill-Rom Holdings, Inc.		1,520		70
*Laboratory Corporation of America Holdings		615		59
*Mettler-Toledo International, Inc.†		390		66

				263

Materials—6.2%
Airgas, Inc.		800		56
Carpenter Technology Corporation		970		56
FMC Corporation		650		56
Sonoco Products Co.		1,440		51
Steel Dynamics, Inc.		2,250		37

				256

Consumer Staples—5.5%
ConAgra Foods, Inc.		2,385		61
Corn Products International, Inc.		915		51
HJ Heinz Co.		1,240		66
The Kroger Co.		1,970		49

				227

Total Common Stocks—95.6% (cost $3,595)				3,958


*Repurchase Agreement*
State Street Bank and Trust Company, 0.010% dated 6/30/11, due 7/1/11, repurchase price $150, collateralized by U.S. Treasury Bill, 0.020%, due 8/11/11	$	150		150

Total Repurchase Agreement—3.6% (cost $150)				150

Total Investments—99.2% (cost $3,745)				4,108
Cash and other assets, less liabilities—0.8%				35

Net assets—100.0%			$	4,143

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 71

Fixed Income Markets Overview

Summary

The first half of 2011 was marked by market volatility, as geopolitical events during the first quarter and renewed concerns over the European sovereign debt crisis during the second quarter weighed on capital markets.

During the first quarter, improvements in the U.S. economy offset concerns stemming from geopolitical events, continued concern about the fiscal situations in certain European countries, and the U.S. budget deficit. The markets reacted favorably to U.S. economic data released during the quarter, which revealed that growth continued, the labor market had improved, and inflation expectations remained in check. However, global events had a mitigating effect on the market’s optimism. The seminal event during the quarter was the Japanese earthquake and tsunami that caused explosions at nuclear power plants in northern Japan. Political unrest throughout Northern Africa and the Middle East resulted in heightened market volatility and a spike in oil prices. The markets remained concerned over the precarious fiscal situation of Portugal, Ireland, Greece, and Spain, and the potential growth-hindering impact that austerity measures might have on the Eurozone region.

The Greek debt crisis took center stage during the second quarter, although concerns over other European countries continued. A string of disappointing economic data releases rekindled fears of a “double-dip” recession in the U.S. New figures on employment, housing, manufacturing, consumer spending, and other indicators pointed to a slowdown in growth from relatively modest first-quarter levels.

Interest rates rose during the first quarter but fell during the second. Year-to-date, interest rates have declined and fixed income instruments generated positive returns. The 10-year Treasury note yielded 3.17% at the end of June, compared to 3.47% at the end of March, and 3.29% at the end of 2010.

Outlook

The Federal Reserve Board’s Quantitative Easing II program expired with a whimper, not a bang. We believe the program was a successful endeavor on the part of the Fed to “reflate” the economy and to prevent deflation. At its meeting on June 22, The Federal Reserve’s Federal Open Market Committee (“FOMC”) left the Federal Funds target rate unchanged at a range of 0.00% - 0.25%.

The FOMC views the recent spike in food and energy prices to be a temporary aberration. In fact, the Fed said that it expects inflation to “subside to levels at or below those consistent with the Committee’s dual mandate.”

U.S. economic data continues to show very modest economic growth. Unemployment remains stubbornly high, and until there is improvement in job creation, the housing market is likely to remain in a depressed state.

Until fundamentals in the economy show significant signs of improvement—including gains in employment and strength in the housing market—and until inflation picks up, we believe the Fed will leave its Federal Funds target rate at that level, which may remain the case through the balance of 2011 and into next year.

72 Semi-Annual Report

June 30, 2011

LOGO

Christopher T. Vincent

LOGO

Paul J. Sularz

BOND FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Bond Fund

The Bond Fund posted a 2.90% increase on a total return basis (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Barclays Capital Aggregate Index, gained 2.72%.

The Fund posted positive performance results, in spite of what could be considered headwinds to our style of investing. Security selection was the main driver of Fund performance.

The Fund has been defensively positioned against rising interest rates, which worked well for the Fund in the first quarter but worked against it during the second.

U.S. Treasury securities were the best performing asset class during the second quarter. The “spread” between U.S. Treasury securities and Corporate bonds widened as interest rates fell during the second quarter. High yield bonds underperformed investment grade securities by 1.25% over this time period.

The Fund typically overweights Corporate bonds and underweights U.S. Treasury securities, so the Fund’s investment style proved challenging to relative performance during the quarter. However, security selection results in the Corporate and Mortgage-Backed sectors mitigated the magnitude of the Fund’s relative underperformance.

Several of the Fund’s Corporate bond holdings had a positive impact on performance during the quarter. Motorola Solutions, Inc. continued to be a stellar performer for the Fund. In addition, positions in Georgia-Pacific LLC, Comcast Corporation, JPMorgan Chase & Co., and Anheuser-Busch InBev Worldwide, Inc. were additive to performance as their incremental yield offset the impact of widening risk spreads during the quarter.

The Fund’s Mortgage-Backed securities holdings were another source of value during the quarter. The Fund emphasizes specified pools with low loan balances, seasoning, or above-market coupon rates in an attempt to earn a yield advantage while experiencing slower-than-expected prepayment speeds. During the second quarter, the Fund’s holdings in such securities had a positive effect on performance.

We believe the Fund’s investment strategy is designed to help the Fund hold its ground in market conditions such as those just experienced in the first half of the year, and the Fund did just that.

Security selection within the Mortgage-backed and Corporate bond sectors—which provide more yield than U.S. Treasury securities—provided a solid underpinning to the Fund. On the other hand, the Fund’s defensive interest rate positioning was a limiting factor as interest rates have declined since the start of the year.

The Fund’s holdings of High Yield Corporate bonds performed strongly, as did its holdings of investment grade Corporate securities. The Fund’s holdings of longer-dated TIPS (Treasury Inflation Protected Securities) also benefitted the Fund.

June 30, 2011

William Blair Funds 73

Motorola Solutions was a standout performer for the Fund. Motorola Solutions represents one of the two units of Motorola spun off by the company this year (the other being Motorola Mobility). Motorola Solutions represents the more commercial mobile phone handset business, whose customers include police and fire departments, while Motorola Mobility makes retail phone handsets. We believe Motorola Solutions has a more stable, predictable business, while Motorola Mobility’s business is much more cyclical in nature. Confusion about these new yet different business units resulted in conflicting opinions about the ratings of Motorola Solution’s bonds from different rating agencies, with the company actually receiving both investment grade as well as high yield ratings on its newly-issued bonds.

We, however, conduct our own research about every company whose bonds we buy, and do not exclusively rely on the rating agencies. We identified Motorola Solution’s Bonds—overlooked by the largest fix income managers because of the divergent opinions of the rating agencies and the relatively small $400 million size of the offering—as an attractive value. The convergence of positive opinions by the rating agencies about Motorola Solutions resulted in price appreciation for its bonds, and a success for our research efforts.

The Fund continues to maintain its overweight position—versus its benchmark—to “spread” products: Corporate Bonds, Mortgage-backed securities and Asset-backed securities. The Fund maintains its exposure to Treasury Securities through its holdings of TIPs (Treasury Inflation-Protected Securities).

In particular, the Fund maintains an overweight allocation to Corporate Bonds. In the current low growth, low inflation environment, corporate balance sheets have improved drastically, which improves the quality profile of corporate bonds. Investment ratings on some securities have risen. We believe that U.S. GDP growth will likely remain subpar due to structural unemployment in the U.S. economy. We believe this current environment is one that should remain favorable for Corporate bonds.

Within our Mortgage-backed securities holdings, we favor securities that we believe are less likely to be refinanced through emphasizing specified pools with low loan balances and above-market coupon rates. Put simply, we are seeking pools least likely to be “called away,” or pre-paid as interest rates decline and refinancings increase. The Fund has benefitted from this strategy, especially given the fact that lenders have more stringent financial criteria in place for borrowers to refinance their existing mortgages. Higher coupon mortgages, in turn, provide a cushion through better convexity characteristics, because they typically do not decline as much when interest rates fall. Finally, this strategy enables the Fund to generate and maintain the Fund’s cash flow and current income.

74 Semi-Annual Report

June 30, 2011

Bond Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			Since Inception(a)
Class N		2.90	%		5.43	%		7.51	%		6.41	%
Class I		3.09			5.64			7.68			6.59
Barclays Capital U.S. Aggregate Bond Index		2.72			3.90			6.46			6.07

(a)

For the period from May 1, 2007 (Commencement of Operations) to June 30, 2011.

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

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

This report identifies the Fund’s investments on June 30, 2011. 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)

LOGO

The sector diversification shown is based on the total investments.

June 30, 2011

William Blair Funds 75

Bond Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—49.0%*
U.S. Treasury Inflation Indexed Notes/Bonds—7.8%
U.S. Treasury Inflation Indexed Bond, 3.875%, due 4/15/29	$	8,207	$	11,245
U.S. Treasury Inflation Indexed Note, 1.875%, due 7/15/13		735		781
U.S. Treasury Inflation Indexed Note, 2.375%, due 1/15/17		3,345		3,816

Total U.S. Treasury Inflation Indexed Notes/Bonds				15,842

U.S. Treasury—1.0%
U.S. Treasury Bond, 3.875%, due 8/15/40		500		458
U.S. Treasury Strip Principal, 0.000%, due 5/15/20		2,000		1,512

Total U.S. Treasury Obligations				1,970

Government National Mortgage Association (GNMA)—4.6%
GNR 2004-2 M5, 4.891%, due 7/16/34		125		136
GNR 2006-67 GB, 4.588%, due 9/16/34, VRN		1,540		1,663
#699118, 6.000%, due 9/15/38		6,702		7,527

Total GNMA Mortgage Obligations				9,326

Federal Home Loan Mortgage Corp. (FHLMC)—9.0%
#G90024, 7.000%, due 1/20/13		22		23
#G30093, 7.000%, due 12/1/17		34		38
#G30255, 7.000%, due 7/1/21		73		84
#G12792, 4.500%, due 12/1/21		391		418
#D95897, 5.500%, due 3/1/23		205		221
#G30372, 5.000%, due 9/1/27		512		551
#G01728, 7.500%, due 7/1/32		290		339
#C01385, 6.500%, due 8/1/32		346		392
#G02141, 6.000%, due 3/1/36		1,714		1,909
#A62179, 6.000%, due 6/1/37		971		1,082
#A63539, 6.000%, due 7/1/37		1,175		1,309
#A62858, 6.500%, due 7/1/37		622		702
#G03170, 6.500%, due 8/1/37		1,654		1,867
#A66843, 6.500%, due 10/1/37		2,303		2,620
#A78138, 5.500%, due 6/1/38		1,264		1,384
#A81799, 6.500%, due 9/1/38		2,771		3,153
#C03665, 9.000%, due 4/1/41		1,916		2,357

Total FHLMC Mortgage Obligations				18,449

Federal National Mortgage Association (FNMA)—26.6%
#535559, 7.500%, due 9/1/12		31		31
#689612, 5.000%, due 5/1/18		360		387
#695910, 5.000%, due 5/1/18		744		809
#747903, 4.500%, due 6/1/19		330		353
#745735, 5.000%, due 3/1/21		801		867
#253847, 6.000%, due 5/1/21		215		236
#900725, 6.000%, due 8/1/21		184		202
#AD8164, 4.000%, due 8/1/25		1,267		1,330
#545437, 7.000%, due 2/1/32		181		209
#545759, 6.500%, due 7/1/32		1,927		2,193
#254548, 5.500%, due 12/1/32		761		829


Issuer	NRSRO Rating		Principal Amount		Value

*U.S. Government and U.S. Government Agency—(continued)*
Federal National Mortgage Association (FNMA)—(continued)
#684601, 6.000%, due 3/1/33			$	1,946	$	2,184
#190340, 5.000%, due 9/1/33				1,627		1,739
#254868, 5.000%, due 9/1/33				806		861
#739243, 6.000%, due 9/1/33				1,814		2,023
#739331, 6.000%, due 9/1/33				844		941
#555800, 5.500%, due 10/1/33				341		371
#725027, 5.000%, due 11/1/33				635		678
#555880, 5.500%, due 11/1/33				410		447
#555946, 5.500%, due 11/1/33				763		837
#756153, 5.500%, due 11/1/33				2,126		2,330
#725231, 5.000%, due 2/1/34				662		708
#725205, 5.000%, due 3/1/34				1,417		1,514
#725220, 5.000%, due 3/1/34				610		652
#725232, 5.000%, due 3/1/34				3,049		3,259
#725238, 5.000%, due 3/1/34				1,412		1,509
#763798, 5.500%, due 3/1/34				445		486
#725424, 5.500%, due 4/1/34				441		480
#725611, 5.500%, due 6/1/34				433		472
#786546, 6.000%, due 7/1/34				843		935
#787816, 6.000%, due 7/1/34				875		975
#190353, 5.000%, due 8/1/34				465		497
#357883, 5.000%, due 5/1/35				994		1,062
#745092, 6.500%, due 7/1/35				1,024		1,165
#357944, 6.000%, due 9/1/35				113		125
#829306, 6.000%, due 9/1/35				308		341
#843487, 6.000%, due 10/1/35				260		289
#849191, 6.000%, due 1/1/36				162		180
#848782, 6.500%, due 1/1/36				732		831
#745349, 6.500%, due 2/1/36				1,065		1,213
#895637, 6.500%, due 5/1/36				448		508
#831540, 6.000%, due 6/1/36				183		203
#745802, 6.000%, due 7/1/36				603		672
#886220, 6.000%, due 7/1/36				1,250		1,393
#893318, 6.500%, due 8/1/36				228		259
#909480, 6.000%, due 2/1/37				1,295		1,436
#928561, 6.000%, due 8/1/37				726		809
#948689, 6.000%, due 8/1/37				1,681		1,857
#888967, 6.000%, due 12/1/37				1,651		1,840
#962058, 6.500%, due 3/1/38				4,293		4,907
#934006, 6.500%, due 9/1/38				1,512		1,728
#986856, 6.500%, due 9/1/38				987		1,120
#991911, 7.000%, due 11/1/38				724		848

Total FNMA Mortgage Obligations						54,130


*Non-Agency Mortgage-Backed Obligations—0.3%*
First Plus Home Loan Trust, 1997-4, Tranche M1, 7.640%, 9/11/23§**		D		199		179
First Horizon Asset Securities, Inc., 2004-AR4, Tranche 3A1, 3.815%, 8/25/34, VRN		AAA		432		386

Total Non-Agency Mortgage-Backed Obligations						565

See accompanying Notes to Financial Statements.

76 Semi-Annual Report

June 30, 2011

Bond Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—4.2%*
Avis Budget Rental Car Funding AESOP LLC—144A, 2009-1A, Tranche A, 9.310%, 10/20/13		Aa1	$	2,000	$	2,167
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A1, 4.260%, 3/25/14		Aaa		2,230		2,330
Centre Point Funding LLC—144A, 2010-1A, Tranche 1, 5.430%, 7/20/16		A2		2,255		2,395
Sierra Receivables Funding Co. LLC—144A, 2011-1A, Tranche A, 3.350%, 4/20/26		A		1,712		1,717

Total Asset-Backed Securities						8,609


*Corporate Obligations—45.5%*
CME Group, Inc., 5.750%, due 2/15/14		AA		700		778
Bank of America Corporation, 7.375%, due 5/15/14		A+		700		787
American Express Co., 7.250%, due 5/20/14		A+		500		572
AT&T, Inc., 5.100%, due 9/15/14		A2		1,250		1,374
D.R. Horton, Inc., 5.625%, due 9/15/14		BB		1,500		1,556
Corporation Nacional del Cobre de Chile—144A, 4.750%, due 10/15/14		A1		1,350		1,447
The Kroger Co., 4.950%, due 1/15/15		BBB		1,175		1,291
Yum! Brands, Inc., 4.250%, due 9/15/15		BBB-		350		372
Yum! Brands, Inc., 6.250%, due 4/15/16		BBB-		700		803
Owens-Brockway Glass Container, Inc., 7.375%, due 5/15/16		BB+		1,250		1,359
Fiserv, Inc., 3.125%, due 6/15/16		Baa2		1,825		1,815
FUEL Trust—144A, 3.984%, due 6/15/16		Baa2		2,000		1,984
SABMiller plc—144A, 6.500%, due 7/1/16		BBB+		700		810
Petrobras International Finance Co., 6.125%, due 10/6/16		A3		1,350		1,503
EI du Pont de Nemours & Co., 5.250%, due 12/15/16		A		500		565
Comcast Corporation, 6.500%, due 1/15/17		BBB+		350		408
Corrections Corporation of America, 7.750%, due 6/1/17		Ba1		1,250		1,361
ERP Operating L.P., 5.750%, due 6/15/17		BBB+		2,000		2,217
JPMorgan Chase & Co., 6.125%, due 6/27/17		A1		600		670
Smithfield Foods, Inc., 7.750%, due 7/1/17		B+		1,000		1,037
American Express Co., 6.150%, due 8/28/17		A+		1,000		1,140
Capital One Financial Corporation, 6.750%, due 9/15/17		A-		1,775		2,052
Exelon Generation Co. LLC, 6.200%, due 10/1/17		A3		1,100		1,241


Issuer	NRSRO Rating		Principal Amount		Value

*Corporate Obligations—(continued)*
Toll Brothers Finance Corporation, 8.910%, due 10/15/17		BBB-	$	1,000	$	1,172
Motorola Solutions, Inc., 6.000%, due 11/15/17		BBB		1,500		1,707
Triumph Group, Inc., 8.000%, due 11/15/17		B+		1,500		1,579
Union Pacific Corporation, 5.750%, due 11/15/17		BBB+		800		919
Wells Fargo & Co., 5.625%, due 12/11/17		AA-		1,000		1,105
Kohl’s Corporation, 6.250%, due 12/15/17		BBB+		350		411
American Tower Corporation, 4.500%, due 1/15/18		Baa3		1,150		1,149
Morgan Stanley, 6.625%, due 4/1/18		A		2,000		2,203
General Electric Capital Corporation, 5.625%, due 5/1/18		AA+		1,250		1,367
Philip Morris International, Inc., 5.650%, due 5/16/18		A		1,000		1,125
Simon Property Group L.P., 6.125%, due 5/30/18		A-		1,750		1,962
Time Warner Cable, Inc., 6.750%, due 7/1/18		BBB		1,000		1,160
Petrohawk Energy Corporation, 7.250%, due 8/15/18		B+		1,000		1,026
Merrill Lynch & Co., Inc., 6.875%, due 11/15/18		A+		1,075		1,179
Anheuser-Busch InBev Worldwide, Inc., 7.750%, due 1/15/19		A-		1,000		1,258
FedEx Corporation, 8.000%, due 1/15/19		BBB		750		943
CSX Corporation, 7.375%, due 2/1/19		BBB		800		975
Honeywell International, Inc., 5.000%, due 2/15/19		A		1,000		1,099
Pfizer, Inc., 6.200%, due 3/15/19		AA		1,250		1,462
BHP Billiton Finance USA, Ltd., 6.500%, due 4/1/19		A+		1,300		1,556
Owens Corning, 9.000%, due 6/15/19		BBB-		1,000		1,194
Discovery Communications LLC, 5.625%, due 8/15/19		BBB		500		553
Roper Industries, Inc., 6.250%, due 9/1/19		Baa2		1,225		1,387
Republic Services, Inc., 5.500%, due 9/15/19		BBB		1,650		1,799
Boston Properties L.P., 5.875%, due 10/15/19		A-		1,500		1,643
Crown Castle International Corporation, 7.125%, due 11/1/19		BB-		1,000		1,052
Toll Brothers Finance Corporation, 6.750%, due 11/1/19		BBB-		500		517
Ford Motor Credit Co. LLC, 8.125%, due 1/15/20		Ba2		1,515		1,755
Jarden Corporation, 7.500%, due 1/15/20		B		1,500		1,560
Johnson Controls, Inc., 5.000%, due 3/30/20		BBB+		1,625		1,727
United Technologies Corporation, 4.500%, due 4/15/20		A+		1,500		1,588

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 77

Bond Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Corporate Obligations—(continued)*
The Goldman Sachs Group, Inc., 6.000%, due 6/15/20		A1	$	1,800	$	1,937
Commonwealth Edison Co., 4.000%, due 8/1/20		A-		1,000		990
Alcoa, Inc., 6.150%, due 8/15/20		BBB-		1,775		1,880
Omnicom Group, Inc., 4.450%, due 8/15/20		A-		2,000		1,984
The Goodyear Tire & Rubber Co., 8.250%, due 8/15/20		B+		1,000		1,080
BE Aerospace, Inc., 6.875%, due 10/1/20		BB		1,000		1,047
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20		BBB		1,500		1,529
Progress Energy, Inc., 4.400%, due 1/15/21		BBB		1,625		1,643
Wyndham Worldwide Corporation, 5.625%, due 3/1/21		BBB-		1,000		997
Ball Corporation, 5.750%, due 5/15/21		BB+		1,000		1,003
Energizer Holdings, Inc.—144A, 4.700%, due 5/19/21		BBB-		2,000		1,975
Discovery Communications LLC, 4.375%, due 6/15/21		BBB		1,000		990
Southwest Airlines Co. 2007-1 Pass Through Trust, 6.150%, due 8/1/22		A2		649		701
The Kroger Co., 8.000%, due 9/15/29		BBB		425		533
Conoco Funding Co., 7.250%, due 10/15/31		A1		400		493
Kohl’s Corporation, 6.000%, due 1/15/33		BBB+		1,000		1,034

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

VRN = Variable Rate Note

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.09% of the net assets at June 30, 2011.

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.09% of the Fund’s net assets at June 30, 2011.


Issuer	NRSRO Rating		Principal Amount		Value

*Corporate Obligations—(continued)*
Wisconsin Electric Power Co., 5.700%, due 12/1/36		A+	$	500	$	530
Comcast Corporation, 6.450%, due 3/15/37		BBB+		650		695
Yum! Brands, Inc., 6.875%, due 11/15/37		BBB-		600		681
JPMorgan Chase & Co., 6.400%, due 5/15/38		Aa3		900		1,016
COX Communications, Inc.— 144A, 6.950%, due 6/1/38		Baa2		350		394
General Electric Capital Corporation, 6.875%, due 1/10/39		AA+		750		849
Burlington Northern Santa Fe LLC, 5.750%, due 5/1/40		A3		1,515		1,561

Total Corporate Obligations						92,816

Total Long-Term Investments—99.0% (cost $191,646)						201,707


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $2,256, collateralized by Federal National Mortgage Association, 3.420%, due 11/24/20		AAA		2,256		2,256

Total Repurchase Agreement—1.1% (cost $2,256)						2,256

Total Investments—100.1% (cost $193,902)						203,963
Liabilities, plus cash and other assets—(0.1)%						(155	)

Net assets—100.0%					$	203,808

See accompanying Notes to Financial Statements.

78 Semi-Annual Report

June 30, 2011

LOGO

Christopher T. Vincent

INCOME FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The Income Fund posted a 2.48% increase on a total return basis (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Barclays Capital Intermediate Government/Credit Bond Index, gained 2.47%.

The Fund posted positive performance results, in spite of what could be considered headwinds to our style of investing. Security selection was the main driver of Fund performance.

The Fund has been defensively positioned against rising interest rates, which worked well for the Fund in the first quarter but worked against it during the second.

The Fund typically overweights Corporate bonds and underweights U.S. Treasury securities, so the Fund’s investment style proved challenging to relative performance during the quarter. However, security selection in the Corporate and Mortgage-backed sectors mitigated the magnitude of the Fund’s relative underperformance.

Several of the Fund’s Corporate bond holdings had a positive impact on performance during the quarter. In addition, positions in Georgia-Pacific LLC, Comcast Corporation, J.P. Morgan Chase & Co., and Anheuser-Busch/InBev Worldwide, Inc. were additive to performance as their incremental yield offset the impact of widening risk spreads during the quarter.

We believe the Fund’s investment strategy is designed to help the Fund hold its ground in market conditions such as those just experienced in the first half of the year, and the Fund did just that.

An allocation to longer-dated TIPS (Treasury Inflation Protected Securities) also benefitted the Fund. TIPS have been the strongest-performing segment of the investment-grade bond market year-to-date. We find appeal in TIPS because they offer protection against unexpected inflation as well as diversification benefits.

June 30, 2011

William Blair Funds 79

Income Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year to Date			1 Year			3 Year			5 Year			10 Year
Class N		2.48	%		4.56	%		5.26	%		4.13	%		4.03	%
Class I		2.60			4.83			5.47			4.33			4.20
Barclays Capital Intermediate Government/Credit Bond Index		2.47			3.77			5.76			6.08			5.35

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

The Barclays Capital Intermediate Government/Credit Bond Index indicates broad intermediate government/corporate bond market performance.

Sector Diversification (unaudited)

LOGO

The sector diversification shown is based on the total investments.

80 Semi-Annual Report

June 30, 2011

Income Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—41.7%*
U.S. Treasury Inflation Indexed Notes/Bonds—4.7%
U.S. Treasury Inflation Indexed Note, 2.375%, due 1/15/17	$	3,903	$	4,452

U.S. Treasury—4.0%
U.S. Treasury Note, 3.125%, due 5/15/19		500		516
U.S. Treasury Note, 2.625%, due 8/15/20		2,500		2,420
U.S. Treasury Strip Principal, 0.000%, due 5/15/20		1,185		896

Total U.S. Treasury Obligations				3,832

Government National Mortgage Association (GNMA)—0.2%
#780405, 9.500%, due 11/15/17		128		139
#357322, 7.000%, due 9/15/23		83		96

Total GNMA Mortgage Obligations				235

Federal Home Loan Mortgage Corp. (FHLMC)—11.8%
#G10708, 6.500%, due 8/1/12		13		13
#E72924, 7.000%, due 10/1/13		184		190
#E81703, 7.000%, due 5/1/15		235		248
#E81697, 8.000%, due 5/1/15		566		622
#E81908, 8.500%, due 12/1/15		35		40
#J02184, 8.000%, due 4/1/16		361		387
#G90022, 8.000%, due 9/17/16		189		202
#M30028, 5.500%, due 5/1/17		30		31
#E90398, 7.000%, due 5/1/17		551		604
#E96536, 5.000%, due 3/1/18		627		678
#E97112, 4.000%, due 5/1/18		287		304
#B13459, 4.500%, due 4/1/19		199		212
#C67537, 9.500%, due 8/1/21		6		6
#D95621, 6.500%, due 7/1/22		1,721		1,940
#A45790, 7.500%, due 5/1/35		343		401
#G02141, 6.000%, due 3/1/36		953		1,062
#A66843, 6.500%, due 10/1/37		1,066		1,213
#A81799, 6.500%, due 9/1/38		1,640		1,866
#C03665, 9.000%, due 4/1/41		976		1,200

Total FHLMC Mortgage Obligations				11,219

Federal National Mortgage Association (FNMA)—21.0%
#577395, 10.000%, due 8/1/11		1		1
#254788, 6.500%, due 4/1/13		41		42
#725315, 8.000%, due 5/1/13		55		57
#593561, 9.500%, due 8/1/14		91		99
#567027, 7.000%, due 9/1/14		455		480
#567026, 6.500%, due 10/1/14		314		328
#458124, 7.000%, due 12/15/14		59		63
#576554, 8.000%, due 1/1/16		540		594
#576553, 8.000%, due 2/1/16		808		908
#555747, 8.000%, due 5/1/16		72		75
#735569, 8.000%, due 10/1/16		463		508
#725410, 7.500%, due 4/1/17		253		263
#643217, 6.500%, due 6/1/17		166		182
#679247, 7.000%, due 8/1/17		677		760
#685194, 4.500%, due 3/1/18		993		1,063
#689334, 5.000%, due 3/1/18		148		160


Issuer	NRSRO Rating		Principal Amount		Value

*U.S. Government and U.S. Government Agency—(continued)*
Federal National Mortgage Association (FNMA)—(continued)
#695910, 5.000%, due 5/1/18			$	638	$	694
#740847, 6.000%, due 10/1/18				396		434
#323501, 6.500%, due 1/1/19				129		146
#255358, 5.000%, due 9/1/19				185		200
#852864, 7.000%, due 7/1/20				1,433		1,640
#458147, 10.000%, due 8/15/20				347		391
#835563, 7.000%, due 10/1/20				612		688
#735574, 8.000%, due 3/1/22				372		444
#679253, 6.000%, due 10/1/22				895		981
FNR G93-19 SH, 11.234%, due 4/25/23, VRN				11		12
#AD8164, 4.000%, due 8/1/25				938		985
#AE1176, 4.000%, due 8/1/25				948		995
#255956, 5.500%, due 10/1/25				242		264
#806458, 8.000%, due 6/1/28				298		350
#880155, 8.500%, due 7/1/29				730		861
#797846, 7.000%, due 3/1/32				843		957
#745519, 8.500%, due 5/1/32				227		268
#654674, 6.500%, due 9/1/32				176		201
#733897, 6.500%, due 12/1/32				276		316
#886220, 6.000%, due 7/1/36				891		992
#962058, 6.500%, due 3/1/38				1,628		1,861
#991911, 7.000%, due 11/1/38				579		677

Total FNMA Mortgage Obligations						19,940


*Non-Agency Mortgage-Backed Obligations—1.2%*
First Plus Home Loan Trust, 1997-4, Tranche M1, 7.640%, 9/11/23**§		D		676		609
First Plus Home Loan Trust, 1997-4, Tranche M2, 7.830%, 9/11/23**§		D		143		108
First Plus Home Loan Trust, 1998-3, Tranche M2, 7.920%, 5/10/24**§		Caa1		256		247
Lehman Structured Securities Corp.—144A, 2004-2, Tranche M1, 2.705%, 2/28/33, VRN§		CCC		398		182

Total Non-Agency Mortgage-Backed Obligations						1,146


*Asset-Backed Securities—8.3%*
John Deere Owner Trust, 2009-A, Tranche A3, 2.590%, 10/15/13		AAA		102		103
Avis Budget Rental Car Funding AESOP LLC—144A, 2009-1A, Tranche A, 9.310%, 10/20/13		Aa1		1,000		1,083
Harley-Davidson Motorcycle Trust, 2009-1, Tranche A3, 3.190%, 11/15/13		AAA		309		312
Mercedes-Benz Auto Receivables Trust, 2009-1, Tranche A3, 1.670%, 1/15/14		AAA		341		343
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A1, 4.260%, 3/25/14		AAA		1,500		1,567

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 81

Income Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(continued)*
Chase Issuance Trust, 2008-A10, Tranche A10, 0.937%, 8/17/15, VRN		AAA	$	1,500	$	1,519
Chase Issuance Trust, 2008-A3, Tranche A, 1.287%, 3/15/16, VRN		AAA		250		257
Centre Point Funding LLC—144A, 2010-1A, Tranche 1, 5.430%, 7/20/16		A2		1,503		1,597
Citibank Omni Master Trust—144A, 2009-A14A, Tranche A14, 2.937%, 8/15/18, VRN		AAA		1,000		1,051

Total Asset-Backed Securities						7,832


*Corporate Obligations—47.5%*
Citigroup, Inc., 5.500%, due 4/11/13		A+		1,000		1,062
Novartis Capital Corporation, 4.125%, due 2/10/14		Aa2		1,000		1,078
CME Group, Inc., 5.750%, due 2/15/14		AA		1,000		1,111
PACCAR, Inc., 6.875%, due 2/15/14		A+		1,000		1,142
PepsiAmericas, Inc., 4.375%, due 2/15/14		Aa3		500		541
Coca-Cola Enterprises, Inc., 7.375%, due 3/3/14		A+		900		1,045
Bank of America Corporation, 7.375%, due 5/15/14		A+		500		562
St. Jude Medical, Inc., 3.750%, due 7/15/14		A		500		532
AT&T, Inc., 5.100%, due 9/15/14		A2		1,250		1,374
Corporation Nacional del Cobre de Chile—144A, 4.750%, due 10/15/14		A1		1,000		1,072
EI du Pont de Nemours & Co., 3.250%, due 1/15/15		A		700		733
United Technologies Corporation, 4.875%, due 5/1/15		A+		1,000		1,112
Petrobras International Finance Co., 6.125%, due 10/6/16		A3		1,000		1,113
BHP Billiton Finance USA, Ltd., 5.400%, due 3/29/17		A+		1,000		1,137
ERP Operating L.P., 5.750%, due 6/15/17		BBB+		1,000		1,109
JPMorgan Chase & Co., 6.125%, due 6/27/17		A1		1,750		1,956
Kimberly-Clark Corporation, 6.125%, due 8/1/17		A		1,000		1,180
American Express Co., 6.150%, due 8/28/17		A+		1,500		1,709
IBM Corporation, 5.700%, due 9/14/17		Aa3		1,750		2,035
Capital One Financial Corporation, 6.750%, due 9/15/17		A-		1,000		1,156
Exelon Generation Co. LLC, 6.200%, due 10/1/17		A3		1,000		1,128
Tesco plc—144A, 5.500%, due 11/15/17		A-		1,000		1,131
Abbott Laboratories, 5.600%, due 11/30/17		AA		500		579


Issuer	NRSRO Rating		Principal Amount		Value
Wells Fargo & Co., 5.625%, due 12/11/17		AA-	$	750	$	828
American Tower Corporation, 4.500%, due 1/15/18		Baa3		500		500
Morgan Stanley, 6.625%, due 4/1/18		A		750		826
General Electric Capital Corporation, 5.625%, due 5/1/18		AA+		1,725		1,891
Philip Morris International, Inc., 5.650%, due 5/16/18		A		1,250		1,406
Simon Property Group L.P., 6.125%, due 5/30/18		A-		1,000		1,121
Time Warner Cable, Inc., 6.750%, due 7/1/18		BBB		750		870
FedEx Corporation, 8.000%, due 1/15/19		BBB		750		942
Honeywell International, Inc., 5.000%, due 2/15/19		A		1,225		1,347
The Procter & Gamble Co., 4.700%, due 2/15/19		AA-		500		552
Unilever Capital Corporation, 4.800%, due 2/15/19		A+		500		548
Pfizer, Inc., 6.200%, due 3/15/19		AA		1,000		1,170
Boston Properties L.P., 5.875%, due 10/15/19		A-		1,350		1,479
The Goldman Sachs Group, Inc., 6.000%, due 6/15/20		A1		1,000		1,076
Alcoa, Inc., 6.150%, due 8/15/20		A-		750		795
Omnicom Group, Inc., 4.450%, due 8/15/20		BBB+		750		744
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20		BBB		450		459
Progress Energy, Inc., 4.400%, due 1/15/21		BBB		750		758
Energizer Holdings, Inc.—144A, 4.700%, due 5/19/21		BBB-		750		741
Southwest Airlines Co. 2007-1 Pass Through Trust, 6.150%, due 2/1/24		A2		1,428		1,542

Total Corporate Obligations						45,192

Total Long-Term Investments—98.7% (cost $88,998)						93,848


*Repurchase Agreement*
State Street Bank and Trust Company, 0.010% dated 6/30/11, due 7/1/11, repurchase price $2,481, collateralized by U.S. Treasury Bill, 0.020%, due 8/11/11				2,481		2,481

Total Repurchase Agreement—2.6% (cost $2,481)						2,481

Total Investments—101.3% (cost $91,479)						96,329
Liabilities, plus cash and other assets—(1.3)%						(1,201	)

Net assets—100.0%					$	95,128

See accompanying Notes to Financial Statements.

82 Semi-Annual Report

June 30, 2011

Income Fund

Portfolio of Investments, June 30, 2011 (all amounts in thousands) (unaudited)

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

VRN = Variable Rate Note

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. These holdings represent 1.01% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. These holdings represent 1.20% of the net assets at June 30, 2011.

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 83

LOGO

Christopher T. Vincent

LOGO

Paul J. Sularz

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

The Low Duration Fund posted a 1.13% increase on a total return basis (Class N Shares) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Merrill Lynch 1-Year U.S. Treasury Note Index, gained 0.35%.

The Fund had a positive first half of 2011, with the Fund outperforming its Merrill Lynch 1-Year U.S. Treasury Note Index benchmark. We believe the Fund has been able to accomplish this objective without sacrificing credit quality. The Fund does not own securities with a rating below “A” from a Nationally Recognized Statistical Rating Organization (“NRSRO”).

The majority of the Fund’s portfolio is invested in seasoned U.S. Government-guaranteed short duration Mortgage-backed Fannie Mae and Freddie Mac securities. This is the Fund’s major sector emphasis. We favor such securities because they are high quality instruments, provide excellent liquidity, and pay monthly principal and interest, which we then are able to reinvest. The benefits of this strategy are evident in a rising rate environment such as the one we experienced during the first quarter.

Asset-backed Securities are another segment of the market in which we invest that offers monthly payment of principal and interest. We continued to invest in credit card securitizations issued by top-tier banking institutions. As mentioned, all Asset-backed Securities held in the Fund must maintain a rating above “A.”

Since the beginning of this year we have increased the Fund’s holdings of Asset-backed Securities whose coupons are reset monthly and are tied to LIBOR—the London Interbank Offered Rate. The income from these securities will rise with any increase in rates and will protect the Fund against falling prices. The percentage of these floating-rate securities in the Fund’s portfolio rose from approximately 15% at the beginning of 2011 to 17% at the end of June.

The Fund purchased TIPS (Treasury Inflation-Protected Securities) earlier this year. TIPS have been the strongest-performing investment grade security. We believe in holding TIPS instead of nominal Treasuries, as TIPS provide protection against unexpected inflation and diversification benefits.

The Fund kept its exposure to cash and cash equivalents extremely low, given the very low rates currently available from money market instruments.

Assets in this Fund continued to build since the Fund’s inception on December 1, 2009, with assets increasing to a new high “watermark” of approximately $155 million at the end of the first quarter.

84 Semi-Annual Report

June 30, 2011

Low Duration Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			Since Inception(a)
Class N		1.13	%		1.56	%		1.51	%
Class I		1.31			1.71			1.64
Merrill Lynch 1-Year U.S. Treasury Note Index		0.35			0.67			0.65

(a)

For the period from December 1, 2009 (Commencement of Operations) to June 30, 2011.

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 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)

LOGO

The sector diversification shown is based on the total investments.

June 30, 2011

William Blair Funds 85

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—47.2%*
U.S. Treasury Inflation Indexed Notes/Bonds—2.2%
U.S. Treasury Inflation Indexed Note, 2.000%, due 7/15/14	$	2,982	$	3,252

Government National Mortgage Association (GNMA)—0.5%
#781567, 5.000%, due 2/15/18		118		127
#606406, 5.000%, due 4/15/18		183		198
#003438, 4.500%, due 9/20/18		293		316
#003465, 4.500%, due 11/20/18		87		93

Total GNMA Mortgage Obligations				734

Federal Home Loan Mortgage Corp. (FHLMC)—13.1%
#M80931, 5.500%, due 8/1/11		9		9
#M80953, 4.000%, due 12/1/11		221		224
#M80970, 4.500%, due 5/1/12		44		44
#B18053, 5.000%, due 3/1/15		80		84
#G11885, 5.000%, due 1/1/16		251		269
#E86134, 5.000%, due 11/1/16		231		248
#E96536, 5.000%, due 3/1/18		391		423
#E95355, 5.000%, due 4/1/18		492		531
#E01377, 4.500%, due 5/1/18		486		517
#G11618, 4.500%, due 5/1/18		2,288		2,445
#E01411, 5.000%, due 7/1/18		246		264
#E01424, 4.000%, due 8/1/18		6		7
#E99963, 4.500%, due 10/1/18		140		150
#E01488, 5.000%, due 10/1/18		524		564
#E99895, 5.000%, due 10/1/18		1,027		1,110
#G12093, 4.500%, due 12/1/18		630		673
#B11386, 5.000%, due 12/1/18		227		246
#B11362, 5.500%, due 12/1/18		33		35
#G13367, 5.500%, due 12/1/18		182		198
#E01545, 5.000%, due 1/1/19		300		323
#B12826, 4.500%, due 3/1/19		429		459
#G11766, 5.000%, due 3/1/19		214		231
#G18001, 4.500%, due 7/1/19		280		299
#G11596, 5.500%, due 8/1/19		240		261
#B16291, 5.000%, due 9/1/19		1,803		1,949
#G11690, 4.000%, due 2/1/20		41		44
#G18045, 5.000%, due 3/1/20		234		253
#G11892, 4.000%, due 4/1/20		248		263
#B19078, 5.000%, due 4/1/20		158		171
#G18048, 5.000%, due 4/1/20		158		171
#J08152, 5.000%, due 5/1/20		201		217
#G11720, 4.500%, due 8/1/20		51		55
#G12394, 5.000%, due 5/1/21		298		322
#G13296, 5.000%, due 5/1/21		794		858
#G12113, 5.500%, due 5/1/21		395		431
#G12286, 5.000%, due 7/1/21		164		177
#E02322, 5.500%, due 5/1/22		44		49
#J06484, 5.500%, due 11/1/22		927		1,011
#C00351, 8.000%, due 7/1/24		145		172
#G00363, 8.000%, due 6/1/25		175		208
#C80329, 8.000%, due 8/1/25		44		52
#J13022, 4.000%, due 9/1/25		2,936		3,081

Total FHLMC Mortgage Obligations				19,098


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—(contunued)*
Federal National Mortgage Association (FNMA)—31.4%
#255325, 4.500%, due 7/1/11	$	41	$	41
#256224, 5.500%, due 4/1/16		44		48
#256559, 5.500%, due 1/1/17		24		25
#256606, 5.500%, due 2/1/17		32		34
#256646, 5.500%, due 3/1/17		23		26
#545898, 5.500%, due 9/1/17		668		726
#545899, 5.500%, due 9/1/17		765		831
#257067, 5.000%, due 1/1/18		111		117
#663692, 5.000%, due 1/1/18		317		343
#674713, 5.000%, due 1/1/18		25		27
#679305, 5.000%, due 1/1/18		107		116
#254591, 5.500%, due 1/1/18		499		540
#677680, 4.500%, due 2/1/18		18		19
#681310, 4.500%, due 2/1/18		405		434
#683100, 5.500%, due 2/1/18		623		681
#254684, 5.000%, due 3/1/18		35		38
#675717, 5.000%, due 3/1/18		481		520
#681361, 5.000%, due 3/1/18		125		135
#656564, 5.000%, due 4/1/18		2,288		2,473
#696677, 5.000%, due 4/1/18		164		178
#702888, 5.000%, due 4/1/18		154		167
#929388, 4.500%, due 5/1/18		595		634
#254721, 5.000%, due 5/1/18		380		410
#702332, 5.000%, due 5/1/18		80		87
#704049, 5.500%, due 5/1/18		1,167		1,279
#735357, 5.500%, due 5/1/18		1,899		2,079
#254785, 4.000%, due 6/1/18		292		309
#555622, 4.500%, due 6/1/18		498		533
#656573, 5.000%, due 6/1/18		331		358
#709848, 5.000%, due 6/1/18		292		316
#713380, 4.000%, due 7/1/18		273		289
#254802, 4.500%, due 7/1/18		413		442
#713807, 4.500%, due 7/1/18		243		260
#735003, 5.500%, due 7/1/18		1,781		1,949
#254840, 4.000%, due 8/1/18		137		145
#711991, 5.000%, due 8/1/18		277		299
#254919, 4.000%, due 9/1/18		35		37
#740444, 4.500%, due 9/1/18		395		422
#734741, 4.000%, due 10/1/18		27		29
#743183, 5.000%, due 10/1/18		120		130
#255003, 4.000%, due 11/1/18		17		18
#747823, 4.000%, due 11/1/18		734		777
#749596, 5.000%, due 11/1/18		424		458
#745237, 5.000%, due 12/1/18		101		109
#725171, 4.000%, due 1/1/19		17		18
#255079, 5.000%, due 2/1/19		50		54
#766276, 5.000%, due 3/1/19		524		566
#MA0045, 4.000%, due 4/1/19		613		648
#255233, 4.000%, due 5/1/19		625		661
#725445, 4.500%, due 5/1/19		1,123		1,202
#785259, 5.000%, due 8/1/19		522		565
#725953, 5.000%, due 10/1/19		146		159
#745240, 4.500%, due 12/1/19		646		691
#735401, 5.500%, due 3/1/20		401		436
#735646, 4.500%, due 7/1/20		764		817
#745440, 4.500%, due 7/1/20		14		14
#825912, 4.000%, due 9/1/20		78		82
#MA0517, 4.000%, due 9/1/20		1,278		1,352

See accompanying Notes to Financial Statements.

86 Semi-Annual Report

June 30, 2011

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*U.S. Government and U.S. Government Agency—(contunued)*
Federal National Mortgage Association (FNMA)—(contunued)
#836016, 4.500%, due 9/1/20			$	994	$	1,063
#MA0548, 3.500%, due 10/1/20				2,311		2,407
#879607, 5.500%, due 4/1/21				170		186
#881284, 4.500%, due 12/1/21				1,434		1,529
#190988, 9.000%, due 6/1/24				227		268
#AC9560, 5.000%, due 1/1/25				4,815		5,217
#AD0855, 4.000%, due 3/1/25				196		206
#932723, 4.000%, due 4/1/25				881		925
#935995, 4.000%, due 6/1/25				247		259
#AD4677, 4.000%, due 6/1/25				1,997		2,097
#AD8164, 4.000%, due 8/1/25				2,157		2,265
#AE1176, 4.000%, due 8/1/25				1,066		1,120
#AH2671, 4.000%, due 1/1/26				2,025		2,127

Total FNMA Mortgage Obligations						45,822


*Asset-Backed Securities—39.4%*
Volkswagen Auto Lease Trust, 2009-A, Tranche A3, 3.410%, 4/16/12		AAA		342		343
Ford Credit Auto Owner Trust, 2007-B, Tranche A4A, 5.240%, 7/15/12		AAA		226		228
Daimler Chrysler Auto Trust, 2008-B, Tranche A3A, 4.710%, 9/10/12		AAA		31		31
BMW Vehicle Lease Trust, 2010-1, Tranche A2, 0.580%, 9/17/12		Aaa		428		428
BMW Vehicle Owner Trust, 2010-A, Tranche A2, 0.680%, 9/25/12		AAA		406		406
Capital Auto Receivables Asset Trust, 2008-2, Tranche A3B, 1.637%, 10/15/12, VRN		AAA		200		200
Ford Credit Auto Owner Trust, 2010-B, Tranche A2, 0.650%, 12/15/12		Aaa		736		736
Chrysler Financial Auto Securitization Trust, 2010-A, Tranche A2, 0.690%, 1/8/13		AAA		878		879
Honda Auto Receivables Owner Trust, 2009-2, Tranche A3, 2.790%, 1/15/13		AAA		398		401
CarMax Auto Owner Trust, 2009-1, Tranche A3, 4.120%, 3/15/13		AAA		197		199
Nissan Auto Lease Trust, 2010-A, Tranche A2, 1.100%, 3/15/13		AAA		345		345
Ford Credit Auto Owner Trust, 2009-A, Tranche A3A, 3.960%, 5/15/13		AAA		215		217
Ford Credit Auto Owner Trust, 2009-A, Tranche A3B, 2.687%, 5/15/13, VRN		AAA		538		541
Harley-Davidson Motorcycle Trust, 2007-1, Tranche A4, 5.210%, 6/17/13		AAA		383		387
USAA Auto Owner Trust, 2009-1, Tranche A3, 3.020%, 6/17/13		AAA		392		395
American Express Issuance Trust, 2007-2, Tranche A, 0.437%, 7/15/13, VRN		AAA		373		373
Ally Auto Receivables Trust, 2010-3, Tranche A2, 0.287%, 8/15/13, VRN		AAA		726		726


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(contunued)*
BMW Vehicle Lease Trust, 2009-1, Tranche A4, 3.660%, 8/15/13		AAA	$	500	$	502
Ford Credit Auto Owner Trust, 2009-B, Tranche A3, 2.790%, 8/15/13		AAA		308		311
Ford Credit Auto Owner Trust, 2009-D, Tranche A3, 2.170%, 10/15/13		AAA		791		798
John Deere Owner Trust, 2009-A, Tranche A3, 2.590%, 10/15/13		AAA		712		716
John Deere Owner Trust, 2009-B, Tranche A3, 1.570%, 10/15/13		AAA		540		542
Avis Budget Rental Car Funding AESOP LLC—144A, 2009-1A, Tranche A, 9.310%, 10/20/13		Aa1		2,000		2,166
Harley-Davidson Motorcycle Trust, 2009-1, Tranche A3, 3.190%, 11/15/13		AAA		1,272		1,282
CNH Equipment Trust, 2009-C, Tranche A3, 1.850%, 12/16/13		AAA		222		222
Volkswagen Auto Loan Enhanced Trust, 2010-1, Tranche A3, 1.310%, 1/20/14		AAA		864		868
USAA Auto Owner Trust, 2008-3, Tranche A4, 4.710%, 2/18/14		AAA		45		45
Harley-Davidson Motorcycle Trust, 2009-2, Tranche A3, 2.620%, 3/15/14		AAA		496		500
Citibank Credit Card Issuance Trust, 2009-A1, Tranche A1, 1.937%, 3/17/14, VRN		AAA		200		202
Volkswagen Auto Lease Trust, 2009-A, Tranche A4, 4.590%, 3/17/14		AAA		2,000		2,013
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A1, 4.260%, 3/25/14		Aaa		1,765		1,844
BMW Vehicle Owner Trust, 2010-A, Tranche A3, 1.390%, 4/25/14		AAA		300		302
Citibank Credit Card Issuance Trust, 2009-A2, Tranche A2, 1.737%, 5/15/14, VRN		AAA		500		506
Ford Credit Auto Owner Trust, 2010-A, Tranche A3, 1.320%, 6/15/14		AAA		500		503
Chase Issuance Trust, 2007-A9, Tranche A, 3.151%, 6/16/14, VRN		AAA		2,000		1,999
Nissan Auto Receivables Owner Trust, 2008-A, Tranche A4, 4.280%, 6/16/14		AAA		71		72
Capital Auto Receivables Asset Trust, 2008-1, Tranche A4B, 1.537%, 7/15/14, VRN		AAA		605		608
CNH Equipment Trust, 2010-A, Tranche A3, 1.540%, 7/15/14		AAA		837		841
Nissan Auto Receivables Owner Trust, 2010-A, Tranche A3, 0.870%, 7/15/14		Aaa		500		500
Daimler Chrysler Auto Trust, 2008-A, Tranche A4, 4.480%, 8/8/14		AAA		1,495		1,513
American Express Credit Account Master Trust, 2009-1, Tranche A, 1.537%, 12/15/14, VRN		AAA		450		455

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 87

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(contunued)*
Nissan Master Owner Trust Receivables—144A, 2010-AA, Tranche A, 1.337%, 1/15/15, VRN		AAA	$	2,000	$	2,022
Capital One Multi-Asset Execution Trust, 2007-A4, Tranche A4, 0.217%, 3/16/15, VRN		AAA		1,778		1,776
CNH Equipment Trust, 2010-C, Tranche A3, 1.170%, 5/15/15		AAA		500		502
Discover Card Master Trust, 2007-A2, Tranche A2, 0.587%, 6/15/15, VRN		AAA		192		193
MBNA Credit Card Master Note Trust, 2006-A2, Tranche A2, 0.247%, 6/15/15, VRN		AAA		200		200
Discover Card Master Trust I, 2005-4, Tranche A2, 0.277%, 6/16/15, VRN		AAA		77		77
FPL Recovery Funding LLC, 2007-A, Tranche A2, 5.044%, 8/1/15		AAA		852		893
Chase Issuance Trust, 2008-A10, Tranche A10, 0.937%, 8/17/15, VRN		AAA		2,000		2,026
Bank of America Credit Card Trust, 2010-A1, Tranche A1, 0.487%, 9/15/15, VRN		AAA		2,000		2,005
Discover Card Master Trust, 2010-A1, Tranche A1, 0.837%, 9/15/15, VRN		Aaa		347		350
Ford Credit Floorplan Master Owner Trust, 2010-A5, Tranche A2, 0.887%, 9/15/15, VRN		AAA		1,800		1,806
USAA Auto Owner Trust, 2010-1, Tranche A4, 2.140%, 9/15/15		AAA		685		700
American Express Credit Account Master Trust, 2010-1, Tranche A, 0.437%, 11/16/15, VRN		AAA		500		501
Ford Credit Floorplan Master Owner Trust, 2011-1, Tranche A2, 0.787%, 2/15/16, VRN		AAA		1,000		996
Chase Issuance Trust, 2008-A3, Tranche A, 1.287%, 3/15/16, VRN		AAA		2,000		2,051
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A2, 5.290%, 3/25/16		Aaa		2,250		2,467
Ally Master Owner Trust, 2011-3, Tranche A1, 0.817%, 5/15/16, VRN		Aaa		1,100		1,100
CNH Equipment Trust, 2010-C, Tranche A4, 1.750%, 5/16/16		AAA		60		60
Avis Budget Rental Car Funding AESOP LLC—144A, 2010-3A, Tranche A, 4.640%, 5/20/16		Aaa		1,400		1,506
Centre Point Funding LLC—144A, 2010-1A, Tranche 1, 5.430%, 7/20/16		A2		1,721		1,828
Discover Card Master Trust, 2011-A1, Tranche A1, 0.537%, 8/15/16, VRN		Aaa		1,400		1,405
Enterprise Fleet Financing LLC—144A, 2011-2, Tranche A2, 1.430%, 10/20/16		AAA		2,000		2,000
GE Capital Credit Card Master Note Trust, 2011-1, Tranche A, 0.737%, 1/15/17, VRN		Aaa		500		503
Discover Card Master Trust, 2010-A2, Tranche A2, 0.767%, 3/15/18, VRN		AAA		350		353


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(contunued)*
Citibank Omni Master Trust—144A, 2009-A14A, Tranche A14, 2.937%, 8/15/18, VRN		Aaa	$	2,000	$	2,103
Capital One Multi-Asset Execution Trust, 2007-A2, Tranche A2, 0.267%, 12/16/19, VRN		AAA		215		212
MBNA Credit Card Master Note Trust, 2004-A3, Tranche A3, 0.447%, 8/16/21, VRN		AAA		300		298
Sierra Receivables Funding Co. LLC—144A, 2011-1A, Tranche A, 3.350%, 4/20/26		A		1,498		1,502

Total Asset-Backed Securities						57,580


*Corporate Obligations—12.9%*
American Express Bank FSB, 0.316%, due 5/29/12, VRN		A+		500		499
General Electric Capital Corporation, 3.500%, due 8/13/12		AA+		1,000		1,030
Bank of America Corporation, 5.375%, due 9/11/12		A+		1,000		1,048
ConocoPhillips, 4.750%, due 10/15/12		A1		1,000		1,052
Citigroup, Inc., 5.300%, due 10/17/12		A+		1,000		1,050
Wells Fargo & Co., 5.250%, due 10/23/12		AA-		1,000		1,055
The Procter & Gamble Co., 0.301%, due 11/14/12, VRN		AA-		700		701
The Walt Disney Co., 4.700%, due 12/1/12		A		1,000		1,056
Hewlett-Packard Co., 4.500%, due 3/1/13		A+		1,000		1,059
General Electric Capital Corporation, 0.418%, due 5/8/13, VRN		AA+		1,000		996
American Express Co., 4.875%, due 7/15/13		A+		1,000		1,063
Barclays Bank plc, 1.323%, due 1/13/14, VRN		AA-		500		502
JPMorgan Chase & Co., 1.074%, due 1/24/14, VRN		Aa3		1,000		1,003
Morgan Stanley, 1.874%, due 1/24/14, VRN		A		1,000		1,007
Bank of America Corporation, 1.693%, due 1/30/14, VRN		A+		1,000		1,002
MetLife, Inc., 2.375%, due 2/6/14		A-		1,000		1,019
The Boeing Co., 5.000%, due 3/15/14		A		375		412
Shell International Finance BV, 4.000%, due 3/21/14		Aa1		1,142		1,229
Citigroup, Inc., 1.176%, due 4/1/14, VRN		A		1,000		986
Morgan Stanley, 6.000%, due 5/13/14		A		1,000		1,089

Total Corporate Obligations						18,858

Total Long-Term Investments—99.5% (cost $144,761)						145,344

See accompanying Notes to Financial Statements.

88 Semi-Annual Report

June 30, 2011

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Repurchase Agreement*
State Street Bank and Trust Company, 0.010% dated 6/30/11, due 7/1/11, repurchase price $3,243, collateralized by U.S. Treasury Bill, 0.020%, due 8/11/11		AAA	$	3,243	$	3,243

Total Repurchase Agreement—2.2% (cost $3,243)						3,243

Total Investments—101.7% (cost $148,004)						148,587
Liabilities, plus cash and other assets—(1.7)%						(2,552	)

Net assets—100.0%					$	146,035

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

VRN = Variable Rate Note

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 89

LOGO

Christopher T. Vincent

LOGO

Kathleen M. Lynch

READY RESERVES FUND

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The return for the six months ended June 30, 2011, of the Fund’s Class N Shares was 0.00%, versus the 0.01% return of the Fund’s benchmark, the AAA-Rated Money Market Funds Average. Total assets were $1.26 billion, compared to $1.21 billion at December 31, 2010 and $1.27 billion at June 30, 2010.

The minutes from the June 22, 2011 meeting of the Federal Open Market Committee (FOMC)—which is comprised of members of the Federal Reserve’s board of governors and selected presidents of the regional Federal Reserve banks—indicated that the majority of the committee members believe that the recent spike in food and energy prices has been a temporary aberration.

The FOMC said that it believed the recent rise in inflation would “prove transitory” and that over the medium term inflation would “be subdued as long as commodity prices did not continue to rise rapidly and longer-term inflation expectations remained stable.” Furthermore, the Fed said that it expects inflation to “subside to levels at or below those consistent with the Committee’s dual mandate.”

Federal Reserve policy makers disagreed on whether additional monetary stimulus would be required, even if the outlook for economic growth remained weak, minutes of their meeting showed.

“A few members noted that, depending on how economic conditions evolve, the committee might have to consider providing additional monetary stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run,” the FOMC said.

“On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the committee taking steps to begin removing policy accommodation sooner than currently anticipated.”

Some Fed watchers maintain that a divided FOMC means officials are likely to prolong their low interest-rate policy.

We believe that until fundamentals in the economy show significant signs of improvement—including gains in employment and strength in the housing market—and until inflation picks up, the Fed will leave its Federal Funds target rate at the current level, which may remain the case through the balance of 2011 and into next year.

We continue to favor overnight repurchase agreements, in an effort to maintain a high degree of overnight liquidity.

The Fund also continues to maintain a relatively short Average Maturity. On June 30, 2011, the Fund’s Average Maturity was approximately 33 days, compared to 40 days on December 31, 2010, and 38 days on June 30, 2010.

90 Semi-Annual Report

June 30, 2011

Ready Reserves Fund

Performance Highlights (unaudited)

The Fund’s 7 day yield on June 30, 2011 was 0.01%.

Average Annual Total Returns—Class N Shares period ended June 30, 2011.


	Year To Date			1 Year			3 Year			5 Year			10 Year
Ready Reserves Fund Class N		0.00	%		0.01	%		0.31	%		1.87	%		1.81	%
AAA Ready Money Market Funds		0.01	%		0.02	%		0.36	%		1.86	%		1.76	%

Performance cited represents past performance. Past performance does not guarantee future results and current performance may be lower or higher than the data quoted. For the most current month-end performance information, please call 1-800-742-7272, or visit our Web site at www.williamblairfunds.com. Class N Shares are available to the general public without a sales load. Total return includes reinvestment of income. Yields fluctuate and are not guaranteed. An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corp. (FDIC) or any government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

The AAA Rated Money Market Funds Average represents the average annual composite performance of all AAA rated First Tier Retail Money Market Funds listed by iMoneyNet data.

This report identifies the Fund’s investments on June 30, 2011. These holdings are subject to change. Not all fixed-income securities in the Fund performed the same, nor is there any guarantee that these fixed-income securities will perform as well in the future. Market forecasts provided in this report may not necessarily come to pass.

Sector Diversification (unaudited)

LOGO

The sector diversification shown is based on the total Investments.

June 30, 2011

William Blair Funds 91

Ready Reserves Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Amortized Cost

*U.S. Government and U.S. Government Agency—7.8%*
Federal Home Loan Mortgage Corp. (FHLMC)—2.6%
Federal Home Loan Mortgage Corporation, 0.070%-5.500%, 7/25/11-12/15/11	$	32,397	$	32,532

Total Federal Home Loan Mortgage Corp. (FHLMC)				32,532

Federal National Mortgage Association (FNMA)—2.8%
Federal National Mortgage Association, 0.065%-2.000%, 7/7/11-1/9/12		35,000		35,057

Total Federal National Mortgage Association (FNMA)				35,057

U.S. Treasury—2.4%
U.S. Treasury Bills, 0.080%-0.090%, 7/28/11-8/11/11		20,000		19,999
U.S. Treasury Note, 1.000%, 8/31/11		10,000		10,014

Total U.S. Treasury				30,013

Corporate Notes—11.4%
Brown-Forman Corporation, 5.200%, 4/1/12		1,100		1,139
Caterpillar Financial Services Corporation, 5.125%-5.750%, 10/12/11-2/15/12		8,815		8,951
Citibank NA, 1.375%-1.500%, 7/12/11-8/10/11		10,060		10,068
Eli Lilly & Co., 3.550%, 3/6/12		10,000		10,209
General Electric Capital Corporation, 5.000%-5.875%, 11/15/11-4/10/12		20,500		21,035
Hewlett-Packard Co., 4.250%, 2/24/12		7,000		7,176
International Business Machines Corporation, 0.277%-0.853%, 7/28/11-6/15/12, VRN		18,575		18,584
John Deere Capital Corporation, 5.400%-5.650%, 7/25/11-10/17/11		1,250		1,261
Kimberly-Clark Corporation, 5.625%, 2/15/12		500		516
Pfizer, Inc., 4.450%, 3/15/12		6,912		7,108
Praxair, Inc., 6.375%, 4/1/12		3,731		3,897
Procter & Gamble International Funding, 1.350%, 8/26/11		15,489		15,512
Shell International Finance BV, 1.300%, 9/22/11		10,000		10,022
U.S. Bank NA, 6.375%, 8/1/11		12,045		12,105
Wells Fargo & Co., 5.300%, 8/26/11		15,000		15,112

Total Corporate Notes				142,695

Foreign Government Notes—0.6%
Canadian Wheat Board, 0.040%, 7/11/11		7,000		7,000

Total Foreign Government Notes				7,000

Commercial Paper—54.9%
Abbott Laboratories, 0.070%-0.150%, 7/11/11-8/30/11		38,450		38,448
Caterpillar Financial Services Corporation, 0.060%-0.110%, 7/1/11-8/9/11		34,000		33,999
Chevron Funding Corporation, 0.020%-0.060%, 7/5/11-7/7/11		31,000		31,000
Coca-Cola Co., 0.090%-0.220%, 7/22/11-12/5/11		40,500		40,487
Colgate-Palmolive Co., 0.060%, 7/28/11		8,000		8,000


Issuer	Principal Amount		Amortized Cost

*U.S. Government and U.S. Government Agency—(continued)*
Commercial Paper—(continued)
ConocoPhillips Qatar Funding, Ltd., 0.100%-0.140%, 7/6/11-8/8/11	$	44,450	$	44,447
Deere & Co., 0.110%, 7/8/11		5,850		5,850
General Electric Capital Corporation, 0.090%-0.120%, 7/1/11-8/11/11		24,000		23,998
Hewlett-Packard Co., 0.080%-0.090%, 7/12/11-7/18/11		35,000		35,000
IBM Corporation, 0.060%, 7/12/11-7/20/11		26,000		26,000
Illinois Tool Works, Inc., 0.080%-0.100%, 7/5/11-8/3/11		37,200		37,198
John Deere Credit, Inc., 0.050%-0.110%, 7/1/11-8/5/11		36,336		36,336
Kimberly-Clark Corporation, 0.070%, 7/11/11-7/15/11		17,000		17,000
Merck & Co., 0.080%-0.110%, 8/1/11-8/29/11		26,805		26,801
Nestle Capital Corporation, 0.050%-0.190%, 7/13/11-9/26/11		30,000		29,994
PACCAR Financial Corporation, 0.100%-0.130%, 7/5/11-7/28/11		40,000		39,999
Pfizer, Inc., 0.060%, 7/6/11-7/12/11		29,000		29,000
Private Export Funding, 0.070%-0.200%, 7/11/11-12/1/11		44,000		43,993
Procter & Gamble Co. (The), 0.070%-0.080%, 7/5/11-7/15/11		28,000		28,000
Roche Holding, Inc., 0.080%-0.100%, 7/21/11-8/3/11		42,000		41,996
Shell International Finance BV, 0.080%-0.260%, 7/11/11-7/14/11		9,600		9,599
United Parcel Service, Inc., 0.010%-0.020%, 7/1/11-7/6/11		13,500		13,500
United Technologies Corporation, 0.030%-0.090%, 7/1/11-7/21/11		26,000		26,000
Wal-Mart Stores, Inc., 0.060%-0.080%, 7/1/11-7/26/11		24,000		24,000

Total Commercial Paper				690,645

Asset-Backed Commercial Paper—7.1%
Chariot Funding L.L.C., 0.130%, 7/8/11-7/18/11		46,000		45,999
Govco L.L.C, 0.120%-0.133%, 7/8/11-7/29/11		44,000		43,997

Total Asset-Backed Commercial Paper				89,996

Repurchase Agreements—18.5%
Bank of America, 0.040% dated 6/30/11, due 7/1/11, repurchase price $57,000, collateralized by U.S. Government Agency securities, 0.470%-1.125%, due 11/30/11-9/17/13		57,000		57,000
Barclays Capital, 0.040% dated 6/30/11, due 7/1/11, repurchase price $57,000, collateralized by FDIC guaranteed security, 1.875%, due 10/22/12		57,000		57,000
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $62,209, collateralized by FNMA, 3.420%, due 11/24/20		62,209		62,209

See accompanying Notes to Financial Statements.

92 Semi-Annual Report

June 30, 2011

Ready Reserves Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Amortized Cost
Repurchase Agreements—(continued)
Goldman Sachs, 0.060% dated 6/30/11, due 7/7/11, repurchase price $57,000, collateralized by GNMA, 3.500%-6.000%, due 10/15/33-2/15/41	$	57,000	$	57,000

Total Repurchase Agreements				233,209

Total Investments—100.3% (cost $1,261,147)				1,261,147
Liabilities, plus cash and other assets—(0.3)%				(3,329	)

Net assets—100.0%			$	1,257,818

Portfolio Weighted Average Maturity				33 Days

VRN = Variable Rate Note

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 93

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands) (unaudited)


	Growth Fund		Large Cap Growth Fund			Small Cap Growth Fund			Mid Cap Growth Fund
*Assets*
Investments in securities, at cost	$	525,163	$	22,195		$	580,764		$	114,601
Investments in affiliated companies, at cost		—		—			61,946			—


Investments in securities, at value	$	633,145	$	28,291		$	684,657		$	143,734
Investments in affiliated companies, at value		—		—			77,398			—
Receivable for securities sold		2,183		—			4,957			108
Receivable for fund shares sold		281		20			1,062			354
Receivable from Advisor		—		8			105			3
Dividend and interest receivable		331		27			40			31

Total assets		635,940		28,346			768,219			144,230
*Liabilities*
Payable for investment securities purchased		—		141			1,536			—
Payable for fund shares redeemed		648		35			2,094			62
Investment advisory fee payable		378		18			668			106
Distribution fee payable		46		1			64			3
Other accrued expenses		87		18			380			25

Total liabilities		1,159		213			4,742			196

Net Assets	$	634,781	$	28,133		$	763,477		$	144,034

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	52	$	4		$	32		$	10
Capital paid in excess of par value		506,813		25,798			717,482			110,786
Accumulated net investment income (loss)		568		22			(4,602	)		(187	)
Accumulated net realized gain (loss)		19,366		(3,787	)		(68,780	)		4,292
Net unrealized appreciation (depreciation) of investments and foreign currencies		107,982		6,096			119,345			29,133

Net Assets	$	634,781	$	28,133		$	763,477		$	144,034


Class N Shares
Net Assets	$	227,488	$	3,511		$	320,578		$	16,125
Shares Outstanding		19,080,764		474,354			13,619,458			1,152,114
Net Asset Value Per Share	$	11.92	$	7.40		$	23.54		$	14.00
Class I Shares
Net Assets	$	407,293	$	24,622		$	442,899		$	127,909
Shares Outstanding		32,842,571		3,249,767			18,138,543			8,998,183
Net Asset Value Per Share	$	12.40	$	7.58		$	24.42		$	14.21

See accompanying Notes to Financial Statements.

94 Semi-Annual Report

June 30, 2011

Statements of Operations

for the Period Ended June 30, 2011 (all amounts in thousands) (unaudited)


	Growth Fund			Large Cap Growth Fund			Small Cap Growth Fund			Mid Cap Growth Fund
*Investment income*
Dividends	$	3,177		$	181		$	975		$	471
Less foreign tax withheld		(4	)		(2	)		(36	)		—
Interest		3			—			5			1

Total income		3,176			179			944			472
*Expenses*
Investment advisory fees		2,295			124			4,506			554
Distribution fees		276			8			440			18
Custodian fees		12			17			17			19
Transfer agent fees		67			5			46			7
Sub-transfer agent fees
Class N		140			4			279			8
Class I		68			1			336			26
Professional fees		18			14			24			14
Registration fees		18			16			39			23
Shareholder reporting fees		22			1			122			6
Trustee fees		9			1			16			2
Other expenses		12			3			19			3

Total expenses before waiver		2,937			194			5,844			680
Expenses waived by the Advisor		—			(37	)		(298	)		(21	)

Net expenses		2,937			157			5,546			659

Net investment income (loss)		239			22			(4,602	)		(187	)
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from investments		27,871			3,054			27,659			7,281

Change in net unrealized appreciation (depreciation) of investments		6,467			(1,831	)		(12,408	)		5,967

Net increase (decrease) in net assets resulting from operations	$	34,577		$	1,245		$	10,649		$	13,061

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 95

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (unaudited) and the Year Ended December 31, 2010 (all amounts in thousands)


	Growth Fund						Large Cap Growth Fund						Small Cap Growth Fund						Mid Cap Growth Fund
	2011			2010			2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	239		$	329		$	22		$	32		$	(4,602	)	$	(7,283	)	$	(187	)	$	(147	)
Net realized gain (loss) on investments		27,871			29,431			3,054			1,167			27,659			98,419			7,281			9,349
Change in net unrealized appreciation (depreciation) on investments		6,467			35,328			(1,831	)		3,134			(12,408	)		32,801			5,967			10,074

Net increase (decrease) in net assets resulting from operations		34,577			65,088			1,245			4,333			10,649			123,937			13,061			19,276
*Distributions to shareholders from*
Net investment income		—			(13	)		—			(33	)		—			—			—			—
Net realized gain		—			—			—			—			—			—			—			—

		—			(13	)		—			(33	)		—			—			—			—
*Capital stock transactions*
Net proceeds from sale of shares		88,482			176,362			2,322			3,077			55,731			364,595			40,841			24,389
Shares issued in reinvestment of income dividends and capital gain distributions		—			11			—			29			—			—			—			—
Less cost of shares redeemed		(63,891	)		(85,355	)		(7,469	)		(5,682	)		(194,492	)		(359,741	)		(11,116	)		(13,251	)

Net increase (decrease) in net assets resulting from capital share transactions		24,591			91,018			(5,147	)		(2,576	)		(138,761	)		4,854			29,725			11,138

Increase (decrease) in net assets		59,168			156,093			(3,902	)		1,724			(128,112	)		128,791			42,786			30,414
Net assets
Beginning of period		575,613			419,520			32,035			30,311			891,589			762,798			101,248			70,834

End of period	$	634,781		$	575,613		$	28,133		$	32,035		$	763,477		$	891,589		$	144,034		$	101,248

Undistributed net investment income (loss) at the end of the period	$	568		$	329		$	22		$	—		$	(4,602	)	$	—		$	(187	)	$	—

See accompanying Notes to Financial Statements.

96 Semi-Annual Report

June 30, 2011

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands) (unaudited)


	Small-Mid Cap Growth Fund			Global Growth Fund			International Growth Fund			International Equity Fund
*Assets*
Investments in securities, at cost	$	210,376		$	38,680		$	3,913,278		$	96,318


Investments in securities, at value	$	264,895		$	47,792		$	4,693,509		$	116,416
Foreign currency, at value (cost $—; $302; $20,549; $307)		—			304			20,570			308
Receivable for securities sold		3,651			159			72,159			67,199
Receivable for fund shares sold		376			200			13,483			49
Receivable from Advisor		1			12			—			12
Dividend and interest receivable		29			77			18,387			345
Unrealized appreciation on forward foreign currency contracts		—			—			6,120			—

Total assets		268,952			48,544			4,824,228			184,329
*Liabilities*
Payable for investment securities purchased		3,717			—			27,769			1,276
Payable for fund shares redeemed		81			21			3,277			69,622
Unrealized depreciation on forward foreign currency contracts		—			—			2,037			14
Investment advisory fee payable		208			39			3,904			163
Distribution fee payable		6			7			461			2
Other accrued expenses		27			42			2,157			113

Total liabilities		4,039			109			39,605			71,190

Net Assets	$	264,913		$	48,435		$	4,784,623		$	113,139

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	16		$	5		$	212		$	9
Capital paid in excess of par value		195,997			57,186			5,119,954			185,316
Accumulated net investment income (loss)		(723	)		209			32,775			1,494
Accumulated net realized gain (loss)		15,104			(18,079	)		(1,153,920	)		(93,736	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		54,519			9,114			785,602			20,056

Net Assets	$	264,913		$	48,435		$	4,784,623		$	113,139


Class N Shares
Net Assets	$	29,917		$	4,892		$	2,276,957		$	12,080
Shares Outstanding		1,862,389			548,252			102,219,527			967,449
Net Asset Value Per Share	$	16.06		$	8.92		$	22.28		$	12.51
Class I Shares
Net Assets	$	234,996		$	43,543		$	2,507,666		$	101,059
Shares Outstanding		14,333,276			4,873,673			109,944,287			8,016,517
Net Asset Value Per Share	$	16.40		$	8.93		$	22.81		$	12.63

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 97

Statements of Operations

for the Period Ended June 30, 2011 (all amounts in thousands) (unaudited)


	Small-Mid Cap Growth Fund			Global Growth Fund			International Growth Fund			International Equity Fund
*Investment income*
Dividends	$	671		$	545		$	85,255		$	3,069
Less foreign tax withheld		—			(38	)		(7,246	)		(258	)
Interest		1			—			268			1

Total income		672			507			78,277			2,812
*Expenses*
Investment advisory fees		1,238			232			24,559			971
Distribution fees		36			6			3,101			17
Shareholder services fees		—			35			—			—
Custodian fees		21			35			339			47
Transfer agent fees		18			9			197			4
Sub-transfer agent fees
Class N		17			1			1,649			7
Class I		28			1			795			53
Professional fees		17			22			97			29
Registration fees		27			20			48			19
Shareholder reporting fees		5			—			486			—
Trustee fees		3			1			88			5
Other expenses		5			4			127			8

Total expenses before waiver		1,415			366			31,486			1,160
Expenses waived by the Advisor		(20	)		(70	)		—			(84	)

Net expenses		1,395			296			31,486			1,076

Net investment income (loss)		(723	)		211			46,791			1,736
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments		16,934			4,332			336,096			23,909
Foreign currency transactions		—			(23	)		(41,812	)		(151	)

Total net realized gain (loss)		16,934			4,309			294,284			23,758
Change in net unrealized appreciation (depreciation) of:
Investments		10,526			(1,624	)		(245,480	)		(19,902	)
Foreign currency translations		—			—			4,497			(52	)

Total change in net unrealized appreciation (depreciation)		10,526			(1,624	)		(240,983	)		(19,954	)

Net increase (decrease) in net assets resulting from operations	$	26,737		$	2,896		$	100,092		$	5,540

See accompanying Notes to Financial Statements.

98 Semi-Annual Report

June 30, 2011

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (unaudited) and the Year Ended December 31, 2010 (all amounts in thousands)


	Small-Mid Cap Growth Fund						Global Growth Fund						International Growth Fund						International Equity Fund
	2011			2010			2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	(723	)	$	(871	)	$	211		$	51		$	46,791		$	38,496		$	1,736		$	2,202
Net realized gain (loss) on investments and foreign currency transactions		16,934			22,299			4,309			3,989			294,284			706,043			23,758			30,531
Change in net unrealized appreciation (depreciation) on investments and foreign currency translation		10,526			16,762			(1,624	)		3,533			(240,983	)		122,523			(19,954	)		(21,798	)

Net increase (decrease) in net assets resulting from operations		26,737			38,190			2,896			7,573			100,092			867,062			5,540			10,935
*Distributions to shareholders from*
Net investment income		—			—			—			(12	)		—			(101,433	)		—			(2,578	)
Net realized gain		—			—			—			—			—			—			—			—

		—			—			—			(12	)		—			(101,433	)		—			(2,578	)
*Capital stock transactions*
Net proceeds from sale of shares		49,639			51,303			2,725			4,844			441,345			1,498,589			20,107			59,843
Shares issued in reinvestment of income dividends and capital gain distributions		—			—			—			11			—			92,533			—			2,452
Less cost of shares redeemed		(19,528	)		(28,256	)		(2,063	)		(5,826	)		(838,993	)		(1,747,980	)		(90,563	)		(190,765	)

Net increase (decrease) in net assets resulting from capital share transactions		30,111			23,047			662			(971	)		(397,648	)		(156,858	)		(70,456	)		(128,470	)

Increase (decrease) in net assets		56,848			61,237			3,558			6,590			(297,556	)		608,771			(64,916	)		(120,113	)
Net assets
Beginning of period	$	208,065		$	146,828		$	44,877		$	38,287		$	5,082,179		$	4,473,408		$	178,055		$	298,168

End of period	$	264,913		$	208,065		$	48,435		$	44,877		$	4,784,623		$	5,082,179		$	113,139		$	178,055

Undistributed net investment income (loss) at the end of the period	$	(723	)	$	—		$	209		$	(2	)	$	32,775		$	(14,016	)	$	1,494		$	(242	)

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 99

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands) (unaudited)


	International Small Cap Growth Fund			Emerging Markets Growth Fund			Emerging Leaders Growth Fund
*Assets*
Investments in securities, at cost	$	640,773		$	746,542		$	88,893


Investments in securities, at value	$	757,903		$	869,140		$	98,436
Foreign currency, at value (cost $5,547; $4,854; $2,617)		5,572			4,854			2,629
Receivable for securities sold		7,313			16,083			2,138
Receivable for fund shares sold		2,434			101			99
Receivable from Advisor		—			—			11
Dividend and interest receivable		1,350			2,645			286
Unrealized appreciation on forward foreign currency contracts		—			—			—

Total assets		774,572			892,823			103,599
*Liabilities*
Payable for investment securities purchased		4,890			9,754			2,937
Payable for fund shares redeemed		231			1,015			112
Payable to custodian		—			1,102			—
Unrealized depreciation on forward foreign currency contracts		30			—			—
Investment advisory fee payable		610			963			86
Distribution fee payable		60			32			4
Other accrued expenses		152			368			58

Total liabilities		5,973			13,234			3,197

Net Assets	$	768,599		$	879,589		$	100,402

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	55		$	56		$	10
Capital paid in excess of par value		709,028			644,901			84,117
Accumulated net investment income (loss)		4,319			(5,429	)		336
Accumulated net realized gain (loss)		(61,930	)		117,446			6,390
Net unrealized appreciation (depreciation) of investments and foreign currencies		117,127			122,615			9,549

Net Assets	$	768,599		$	879,589		$	100,402


Class N Shares
Net Assets	$	22,415		$	29,687		$	50
Shares Outstanding		1,626,233			1,897,450			4,989
Net Asset Value Per Share	$	13.78		$	15.65		$	10.09
Class I Shares
Net Assets	$	441,132		$	173,639		$	32,417
Shares Outstanding		31,650,384			11,000,289			3,208,667
Net Asset Value Per Share	$	13.94		$	15.78		$	10.10

See accompanying Notes to Financial Statements.

100 Semi-Annual Report

June 30, 2011

Statements of Operations

for the Period Ended June 30, 2011 (all amounts in thousands) (unaudited)


	International Small Cap Growth Fund			Emerging Markets Growth Fund			Emerging Leaders Growth Fund
*Investment income*
Dividends	$	9,805		$	14,909		$	1,185
Less foreign tax withheld		(816	)		(1,112	)		(99	)
Interest		90			148			—

Total income		9,079			13,945			1,086
*Expenses*
Investment advisory fees		3,524			6,374			530
Distribution fees		28			39			—
Shareholder services fees		313			164			18
Custodian fees		93			258			66
Transfer agent fees		15			24			7
Sub-transfer agent fees
Class N		17			14			—
Class I		57			28			—
Professional fees		33			58			34
Registration fees		48			28			27
Shareholder reporting fees		24			11			1
Trustee fees		9			21			2
Other expenses		13			28			4

Total expenses before waiver		4,174			7,047			689
Expenses waived by the Advisor		—			—			(70	)

Net expenses		4,174			7,047			619

Net investment income (loss)		4,905			6,898			467
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments		51,734			135,105			5,902
Foreign currency transactions		1,996			(885	)		(177	)

Total net realized gain (loss)		53,730			134,220			5,725
Change in net unrealized appreciation (depreciation) of:
Investments		(18,159	)		(162,150	)		(8,084	)
Foreign currency translations		(61	)		(29	)		11

Total change in net unrealized appreciation (depreciation)		(18,220	)		(162,179	)		(8,073	)

Net increase (decrease) in net assets resulting from operations	$	40,415		$	(21,061	)	$	(1,881	)

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 101

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (unaudited) and the Year Ended December 31, 2010 (all amounts in thousands)


	International Small Cap Growth Fund						Emerging Markets Growth Fund						Emerging Leaders Growth Fund
	2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	4,905		$	3,235		$	6,898		$	4,305		$	467		$	468
Net realized gain (loss) on investments and foreign currency transactions		53,730			57,094			134,220			245,341			5,725			33,656
Change in net unrealized appreciation (depreciation) on investments and foreign currency translation		(18,220	)		62,315			(162,179	)		13,556			(8,073	)		(16,315	)

Net increase (decrease) in net assets resulting from operations		40,415			122,644			(21,061	)		263,202			(1,881	)		17,809
*Distributions to shareholders from*
Net investment income		—			(2,781	)		—			(13,461	)		—			(255	)
Net realized gain		—			—			—			—			—			(505	)

		—			(2,781	)		—			(13,461	)		—			(760	)
*Capital stock transactions*
Net proceeds from sale of shares		136,913			222,392			125,492			357,761			17,588			14,224
Shares issued in reinvestment of income dividends and capital gain distributions		—			2,417			—			12,072			—			681
Less cost of shares redeemed		(55,680	)		(88,572	)		(475,385	)		(407,291	)		(10,206	)		(52,189	)

Net increase (decrease) in net assets resulting from capital share transactions		81,233			136,237			(349,893	)		(37,458	)		7,382			(37,284	)

Increase (decrease) in net assets		121,648			256,100			(370,954	)		212,283			5,501			(20,235	)
Net assets
Beginning of period	$	646,951		$	390,851		$	1,250,543		$	1,038,260		$	94,901		$	115,136

End of period	$	768,599		$	646,951		$	879,589		$	1,250,543		$	100,402		$	94,901

Undistributed net investment income (loss) at the end of the period	$	4,319		$	(586	)	$	(5,429	)	$	(12,327	)	$	336		$	(131	)

See accompanying Notes to Financial Statements.

102 Semi-Annual Report

June 30, 2011

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands) (unaudited)


	Small Cap Value Fund		Mid Cap Value Fund
*Assets*
Investments in securities, at cost	$	207,438	$	3,745


Investments in securities, at value	$	227,947	$	4,108
Receivable for securities sold		1,538		123
Receivable for fund shares sold		3,252		25
Receivable from Advisor		28		10
Dividend and interest receivable		231		6

Total assets		232,996		4,272
*Liabilities*
Payable for investment securities purchased		3,294		120
Payable for fund shares redeemed		24		—
Investment advisory fee payable		197		3
Distribution fee payable		8		—
Other accrued expenses		30		6

Total liabilities		3,553		129

Net Assets	$	229,443	$	4,143

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	17	$	—
Capital paid in excess of par value		198,266		3,719
Accumulated net investment income (loss)		402		22
Accumulated net realized gain (loss)		10,249		39
Net unrealized appreciation (depreciation) of investments		20,509		363

Net Assets	$	229,443	$	4,143


Class N Shares
Net Assets	$	42,765	$	47
Shares Outstanding		3,052,044		4,163
Net Asset Value Per Share	$	14.01	$	11.38
Class I Shares
Net Assets	$	186,678	$	4,096
Shares Outstanding		13,089,611		359,619
Net Asset Value Per Share	$	14.26	$	11.39

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 103

Statements of Operations

for the Period Ended June 30, 2011 (all amounts in thousands) (unaudited)


	Small Cap Value Fund			Mid Cap Value Fund
*Investment income*
Dividends	$	1,412		$	36
Interest		1			—

Total income		1,413			36
*Expenses*
Investment advisory fees		1,072			17
Distribution fees		48			—
Custodian fees		38			20
Transfer agent fees		16			2
Sub-transfer agent fees
Class N		21			—
Class I		51			—
Professional fees		13			13
Registration fees		17			17
Shareholder reporting fees		9			—
Trustee fees		2			—
Other expenses		3			1

Total expenses before waiver		1,290			70
Expenses waived and reimbursed by the Advisor		(152	)		(51	)

Net expenses		1,138			19

Net investment income (loss)		275			17
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from investments		9,673			25

Change in net unrealized appreciation (depreciation) of investments		(5,949	)		173

Net increase (decrease) in net assets resulting from operations	$	3,999		$	215

See accompanying Notes to Financial Statements.

104 Semi-Annual Report

June 30, 2011

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (unaudited) and the Year Ended December 31, 2010 (all amounts in thousands)


	Small Cap Value Fund						Mid Cap Value Fund
	2011			2010			2011			2010(a)
*Operations*
Net investment income (loss)	$	275		$	411		$	17		$	26
Net realized gain (loss) on investments		9,673			9,981			25			19
Change in net unrealized appreciation (depreciation) on investments		(5,949	)		20,721			173			190

Net increase (decrease) in net assets resulting from operations		3,999			31,113			215			235
*Distributions to shareholders from*
Net investment income		—			(404	)		—			(21	)
Net realized gain		—			—			—			(5	)

		—			(404	)		—			(26	)
*Capital stock transactions*
Net proceeds from sale of shares		101,754			92,468			769			3,163
Shares issued in reinvestment of income dividends and capital gain distributions		—			354			—			26
Less cost of shares redeemed		(40,809	)		(13,891	)		(234	)		(5	)

Net increase (decrease) in net assets resulting from capital share transactions		60,945			78,931			535			3,184

Increase (decrease) in net assets		64,944			109,640			750			3,393
Net assets
Beginning of period	$	164,499		$	54,859		$	3,393		$	—

End of period	$	229,443		$	164,499		$	4,143		$	3,393

Undistributed net investment income (loss) at the end of the period	$	402		$	127		$	22		$	5

(a)

For the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 105

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands) (unaudited)


	Bond Fund			Income Fund			Low Duration Fund			Ready Reserves Fund
*Assets*
Investments in securities, at cost	$	193,902		$	91,479		$	148,004		$	1,261,147


Investments in securities, at value	$	203,963		$	96,329		$	148,587		$	1,261,147
Receivable for securities sold		252			1,859			1,061			—
Receivable for fund shares sold		1,071			62			—			—
Receivable from Advisor		12			3			5			506
Dividend and interest receivable		1,862			870			486			1,828

Total assets		207,160			99,123			150,139			1,263,481
*Liabilities*
Payable for investment securities purchased		2,167			3,800			3,209			4,997
Payable for fund shares redeemed		1,044			92			798			—
Investment advisory fee payable		50			38			36			250
Distribution fee payable		19			4			10			365
Other accrued expenses		72			61			51			51

Total liabilities		3,352			3,995			4,104			5,663

Net Assets	$	203,808		$	95,128		$	146,035		$	1,257,818

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	19		$	10		$	15		$	1,258
Capital paid in excess of par value		192,598			130,881			147,214			1,256,497
Accumulated net investment income (loss)		(388	)		(261	)		(710	)		86
Accumulated net realized gain (loss)		1,518			(40,352	)		(1,067	)		(23	)
Net unrealized appreciation (depreciation) of investments		10,061			4,850			583			—

Net Assets	$	203,808		$	95,128		$	146,035		$	1,257,818


Class N Shares
Net Assets	$	4,939		$	30,526		$	5,931		$	1,257,818
Shares Outstanding		458,971			3,301,286			599,410			1,257,875,022
Net Asset Value Per Share	$	10.76		$	9.25		$	9.89		$	1.00
Class I Shares
Net Assets	$	145,432		$	64,602		$	70,409		$	—
Shares Outstanding		13,648,936			7,039,967			7,115,870			—
Net Asset Value Per Share	$	10.66		$	9.18		$	9.89		$	—

See accompanying Notes to Financial Statements.

106 Semi-Annual Report

June 30, 2011

Statements of Operations

for the Period Ended June 30, 2011 (all amounts in thousands) (unaudited)


	Bond Fund			Income Fund			Low Duration Fund			Ready Reserves Fund
*Investment income*
Interest	$	4,839		$	2,270		$	1,623		$	1,144

Total income		4,839			2,270			1,623			1,144
*Expenses*
Investment advisory fees		294			239			220			1,492
Distribution fees		4			24			5			—
Shareholder services fees		113			—			64			2,176
Custodian fees		27			25			30			4
Transfer agent fees		11			12			8			14
Sub-transfer agent fees
Class N		2			24			—			—
Class I		4			1			—			—
Professional fees		17			17			14			28
Registration fees		28			16			42			13
Shareholder reporting fees		4			6			2			26
Trustee fees		3			2			2			24
Other expenses		8			4			6			36

Total expenses before waiver		515			370			393			3,813
Expenses waived and reimbursed by the Advisor		(55	)		(16	)		(32	)		(2,731	)

Net expenses		460			354			361			1,082

Net investment income (loss)		4,379			1,916			1,262			62
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from investments		1,281			1,567			37			—

Change in net unrealized appreciation (depreciation) of investments		258			(1,005	)		683			—

Net increase (decrease) in net assets resulting from operations	$	5,918		$	2,478		$	1,982		$	62

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 107

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (unaudited) and the Year Ended December 31, 2010 (all amounts in thousands)


	Bond Fund						Income Fund						Low Duration Fund						Ready Reserves Fund
	2011			2010			2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	4,379		$	8,051		$	1,916		$	4,613		$	1,262		$	1,915		$	62		$	126
Net realized gain (loss) on investments		1,281			2,212			1,567			2,316			37			(60	)		—			—
Change in net unrealized appreciation (depreciation) on investments		258			3,290			(1,005	)		202			683			468			—			—

Net increase (decrease) in net assets resulting from operations		5,918			13,553			2,478			7,131			1,982			2,323			62			126
*Distributions to shareholders from*
Net investment income		(4,768	)		(8,566	)		(2,177	)		(5,134	)		(1,972	)		(2,958	)		(62	)		(126	)
Net realized gain		—			(494	)		—			—			—			—			—			—

		(4,768	)		(9,060	)		(2,177	)		(5,134	)		(1,972	)		(2,958	)		(62	)		(126	)
*Capital stock transactions*
Net proceeds from sale of shares		51,086			90,709			4,748			15,385			69,555			149,882			449,947			670,783
Shares issued in reinvestment of income dividends and capital gain distributions		3,450			6,013			1,845			4,350			1,574			2,297			62			126
Less cost of shares redeemed		(44,654	)		(55,783	)		(25,043	)		(26,063	)		(68,574	)		(103,208	)		(408,734	)		(807,267	)

Net increase (decrease) in net assets resulting from capital share transactions		9,882			40,939			(18,450	)		(6,328	)		2,555			48,971			41,275			(136,358	)

Increase (decrease) in net assets		11,032			45,432			(18,149	)		(4,331	)		2,565			48,336			41,275			(136,358	)
Net assets
Beginning of period	$	192,776		$	147,344		$	113,277		$	117,608		$	143,470		$	95,134		$	1,216,543		$	1,352,901

End of period	$	203,808		$	192,776		$	95,128		$	113,277		$	146,035		$	143,470		$	1,257,818		$	1,216,543

Undistributed net investment income (loss) at the end of the period	$	(388	)	$	1		$	(261	)	$	—		$	(710	)	$	—		$	86		$	86

See accompanying Notes to Financial Statements.

108 Semi-Annual Report

June 30, 2011

Notes to Financial Statements

(1) Significant Accounting Policies

The following is a summary of William Blair Funds’ (the “Fund”) significant accounting policies in effect during the period covered by the financial statements, which are in accordance with U.S. generally accepted accounting principles.

(a) Description of the Fund

The Fund is a diversified mutual fund registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company. The Fund currently consists of the following nineteen portfolios (the “Portfolios”), each with its own investment objective and policies. For each portfolio, the number of shares authorized is unlimited.


Equity Portfolios Growth Large Cap Growth Small Cap Growth Mid Cap Growth Small-Mid Cap Growth Small Cap Value Mid Cap Value Global Equity Portfolio Global Growth		International Equity Portfolios International Growth International Equity Institutional International Growth Institutional International Equity International Small Cap Growth Emerging Markets Growth Emerging Leaders Growth Fixed-Income Portfolios Bond Income Low Duration Money Market Portfolio Ready Reserves

The investment objectives of the Portfolios are as follows:


Equity		Long-term capital appreciation.
Global Equity		Long-term capital appreciation.
International Equity		Long-term capital appreciation.
Fixed-Income		High level of current income with relative stability of principal. (Maximize total return—Low Duration)
Money Market		Current income, a stable share price and daily liquidity.

The Institutional International Growth Portfolio, the Institutional International Equity Portfolio and the Institutional Class of the International Small Cap Growth Portfolio, the Emerging Markets Growth Portfolio, the Emerging Leaders Growth Portfolio, the Bond Portfolio and the Low Duration Portfolio issue a separate report.

(b) Share Classes

Three different classes of shares currently exist: N, I and Institutional. This report includes financial highlight information for Classes N and I. The table below describes the Class N shares and the Class I shares covered by this report:


Class		Description
N		Class N shares are sold to the general public, either directly through the Fund’s distributor or through a select number of financial intermediaries. Class N shares are sold without any sales load, and carry an annual 12b-1 distribution fee (0.25% for the Equity, Global Equity and International Equity Portfolios and 0.15% for the Fixed-Income Portfolios) or a service fee (0.35% for the Money Market Portfolio), a Sub-transfer agent expense which is not a fixed rate and may vary by Portfolio and class, and an annual shareholder administration fee (0.15% for the Global Growth Portfolio, the International Small Cap Growth Portfolio, the Emerging Markets Growth Portfolio, the Emerging Leaders Growth Portfolio, the Bond Portfolio and the Low Duration Portfolio).
I		Class I shares are sold to a limited group of investors. They do not carry any sales load or distribution fees and generally have lower ongoing expenses than the Class N shares. Class I shares have a Sub-transfer agent expense which is not a fixed rate and may vary by Portfolio and class and the Global Growth Portfolio, the International Small Cap Growth Portfolio, the Emerging Markets Growth Portfolio, the Emerging Leaders Growth Portfolio, the Bond Portfolio and the Low Duration Portfolio carry an annual shareholder administration fee of 0.15%.

June 30, 2011

William Blair Funds 109

Sub-transfer: The Portfolios may reimburse the Advisor for fees paid to intermediaries such as banks, broker-dealers, financial advisors or other financial institutions for sub-administration, sub-transfer agency and other services provided to investors whose shares are held of record in omnibus, other group accounts, retirement plans or accounts traded through registered securities clearing agents. These fees may vary based on, for example, the nature of services provided, but generally range up to 0.15% of the assets of the class serviced or maintained by the intermediary or up to $15 per shareholder account.

Investment income, realized and unrealized gains and losses, and certain Portfolio 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 Portfolios have equal rights with respect to voting subject to class specific arrangements.

(c) Investment Valuation

The market value of domestic equity securities is determined by valuing securities traded on national securities markets or in the over-the-counter markets at the last sale price or, if applicable, the official closing price or, in the absence of a recent sale on the date of determination, at the latest bid price.

The value of foreign equity securities is generally determined based upon the last sale price on the foreign exchange or market on which it is primarily traded and in the currency of that market as of the close of the appropriate exchange or, if there have been no sales during that day, at the latest bid price. The Board of Trustees has determined that the passage of time between when the foreign exchanges or markets close and when the Portfolios 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 Portfolios may use an independent pricing service to fair value the security as of the close of regular trading on the New York Stock Exchange. As a result, a Portfolio’s value for a security may be different from the last sale price (or the latest bid price).

Fixed-income securities are valued by using market quotations or independent pricing services that use either prices provided by market-makers or matrixes that produce estimates of market values obtained from yield data relating to instruments or securities with similar characteristics.

Other securities, and all other assets, including securities 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 Fund’s Valuation Procedures. The value of fair valued securities may be different from the last sale price (or the latest bid price), and there is no guarantee that a fair valued security will be sold at the price at which a Portfolio is carrying the security.

Investments in other funds are valued at the underlying fund’s net asset value on the date of valuation. Securities held in the Ready Reserves Portfolio are valued at amortized cost, which approximates market value.

As of June 30, 2011, there were securities held in the International Growth, International Small Cap Growth, Emerging Markets Growth, Bond and Income Portfolios requiring fair valuation pursuant to the Funds’ Valuation Procedures.

(d) Investment income and transactions

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

Interest income is recorded on an accrual basis, adjusted for amortization of premium or discount. Variable rate bonds and floating rate notes earn interest at coupon rates that fluctuate at specific time intervals. The interest rates shown in the Portfolio of Investments for the Bond, Income, Low Duration and Ready Reserves Portfolios were the rates in effect on June 30, 2011. Put bonds may be redeemed at the discretion of the holder on specified dates prior to maturity.

Premiums and discounts are accreted and amortized on a straight-line basis for short-term investments and on an effective interest method for long-term investments.

Paydown gains and losses on mortgage and asset-backed securities are treated as an adjustment to interest income. For the period ended June 30, 2011, the Bond, Income and Low Duration Portfolios recognized a reduction of interest

110 Semi-Annual Report

June 30, 2011

income and a decrease of net realized loss of $(390), $(261) and $(709), respectively (in thousands). This reclassification had no effect on the net asset value or the net assets of the Portfolios.

The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign currency gains or losses arise from disposition of foreign currency, the difference in the foreign exchange rates between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the ex-date or accrual date and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes (due to the changes in the exchange rate) in the value of foreign currency and other assets and liabilities denominated in foreign currencies held at period end.

Security and shareholder transactions are accounted for no later than one business day following the trade date. However, for financial reporting purposes, security and shareholder transactions are accounted for on the trade date of the last business day of the reporting period. Realized gains and losses from securities transactions are recognized on a specifically identified cost basis.

(e) Share Valuation and Dividends 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 Portfolio’s net assets attributable to that class by the number of shares of the class outstanding as of the close of regular trading on the New York Stock Exchange (the “Exchange”), which is generally 4:00 p.m. Eastern time, on each day the Exchange is open. Redemption fees may be applicable to redemptions or exchanges within 60 days of purchase. For both Class N and Class I shares, the William Blair domestic equity portfolios assess a 1% redemption fee on shares sold or exchanged that have been owned 60 days or less and the William Blair global equity and international equity portfolios assess a 2% redemption fee on shares sold or exchanged that have been owned 60 days or less as disclosed within the Fund’s Prospectus. The redemption fees collected by the Portfolio are netted against the amount of redemptions for presentation on the Statement of Changes in Net Assets.

The redemption fees collected by the Portfolios were as follows (in thousands):


	Period Ended June 30, 2011		Year Ended December 31, 2010
Growth	$	3	$	10
Large Cap Growth		—		1
Small Cap Growth		10		78
Mid Cap Growth		4		2
Small-Mid Cap Growth		4		—
Global Growth		—		—
International Growth		52		149
International Equity		4		7
International Small Cap Growth		7		3
Emerging Markets Growth		4		18
Emerging Leaders Growth		—		—
Small Cap Value		33		20
Mid Cap Value		—		—

Dividends from net investment income, if any, of the Growth, Large Cap Growth, Small Cap Growth, Mid Cap Growth, Small-Mid Cap Growth, Global Growth, International Growth, International Equity, International Small Cap Growth, Emerging Markets Growth, Emerging Leaders Growth, Small Cap Value and Mid Cap Value Portfolios are declared and paid at least annually. Dividends from the Income, Bond, Low Duration and Ready Reserves Portfolios are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid at least annually in December. Dividends payable to shareholders are recorded on the ex-dividend date.

June 30, 2011

William Blair Funds 111

(f) Foreign Currency Translation and Forward Foreign Currency Contracts

The Global Growth, International Growth, International Equity, International Small Cap Growth, Emerging Markets Growth and Emerging Leaders Growth Portfolios 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 Portfolio’s Net Asset Value, typically 4:00 p.m. Eastern time on days when there is regular trading on the New York Stock Exchange. Payables and receivables for securities transactions, dividends, interest income and tax reclaims are translated into U.S. dollars using a spot market rate of exchange as of 4:00 p.m. Eastern time. Settlement of purchases and sales and dividend and interest receipts are translated into U.S. dollars using a spot market rate of exchange as of 11:00 a.m. Eastern time.

(g) Income Taxes

Each Portfolio intends to comply with the provisions of Subchapter M of the Internal Revenue Code available to regulated investment companies. Each portfolio 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.

The Global Growth, International Growth, International Equity, International Small Cap Growth, Emerging Markets Growth and Emerging Leaders Growth Portfolios may be subject to a tax imposed on net realized gains on securities of certain foreign countries.

Each Portfolio is subject to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. Management has evaluated the implications of ASC 740 and all of the uncertain tax positions of the Portfolios and has determined that no liability is required to be recorded in the financial statements.

The statute of limitations on the Portfolios’ tax returns for each of the tax years in the four year period ended December 31, 2010, remains open and the returns are subject to examination.

The Global Growth, International Growth, International Equity, International Small Cap Growth, Emerging Markets Growth and Emerging Leaders Growth Portfolios have elected to mark-to-market their investments in Passive Foreign Investment Companies (“PFICs”) for federal income tax purposes. The Portfolios also treat the deferred loss associated with current and prior year wash sales as an adjustment to the cost of investments for tax purposes. The cost of investments for federal income tax purposes and related gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) at June 30, 2011, were as follows (in thousands):


Portfolio	Cost of Investments		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Appreciation/ Depreciation
Growth	$	526,569	$	118,412	$	11,836	$	106,576
Large Cap Growth		22,491		6,143		343		5,800
Small Cap Growth		651,552		148,517		38,014		110,503
Mid Cap Growth		114,872		29,727		865		28,862
Small-Mid Cap Growth		212,110		54,780		1,995		52,785
Global Growth		38,710		9,599		515		9,084
International Growth		3,922,154		861,359		84,633		776,726
International Equity		97,122		19,971		719		19,252
International Small Cap Growth		641,583		124,962		8,645		116,317
Emerging Markets Growth		753,870		127,720		12,433		115,287
Emerging Leaders Growth		89,549		9,746		853		8,893
Small Cap Value		208,911		23,310		4,274		19,036
Mid Cap Value		3,756		400		48		352
Bond		193,902		10,501		440		10,061
Income		91,479		5,503		653		4,850
Low Duration		148,004		918		335		583
Ready Reserves		1,261,134		13		—		13

112 Semi-Annual Report

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The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal income tax regulations that may differ from U.S. generally accepted accounting principles. As a result, net investment income or loss and net realized gain or loss for a reporting period may differ from the amount distributed during such period. In addition, the Portfolios may periodically record reclassifications among certain capital accounts to reflect differences between financial reporting and income tax basis distributions. The reclassifications were reported in order to reflect the tax treatment for certain permanent differences that exist between income tax regulations and U.S. generally accepted accounting principles. The reclassifications generally relate to net operating losses, Section 988 currency gains and losses, PFICs gains and losses, recharacterization of dividends received from investments in REITs, expired capital loss carryforwards and redemptions in-kind. These reclassifications have no impact on the net asset values of the Portfolios. Accordingly, at December 31, 2010, (the Funds’ most recent fiscal year end) the following reclassifications were recorded (in thousands):


Portfolio	Accumulated Net Investment Income (Loss)			Accumulated Net Realized Gain/(Loss)			Capital Paid in Excess of Par Value
Growth	$	—		$	—		$	—
Large Cap Growth		—			472			(472	)
Small Cap Growth		7,283			(6,138	)		(1,145	)
Mid Cap Growth		147			—			(147	)
Small-Mid Cap Growth		871			—			(871	)
Global Growth		(51	)		60			(9	)
International Growth		62,698			(62,698	)		—
International Equity		173			(163	)		(10	)
International Small Cap Growth		(849	)		849			—
Emerging Markets Growth		4,413			(33,541	)		29,128
Emerging Leaders Growth		(47	)		51			(4	)
Small Cap Value		102			(30	)		(72	)
Mid Cap Value		—			—			—
Bond		516			(516	)		—
Income		521			(517	)		(4	)
Low Duration		1,043			(1,043	)		—
Ready Reserves		2			930			(932	)

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 2010 and 2009 was as follows (in thousands):


	Distributions Paid in 2010						Distributions Paid in 2009
Portfolio	Ordinary Income		Long-Term Capital Gains		Total Distributions		Ordinary Income			Long-Term Capital Gains		Total Distributions
Growth	$	13	$	—	$	13	$	43		$	—	$	43
Large Cap Growth		33		—		33		16			—		16
Small Cap Growth		—		—		—		—			—		—
Mid Cap Growth		—		—		—		—			—		—
Small-Mid Cap Growth		—		—		—		—			—		—
Global Growth		12		—		12		3			—		3
International Growth		101,433		—		101,433		31,541			—		31,541
International Equity		2,578		—		2,578		1,449	��		—		1,449
International Small Cap Growth		2,781		—		2,781		778			—		778
Emerging Markets Growth		13,461		—		13,461		11,127			—		11,127
Emerging Leaders Growth		255		505		760		1,588			—		1,588
Small Cap Value		269		135		404		213			—		213
Mid Cap Value		26		—		26		N/A			N/A		N/A
Bond		8,566		494		9,060		6,213			—		6,213
Income		5,134		—		5,134		6,533			—		6,533
Low Duration		2,958		—		2,958		86			—		86
Ready Reserves		126		—		126		1,639			—		1,639

June 30, 2011

William Blair Funds 113

As of December 31, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):


Portfolio	Undistributed Ordinary Income		Accumulated Capital and Other Losses			Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ Depreciation
Growth	$	329	$	(7,557	)	$	—	$	100,567
Large Cap Growth		—		(6,323	)		—		7,409
Small Cap Growth		—		(87,410	)		—		122,724
Mid Cap Growth		—		(2,637	)		—		22,814
Small-Mid Cap Growth		—		—			401		41,762
Global Growth		—		(22,357	)		—		10,705
International Growth		6,047		(1,421,884	)		—		980,202
International Equity		—		(116,060	)		—		38,334
International Small Cap Growth		5,932		(113,021	)		—		126,190
Emerging Markets Growth		—		(5,861	)		—		261,554
Emerging Leaders Growth		987		(14	)		539		16,644
Small Cap Value		—		—			1,617		25,544
Mid Cap Value		21		—			—		188
Bond		2		—			236		9,803
Income		—		(41,771	)		—		5,707
Low Duration		—		(1,104	)		—		(100	)
Ready Reserves		86		(23	)		—		—

As of December 31, 2010, the Portfolios have unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows (in thousands):


Portfolio	2011		2012		2013		2014		2015		2016		2017		2018		Total
Growth	$	—	$	—	$	—	$	—	$	—	$	—	$	7,557	$	—	$	7,557
Large Cap Growth		769		—		—		—		—		1,709		3,845		—		6,323
Small Cap Growth		—		—		—		—		—		—		72,368		—		72,368
Mid Cap Growth		—		—		—		—		—		—		2,638		—		2,638
Small-Mid Cap Growth		—		—		—		—		—		—		—		—		—
Global Growth		—		—		—		—		—		9,230		13,127		—		22,357
International Growth		—		—		—		—		—		224,515		1,198,096		—		1,422,611
International Equity		—		—		—		—		—		34,279		81,926		—		116,205
International Small Cap Growth		—		—		—		—		—		26,723		86,330		—		113,053
Emerging Markets Growth		—		—		—		—		—		—		5,572		—		5,572
Emerging Leaders Growth		—		—		—		—		—		—		—		—		—
Small Cap Value		—		—		—		—		—		—		—		—		—
Mid Cap Value		—		—		—		—		—		—		—		—		—
Bond		—		—		—		—		—		—		—		—		—
Income		1,578		4,431		3,398		4,138		9,190		14,459		4,577		—		41,771
Low Duration		—		—		—		—		—		—		—		955		955
Ready Reserves		—		20		—		—		3		—		—		—		23

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For the period from November 1, 2010 through December 31, 2010, the following Portfolios incurred net realized capital losses or foreign currency losses. Each Portfolio intends to treat this loss as having occurred in fiscal year 2011 for federal income tax purposes (in thousands):


Portfolio	Capital Amount		Currency Amount
Growth	$	—	$	—
Large Cap Growth		—		—
Small Cap Growth		15,042		—
Mid Cap Growth		—		—
Small-Mid Cap Growth		—		—
Global Growth		—		2
International Growth		—		—
International Equity		—		—
International Small Cap Growth		—		—
Emerging Markets Growth		—		324
Emerging Leaders Growth		—		—
Small Cap Value		—		—
Mid Cap Value		—		—
Bond		—		—
Income		—		—
Low Duration		149		—
Ready Reserves		—		—

(h) Repurchase Agreements

In a repurchase agreement, a Portfolio buys a security at one price and at the time of sale, the seller agrees to repurchase the obligation at a mutually agreed upon time and price (usually within seven days). The repurchase agreement thereby determines the yield during the purchaser’s holding period, while the seller’s obligation to repurchase is secured by the value of the underlying security. William Blair & Company, L.L.C. (“William Blair” or the “Advisor”) will monitor, on an ongoing basis, the value of the underlying securities to ensure that the value always equals or exceeds the repurchase price plus accrued interest. Repurchase agreements could involve certain risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon a Portfolio’s ability to dispose of the underlying securities. The risk to a Portfolio 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 Portfolio is entitled to sell the underlying collateral. The loss, if any, to a Portfolio 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 Portfolio may be delayed or limited. Although no definitive creditworthiness criteria are used, the Advisor reviews the creditworthiness of the banks and non-bank dealers with which a Portfolio enters into repurchase agreements to evaluate those risks. A Portfolio may, for tax purposes, deem repurchase agreements collateralized by U.S. Government securities to be investments in U.S. Government securities.

(i) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates.

(j) Fair Value Measurements

The Portfolios are subject to ASC 820, Fair Value measurement and Disclosures. In accordance with ASC 820, “fair value” is defined as the price that a Portfolio 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 Portfolio’s investments. ASC 820 establishes a three-tier hierarchy of inputs to classify fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

•

Level 1—Quoted prices in active markets for an identical security.

•

June 30, 2011

William Blair Funds 115

benchmark securities indices and foreign futures contracts may be utilized in the valuation of certain foreign securities when significant events occur between the last sale on the foreign securities exchange and the time the net asset value of the Portfolio 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 Portfolio’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities. For example, money market securities are valued using amortized cost, in accordance with rules under the 1940 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

Any transfers between Level 1 and Level 2 are disclosed, effective beginning of the period, in the tables below with the reasons for the transfers disclosed in a note to the tables, if applicable.

At June 30, 2011, the Portfolios held no other financial instruments, such as options or futures, that required fair valuation.

As of June 30, 2011, the hierarchical input levels of securities in each Portfolio, segregated by security class, are as follows (in thousands):


	Growth			Large Cap Growth		Small Cap Growth		Mid Cap Growth		Small- Mid Cap Growth		Global Growth
Investments in securities			��
Level 1—Quoted prices
Common Stocks	$	622,795		$	27,632	$	734,180	$	140,235	$	262,775	$	47,342
Exchange Traded Funds		—			—		22,748		—		—		—
Level 2—Other significant observable inputs
Warrants		—			—		1		—		—		—
Short-Term Investments		10,350			659		5,126		3,499		2,120		450
Level 3—Significant unobservable inputs
None		—			—		—		—		—		—

Total investments in securities	$	633,145		$	28,291	$	762,055	$	143,734	$	264,895	$	47,792

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	International Growth		International Equity		International Small Cap Growth		Emerging Markets Growth		Emerging Leaders Growth		Small Cap Value		Mid Cap Value
Investments in securities
Level 1—Quoted prices
Common Stocks	$	4,584,629	$	108,409	$	736,120	$	840,987	$	94,136	$	222,025	$	3,958
Preferred Stocks		—		1,299		—		27,098		4,126		—		—
Exchange Traded Funds		38,468		—		—		—		—		—		—
Rights		—		—		37		43		—		—		—
Level 2—Other significant observable inputs
Convertible Bonds		1,893		—		632		1,055		—		—		—
Short-Term Investments		68,519		6,708		21,114		—		174		5,922		150
Level 3—Significant unobservable inputs None		—		—		—		—		—		—		—

Total investments in securities	$	4,693,509	$	116,416	$	757,903	$	869,140	$	98,436	$	227,947	$	4,108

Other financial instruments — Assets
Level 2—Other significant observable inputs
Forward foreign currency contracts	$	6,120		—		—		—		—		—

Other financial instruments — Liabilities
Level 2—Other significant observable inputs
Forward foreign currency contracts	$	2,037	$	14	$	30		—		—		—


	Bond		Income		Low Duration		Ready Reserves*
Investments in securities
Level 1—Quoted Prices
None	$	—	$	—	$	—	$	—
Level 2—Other significant observable inputs
US Government and Agency Bonds		99,717		39,678		68,906		97,602
Foreign Government Notes								7,000
Corporate Bonds		92,816		45,192		18,858		142,695
Asset Backed Bonds		8,995		8,014		57,580
Commercial Paper		—		—		—		780,641
Short-Term Investments		2,256		2,481		3,243		233,209
Level 3—Significant unobservable inputs
Asset Backed Bonds		179		964		—		—

Total investments in securities	$	203,963	$	96,329	$	148,587	$	1,261,147

*	All of the investments held by Ready Reserves are short-term investments.

Level 1 Common Stocks are exchange-traded securities with a quoted price. See Portfolio of Investments for Sector Classification.

June 30, 2011

William Blair Funds 117

The following is a reconciliation of Level 3 securities for which significant unobservable inputs were used to determine fair value:


	Balance January 1, 2011		Purchases		Sales		Transfers to Level 3		Transfers from Level 3			Change in Unrealized Gain (Loss)		Realized Gain (Loss)		Balance June 30, 2011
Small Cap Growth	$	1,109	$	—	$	—		—	$	(1,109	)	$	—	$	—	$	—
Bond		170		—		—		—		—			9		—		179
Income		918		—		—		—		—			46		—		964

The fair value estimates for the Level 3 securities in the Bond and Income Portfolios were determined in good faith by the Pricing Committee in consultation with the Valuation Committee, pursuant to the Valuation Procedures adopted by the Board of Trustees. There were various factors considered in reaching this fair value determination, including, but not limited to, the following: the type of security, the extent of public trading of the security, information obtained from a broker-dealer for the security, analysis of the company’s performance, market trends that influence its performance and the potential for an adverse outcome in pending litigation. At June 30, 2011, these securities represented 0.09% and 1.01% of the net assets of the Bond and Income Portfolios, respectively. The change in unrealized gain (loss) related to those securities held at June 30, 2011 was $55, in thousands, and is included in the change in net unrealized appreciation (depreciation) of investments on the Statement of Operations.

Vitacost.com held in the Small Cap Growth Portfolio moved from Level 3 to Level 1 due to a change in observable inputs. The First Plus Home Loan Trust bonds held in the Bond and Income Portfolios remained in Level 3 during the period due to the lack of significant other observable inputs.

(k) Redemptions In-Kind

In accordance with the Fund’s prospectus, the Portfolios may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the Portfolio recognizes a gain or loss on the transfer of securities depending on the market value of those securities on the date of redemption. Gains and losses realized on in-kind redemptions are not recognized for tax purposes and are reclassified from undistributed realized gain (loss) to paid-in capital. During the period ended June 30, 2011, the Emerging Markets Growth Portfolio redeemed in-kind (in thousands) $91,525, with a realized gain of $20,249.

(2) Accounting Pronouncement and Regulations

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the Act, each fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

In April 2011, the FASB issued ASU 2011-03 Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 amends ASC 860, Transfers and Servicing, in relation to the accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 modifies the criteria for determining effective control of transferred assets and as a result certain agreements may not be accounted for as secured borrowings. ASU 2011-03 is effective prospectively for new transfers and existing transitions that are modified in the first interim or annual period beginning on or after December 15, 2011. At this time, management is evaluating the implication of this change and its impact on the financial statements has not been determined.

On May 12, 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-04, modifying Topic 820, Fair Value Measurements and Disclosures. The ASU requires reporting entities to disclose (i) the amounts of any transfers between Level 1 and Level 2, and the reasons for the transfers, (ii) for Level 3 fair value measurements, quantitative information about significant unobservable inputs used, (iii) a description of the valuation processes used by the reporting entity and, (iv) a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs might result in a significantly higher or lower fair value measurement. The effective date of ASU 2011-04 is for interim and annual periods beginning after December 15, 2011. At this time, management is evaluating the implication of this change and its impact on the financial statements has not been determined.

118 Semi-Annual Report

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(3) Transactions with Affiliates

(a) Management and Expense Limitation Agreements

Each Portfolio has a management agreement with the “Advisor” for investment advisory, clerical, bookkeeping and administrative services. Each Portfolio pays the Advisor an annual fee, payable monthly, based on a specified percentage of its average daily net assets. A summary of the annual rates expressed as a percentage of average daily net assets is as follows:


Equity Portfolios			International Portfolios
Growth	0.75	%	International Growth:
Large Cap Growth	0.80	%	First $250 million	1.10	%
Small Cap Growth	1.10	%	Next $4.75 billion	1.00	%
Mid Cap Growth	0.95	%	Next $5 billion	0.95	%
Small-Mid Cap Growth	1.00	%	Next $5 billion	0.925	%
Small Cap Value	1.10	%	In excess of $15 billion	0.90	%
Mid Cap Value	0.95	%	International Equity
			First $250 million	1.10	%
Global Portfolio			In excess of $250 million	1.00	%
Global Growth	1.00	%	International Small Cap Growth	1.00	%
			Emerging Markets Growth	1.10	%
			Emerging Leaders Growth	1.10	%

Fixed-Income Portfolios			Money Market Portfolio
Bond	0.30	%	Ready Reserves
Low Duration	0.30	%	First $250 million	0.275	%
Income*			Next $250 million	0.250	%
First $250 million	0.25	%	Next $2 billion	0.225	%
In excess of $250 million	0.20	%	In excess of $2.5 billion	0.200	%

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

Some of the Portfolios have also entered into an Expense Limitation Agreement with the Advisor. Under the terms of the Agreement, the Advisor will waive its management fee and/or reimburse the Portfolio for expenses in excess of the agreed upon rate. The amount the Advisor owes a Portfolio as of the reporting date is recorded as the Receivable from Advisor on the Statement of Assets and Liabilities. The Advisor reimburses the Portfolios on a monthly basis. Under the terms of the Agreement, the Advisor has agreed to waive its advisory fees and/or absorb other operating expenses through April 30, 2012, if total expenses for each class of the following Portfolios exceed the following rates (as a percentage of average daily net assets):


	Class N						Class I
Portfolio	Effective May 1, 2011 through April 30, 2012			Effective May 1, 2010 through April 30, 2011			Effective May 1, 2011 through April 30, 2012			Effective May 1, 2010 through April 30, 2011
Large Cap Growth		1.20	%		1.20	%		0.95	%		0.95	%
Small Cap Growth		1.50	%		1.50	%		1.25	%		1.25	%
Mid Cap Growth		1.35	%		1.35	%		1.10	%		1.10	%
Small-Mid Cap Growth		1.35	%		1.35	%		1.10	%		1.10	%
Global Growth		1.50	%		1.50	%		1.25	%		1.25	%
International Growth		1.45	%		1.45	%		1.20	%		1.20	%
International Equity		1.45	%		1.45	%		1.20	%		1.20	%
International Small Cap Growth		1.65	%		1.65	%		1.40	%		1.40	%
Emerging Markets Growth		1.70	%		1.70	%		1.45	%		1.45	%
Emerging Leaders Growth		1.65	%		1.65	%		1.40	%		1.40	%
Small Cap Value		1.40	%		1.35	%		1.15	%		1.10	%
Mid Cap Value		1.35	%		1.35	%		1.10	%		1.10	%
Bond		0.65	%		0.65	%		0.50	%		0.50	%
Income		0.85	%		0.85	%		0.70	%		0.70	%
Low Duration		0.70	%		0.70	%		0.55	%		0.55	%

June 30, 2011

William Blair Funds 119

For a period of three years subsequent to the commencement of operations of the Mid Cap Value and Low Duration Portfolios, the Advisor is entitled to reimbursement for previously waived fees and reimbursed expenses to the extent the overall expense ratio remains below the expense limitation in place at the time the fee was waived and/or the expense was reimbursed. The total amount available for recapture at June 30, 2011 was $139 (in thousands) for the Mid Cap Value Portfolio and $144 for the Low Duration Portfolio.

The Advisor has agreed to voluntarily waive fees and reimburse expenses incurred for the Ready Reserves Portfolio in order to maintain a minimum yield given the current interest rate environment.

For the period ended June 30, 2011, the fees incurred by the Portfolios and related fee waivers and/or reimbursements were as follows (in thousands):


Portfolio	Fund Level Waiver		Class I Specific Waiver		Class N Specific Waiver		Total Waiver
Growth	$	—	$	—	$	—	$	—
Large Cap Growth		32		1		4		37
Small Cap Growth		—		162		136		298
Mid Cap Growth		—		14		7		21
Small-Mid Cap Growth		—		6		14		20
Global Growth		68		1		1		70
International Growth		—		—		—		—
International Equity		24		53		7		84
International Small Cap Growth		—		—		—		—
Emerging Markets Growth		—		—		—		—
Emerging Leaders Growth		70		—		—		70
Small Cap Value		99		35		18		152
Mid Cap Value		51		—		—		51
Bond		48		5		2		55
Income		—		—		16		16
Low Duration		31		1		—		32
Ready Reserves		2,731		—		—		2,731

(b) Underwriting, Distribution Services and Service Agreement

Each Portfolio, except the Ready Reserves Portfolio, has a Distribution Agreement with William Blair for distribution services to the Portfolios’ Class N shares. Each Portfolio pays William Blair an annual fee, payable monthly, based on a specified percentage of its average daily net assets of Class N shares. The annual rate expressed as a percentage of average daily net assets for Class N is 0.25% for all Portfolios except the Income, Bond and Low Duration Portfolios, which is 0.15%. Pursuant to the Distribution Agreement, William Blair enters into related selling group agreements with various firms at various rates for sales of the Portfolios’ Class N shares.

The Ready Reserves Portfolio has a Service Agreement with William Blair to provide shareholder services and automatic sweep services. The Portfolio pays William Blair an annual fee, payable monthly, based upon 0.35% of the average daily net assets of Class N shares. The Board of Trustees has determined that the amount payable for “service fees” (as defined by FINRA (Financial Industry Regulatory Authority)) will not exceed 0.25% of the average annual net assets attributable to Class N shares.

The Global Growth, International Small Cap Growth, Emerging Markets Growth, Emerging Leaders Growth, Bond and Low Duration Portfolios have a Shareholder Administration Agreement with William Blair to provide shareholder administration services. Class N and Class I shares of the Portfolios pay William Blair an annual fee, payable monthly, based upon 0.15% of average daily net assets attributable to each class, respectively. For the period ended June 30, 2011, the following fees were incurred (in thousands):


Portfolio	Class N		Class I		Total
Global Growth	$	4	$	31	$	35
International Small Cap Growth		17		296		313
Emerging Markets Growth		23		141		164
Emerging Leaders Growth		—		18		18
Bond		4		109		113
Low Duration		5		59		64

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(4) Investment Transactions

Investment transactions, excluding money market instruments, repurchase agreements and demand notes for the period ended June 30, 2011, were as follows (in thousands):


Portfolio	Purchases		Sales
Growth	$	256,293	$	(184,778	)
Large Cap Growth		10,593		(15,675	)
Small Cap Growth		368,579		(485,169	)
Mid Cap Growth		56,738		(28,758	)
Small-Mid Cap Growth		125,991		(96,468	)
Global Growth		21,640		(20,315	)
International Growth		2,528,393		(2,934,198	)
International Equity		80,141		(145,994	)
International Small Cap Growth		372,888		(304,131	)
Emerging Markets Growth		571,199		(879,959	)
Emerging Leaders Growth		105,072		(98,650	)
Small Cap Value		120,603		(64,658	)
Mid Cap Value		1,830		(1,432	)
Bond		52,814		(40,488	)
Income		15,682		(32,420	)
Low Duration		59,628		(50,537	)

(5) Forward Foreign Currency Contracts

The Global Growth, International Growth, International Equity, International Small Cap Growth, Emerging Markets Growth and Emerging Leaders Growth Portfolios from time to time may enter into forward foreign currency contracts with the Fund’s custodian and other counterparties in an attempt to hedge against a decline in the value of foreign currency against the U.S. dollar. The Portfolios bear the market risk that arises from changes in foreign currency rates and bear the credit risk if the counterparty fails to perform under the contract.

For the period ended June 30, 2011, the International Growth, International Equity, and International Small Cap Growth Portfolios engaged in forward foreign currency contracts with notional volume (in thousands) of $8,085,193, $69,682 and $222,182, respectively.

The following tables present the value of forward foreign currency contracts as of June 30, 2011 and their respective location on the Statement of Assets and Liabilities (values in thousands):

Assets

Liabilities

Portfolio

Statement of Assets and
Liabilities Location

Value

Statement of Assets and
Liabilities Location

Value

International Growth

Unrealized appreciation on foreign forward currency contracts

6,120

Unrealized depreciation on foreign forward currency contracts

2,037

International Equity

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

International Small Cap Growth

Unrealized appreciation on foreign forward currency contracts

—

Unrealized depreciation on foreign forward currency contracts

The effect of forward contracts on the Statements of Operations for the period ended June 30, 2011 (values in thousands) are as follows:


Realized gain (loss) recognized in foreign currency transactions
Portfolio	Value
International Growth	$	(32,492	)
International Equity		(163	)
International Small Cap Growth		2,660

Change in unrealized gain (loss) recognized in foreign currency translations
Portfolio	Value
International Growth	$	4,083
International Equity		121
International Small Cap Growth		(30	)

June 30, 2011

William Blair Funds 121

The following table presents open forward foreign currency contracts as of June 30, 2011 (values in thousands):


International Growth
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
State Street Bank and Trust	Canadian Dollar		9/22/2011		66,909	$	69,239	$	(1,082	)
Northern Trust Corporation	Swiss Franc		9/20/2011		54,801		65,213		(15	)
State Street Bank and Trust	European Monetary Unit		9/19/2011		229,686		332,366		(940	)
Morgan Stanley and Company	Great British Pound		9/23/2011		195,317		313,169		5,755
Bank of New York	Japanese Yen		9/21/2011		30,382,242		377,561		365

International Equity
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
Northern Trust Corporation	Japanese Yen		7/20/2011		435,304		5,408		(14	)

International Small Cap Growth
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
Northern Trust Corporation	Swiss Franc		9/20/2011		2,402		2,858		(9	)
Bank of New York	Japanese Yen		9/21/2011		2,314,926		28,768		(21	)

(6) Fund Share Transactions


	Sales (Dollars)
	Period Ended June 30, 2011						Year Ended December 31, 2010
Portfolio	Class N		Class I		Total		Class N			Class I			Total
Growth	$	53,599	$	34,883	$	88,482	$	68,365		$	107,997		$	176,362
Large Cap Growth		616		1,706		2,322		1,142			1,935			3,077
Small Cap Growth		16,906		38,825		55,731		108,310			256,285			364,595
Mid Cap Growth		3,771		37,070		40,841		2,798			21,591			24,389
Small Mid-Cap Growth		4,238		45,401		49,639		3,028			48,275			51,303
Global Growth		236		2,489		2,725		1,046			3,798			4,844
International Growth		127,675		313,670		441,345		876,749			621,840			1,498,589
International Equity		612		19,495		20,107		1,093			58,750			59,843
International Small Cap Growth		2,616		101,266		103,882		7,838			138,435			146,273
Emerging Markets Growth		1,041		15,357		16,398		6,588	(a)		51,960			58,548
Emerging Leaders Growth		28		17,560		17,588		49			11,564			11,613
Small Cap Value		30,938		70,816		101,754		24,765			67,703			92,468
Mid Cap Value		67		702		769		4	(b)		3,158	(b)		3,162	(b)
Bond		902		20,326		21,228		1,759			65,749			67,508
Income		2,975		1,773		4,748		8,860			6,525			15,385
Low Duration		1,085		24,582		25,667		6,671			77,708			84,379
Ready Reserves		449,947		—		449,947		670,783			—			670,783


	Reinvested Distributions (Dollars)
	Period Ended June 30, 2011						Year Ended December 31, 2010
Portfolio	Class N		Class I		Total		Class N			Class I			Total
Growth	$	—	$	—	$	—	$	—		$	11		$	11
Large Cap Growth		—		—		—		—			29			29
Small Cap Growth		—		—		—		—			—			—
Mid Cap Growth		—		—		—		—			—			—
Small Mid-Cap Growth		—		—		—		—			—			—
Global Growth		—		—		—		—			11			11
International Growth		—		—		—		50,365			42,168			92,533
International Equity		—		—		—		174			2,278			2,452
International Small Cap Growth		—		—		—		38			1,078			1,116
Emerging Markets Growth		—		—		—		234			1,348			1,582
Emerging Leaders Growth		—		—		—		—	(a)		79			79
Small Cap Value		—		—		—		58			296			354
Mid Cap Value		—		—		—		—	(b)		27	(b)		27	(b)
Bond		76		2,499		2,575		126			4,728			4,854
Income		642		1,203		1,845		1,462			2,888			4,350
Low Duration		44		710		754		54			1,211			1,265
Ready Reserves		62		—		62		126			—			126

122 Semi-Annual Report

June 30, 2011


	Redemptions (Dollars)
	Period Ended June 30, 2011						Year Ended December 31, 2010
Portfolio	Class N		Class I		Total		Class N			Class I			Total
Growth	$	36,984	$	26,907	$	63,891	$	47,695		$	37,660		$	85,355
Large Cap Growth		4,546		2,923		7,469		925			4,757			5,682
Small Cap Growth		97,720		96,772		194,492		235,001			124,740			359,741
Mid Cap Growth		3,159		7,957		11,116		2,034			11,217			13,251
Small Mid-Cap Growth		4,257		15,271		19,528		4,809			23,447			28,256
Global Growth		754		1,309		2,063		1,468			4,358			5,826
International Growth		588,109		250,884		838,993		1,196,684			551,296			1,747,980
International Equity		2,701		87,862		90,563		4,139			186,626			190,765
International Small Cap Growth		3,350		31,738		35,088		5,438			62,241			67,679
Emerging Markets Growth		5,279		35,437		40,716		5,661			70,448			76,109
Emerging Leaders Growth		30		1,543		1,573		—	(a)		6,692			6,692
Small Cap Value		23,310		17,499		40,809		2,617			11,274			13,891
Mid Cap Value		24		210		234		—	(b)		5	(b)		5	(b)
Bond		543		26,059		26,602		1,085			54,078			55,163
Income		8,941		16,102		25,043		12,781			13,282			26,063
Low Duration		2,133		43,404		45,537		1,607			69,878			71,485
Ready Reserves		408,734		—		408,734		807,267			—			807,267


	Net Change in Net Assets relating to Fund Share Activity (Dollars)
	Period Ended June 30, 2011									Year Ended December 31, 2010
Portfolio	Class N			Class I			Total			Class N			Class I			Total
Growth	$	16,615		$	7,976		$	24,591		$	20,670		$	70,348		$	91,018
Large Cap Growth		(3,930	)		(1,217	)		(5,147	)		217			(2,793	)		(2,576	)
Small Cap Growth		(80,814	)		(57,947	)		(138,761	)		(126,691	)		131,545			4,854
Mid Cap Growth		612			29,113			29,725			764			10,374			11,138
Small Mid-Cap Growth		(19	)		30,130			30,111			(1,781	)		24,828			23,047
Global Growth		(518	)		1,180			662			(422	)		(549	)		(971	)
International Growth		(460,434	)		62,786			(397,648	)		(269,570	)		112,712			(156,858	)
International Equity		(2,089	)		(68,367	)		(70,456	)		(2,872	)		(125,598	)		(128,470	)
International Small Cap Growth		(734	)		69,528			68,794			2,438			77,272			79,710
Emerging Markets Growth		(4,238	)		(20,080	)		(24,318	)		1,161			(17,140	)		(15,979	)
Emerging Leaders Growth		(2	)		16,017			16,015			49	(a)		4,951			5,000
Small Cap Value		7,628			53,317			60,945			22,206			56,725			78,931
Mid Cap Value		43			492			535			4	(b)		3,180	(b)		3,184	(b)
Bond		435			(3,234	)		(2,799	)		800			16,399			17,199
Income		(5,324	)		(13,126	)		(18,450	)		(2,459	)		(3,869	)		(6,328	)
Low Duration		(1,004	)		(18,112	)		(19,116	)		5,118			9,041			14,159
Ready Reserves		41,275			—			41,275			(136,358	)		—			(136,358	)

	Sales (Shares)
	Period Ended June 30, 2011									Year Ended December 31, 2010
Portfolio	Class N			Class I			Total			Class N			Class I			Total
Growth		4,628			2,881			7,509			6,808			9,829			16,637
Large Cap Growth		84			230			314			182			299			481
Small Cap Growth		723			1,605			2,328			5,035			12,133			17,168
Mid Cap Growth		282			2,689			2,971			261			1,998			2,259
Small Mid-Cap Growth		273			2,960			3,233			242			3,846			4,088
Global Growth		28			288			316			139			526			665
International Growth		5,860			14,055			19,915			45,601			31,294			76,895
International Equity		49			1,562			1,611			96			5,289			5,385
International Small Cap Growth		197			7,483			7,680			729			12,221			12,950
Emerging Markets Growth		67			1,020			1,087			467			3,722			4,189
Emerging Leaders Growth		3			1,787			1,790			5	(a)		1,252			1,257
Small Cap Value		2,225			4,983			7,208			1,978			5,844			7,822
Mid Cap Value		6			64			70			—	(b)		313	(b)		313	(b)
Bond		84			1,915			1,999			164			6,220			6,384
Income		322			194			516			957			713			1,670
Low Duration		110			2,485			2,595			670			7,796			8,466
Ready Reserves		449,947			—			449,947			670,783			—			670,783

(a)

For Class N shares the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

(b)

For the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

June 30, 2011

William Blair Funds 123


	Reinvested Distributions (Shares)
	Period Ended June 30, 2011							Year Ended December 31, 2010
Portfolio	Class N		Class I		Total			Class N			Class I			Total
Growth		—		—		—			—			1			1
Large Cap Growth		—		—		—			—			4			4
Small Cap Growth		—		—		—			—			—			—
Mid Cap Growth		—		—		—			—			—			—
Small Mid-Cap Growth		—		—		—			—			—			—
Global Growth		—		—		—			—			1			1
International Growth		—		—		—			2,343			1,918			4,261
International Equity		—		—		—			15			189			204
International Small Cap Growth		—		—		—			3			83			86
Emerging Markets Growth		—		—		—			15			87			102
Emerging Leaders Growth		—		—		—			—	(a)		8			8
Small Cap Value		—		—		—			4			22			26
Mid Cap Value		—		—		—			—	(b)		3	(b)		3	(b)
Bond		7		235		242			12			447			459
Income		69		131		200			159			315			474
Low Duration		4		72		76			5			122			127
Ready Reserves		62		—		62			126			—			126

	Redemptions (Shares)
	Period Ended June 30, 2011							Year Ended December 31, 2010
Portfolio	Class N		Class I		Total			Class N			Class I			Total
Growth		3,155		2,222		5,377			4,775			3,591			8,366
Large Cap Growth		610		391		1,001			148			761			909
Small Cap Growth		4,189		4,032		8,221			11,449			5,763			17,212
Mid Cap Growth		234		588		822			187			1,030			1,217
Small Mid-Cap Growth		277		970		1,247			386			1,836			2,222
Global Growth		87		150		237			209			615			824
International Growth		26,703		11,204		37,907			61,789			28,153			89,942
International Equity		215		6,992		7,207			373			17,372			17,745
International Small Cap Growth		248		2,350		2,598			483			5,850			6,333
Emerging Markets Growth		349		2,291		2,640			422			5,459			5,881
Emerging Leaders Growth		3		156		159			—	(a)		728			728
Small Cap Value		1,674		1,238		2,912			219			945			1,164
Mid Cap Value		2		19		21			—	(b)		1	(b)		1	(b)
Bond		51		2,455		2,506			101			5,087			5,188
Income		968		1,756		2,724	��		1,382			1,449			2,831
Low Duration		216		4,392		4,608			161			7,002			7,163
Ready Reserves		408,734		—		408,734			807,267			—			807,267

(a)

For Class N shares the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

(b)

For the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

124 Semi-Annual Report

June 30, 2011


	Net Change in Shares Outstanding relating to Fund Share Activity (Shares)
	Period Ended June 30, 2011									Year Ended December 31, 2010
Portfolio	Class N			Class I			Total			Class N			Class I			Total
Growth		1,473			659			2,132			2,033			6,239			8,272
Large Cap Growth		(526	)		(161	)		(687	)		34			(458	)		(424	)
Small Cap Growth		(3,466	)		(2,427	)		(5,893	)		(6,414	)		6,370			(44	)
Mid Cap Growth		48			2,101			2,149			74			968			1,042
Small Mid-Cap Growth		(4	)		1,990			1,986			(144	)		2,010			1,866
Global Growth		(59	)		138			79			(70	)		(88	)		(158	)
International Growth		(20,843	)		2,851			(17,992	)		(13,845	)		5,059			(8,786	)
International Equity		(166	)		(5,430	)		(5,596	)		(262	)		(11,894	)		(12,156	)
International Small Cap Growth		(51	)		5,133			5,082			249			6,454			6,703
Emerging Markets Growth		(282	)		(1,271	)		(1,553	)		60			(1,650	)		(1,590	)
Emerging Leaders Growth		—			1,631			1,631			5	(a)		532			537
Small Cap Value		551			3,745			4,296			1,763			4,921			6,684
Mid Cap Value		4			45			49			—	(b)		315	(b)		315	(b)
Bond		40			(305	)		(265	)		75			1,580			1,655
Income		(577	)		(1,431	)		(2,008	)		(266	)		(421	)		(687	)
Low Duration		(102	)		(1,835	)		(1,937	)		514			916			1,430
Ready Reserves		41,275			—			41,275			(136,358	)		—			(136,358	)

(a)

For Class N shares the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

(b)

For the period from May 3, 2010 (Commencement of Operations) to December 31, 2010.

June 30, 2011

William Blair Funds 125

Financial Highlights

Growth Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	11.28		$	9.89		$	7.12		$	11.70		$	11.42		$	11.33
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.01	)		(0.02	)		(0.05	)		(0.04	)		(0.06	)
Net realized and unrealized gain (loss) on investments		0.65			1.40			2.79			(4.35	)		1.53			1.48

Total from investment operations		0.64			1.39			2.77			(4.40	)		1.49			1.42
Less distributions from:
Net investment income		—			—			—			—			—			—
Net realized gain		—			—			—			0.18			1.21			1.33

Total distributions		—			—			—			0.18			1.21			1.33

Net asset value, end of year	$	11.92		$	11.28		$	9.89		$	7.12		$	11.70		$	11.42

Total Return (%)*		5.67			14.05			38.90			(37.61	)		13.17			12.42
Ratios to average daily net assets (%):**
Expenses		1.18			1.16			1.23			1.17			1.22			1.17
Net investment income (loss)		(0.14	)		(0.13	)		(0.20	)		(0.54	)		(0.35	)		(0.49	)


	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010			2009			2008			2007		2006
Net asset value, beginning of year	$	11.71	$	10.24		$	7.35		$	12.02		$	11.66	$	11.52
Income (loss) from investment operations:
Net investment income (loss)		0.01		0.02			0.01			(0.02	)		0.00^		(0.02)
Net realized and unrealized gain (loss) on investments		0.68		1.45			2.88			(4.47	)		1.57		1.49

Total from investment operations		0.69		1.47			2.89			(4.49	)		1.57		1.47
Less distributions from:
Net investment income		—		0.00	^		0.00	^		—			—		—
Net realized gain		—		—			—			0.18			1.21		1.33

Total distributions		—		0.00	^		0.00	^		0.18			1.21		1.33

Net asset value, end of year	$	12.40	$	11.71		$	10.24		$	7.35		$	12.02	$	11.66

Total Return (%)*		5.89		14.36			39.34			(37.35	)		13.59		12.64
Ratios to average daily net assets (%):**
Expenses		0.84		0.84			0.89			0.85			0.87		0.89
Net investment income (loss)		0.20		0.20			0.14			(0.22	)		0.00		(0.20	)


	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	634,781	$	575,613	$	419,520	$	238,586	$	369,644	$	264,525
Portfolio turnover rate (%)*		30		66		67		60		72		61

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

126 Semi-Annual Report

June 30, 2011

Financial Highlights

Large Cap Growth Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	7.14		$	6.16		$	4.68		$	7.52		$	6.88		$	6.47
Income (loss) from investment operations:
Net investment income (loss)		0.00	^		(0.00	)^		(0.01	)		(0.02	)		(0.01	)		(0.02	)
Net realized and unrealized gain (loss) on investments		0.26			0.98			1.49			(2.82	)		0.65			0.43

Total from investment operations		0.26			0.98			1.48			(2.84	)		0.64			0.41
Less distributions from:
Net investment income		—			—			—			0.00	^		—			—
Net realized gain		—			—			—			—			—			—

Total distributions		—			—			—			0.00	^		—			—

Net asset value, end of year	$	7.40		$	7.14		$	6.16		$	4.68		$	7.52		$	6.88

Total Return (%)*		3.64			15.91			31.62			(37.76	)		9.30			6.34
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.20			1.21			1.23			1.23			1.23			1.24
Expenses, before waivers and reimbursements		1.52			1.53			2.28			1.85			1.50			1.63
Net investment income (loss), net of waivers and reimbursements		(0.07	)		(0.08	)		(0.13	)		(0.29	)		(0.16	)		(0.29	)
Net investment income (loss), before waivers and reimbursements		(0.39	)		(0.40	)		(1.18	)		(0.91	)		(0.43	)		(0.68	)


	Class I
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	7.30		$	6.30		$	4.77		$	7.64		$	6.99		$	6.56
Income (loss) from investment operations:
Net investment income (loss)		0.01			0.02			0.01			0.00 ^			0.01			0.00
Net realized and unrealized gain (loss) on investments		0.27			1.00			1.52			(2.87	)		0.64			0.43

Total from investment operations		0.28			1.01			1.53			(2.87	)		0.65			0.43
Less distributions from:
Net investment income		—			0.01			0.00	^		0.00	^		0.00	^		—
Net realized gain		—			—			—			—			—			—

Total distributions		—			0.01			0.00	^		0.00	^		0.00	^		—

Net asset value, end of year	$	7.58		$	7.30		$	6.30		$	4.77		$	7.64		$	6.99

Total Return (%)*		3.84			16.03			32.17			(37.56	)		9.36			6.55
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.95			0.96			0.98			0.98			0.98			0.99
Expenses, before waivers and reimbursements		1.17			1.16			1.26			1.21			1.20			1.38
Net investment income (loss), net of waivers and reimbursements		0.20			0.16			0.12			(0.04	)		0.18			(0.04	)
Net investment income (loss), before waivers and reimbursements		(0.02	)		(0.04	)		(0.16	)		(0.27	)		(0.04	)		(0.43	)


	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	28,133	$	32,035	$	30,311	$	23,279	$	33,667	$	20,191
Portfolio turnover rate (%)*		34		54		88		85		60		53

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

Rates are annualized for periods that are less than a year.

Amount is between $(0.005) and $0.005 per share.

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

June 30, 2011

William Blair Funds 127

Financial Highlights

Small Cap Growth Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	23.22		$	19.99		$	11.79		$	23.30		$	25.41		$	23.76
Income (loss) from investment operations:
Net investment income (loss)		(0.15	)		(0.21	)		(0.15	)		(0.19	)		(0.33	)		(0.29	)
Net realized and unrealized gain (loss) on investments		0.47			3.44			8.35			(10.73	)		(0.25	)		3.65

Total from investment operations		0.32			3.23			8.20			(10.92	)		(0.58	)		3.36
Less distributions from:
Net investment income		—			—			—			—			—			—
Net realized gain		—			—			—			0.59			1.53			1.71

Total distributions		—			—			—			0.59			1.53			1.71

Net asset value, end of year	$	23.54		$	23.22		$	19.99		$	11.79		$	23.30		$	25.41

Total Return (%)*		1.38			16.16			69.55			(46.85	)		(2.15	)		14.12
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.50			1.50			1.50			1.50			1.49			1.48
Expenses, before waivers and reimbursements		1.58			1.52			1.55			1.50			1.49			1.48
Net investment income (loss), net of waivers and reimbursements		(1.27	)		(1.03	)		(0.93	)		(1.05	)		(1.24	)		(1.14	)
Net investment income (loss), before waivers and reimbursements		(1.35	)		(1.05	)		(0.98	)		(1.05	)		(1.24	)		(1.14	)


	Class I
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	24.07		$	20.64		$	12.14		$	23.89		$	25.94		$	24.16
Income (loss) from investment operations:
Net investment income (loss)		(0.12	)		(0.16	)		(0.11	)		(0.14	)		(0.25	)		(0.22	)
Net realized and unrealized gain (loss) on investments		0.47			3.59			8.61			(11.02	)		(0.27	)		3.71

Total from investment operations		0.35			3.43			8.50			(11.16	)		(0.52	)		3.49
Less distributions from:
Net investment income		—			—			—			—			—			—
Net realized gain		—			—			—			0.59			1.53			1.71

Total distributions		—			—			—			0.59			1.53			1.71

Net asset value, end of year	$	24.42		$	24.07		$	20.64		$	12.14		$	23.89		$	25.94

Total Return (%)*		1.45			16.62			70.02			(46.70	)		(1.88	)		14.42
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.25			1.25			1.20			1.20			1.20			1.21
Expenses, before waivers and reimbursements		1.31			1.25			1.20			1.20			1.20			1.21
Net investment income (loss), net of waivers and reimbursements		(1.01	)		(0.76	)		(0.63	)		(0.75	)		(0.94	)		(0.87	)
Net investment income (loss), before waivers and reimbursements		(1.07	)		(0.76	)		(0.63	)		(0.75	)		(0.94	)		(0.87	)



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	763,477	$	891,589	$	762,798	$	401,627	$	1,094,419	$	1,261,174
Portfolio turnover rate (%)*		46		117		122		135		97		105

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

Rates are annualized for periods that are less than a year.

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

128 Semi-Annual Report

June 30, 2011

Financial Highlights

Mid Cap Growth Fund


	Class N
	Period Ended June 30,			Periods Ended December 31,
	2011			2010			2009			2008			2007			2006(a)
Net asset value, beginning of year	$	12.50		$	10.08		$	7.41		$	11.35		$	10.46		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)		(0.05	)		(0.04	)		(0.07	)		(0.07	)		(0.07	)
Net realized and unrealized gain (loss) on investments		1.54			2.47			2.71			(3.87	)		1.59			0.53

Total from investment operations		1.50			2.42			2.67			(3.94	)		1.52			0.46
Less distributions from:
Net investment income		—			—			—			—			—			—
Net realized gain		—			—			—			0.00	^		0.63			—

Total distributions		—			—			—			0.00	^		0.63			—

Net asset value, end of year	$	14.00		$	12.50		$	10.08		$	7.41		$	11.35		$	10.46

Total Return (%)*		12.00			24.01			36.03			(34.71	)		14.62			4.60
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.35			1.35			1.36			1.36			1.38			1.40
Expenses, before waivers and reimbursements		1.44			1.42			2.13			2.03			1.67			2.35
Net investment income (loss), net of waivers and reimbursements		(0.53	)		(0.42	)		(0.51	)		(0.76	)		(0.58	)		(0.70	)
Net investment income (loss), before waivers and reimbursements		(0.62	)		(0.49	)		(1.28	)		(1.43	)		(0.87	)		(1.65	)


	Class I
	Period Ended June 30,			Periods Ended December 31,
	2011			2010			2009			2008			2007			2006(a)
Net asset value, beginning of year	$	12.68		$	10.20		$	7.48		$	11.42		$	10.49		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.02	)		(0.02	)		(0.02	)		(0.05	)		(0.04	)		(0.04	)
Net realized and unrealized gain (loss) on investments		1.55			2.50			2.74			(3.89	)		1.60			0.53

Total from investment operations		1.53			2.48			2.72			(3.94	)		1.56			0.49
Less distributions from:
Net investment income		—			—			—			—			—			��
Net realized gain		—			—			—			0.00	^		0.63			—

Total distributions		—			—			—			0.00	^		0.63			—

Net asset value, end of year	$	14.21		$	12.68		$	10.20		$	7.48		$	11.42		$	10.49

Total Return (%)*		12.07			24.31			36.36			(34.50	)		14.95			4.90
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.10			1.10			1.11			1.11			1.12			1.15
Expenses, before waivers and reimbursements		1.13			1.15			1.28			1.23			1.37			2.10
Net investment income (loss), net of waivers and reimbursements		(0.29	)		(0.14	)		(0.26	)		(0.51	)		(0.32	)		(0.43	)
Net investment income (loss), before waivers and reimbursements		(0.32	)		(0.19	)		(0.43	)		(0.63	)		(0.57	)		(1.38	)



	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009		2008		2007		2006(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	144,034	$	101,248	$	70,834	$	40,526	$	45,393	$	19,639
Portfolio turnover rate (%)*		24		73		87		76		66		56

(a)

For the period February 1, 2006 (Commencement of Operations) to December 31, 2006.

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

June 30, 2011

William Blair Funds 129

Financial Highlights

Small-Mid Cap Growth Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	14.40		$	11.73		$	8.16		$	13.10		$	12.96		$	12.40
Income (loss) from investment operations:
Net investment income (loss)		(0.06	)		(0.09	)		(0.06	)		(0.03	)		(0.12	)		(0.11	)
Net realized and unrealized gain (loss) on investments		1.72			2.76			3.63			(4.91	)		1.71			1.32

Total from investment operations		1.66			2.67			3.57			(4.94	)		1.59			1.21
Less distributions from:
Net investment income		—			—			—			—			—			—
Net realized gain		—			—			—			0.00	^		1.45			0.65

Total distributions		—			—			—			0.00	^		1.45			0.65

Net asset value, end of year	$	16.06		$	14.40		$	11.73		$	8.16		$	13.10		$	12.96

Total Return (%)*		11.53			22.76			43.75			(37.71	)		12.34			9.68
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.35			1.35			1.36			1.36			1.36			1.38
Expenses, before waivers and reimbursements		1.44			1.46			1.49			1.41			1.42			1.45
Net investment income (loss), net of waivers and reimbursements		(0.80	)		(0.76	)		(0.60	)		(0.26	)		(0.79	)		(0.86	)
Net investment income (loss), before waivers and reimbursements		(0.90	)		(0.87	)		(0.73	)		(0.31	)		(0.85	)		(0.93	)


	Class I
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	14.68		$	11.93		$	8.27		$	13.24		$	13.06		$	12.46
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)		(0.06	)		(0.03	)		0.00	^		(0.08	)		(0.08	)
Net realized and unrealized gain (loss) on investments		1.76			2.81			3.69			(4.97	)		1.71			1.33

Total from investment operations		1.72			2.75			3.66			(4.97	)		1.63			1.25
Less distributions from:
Net investment income		—			—			0.00	^		—			—			—
Net realized gain		—			—			—			0.00	^		1.45			0.65

Total distributions		—			—			0.00	^		0.00	^		1.45			0.65

Net asset value, end of year	$	16.40		$	14.68		$	11.93		$	8.27		$	13.24		$	13.06

Total Return (%)*		11.72			23.05			44.26			(37.54	)		12.54			9.95
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.10			1.10			1.11			1.11			1.11			1.13
Expenses, before waivers and reimbursements		1.10			1.11			1.18			1.17			1.17			1.20
Net investment income (loss), net of waivers and reimbursements		(0.55	)		(0.50	)		(0.33	)		0.03			(0.54	)		(0.61	)
Net investment income (loss), before waivers and reimbursements		(0.55	)		(0.51	)		(0.40	)		(0.03	)		(0.60	)		(0.68	)



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	264,913	$	208,065	$	146,828	$	83,479	$	124,501	$	92,766
Portfolio turnover rate (%)*		39		93		112		77		80		68

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

130 Semi-Annual Report

June 30, 2011

Financial Highlights

Global Growth Fund


	Class N
	Period Ended June 30,		Periods Ended December 31,
	2011		2010			2009			2008			2007(a)
Net asset value, beginning of year	$	8.40	$	6.97		$	4.96		$	9.89		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)		0.03		(0.01	)		(0.01	)		0.08			0.00	^
Net realized and unrealized gain (loss) on investments		0.49		1.44			2.02			(4.98	)		(0.11	)

Total from investment operations		0.52		1.43			2.01			(4.90	)		(0.11	)
Less distributions from:
Net investment income		—		—			—			0.03			0.00	^
Net realized gain		—		—			—			—			—

Total distributions		—		—			—			0.03			0.00	^

Net asset value, end of year	$	8.92	$	8.40		$	6.97		$	4.96		$	9.89

Total Return (%)*		6.19		20.52			40.52			(49.52	)		(1.10	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.50		1.52			1.55			1.55			1.55
Expenses, before waivers and reimbursements		1.82		1.93			2.61			2.17			2.14
Net investment income (loss), net of waivers and reimbursements		0.67		(0.09	)		(0.17	)		0.98			(0.08	)
Net investment income (loss), before waivers and reimbursements		0.35		(0.50	)		(1.23	)		0.36			(0.67	)


	Class I
	Period Ended June 30,		Periods Ended December 31,
	2011		2010			2009			2008			2007(a)
Net asset value, beginning of year	$	8.40	$	6.96		$	4.94		$	9.91		$	10.00
Income (loss) from investment operations:
Net investment income (loss) (b)		0.04		0.01			0.00	^		0.08			0.00	^
Net realized and unrealized gain (loss) on investments		0.49		1.43			2.02			(4.98	)		(0.09	)

Total from investment operations		0.53		1.44			2.02			(4.90	)		(0.09	)
Less distributions from:
Net investment income		—		0.00	^		0.00	^		0.07			0.00	^
Net realized gain		—		—			—			—			—

Total distributions		—		0.00	^		0.00	^		0.07			0.00	^

Net asset value, end of year	$	8.93	$	8.40		$	6.96		$	4.94		$	9.91

Total Return (%)*		6.31		20.73			40.90			(49.41	)		(0.85	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.25		1.27			1.30			1.30			1.30
Expenses, before waivers and reimbursements		1.55		1.62			1.62			1.74			1.89
Net investment income (loss), net of waivers and reimbursements		0.94		0.16			0.05			1.05			0.14
Net investment income (loss), before waivers and reimbursements		0.64		(0.27	)		(0.27	)		0.61			(0.45	)



	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009		2008		2007(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	48,435	$	44,877	$	38,287	$	28,005	$	45,576
Portfolio turnover rate (%)*		44		96		133		124		63

(a)

For the period October 15, 2007 (Commencement of Operations) to December 31, 2007.

(b)

Excludes $0.00, $0.00, $0.00 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008 and 2007, respectively.

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

June 30, 2011

William Blair Funds 131

Financial Highlights

International Growth Fund


	Class N
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	21.85	$	18.55	$	13.12	$	29.12		$	27.70	$	25.22
Income (loss) from investment operations:
Net investment income (loss) (a)		0.19		0.14		0.07		0.29			0.12		0.05
Net realized and unrealized gain (loss) on investments		0.24		3.58		5.47		(15.54	)		4.77		5.71

Total from investment operations		0.43		3.72		5.54		(15.25	)		4.89		5.76
Less distributions from:
Net investment income		—		0.42		0.11		—			0.34		0.37
Net realized gain		—		—		—		0.75			3.13		2.91

Total distributions		—		0.42		0.11		0.75			3.47		3.28

Net asset value, end of year	$	22.28	$	21.85	$	18.55	$	13.12		$	29.12	$	27.70

Total Return (%)*		1.97		20.09		42.27		(52.33	)		18.13		23.06
Ratios to aveage daily net assets (%):**
Expenses, net of waivers and reimbursements		1.45		1.42		1.45		1.39			1.40		1.42
Expenses, before waivers and reimbursements		1.45		1.43		1.46		1.39			1.40		1.42
Net investment income (loss), net of waivers and reimbursements		1.75		0.73		0.48		1.29			0.38		0.19
Net investment income (loss), before waivers and reimbursements		1.75		0.73		0.47		1.29			0.38		0.19

	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	22.34	$	18.95	$	13.40	$	29.61		$	28.10	$	25.55
Income (loss) from investment operations:
Net investment income (loss) (a)		0.23		0.20		0.12		0.37			0.21		0.13
Net realized and unrealized gain (loss) on investments		0.24		3.67		5.59		(15.83	)		4.86		5.78

Total from investment operations		0.47		3.87		5.71		(15.46	)		5.07		5.91
Less distributions from:
Net investment income		—		0.48		0.16		—			0.43		0.45
Net realized gain		—		—		—		0.75			3.13		2.91

Total distributions		—		0.48		0.16		0.75			3.56		3.36

Net asset value, end of year	$	22.81	$	22.34	$	18.95	$	13.40		$	29.61	$	28.10

Total Return (%)*		2.10		20.47		42.63		(52.17	)		18.53		23.35
Ratios to aveage daily net assets (%):**
Expenses		1.13		1.14		1.17		1.08			1.09		1.11
Net investment income (loss)		2.09		0.99		0.74		1.58			0.69		0.45



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	4,784,623	$	5,082,179	$	4,473,408	$	3,130,938	$	8,048,654	$	6,267,126
Portfolio turnover rate (%)*		52		99		121		91		56		72

(a)

Excludes $0.13,$0.08, $(0.18), $0.09, and $0.42 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007, and 2006, respectively.

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

Rates are annualized for periods that are less than a year.

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

132 Semi-Annual Report

June 30, 2011

Financial Highlights

International Equity Fund


	Class N
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	12.12	$	11.07	$	8.35	$	16.53		$	15.21	$	12.86
Income (loss) from investment operations:
Net investment income (loss) (a)		0.11		0.06		0.09		0.10			0.09		0.04
Net realized and unrealized gain (loss) on investments		0.28		1.15		2.64		(8.16	)		2.55		2.52

Total from investment operations		0.39		1.21		2.73		(8.06	)		2.64		2.56
Less distributions from:
Net investment income		—		0.16		0.01		—			0.14		0.19
Net realized gain		—		—		—		0.12			1.18		0.02

Total distributions		—		0.16		0.01		0.12			1.32		0.21

Net asset value, end of year	$	12.51	$	12.12	$	11.07	$	8.35		$	16.53	$	15.21

Total Return (%)*		3.22		10.92		32.69		(48.75	)		17.68		19.96
Ratios to aveage daily net assets (%):**
Expenses, net of waivers and reimbursements		1.45		1.45		1.45		1.45			1.45		1.46
Expenses, before waivers and reimbursements		1.58		1.66		1.59		1.45			1.47		1.56
Net investment income (loss), net of waivers and reimbursements		1.75		0.55		1.03		0.80			0.52		0.26
Net investment income (loss), before waivers and reimbursements		1.62		0.34		0.89		0.80			0.50		0.16

	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	12.22	$	11.16	$	8.44	$	16.66		$	15.31	$	12.94
Income (loss) from investment operations:
Net investment income (loss) (a)		0.12		0.10		0.08		0.15			0.13		0.06
Net realized and unrealized gain (loss) on investments		0.29		1.15		2.70		(8.25	)		2.57		2.55

Total from investment operations		0.41		1.25		2.78		(8.10	)		2.70		2.61
Less distributions from:
Net investment income		—		0.19		0.06		—			0.17		0.22
Net realized gain		—		—		—		0.12			1.18		0.02

Total distributions		—		0.19		0.06		0.12			1.35		0.24

Net asset value, end of year	$	12.63	$	12.22	$	11.16	$	8.44		$	16.66	$	15.31

Total Return (%)*		3.36		11.19		32.93		(48.61	)		17.97		20.22
Ratios to aveage daily net assets (%):**
Expenses, net of waivers and reimbursements		1.20		1.20		1.20		1.20			1.20		1.21
Expenses, before waivers and reimbursements		1.29		1.28		1.39		1.22			1.25		1.35
Net investment income (loss), net of waivers and reimbursements		1.98		0.88		0.86		1.12			0.76		0.46
Net investment income (loss), before waivers and reimbursements		1.89		0.80		0.67		1.10			0.71		0.32



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	113,139	$	178,055	$	298,168	$	228,486	$	408,609	$	297,716
Portfolio turnover rate (%)*		49		71		88		92		70		83

(a)

Excludes $0.04, $0.00, $0.00, $(0.07), and $0.01 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007 and 2006, respectively.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 133

Financial Highlights

International Small Cap Growth Fund


	Class N
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009			2008			2007			2006
Net asset value, beginning of year	$	13.07	$	10.40	$	6.62		$	13.98		$	13.37		$	11.16
Income (loss) from investment operations:
Net investment income (loss) (a)		0.06		0.03		(0.01	)		(0.02	)		(0.02	)		(0.05	)
Net realized and unrealized gain (loss) on investments		0.65		2.66		3.79			(7.22	)		1.72			2.32

Total from investment operations		0.71		2.69		3.78			(7.24	)		1.70			2.27
Less distributions from:
Net investment income		—		0.02		—			—			0.05			0.01
Net realized gain		—		—		—			0.12			1.04			0.05

Total distributions		—		0.02		—			0.12			1.09			0.06

Net asset value, end of year	$	13.78	$	13.07	$	10.40		$	6.62		$	13.98		$	13.37

Total Return (%)*		5.43		25.88		57.10			(51.82	)		13.06			20.32
Ratios to aveage daily net assets (%):**
Expenses, net of waivers and reimbursements		1.61		1.55		1.65			1.65			1.60			1.65
Expenses, before waivers and reimbursements		1.61		1.55		1.83			1.62			1.60			1.71
Net investment income (loss), net of waivers and reimbursements		0.92		0.30		(0.16	)		(0.20	)		(0.16	)		(0.40	)
Net investment income (loss), before waivers and reimbursements		0.92		0.30		(0.34	)		(0.17	)		(0.16	)		(0.46	)


	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	13.19	$	10.49	$	6.67	$	14.01		$	13.41	$	11.16
Income (loss) from investment operations:
Net investment income (loss) (a)		0.09		0.07		0.01		0.01			0.03		(0.03	)
Net realized and unrealized gain (loss) on investments		0.66		2.68		3.83		(7.23	)		1.71		2.34

Total from investment operations		0.75		2.75		3.84		(7.22	)		1.74		2.31
Less distributions from:
Net investment income		—		0.05		0.02		—			0.10		0.01
Net realized gain		—		—		—		0.12			1.04		0.05

Total distributions		—		0.05		0.02		0.12			1.14		0.06

Net asset value, end of year	$	13.94	$	13.19	$	10.49	$	6.67		$	14.01	$	13.41

Total Return (%)*		5.69		26.24		57.51		(51.56	)		13.34		20.68
Ratios to aveage daily net assets (%):**
Expenses, net of waivers and reimbursements		1.25		1.25		1.31		1.31			1.29		1.40
Expenses, before waivers and reimbursements		1.25		1.25		1.31		1.28			1.29		1.46
Net investment income (loss), net of waivers and reimbursements		1.34		0.61		0.11		0.11			0.18		(0.25	)
Net investment income (loss), before waivers and reimbursements		1.34		0.61		0.11		0.14			0.18		(0.31	)



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	768,599	$	646,951	$	390,851	$	291,988	$	401,459	$	231,969
Portfolio turnover rate (%)*		44		85		136		78		88		109

(a)

Excludes $0.15, $0.01, $(0.02), $0.05, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007, and 2006, respectively.

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

Rates are annualized for periods that are less than a year.

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

134 Semi-Annual Report

June 30, 2011

Financial Highlights

Emerging Markets Growth Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	15.76		$	12.87		$	7.46		$	21.92		$	19.42		$	14.17
Income (loss) from investment operations:
Net investment income (loss) (a)		0.06			(0.01	)		0.00	^		0.11			(0.10	)		(0.04	)
Net realized and unrealized gain (loss) on investments		(0.17	)		3.02			5.51			(13.63	)		7.23			5.41

Total from investment operations		(0.11	)		3.01			5.51			(13.52	)		7.13			5.37
Less distributions from:
Net investment income		—			0.12			0.10			—			0.09			0.01
Net realized gain		—			—			—			0.94			4.54			0.11

Total distributions		—			0.12			0.10			0.94			4.63			0.12

Net asset value, end of year	$	15.65		$	15.76		$	12.87		$	7.46		$	21.92		$	19.42

Total Return (%)*		(0.70	)		23.44			73.85			(61.71	)		37.75			37.90
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.66			1.63			1.70			1.67			1.65			1.65
Expenses, before waivers and reimbursements		1.66			1.63			1.81			1.65			1.69			1.78
Net investment income (loss), net of waivers and reimbursements		0.75			(0.05	)		0.04			0.65			(0.45	)		(0.22	)
Net investment income (loss), before waivers and reimbursements		0.75			(0.05	)		(0.07	)		0.67			(0.49	)		(0.35	)

	Class I
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of year	$	15.87		$	12.95		$	7.51		$	21.99		$	19.47		$	14.19
Income (loss) from investment operations:
Net investment income (loss) (a)		0.08			0.04			0.03			0.15			(0.04	)		(0.01	)
Net realized and unrealized gain (loss) on investments		(0.17	)		3.03			5.54			(13.69	)		7.26			5.41

Total from investment operations		(0.09	)		3.07			5.57			(13.54	)		7.22			5.40
Less distributions from:
Net investment income		—			0.15			0.13			—			0.16			0.01
Net realized gain		—			—			—			0.94			4.54			0.11

Total distributions		—			0.15			0.13			0.94			4.70			0.12

Net asset value, end of year	$	15.78		$	15.87		$	12.95		$	7.51		$	21.99		$	19.47

Total Return (%)*		(0.57	)		23.77			74.18			(61.60	)		38.13			38.07
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.35			1.36			1.41			1.41			1.40			1.40
Expenses, before waivers and reimbursements		1.35			1.36			1.41			1.39			1.40			1.47
Net investment income (loss), net of waivers and reimbursements		1.10			0.26			0.31			0.91			(0.20	)		(0.06	)
Net investment income (loss), before waivers and reimbursements		1.10			0.26			0.31			0.93			(0.20	)		(0.13	)



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	879,589	$	1,250,543	$	1,038,260	$	385,588	$	1,165,854	$	813,649
Portfolio turnover rate (%)*		53		121		113		118		100		113

(a)

Excludes $0.11, $0.15, $(0.09), $0.21, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007 and 2006 respectively.

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

June 30, 2011

William Blair Funds 135

Financial Highlights

Emerging Leaders Growth Fund


	Class N
	Period Ended June 30,			Period Ended December 31,
	2011			2010(a)
Net asset value, beginning of year	$	10.34		$	8.80
Income (loss) from investment operations:
Net investment income (loss) (c)		0.03			(0.02	)
Net realized and unrealized gain (loss) on investments		(0.28	)		1.64

Total from investment operations		(0.25	)		1.62
Less distributions from:
Net investment income		(0.06	)		0.02
Net realized gain		0.06			0.06

Total distributions		—			0.08

Net asset value, end of year	$	10.09		$	10.34

Total Return (%)*		(2.42	)		18.43
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.65			1.65
Expenses, before waivers and reimbursements		1.81			1.71
Net investment income (loss), net of waivers and reimbursements		0.65			(0.38	)
Net investment income (loss), before waivers and reimbursements		0.49			(0.44	)


	Class I
	Period Ended June 30,			Periods Ended December 31,
	2011			2010		2009		2008(b)
Net asset value, beginning of year	$	10.35		$	8.43	$	4.79	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (c)		0.05			0.02		0.02		0.04
Net realized and unrealized gain (loss) on investments		(0.30	)		1.98		3.73		(5.25	)

Total from investment operations		(0.25	)		2.00		3.75		(5.21	)
Less distributions from:
Net investment income		(0.06	)		0.02		0.11		0.00	^
Net realized gain		0.06			0.06		—		—

Total distributions		—			0.08		0.11		0.00	^

Net asset value, end of year	$	10.10		$	10.35	$	8.43	$	4.79

Total Return (%)*		(2.42	)		23.70		78.38		(52.09	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.40			1.40		1.40		1.40
Expenses, before waivers and reimbursements		1.54			1.52		1.54		1.56
Net investment income (loss), net of waivers and reimbursements		0.97			0.25		0.37		0.70
Net investment income (loss), before waivers and reimbursements		0.83			0.13		0.23		0.54


	Period Ended June 30,			Periods Ended December 31,
	2011			2010		2009		2008(b)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	100,402		$	94,901	$	115,136	$	46,676
Portfolio turnover rate (%)*		102			176		176		151

(a)

For the period May 3, 2010 (Commencement of Operations) to December 31, 2010.

(b)

For the period March 26, 2008 (Commencement of Operations) to December 31, 2008.

(c)

Excludes $0.96, $1.29 and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009 and 2008 respectively.

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

136 Semi-Annual Report

June 30, 2011

Financial Highlights

Small Cap Value Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010		2009		2008			2007			2006
Net asset value, beginning of year	$	13.71		$	10.49	$	8.33	$	11.31		$	16.27		$	14.95
Income (loss) from investment operations:
Net investment income (loss)		0.00	^		0.03		0.06		0.09			0.02			0.03
Net realized and unrealized gain (loss) on investments		0.30			3.22		2.13		(3.02	)		(0.96	)		3.22

Total from investment operations		0.30			3.25		2.19		(2.93	)		(0.94	)		3.25
Less distributions from:
Net investment income		—			0.03		0.03		0.05			—			0.01
Net realized gain		—			—		—		—			4.02			1.92

Total distributions		—			0.03		0.03		0.05			4.02			1.93

Net asset value, end of year	$	14.01		$	13.71	$	10.49	$	8.33		$	11.31		$	16.27

Total Return (%)*		2.19			30.94		26.24		(25.85	)		(5.54	)		21.78
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.37			1.33		1.29		1.29			1.33			1.34
Expenses, before waivers and reimbursements		1.56			1.57		1.78		1.82			1.66			1.75
Net investment income (loss), net of waivers and reimbursements		0.06			0.25		0.68		0.84			0.10			0.21
Net investment income (loss), before waivers and reimbursements		(0.13	)		0.01		0.19		0.31			(0.23	)		(0.20	)


	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007			2006
Net asset value, beginning of year	$	13.93	$	10.65	$	8.45	$	11.50		$	16.51		$	15.12
Income (loss) from investment operations:
Net investment income (loss)		0.02		0.05		0.08		0.11			0.09			0.03
Net realized and unrealized gain (loss) on investments		0.31		3.27		2.16		(3.08	)		(1.01	)		3.30

Total from investment operations		0.33		3.32		2.24		(2.97	)		(0.92	)		3.33
Less distributions from:
Net investment income		—		0.04		0.04		0.08			0.07			0.02
Net realized gain		—		—		—		—			4.02			1.92

Total distributions		—		0.04		0.04		0.08			4.09			1.94

Net asset value, end of year	$	14.26	$	13.93	$	10.65	$	8.45		$	11.50		$	16.51

Total Return (%)*		2.37		31.16		26.56		(25.77	)		(5.31	)		22.10
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.12		1.10		1.09		1.09			1.09			1.09
Expenses, before waivers and reimbursements		1.27		1.29		1.50		1.57			1.37			1.50
Net investment income (loss), net of waivers and reimbursements		0.34		0.43		0.86		1.06			0.52			0.16
Net investment income (loss), before waivers and reimbursements		0.19		0.24		0.45		0.58			0.24			(0.25	)



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	229,443	$	164,499	$	54,859	$	36,249	$	47,118	$	146,777
Portfolio turnover rate (%)*		32		71		62		87		102		162

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

June 30, 2011

William Blair Funds 137

Financial Highlights

Mid Cap Value Fund


	Class N
	Period Ended June 30,			Period Ended December 31,
	2011			2010(a)
Net asset value, beginning of year	$	10.75		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.06			0.09
Net realized and unrealized gain (loss) on investments		0.57			0.74

Total from investment operations		0.63			0.83
Less distributions from:
Net investment income		(0.02	)		0.06
Net realized gain		0.02			0.02

Total distributions		—			0.08

Net asset value, end of year	$	11.38		$	10.75

Total Return (%)*		5.86			8.36
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.35			1.35
Expenses, before waivers and reimbursements		4.28			5.09
Net investment income (loss), net of waivers and reimbursements		1.03			0.92
Net investment income (loss), before waivers and reimbursements		(1.90	)		(2.82	)

	Class I
	Period Ended June 30,			Period Ended December 31,
	2011			2010(a)
Net asset value, beginning of year	$	10.76		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.05			0.11
Net realized and unrealized gain (loss) on investments		0.58			0.75

Total from investment operations		0.63			0.86
Less distributions from:
Net investment income		(0.02	)		0.08
Net realized gain		0.02			0.02

Total distributions		—			0.10

Net asset value, end of year	$	11.39		$	10.76

Total Return (%)*		5.86			8.66
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.10			1.10
Expenses, before waivers and reimbursements		3.97			4.92
Net investment income (loss), net of waivers and reimbursements		0.92			1.10
Net investment income (loss), before waivers and reimbursements		(1.95	)		(2.72	)

	Period Ended June 30,			Period Ended December 31,
	2011			2010(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	4,143		$	3,393
Portfolio turnover rate (%)*		40			35

(a)

For the period May 3, 2010 (Commencement of Operations) to December 31, 2010.

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

Rates are annualized for periods that are less than a year.

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.

138 Semi-Annual Report

June 30, 2011

Financial Highlights

Bond Fund


	Class N
	Period Ended June 30,		Period Ended December 31,
	2011		2010		2009		2008			2007(a)
Net asset value, beginning of year	$	10.70	$	10.40	$	9.82	$	10.07		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.23		0.46		0.48		0.47			0.31
Net realized and unrealized gain (loss) on investments		0.07		0.35		0.59		(0.31	)		0.02

Total from investment operations		0.30		0.81		1.07		0.16			0.33
Less distributions from:
Net investment income		0.24		0.48		0.49		0.41			0.26
Net realized gain		—		0.03		—		—			—

Total distributions		0.24		0.51		0.49		0.41			0.26

Net asset value, end of year	$	10.76	$	10.70	$	10.40	$	9.82		$	10.07

Total Return (%)*		2.90		7.86		11.11		1.64			3.38
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.65		0.65		0.65		0.65			0.65
Expenses, before waivers and reimbursements		0.77		0.70		1.40		2.47			0.81
Net investment income (loss), net of waivers and reimbursements		4.29		4.25		4.76		4.69			4.80
Net investment income (loss), before waivers and reimbursements		4.17		4.01		4.01		2.87			4.64

	Class I
	Period Ended June 30,		Period Ended December 31,
	2011		2010		2009		2008			2007(a)
Net asset value, beginning of year	$	10.59	$	10.31	$	9.72	$	10.04		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.23		0.47		0.49		0.48			0.32
Net realized and unrealized gain (loss) on investments		0.09		0.33		0.59		(0.31	)		0.02

Total from investment operations		0.32		0.80		1.08		0.17			0.34
Less distributions from:
Net investment income		0.25		0.49		0.49		0.49			0.30
Net realized gain		—		0.03		—		—			—

Total distributions		0.25		0.52		0.49		0.49			0.30

Net asset value, end of year	$	10.66	$	10.59	$	10.31	$	9.72		$	10.04

Total Return (%)*		3.09		7.89		11.40		1.72			3.50
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.50		0.50		0.50		0.50			0.50
Expenses, before waivers and reimbursements		0.56		0.55		0.58		0.71			0.67
Net investment income (loss), net of waivers and reimbursements		4.45		4.41		4.92		4.90			4.95
Net investment income (loss), before waivers and reimbursements		4.40		4.36		4.84		4.69			4.78



	Period Ended June 30,		Period Ended December 31,
	2011		2010		2009		2008		2007(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	203,808	$	192,776	$	147,344	$	74,613	$	68,483
Portfolio turnover rate (%)*		17		25		29		52		38

(a)

For the period May 1, 2007 (Commencement of Operations) to December 31, 2007.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 139

Financial Highlights

Income Fund


	Class N
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007			2006
Net asset value, beginning of year	$	9.22	$	9.07	$	8.69	$	9.29		$	9.74		$	9.83
Income (loss) from investment operations:
Net investment income (loss)		0.17		0.35		0.40		0.37			0.45			0.44
Net realized and unrealized gain (loss) on investments		0.05		0.19		0.44		(0.59	)		(0.35	)		(0.04	)

Total from investment operations		0.22		0.54		0.84		(0.22	)		0.10			0.40

Less distributions from:
Net investment income		0.19		0.39		0.46		0.38			0.55			0.49
Net realized gain		—		—		—		—			—			—

Total distributions		0.19		0.39		0.46		0.38			0.55			0.49

Net asset value, end of year	$	9.25	$	9.22	$	9.07	$	8.69		$	9.29		$	9.74

Total Return (%)*		2.48		6.04		9.88		(2.46	)		1.08			4.25
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.85		0.85		0.85		0.90			0.79			0.74
Expenses, before waivers and reimbursements		0.94		0.85		0.93		0.93			0.81			0.80
Net investment income (loss), net of waivers and reimbursements		3.72		3.79		4.48		4.38			4.73			4.54
Net investment income (loss), before waivers and reimbursements		3.63		3.79		4.41		4.35			4.71			4.48

	Class I
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007			2006
Net asset value, beginning of year	$	9.15	$	9.00	$	8.64	$	9.30		$	9.69		$	9.82
Income (loss) from investment operations:
Net investment income (loss)		0.18		0.37		0.41		0.39			0.47			0.45
Net realized and unrealized gain (loss) on investments		0.05		0.19		0.43		(0.59	)		(0.34	)		(0.04	)

Total from investment operations		0.23		0.56		0.84		(0.20	)		0.13			0.41

Less distributions from:
Net investment income		0.20		0.41		0.48		0.46			0.52			0.54
Net realized gain		—		—		—		—			—			—

Total distributions		0.20		0.41		0.48		0.46			0.52			0.54

Net asset value, end of year	$	9.18	$	9.15	$	9.00	$	8.64		$	9.30		$	9.69

Total Return (%)*		2.60		6.33		9.89		(2.26	)		1.36			4.33
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.65		0.63		0.66		0.72			0.60			0.62
Net investment income (loss), net of waivers and reimbursements		3.93		4.01		4.67		4.57			4.91			4.66



	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	95,128	$	113,277	$	117,608	$	140,435	$	204,630	$	297,077
Portfolio turnover rate (%)*		16		29		40		38		34		33

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

Rates are annualized for periods that are less than a year.

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

140 Semi-Annual Report

June 30, 2011

Financial Highlights

Low Duration Fund


	Class N
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009(a)
Net asset value, beginning of year	$	9.90	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.07		0.13		0.01
Net realized and unrealized gain (loss) on investments		0.04		0.05		(0.07	)

Total from investment operations		0.11		0.18		(0.06	)
Less distributions from:
Net investment income		0.12		0.21		0.01
Net realized gain		—		—		—

Total distributions		0.12		0.21		0.01

Net asset value, end of year	$	9.89	$	9.90	$	9.93

Total Return (%)*		1.13		1.86		(0.60	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.70		0.70		0.70
Expenses, before waivers and reimbursements		0.74		0.78		0.94
Net investment income (loss), net of waivers and reimbursements		1.53		1.33		1.27
Net investment income (loss), before waivers and reimbursements		1.48		1.25		1.03

	Class I
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009(a)
Net asset value, beginning of year	$	9.89	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.08		0.15		0.01
Net realized and unrealized gain (loss) on investments		0.05		0.04		(0.07	)

Total from investment operations		0.13		0.19		(0.06	)
Less distributions from:
Net investment income		0.13		0.23		0.01
Net realized gain		—		—		—

Total distributions		0.13		0.23		0.01

Net asset value, end of year	$	9.89	$	9.89	$	9.93

Total Return (%)*		1.31		1.89		(0.59	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.55		0.55		0.55
Expenses, before waivers and reimbursements		0.60		0.63		0.79
Net investment income (loss), net of waivers and reimbursements		1.68		1.46		1.39
Net investment income (loss), before waivers and reimbursements		1.63		1.38		1.15


	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	146,035	$	143,470	$	95,134
Portfolio turnover rate (%)*		17		51		—

(a)

For the period December 1, 2009 (Commencement of Operations) to December 31, 2009.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 141

Financial Highlights

Ready Reserves Fund


	Class N
	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008		2007		2006
Net asset value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00	$	1.00	$	1.00
Income (loss) from investment operations:
Net investment income (loss)		0.00	^		0.00	^		0.00	^		0.02		0.05		0.04
Net realized and unrealized gain (loss) on investments		—			—			—			—		—		—

Total from investment operations		0.00	^		0.00	^		0.00	^		0.02		0.05		0.04
Less distributions from:
Net investment income		0.00	^		0.00	^		0.00	^		0.02		0.05		0.04
Net realized gain		—			—			—			—		—		—

Total distributions		0.00	^		0.00	^		0.00	^		0.02		0.05		0.04

Net asset value, end of year	$	1.00		$	1.00		$	1.00		$	1.00	$	1.00	$	1.00

Total Return (%)*		0.00			0.01			0.10			2.20		4.75		4.47
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.17			0.24			0.46			0.60		0.63		0.63
Expenses, before waivers and reimbursements		0.61			0.61			0.66			0.60		0.63		0.63
Net investment income (loss), net of waivers and reimbursements		0.01			0.01			0.11			2.12		4.63		4.38
Net investment income (loss), before waivers and reimbursements		(0.43	)		(0.36	)		(0.09	)		2.12		4.63		4.38


	Period Ended June 30,			Years Ended December 31,
	2011			2010			2009			2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	1,257,818		$	1,216,543		$	1,352,901		$	1,841,189	$	1,399,537	$	1,195,593

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

142 Semi-Annual Report

June 30, 2011

Trustees and Officers (Unaudited). The trustees and officers of the William Blair Funds, their year of birth, their principal occupations during the last five years, their affiliations, if any, with William Blair & Company, L.L.C., and other significant affiliations are set forth below. The address of each trustee and officer is 222 West Adams Street, Chicago, Illinois 60606.


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer
Interested Trustees

Michelle R. Seitz, 1965*	Chairperson of the Board of Trustees and President	Trustee since 2002; Chairperson since 2010 Since 2007	Principal, William Blair & Company, L.L.C.; Limited Partner, WB Holdings, L.P. (since November 2008); Member, WBC GP, L.L.P. (since November 2008)	19	Director, William Blair SI CAV

Richard W. Smirl, 1967^*	Trustee and Senior Vice President	Trustee since 2010 and Senior Vice President Since 2007	Principal, William Blair & Company, L.L.C.	19	Director, William Blair SI CAV

Non-Interested Trustees
Ann P. McDermott, 1939	Trustee	Since 1996	Board member and officer for various civic and charitable organizations over the past thirty years; professional experience prior thereto, registered representative for New York Stock Exchange firm	19	Northwestern University, Women’s Board; Rush Presbyterian St. Luke’s Medical Center, Women’s Board; University of Chicago, Women’s Board; Visiting Nurses Association, Honorary Director

Phillip O. Peterson, 1944	Trustee	Since 2007	Retired; formerly, President, Strong Mutual Funds, 2004-2005; formerly, Partner, KPMG LLP	19	The Hartford Group of Mutual Funds (87 portfolios)

Lisa A. Pollina, 1965	Trustee	Since 2011	Senior Advisor to head of RBC Financial Group’s International Banking and Insurance division since 2010; formerly, Bank of America Corporation, Global Financial Institutions Executive from 2006-2008 and multiple Advisory from 2008-2010; prior thereto, Managing Partner, Bordeaux Capital from 2002-2006.	19	Darkstrand, high-speed fiber optic network provider (2009 to 2010); Jane Addams Hull House Association, Board of Trustees (2003 to 2009)

Donald J. Reaves, 1946	Trustee	Since 2004	Chancellor, Winston-Salem State University since 2007; formerly, Vice President for Administration and Chief Financial Officer, University of Chicago 2002-2007.	19	American Student Assistance Corp., guarantor of student loans; Amica Mutual Insurance Company

Donald L. Seeley, 1944	Trustee	Since 2003	Retired; formerly, Director, Applied Investment Management Program, University of Arizona Department of Finance, prior thereto, Vice Chairman and Chief Financial Officer, True North Communications, Inc., marketing communications and advertising firm	19	Warnaco Group, Inc., intimate apparel, sportswear, and swimwear manufacturer; Center for Furniture Craftsmanship (not-for-profit)

June 30, 2011

William Blair Funds 143


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer

Thomas J. Skelly, 1951	Trustee	Since 2007	Advisory Board Member for various U.S. Companies; Director and Investment Committee Chairman of the US Accenture Foundation, Inc.; prior to 2005, Managing Partner of various divisions at Accenture	19	Mutual Trust Financial Group, provider of insurance and investment products; Board Member First MetLife Investors Insurance Company, NY Chartered Company for Metropolitan Life Insurance

Officers
Michael P. Balkin, 1959	Senior Vice President Vice President	Since 2009 2008-2009	Principal, William Blair & Company, L.L.C. Associate, William Blair & Company, L.L.C.; former Partner, Magnetar Capital		N/A

Karl W. Brewer, 1966	Senior Vice President	Since 2000	Principal, William Blair & Company, L.L.C.		N/A

David C. Fording, 1967	Senior Vice President Vice President	Since 2009 2006-2009	Principal, William Blair & Company, L.L.C. Associate, William Blair & Company, L.L.C.; former Portfolio Manager, TIAA-CREF.		N/A

James S. Golan, 1961	Senior Vice President	Since 2005	Principal, William Blair & Company, L.L.C.		N/A

W. George Greig, 1952	Senior Vice President	Since 1996	Principal, William Blair & Company, L.L.C.		N/A

Michael A. Jancosek, 1959	Senior Vice President	Since 2004	Principal, William Blair & Company L.L.C.		N/A

John F. Jostrand, 1954	Senior Vice President	Since 1999	Principal, William Blair & Company, L.L.C.		N/A

Chad M. Kilmer, 1975	Senior Vice President Vice President	Since 2011 Since 2006	Principal, William Blair & Company, L.L.C. Associate, William Blair & Company, L.L.C.; former analyst and Portfolio Manager U.S. Bancorp Asset Management.		N/A

Robert C. Lanphier, IV, 1956	Senior Vice President	Since 2003	Principal, William Blair & Company, L.L.C.		Chairman, AG. Med, Inc.

Mark T. Leslie, 1967	Senior Vice President Vice President	Since 2008 2005-2008	Principal, William Blair & Company, L.L.C. Associate, William Blair & Company, L.L.C.		N/A
Matthew A. Litfin, 1972	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.		N/A

Kenneth J. McAtamney 1966	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.		N/A

144 Semi-Annual Report

June 30, 2011


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years	Other Directorships Held by Trustee/Officer

Todd M. McClone, 1968	Senior Vice President Vice President	Since 2006 2005-2006	Principal, William Blair & Company, L.L.C. Associate, William Blair & Company, L.L.C.	N/A N/A

Tracy McCormick, 1954	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

David Merjan, 1960	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

David S. Mitchell, 1960	Senior Vice President	Since 2004	Principal, William Blair & Company, L.L.C.	N/A

David P. Ricci, 1958	Senior Vice President	Since 2006	Principal, William Blair & Company, L.L.C.	N/A

Jeffrey A. Urbina, 1955	Senior Vice President	Since 1998	Principal, William Blair & Company, L.L.C.	N/A

Christopher T. Vincent, 1956	Senior Vice President	Since 2004	Principal, William Blair & Company, L.L.C.	N/A

Kathleen M. Lynch, 1971	Vice President	Since 2010	Associate, William Blair & Company, L.L.C.	N/A

Paul J. Sularz, 1967	Vice President	Since 2009	Associate, William Blair & Company, L.L.C.; Vice President, J.P. Morgan Securities, Inc.	N/A

Walter R. Randall, Jr., 1960	Chief Compliance Officer and Assistant Secretary	Since 2009	Associate, William Blair & Company, L.L.C.; Associate Counsel and Chief Compliance Officer, Calamos Investments; Assistant General Counsel, American Century Investments.	N/A

Colette M. Garavalia, 1961	Treasurer	Since 2009	Associate, William Blair & Company, L.L.C.	N/A

	Secretary	2000-2009	Associate, William Blair & Company, L.L.C.;	N/A

Andrew T. Pfau, 1970	Secretary	Since 2009	Associate, William Blair & Company, L.L.C.; Associate, Bell, Boyd & Lloyd, LLP; Associate, Sidley Austin LLP	N/A
John M. Raczek, 1970	Assistant Treasurer	Since 2010	Associate, William Blair & Company, L.L.C.; Manager, Calamos Investments

Ms. Seitz and Mr. Smirl are interested persons of the William Blair Funds because each is a principal of William Blair & Company, L.L.C., the Fund’s investment advisor, principal underwriter and distributor.

(1)

Each Trustee serves until the election and qualification of a successor, or until death, resignation or retirement or removal as provided in the Fund’s Declaration of Trust. Retirement for non-interested Trustees occurs no later than at the conclusion of the first regularly scheduled Board meeting of the Fund’s fiscal year that occurs after the earlier of (a) the non-interested Trustee’s 72nd birthday or (b) the 15th anniversary of the date that the non-interested Trustee was first elected or appointed as a member of the Board of Trustees. The Fund’s officers, except the Chief Compliance Officer, are elected annually by the Trustees. The Fund’s Chief Compliance Officer is designated by the Board of Trustees and may only be removed by action of the Board of Trustees, including a majority of the non-interested Trustees.

(2)

In November 2008, all principals of William Blair & Company, L.L.C. also became limited partners in WB Holdings, L.P.

The Statement of Additional Information for the William Blair Funds includes additional information about the trustees and is available without charge by calling 1-800-635-2886 (in Massachusetts 1-800-635-2840) or by writing the Fund.

June 30, 2011

William Blair Funds 145

Renewal of the Trust’s Management Agreement

On April 26, 2011, the Board of Trustees (the “Board”) of the William Blair Funds (the “Trust”), including the Trustees who are not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), approved the renewal for an additional one-year term of the Trust’s Management Agreement with William Blair & Company, L.L.C. (the “Advisor”), on behalf of each of the William Blair Growth Fund, the William Blair Large Cap Growth Fund, the William Blair Small Cap Growth Fund, the William Blair Mid Cap Growth Fund, the William Blair Small-Mid Cap Growth Fund, the William Blair Global Growth Fund, the William Blair International Growth Fund, the William Blair International Equity Fund, the William Blair International Small Cap Growth Fund, the William Blair Emerging Markets Growth Fund, the William Blair Emerging Leaders Growth Fund, the William Blair Small Cap Value Fund, the William Blair Bond Fund, the William Blair Income Fund, the William Blair Low Duration Fund and the William Blair Ready Reserves Fund (each, a “Fund” and collectively, the “Funds”). In deciding to approve the renewal of the Management Agreement, the Board did not identify any single factor or group of factors as all-important or controlling and considered all factors together.

The information in this summary outlines the Board’s considerations associated with its renewal of the Management Agreement. In connection with its deliberations regarding the continuation of the Management Agreement, the Board considered such information and factors as it believed to be relevant. As described below, the Board considered the nature, extent and quality of the services performed by the Advisor under the existing Management Agreement; comparative management fees and expense ratios as prepared by an independent provider (Lipper Inc.); the estimated profits realized by the Advisor; the extent to which the Advisor realizes economies of scale as a Fund grows; and whether any fall-out benefits are being realized by the Advisor. In addition, the Independent Trustees discussed the renewal of the Management Agreement with Fund management and in private sessions with independent legal counsel at which no representatives of the Advisor were present.

The Board, including the Independent Trustees, considered the renewal of the Management Agreement pursuant to a process that concluded at the Board’s April 26, 2011 meeting. In preparation for the review process, the Independent Trustees met with independent legal counsel and discussed the type and nature of information to be requested and independent legal counsel sent a formal request for information to Trust management. The Advisor provided extensive information in response to the request. After reviewing the information received, the Independent Trustees requested supplemental information, which the Advisor provided in writing and/or orally. The Independent Trustees reviewed comparative performance and comparative advisory fees and expense ratios for a peer group and a peer universe of funds provided by Lipper for each Fund. In addition, the Independent Trustees considered: (i) materials describing the nature, quality and extent of services provided by the Advisor; (ii) information comparing the performance of each Fund to one or more relevant securities indexes; (iii) information comparing advisory fees of each Fund to fees charged by the Advisor to other funds and client accounts with similar investment strategies; (iv) the estimated allocated direct or indirect costs of services provided and estimated profits realized by the Advisor for both the Trust as a whole and each Fund individually; and (v) information describing other benefits to the Advisor resulting from its relationship with the Funds. The Independent Trustees also noted that they receive information from the Advisor regarding the Funds throughout the year in connection with regular Board meetings, including presentations from portfolio managers. The Independent Trustees also received a memorandum from independent legal counsel advising them of their duties and responsibilities in connection with the review of the Management Agreement. Finally, the Advisor made an in-person presentation to the Independent Trustees regarding the contract review information, including addressing the supplemental information requests, and answered questions from the Independent Trustees.

On April 14, 25 and 26, 2011, the Independent Trustees met independently of Trust management and of the interested Trustees to review and discuss with independent legal counsel the information provided by the Advisor, Lipper and independent legal counsel. The Independent Trustees noted that in evaluating the Management Agreement, they were taking into account their accumulated experience as Trustees in working with the Advisor on matters relating to the Funds. Based on their review, the Independent Trustees concluded that it was in the best interest of each Fund to renew the Management Agreement and recommended to the Board the renewal of the Management Agreement. The Board considered the recommendation of the Independent Trustees along with the other factors that the Board deemed relevant.

146 Semi-Annual Report

June 30, 2011

investment advisory fee. The Board considered biographical information about the Trust’s officers and the Funds’ portfolio managers, including information on the portfolio managers’ investments in the Funds. The Board also considered the administrative services performed by the Advisor, financial information regarding the Advisor, the Advisor’s execution quality and use of soft dollars, the compliance regime overseen by the Advisor, and the Advisor’s expense limitations in place for certain Funds. The Board was also provided with information pertaining to the Advisor’s organizational structure and senior management. The Board noted that the Advisor pays the compensation of all of the officers and the interested Trustees of the Trust.

The Board reviewed information on the annualized total returns of each Fund for the one, three, five and ten year periods ended December 31, 2010, as applicable, along with annualized total return information for the Lipper performance peer universe of funds and one or more relevant securities indexes. The Lipper performance peer universe for each Fund included all funds with a similar investment style as classified by Lipper regardless of asset size or primary channel of distribution. With respect to the comparative performance information generally, the Board considered the Advisor’s statement that it is committed to managing each Fund consistently with the Fund’s stated investment strategies through all market environments and that, as a result, the Funds’ relative performance compared to the Lipper performance peer universe and relevant securities indexes from year to year will be affected by whether the market environment favors or disfavors the Advisor’s investment strategies. The Board also considered the Advisor’s statement that its investment strategies are intended to produce superior performance over the long term. The Trustees reviewed each Fund’s ranking in its Lipper performance peer universe during the applicable periods, and based on that review, requested and discussed with the Advisor additional information regarding the performance of the International Equity Fund, the Emerging Markets Growth Fund, the Small Cap Growth Fund and the Low Duration Fund. With respect to the International Equity Fund, the Board noted that, except for 2008, the Fund had positive absolute performance for each full year since its inception and also considered the Advisor’s statement that the Fund’s lower allocations to emerging markets and small-cap securities relative to its peer funds had contributed to underperformance in recent periods. With respect to the Emerging Markets Growth Fund, the Board considered the Advisor’s statement that the Fund’s underperformance during the economic downturn in 2008 and 2009 continued to negatively impact the Fund’s three- and five-year rankings within its Lipper performance peer universe and noted that the Fund ranked in the 20th percentile of its Lipper performance peer universe over the most recent one-year period. With respect to the Small Cap Growth Fund, the Board noted the significant changes in the Fund’s ranking in its Lipper performance peer universe from year-to-year in recent periods and considered the Advisor’s statement that the such changes generally resulted from portfolio management managing the Fund consistently with the Fund’s stated investment strategies through different market environments. With respect to the Low Duration Fund, the Board considered supplemental information presented by the Advisor comparing the Fund’s performance to the performance of a different peer group of funds that the Advisor believed to be more representative of the Fund’s investment style and portfolio characteristics, including the Fund’s average duration and average credit quality. The Board considered the Advisor’s statement that the Fund’s lower average duration and higher average credit quality as compared to the funds in its Lipper performance peer universe negatively impacted its comparative performance.

Based upon all relevant factors, the Board concluded that the nature, quality and extent of the services provided by the Advisor to each Fund were satisfactory.

Fees and Expenses. The Board reviewed each Fund’s advisory fee and expense ratio and reviewed information comparing the advisory fee and expense ratio to those of a Lipper expense peer group and Lipper expense peer universe for each Fund. The Lipper expense peer group for each Fund consisted of a group of funds with a similar investment style as classified by Lipper, distribution channel and asset size as the Fund. The Lipper expense peer universe for each Fund consisted of all funds with a similar investment style as classified by Lipper and distribution channel as the Fund. The Board considered that the Advisor had proposed to contractually limit total expenses for the Large Cap Growth Fund, the Small Cap Growth Fund, the Mid Cap Growth Fund, the Small-Mid Cap Growth Fund, the Global Growth Fund, the International Growth Fund, the International Equity Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Leaders Growth Fund, the Small Cap Value Fund, the Bond Fund, the Income Fund and the Low Duration Fund. The Board also considered that the Advisor intended to continue to voluntarily waive or reimburse certain operating expenses of the Ready Reserves Fund to maintain a positive yield for the Fund. For each Fund, the Board also reviewed amounts charged by the Advisor to other pooled investment vehicles, including other registered funds for which the Advisor acts as a subadvisor, and the Advisor’s fee schedule for institutional separate accounts. With respect to other pooled investment vehicles and institutional separate accounts, the Board considered the Advisor’s statement that both the mix of services provided to the Funds and the additional regulatory responsibilities associated with sponsoring registered investment companies were greater as compared to the work involved for other pooled investment vehicles and separate accounts. In addition, the Board considered the Advisor’s statement that institutional separate accounts are distributed differently, operate under different investment and regulatory structures and have different business risks as compared to the Funds.

June 30, 2011

William Blair Funds 147

In considering the information, the Board noted that the advisory fees for the Growth Fund, the Large Cap Growth Fund, the Mid Cap Growth Fund, the Small-Mid Cap Growth Fund, the Global Growth Fund, the International Growth Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Leaders Growth Fund, the Bond Fund, the Income Fund, the Low Duration Fund and the Ready Reserves Fund were below or within an acceptable range of the average advisory fees of their Lipper expense peer group. The Board also noted that the advisory fees for the Small Cap Value Fund were above although within an acceptable range of the average advisory fees of its Lipper expense peer group after giving effect to the expense limitation proposed for 2011. Finally, the Board noted that the advisory fees for the Small Cap Growth Fund and the International Equity Fund were above the average advisory fees of their Lipper expense peer group, but that such advisory fees were within an acceptable range of the average advisory fees of their Lipper expense peer group and consistent with reasonable expectations in light of the nature, quality and extent of services provided by the Advisor. On the basis of the information provided, the Board concluded that each Fund’s advisory fee, coupled with applicable expense limitations, was reasonable in light of the nature, quality and extent of services provided by the Advisor.

Profitability. With respect to the profitability of the Management Agreement to the Advisor, the Board considered the overall fees paid under the Management Agreement, including the estimated allocated costs of the services provided and profits realized by the Advisor from its relationship with the Trust as a whole and each Fund individually. The Board concluded that the estimated profits realized by the Advisor were not unreasonable.

Economies of Scale. The Board considered the extent to which economies of scale would be realized as the Funds grow and whether fee levels reflect these economies of scale for the benefit of investors. The Board noted the Advisor’s representation that certain Fund expenses are relatively fixed and unrelated to asset size and that the Advisor may enjoy some economies of scale as a Fund’s assets grow. The Board also noted that the Advisor increased the number of personnel working on Fund matters during 2010. In considering whether fee levels reflect economies of scale for the benefit of Fund investors, the Board reviewed each Fund’s asset size, breakpoints for those Funds with breakpoints in the advisory fee schedule, the Fund’s total and net expense ratios and the expense limitations in place and/or proposed, and concluded that in the aggregate they reasonably reflect appropriate recognition of any economies of scale.

Other Benefits to the Advisor. The Board considered benefits derived by the Advisor from its relationship with the Funds, including (i) non-advisory fee revenue from the Funds in the form of shareholder administration fees, service fees and/or distribution fees and the payment of some or all of those revenues to affiliates or third parties, (ii) soft dollars, which pertain primarily to the Funds investing in equity securities, and (iii) favorable media coverage. The Board concluded that, taking into account these benefits, each Fund’s advisory fee was reasonable.

Conclusion. Based upon all of the information considered and the conclusions reached, the Board determined that the terms of the Management Agreement continue to be fair and reasonable and that the continuation of the Management Agreement is in the best interests of each Fund.

148 Semi-Annual Report

June 30, 2011

(unaudited)

Proxy Voting

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30 are available without charge, upon request, by calling 1-800-635-2886 (in Massachusetts 1-800-635-2840), at www.williamblairfunds.com and on the SEC’s website at http://www.sec.gov.

Quarterly Portfolio Schedules

Each Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third fiscal quarters of each fiscal year (quarters ended March 31 and September 30) on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s Forms N-Q are also available on the Fund’s website at www.williamblairfunds.com.

Additional Federal Income Tax Information: (unaudited)

Under Section 852(b)(3)(C) of the Code, the Funds hereby designate the following amounts as capital gain dividends for the fiscal year ended December 31, 2010:


Emerging Leaders Growth	Small Cap Value	Bond
$505,181	$135,089	$493,757

The following table provides the percentage of the 2010 year-end distributions that qualify for the dividend received deduction, and the qualified dividend income percentage:


Portfolio	Dividend Received Deduction%			Qualified Dividend Income%
Growth		100.00	%		100.00	%
Large Cap Growth		100.00	%		100.00	%
Small Cap Growth		0.00	%		0.00	%
Mid Cap Growth		0.00	%		0.00	%
Small-Mid Cap Growth		0.00	%		0.00	%
Global Growth		99.93	%		100.00	%
International Growth		0.00	%		85.61	%
International Equity		0.43	%		100.00	%
International Small Cap Growth		0.13	%		100.00	%
Emerging Markets Growth		0.16	%		83.93	%
Emerging Leaders Growth		0.00	%		100.00	%
Small Cap Value		100.00	%		100.00	%
Mid Cap Value		75.51	%		100.00	%
Bond		0.00	%		0.00	%
Income		0.00	%		0.00	%
Low Duration		0.00	%		0.00	%
Ready Reserves		0.00	%		0.00	%

In January 2011, you were notified on IRS Form 1099-Div or substitute 1099 DIV as to the Federal tax status of the distributions received by you in the calendar year 2010.

June 30, 2011

William Blair Funds 149

Useful Information About Your Report (unaudited)

Please refer to this information when reviewing the Expense Example for each Portfolio.

Expense Example

As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs such as redemption fees and (2) ongoing costs, including management fees, distribution (12b-1) fees (for Class N shares except for the Ready Reserves Portfolio), service fees (for Class N shares of the Ready Reserves Portfolio), shareholder administration fees (for Class N and Class I shares of the Global Growth Portfolio, the International Small Cap Growth Portfolio, the Emerging Markets Growth Portfolio, the Emerging Leaders Growth Portfolio, the Bond Portfolio and the Low Duration Portfolio) and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare the Portfolio’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, 2011 to June 30, 2011.

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 Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses. This is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in both examples are meant to highlight your ongoing costs only and do not reflect any transactional costs or account type fees, such as redemption fees and IRA Fiduciary Administration fees, respectively. These fees are fully described in the prospectus. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs or account fees were included, your costs would have been higher.

150 Semi-Annual Report

June 30, 2011

Fund Expenses (unaudited)

The examples below show you the ongoing costs (in dollars) of investing in your fund and allows you to compare these costs with those of other mutual funds. Please refer to the previous page for a detailed explanation of the information presented on this chart.


Expense Example	Beginning Account Value 1/1/2011		Ending Account Value 6/30/2011		Expenses Paid During the Period(a)		Annualized Expense Ratio
Growth Fund
Class N—actual return	$	1,000.00	$	1,056.70	$	6.01		1.18	%
Class N—hypothetical 5% return		1,000.00		1,018.95		5.90		1.18
Class I—actual return		1,000.00		1,058.90		4.27		0.84
Class I—hypothetical 5% return		1,000.00		1,020.65		4.19		0.84
Large Cap Growth Fund
Class N—actual return		1,000.00		1,036.40		6.06		1.20
Class N—hypothetical 5% return		1,000.00		1,018.84		6.01		1.20
Class I—actual return		1,000.00		1,038.40		4.80		0.95
Class I—hypothetical 5% return		1,000.00		1,020.08		4.76		0.95
Small Cap Growth Fund
Class N—actual return		1,000.00		1,013.80		7.49		1.50
Class N—hypothetical 5% return		1,000.00		1,017.36		7.50		1.50
Class I—actual return		1,000.00		1,014.50		6.24		1.25
Class I—hypothetical 5% return		1,000.00		1,018.60		6.26		1.25
Mid Cap Growth Fund
Class N—actual return		1,000.00		1,120.00		7.10		1.35
Class N—hypothetical 5% return		1,000.00		1,018.10		6.76		1.35
Class I—actual return		1,000.00		1,120.70		5.78		1.10
Class I—hypothetical 5% return		1,000.00		1,019.34		5.51		1.10
Small-Mid Cap Growth Fund
Class N—actual return		1,000.00		1,115.30		7.09		1.35
Class N—hypothetical 5% return		1,000.00		1,018.09		6.76		1.35
Class I—actual return		1,000.00		1,117.20		5.76		1.10
Class I—hypothetical 5% return		1,000.00		1,019.36		5.49		1.10
Global Growth Fund
Class N—actual return		1,000.00		1,061.90		7.67		1.50
Class N—hypothetical 5% return		1,000.00		1,017.36		7.50		1.50
Class I—actual return		1,000.00		1,063.10		6.39		1.25
Class I—hypothetical 5% return		1,000.00		1,018.60		6.26		1.25
International Growth Fund
Class N—actual return		1,000.00		1,019.70		7.26		1.45
Class N—hypothetical 5% return		1,000.00		1,017.60		7.25		1.45
Class I—actual return		1,000.00		1,021.00		5.65		1.13
Class I—hypothetical 5% return		1,000.00		1,019.20		5.65		1.13
International Equity Fund
Class N—actual return		1,000.00		1,032.20		7.31		1.45
Class N—hypothetical 5% return		1,000.00		1,017.60		7.25		1.45
Class I—actual return		1,000.00		1,033.60		6.05		1.20
Class I—hypothetical 5% return		1,000.00		1,018.84		6.01		1.20
International Small Cap Growth Fund
Class N—actual return		1,000.00		1,054.30		8.22		1.61
Class N—hypothetical 5% return		1,000.00		1,016.79		8.07		1.61
Class I—actual return		1,000.00		1,056.90		6.35		1.25
Class I—hypothetical 5% return		1,000.00		1,018.62		6.23		1.25
Emerging Markets Growth Fund
Class N—actual return		1,000.00		993.00		8.21		1.66
Class N—hypothetical 5% return		1,000.00		1,016.55		8.31		1.66
Class I—actual return		1,000.00		994.30		6.69		1.35
Class I—hypothetical 5% return		1,000.00		1,018.08		6.77		1.35

(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).

June 30, 2011

William Blair Funds 151


Expense Example	Beginning Account Value 1/1/2011		Ending Account Value 6/30/2011		Expenses Paid During the Period(a)		Annualized Expense Ratio
Emerging Leaders Growth Fund
Class N—actual return	$	1,000.00	$	975.80	$	8.08		1.65	%
Class N—hypothetical 5% return		1,000.00		1,016.61		8.25		1.65
Class I—actual return		1,000.00		975.80		6.86		1.40
Class I—hypothetical 5% return		1,000.00		1,017.85		7.00		1.40
Small Cap Value Fund
Class N—actual return		1,000.00		1,021.90		6.86		1.37
Class N—hypothetical 5% return		1,000.00		1,018.01		6.84		1.37
Class I—actual return		1,000.00		1,023.70		5.62		1.12
Class I—hypothetical 5% return		1,000.00		1,019.24		5.60		1.12
Mid Cap Value Fund
Class N—actual return		1,000.00		1,058.60		6.89		1.35
Class N—hypothetical 5% return		1,000.00		1,018.10		6.75		1.35
Class I—actual return		1,000.00		1,058.60		5.61		1.10
Class N—hypothetical 5% return		1,000.00		1,019.34		5.51		1.10
Bond Fund
Class N—actual return		1,000.00		1,029.00		3.27		0.65
Class N—hypothetical 5% return		1,000.00		1,021.57		3.26		0.65
Class I—actual return		1,000.00		1,030.90		2.52		0.50
Class I—hypothetical 5% return		1,000.00		1,022.32		2.51		0.50
Income Fund
Class N—actual return		1,000.00		1,024.80		4.27		0.85
Class N—hypothetical 5% return		1,000.00		1,020.58		4.26		0.85
Class I—actual return		1,000.00		1,026.00		3.26		0.65
Class I—hypothetical 5% return		1,000.00		1,021.57		3.26		0.65
Low Duration Fund
Class N—actual return		1,000.00		1,011.30		3.49		0.70
Class N—hypothetical 5%		1,000.00		1,021.33		3.51		0.70
Class I—actual return		1,000.00		1,013.10		2.74		0.55
Class I—hypothetical 5%		1,000.00		1,022.07		2.75		0.55
Ready Reserve Fund
Class N—actual return		1,000.00		1,000.00		0.86		0.17
Class N—hypothetical 5% return		1,000.00		1,023.93		0.87		0.17

(a)

152 Semi-Annual Report

June 30, 2011

BOARD OF TRUSTEES

Ann P. McDermott

Director and Trustee

Profit and not-for-profit organizations

Phillip O. Peterson

Retired Partner, KPMG LLP

Lisa A. Pollina

Senior Advisor to RBC Financial Group—International Banking and Insurance Division

Donald J. Reaves

Chancellor, Winston-Salem State University

Donald L. Seeley

Retired Adjunct Lecturer and Director, University of Arizona Department of Finance

Michelle R. Seitz, Chairperson and President

Principal, William Blair & Company, L.L.C.,

Thomas J. Skelly

Retired Managing Partner, Accenture U.S.

Richard W. Smirl, Senior Vice President

Principal, William Blair & Company L.L.C.

Officers

Michael P. Balkin, Senior Vice President

Karl W. Brewer, Senior Vice President

David C. Fording, Senior Vice President

James S. Golan, Senior Vice President

W. George Greig, Senior Vice President

Michael A. Jancosek, Senior Vice President

John F. Jostrand, Senior Vice President

Chad M. Kilmer, Senior Vice President

Robert C. Lanphier, IV, Senior Vice President

Mark T. Leslie, Senior Vice President

Matthew A. Litfin, Senior Vice President

Kenneth J. McAtamney, Senior Vice President

Todd M. McClone, Senior Vice President

Tracy McCormick, Senior Vice President

David Merjan, Senior Vice President

David S. Mitchell, Senior Vice President

David P. Ricci, Senior Vice President

Jeffrey A. Urbina, Senior Vice President

Christopher T. Vincent, Senior Vice President

Kathleen M. Lynch, Vice President

Paul J. Sularz, Vice President

Walter R. Randall, Jr., Chief Compliance Officer and Assistant Secretary

Colette M. Garavalia, Treasurer

Andrew T. Pfau, Secretary

John M. Raczek, Assistant Treasurer

Investment Advisor

William Blair & Company, L.L.C.

Legal Counsel

Vedder Price P.C.

Transfer Agent

Boston Financial Data Services, Inc.

P.O. Box 8506

Boston, MA 02266-8506

For customer assistance, call 1-800-635-2886

(Massachusetts 1-800-635-2840)

June 30, 2011

William Blair Funds 153

LOGO


EQUITY	GLOBAL EQUITY	FIXED-INCOME
Growth Fund	Global Growth Fund	Bond Fund
Large Cap Growth Fund		Income Fund
Small Cap Growth Fund	INTERNATIONAL EQUITY	Low Duration Fund
Mid Cap Growth Fund	International Growth Fund
Small-Mid Cap Growth Fund	International Equity Fund	MONEY MARKET
Small Cap Value Fund	International Small Cap Growth Fund	Ready Reserves Fund
Mid Cap Value Fund	Emerging Markets Growth Fund
	Emerging Leaders Growth Fund

LOGO

222 West Adams Street

Chicago, IL 60606

800.742.7272 Ÿ www.williamblairfunds.com

^©William Blair & Company, L.L.C., distributor

LOGO

INSTITUTIONAL

SEMI-ANNUAL REPORT

June 30, 2011

Table of Contents


Global Markets Overview			2

Institutional International Growth Fund
An Overview from the Portfolio Manager			4
Portfolio of Investments			6

Institutional International Equity Fund
An Overview from the Portfolio Manager			11
Portfolio of Investments			13

International Small Cap Growth Fund
An Overview from the Portfolio Manager			16
Portfolio of Investments			18

Emerging Markets Growth Fund
An Overview from the Portfolio Managers			21
Portfolio of Investments			23

Emerging Leaders Growth Fund
An Overview from the Portfolio Managers			26
Portfolio of Investments			28

Fixed-Income Overview			30

Bond Fund
An Overview from the Portfolio Managers			31
Portfolio of Investments			34

Low Duration Fund
An Overview from the Portfolio Managers			37
Portfolio of Investments			39

Financial Statements			43

Notes to Financial Statements			49

Financial Highlights			60

Board of Trustees and Officers			67

Fund Expense			76

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

June 30, 2011

William Blair Funds 1

GLOBAL MARKETS OVERVIEW

Summary

Year to date the global equity market rose 4.66%, led by Continental Europe and the U.S., which were particularly strong during the first quarter, on reduced European debt concerns and an improving outlook at the outset of 2011. Japan was the worst performing developed market, falling nearly 4%, due largely concerns arising from the March earthquake. Emerging markets eked out a 0.32% return during the first half, led by approximately 8% and 9% returns in Korea and Russia, respectively, which somewhat offset weakness in India, Turkey, Brazil, and South Africa. Year to date, non-U.S. developed small cap stocks trailed their larger cap counterparts, due to second quarter relative weakness in Canada and Continental Europe. All sectors had positive returns during the first half of 2011, led by strength in Healthcare, which rose over 12%, along with Consumer, Energy, and Telecommunication Services, which were each up approximately 7%. Conversely, Information Technology returned 0.6%, while Financials and Materials each rose just over 1%.

Outlook

2 Semi-Annual Report

June 30, 2011

fears, core European economies have been relatively strong and corporate performance has been sound. The details surrounding a deal for peripheral European public sector debt will continue to be debated and we expect that these questions will be more elongated than investors would like. The U.S. is facing similar public sector finance issues as Europe, which will be noisier over the short term, but will likely be resolved more quickly, given a more straightforward set of tradeoffs.

Long Term Strategy Considerations

June 30, 2011

William Blair Funds 3

LOGO

W. George Greig

INSTITUTIONAL INTERNATIONAL GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The Institutional International Growth Fund posted a 2.16% increase for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI All Country World ex-U.S. IMI Index (net), gained 3.52%.

4 Semi-Annual Report

June 30, 2011

Institutional International Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Institutional International Growth Fund		2.16	%		28.26	%		(1.72	)%		3.03	%		10.48	%
MSCI All Country World Ex-U.S. IMI (net)		3.52			30.26			0.31			3.96			11.66

(a)

For the period July 26, 2002 (Commencement of Operations) to June 30, 2011.

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)

LOGO

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

June 30, 2011

William Blair Funds 5

Institutional International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe, Mid-East—30.6%*
Austria—0.1%
Schoeller-Bleckmann Oilfield Equipment AG (Energy equipment & services)		27,713	$	2,400

Belgium—1.4%
Anheuser-Busch InBev N.V. (Beverages)		300,154		17,411
Colruyt S.A. (Food & staples retailing)		128,967		6,452

				23,863

Denmark—1.4%
Coloplast A/S (Health care equipment & supplies)		57,377		8,712
Novo Nordisk A/S (Pharmaceuticals)		97,100		12,186
SimCorp A/S (Software)		13,528		2,670

				23,568

Finland—1.5%
Kone Oyj (Machinery)		171,209		10,758
Nokian Renkaat Oyj (Auto components)		138,092		6,929
UPM-Kymmene Oyj (Paper & forest products)		463,867		8,482

				26,169

France—7.0%
Air Liquide S.A. (Chemicals)		66,614		9,548
*Arkema S.A. (Chemicals)		69,036		7,107
AXA S.A. (Insurance)		785,739		17,855
BNP Paribas (Commercial banks)		281,989		21,767
Essilor International S.A. (Health care equipment & supplies)		212,503		17,235
L’Oreal S.A. (Personal products)		177,344		23,033
Schneider Electric S.A. (Electrical equipment)		85,139		14,223
SEB S.A. (Household durables)		43,696		4,578
Suez Environnement Co. (Multi-utilities)		345,301		6,888

				122,234

Germany—7.1%
Aixtron AG (Semiconductors & semiconductor equipment)		118,657		4,049
BASF SE (Chemicals)		261,092		25,584
Bayer AG (Pharmaceuticals)		310,493		24,962
*Bayerische Motoren Werke AG (Automobiles)		199,302		19,887
Gerry Weber International AG (Textiles, apparel & luxury goods)		46,124		3,028
Infineon Technologies AG (Semiconductors & semiconductor equipment)		998,512		11,225
Lanxess AG (Chemicals)		91,384		7,501
MTU Aero Engines Holding AG (Aerospace & defense)		79,845		6,378
SAP AG (Software)		281,985		17,072
Wincor Nixdorf AG (Computers & peripherals)		64,713		4,677

				124,363

Ireland—0.4%
Paddy Power plc (Hotels, restaurants & leisure)		84,859		4,614
Shire plc (Pharmaceuticals)		96,686		3,018

				7,632


Issuer	Shares		Value

*Common Stocks—Europe, Mid-East—30.6%—(continued)*
Israel—1.7%
*Check Point Software Technologies, Ltd. (Software)†		133,008	$	7,562
Israel Chemicals, Ltd. (Chemicals)		645,996		10,254
Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		238,494		11,500

				29,316

Italy—1.2%
Ansaldo STS SpA (Transportation infrastructure)		255,401		3,580
DiaSorin SpA (Health care equipment & supplies)		87,261		4,188
Saipem SpA (Energy equipment & services)		255,858		13,209

				20,977

Luxembourg—0.0%
*L’Occitane International S.A. (Specialty retail)		211,000		564

Netherlands—0.6%
*ASML Holding N.V. (Semiconductors & semiconductor equipment)		292,268		10,765

Norway—0.2%
*Norwegian Air Shuttle ASA (Airlines)		138,200		2,549
Opera Software ASA (Internet software & services)		215,749		1,355

				3,904

Spain—1.3%
Banco Santander S.A. (Commercial banks)		1,282,744		14,813
Prosegur Cia de Seguridad S.A. (Commercial services & supplies)		74,861		3,981
Tecnicas Reunidas S.A. (Energy equipment & services)		28,381		1,456
*Viscofan S.A. (Food products)		74,509		2,966

				23,216

Sweden—2.3%
Atlas Copco AB (Machinery)		530,051		13,953
Elekta AB (Health care equipment & supplies)		129,565		6,137
*Hexagon AB (Machinery)		554,301		13,653
JM AB (Household durables)		131,970		3,114
Mekonomen AB (Specialty retail)		25,413		880
NIBE Industrier AB (Building products)		103,430		1,790

				39,527

Switzerland—4.4%
*ABB, Ltd. (Electrical equipment)		672,537		17,438
Cie Financiere Richemont S.A. (Textiles, apparel & luxury goods)		116,985		7,660
*Glencore International plc (Metals & mining)		249,741		1,968
*Julius Baer Group, Ltd. (Capital markets)		142,486		5,886
*Meyer Burger Technology AG (Machinery)		63,422		2,802
*Orascom Development Holding AG (Hotels, restaurants & leisure)		71,619		2,360
Partners Group Holding AG (Capital markets)		40,043		7,087
SGS S.A. (Professional services)		4,914		9,328

See accompanying Notes to Financial Statements.

6 Semi-Annual Report

June 30, 2011

Institutional International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Europe, Mid-East—30.6%—(continued)*
Switzerland—(continued)
Sika AG (Chemicals)		2,452	$	5,912
Xstrata plc (Metals & mining)		720,917		15,869

				76,310


*United Kingdom—20.3%*
Abcam plc (Biotechnology)		753,393		5,039
Admiral Group plc (Insurance)		264,465		7,050
Aggreko plc (Commercial services & supplies)		210,221		6,508
AMEC plc (Energy equipment & services)		582,764		10,176
Amlin plc (Insurance)		932,038		6,075
Antofagasta plc (Metals & mining)		278,128		6,222
Ashmore Group plc (Capital markets)		682,488		4,364
*Autonomy Corporation plc (Software)		224,395		6,148
Babcock International Group plc (Commercial services & supplies)		938,423		10,724
BG Group plc (Oil, gas & consumable fuels)		762,650		17,308
BHP Billiton plc (Metals & mining)		748,329		29,449
Britvic plc (Beverages)		539,810		3,418
Burberry Group plc (Textiles, apparel & luxury goods)		308,471		7,179
*Cairn Energy plc (Oil, gas & consumable fuels)		595,024		3,961
*Carphone Warehouse Group plc (Specialty retail)		1,024,283		6,954
Centrica plc (Multi-utilities)		4,793,130		24,871
Diageo plc (Beverages)		1,111,544		22,710
Dunelm Group plc (Specialty retail)		496,372		3,099
*EnQuest plc (Oil, gas & consumable fuels)		781,394		1,542
Halma plc (Electronic equipment, instruments & components)		491,608		3,269
Hargreaves Lansdown plc (Capital markets)		342,619		3,340
Hiscox, Ltd. (Insurance)		455,088		3,060
IG Group Holdings plc (Diversified financial services)		628,161		4,400
*John Wood Group plc (Energy equipment & services)		523,236		5,437
Johnson Matthey plc (Chemicals)		427,368		13,485
Jupiter Fund Management plc (Capital markets)		542,914		2,204
Lancashire Holdings, Ltd. (Insurance)		462,146		4,840
Meggitt plc (Aerospace & defense)		673,908		4,126
Michael Page International plc (Professional services)		315,044		2,705
Next plc (Multiline retail)		273,503		10,206
*Ocado Group plc (Internet & catalog retail)		935,655		2,738
Petrofac, Ltd. (Energy equipment & services)		692,003		16,815
Restaurant Group plc (Hotels, restaurants & leisure)		347,227		1,638
*Rolls-Royce Holdings plc (Aerospace & defense)		1,232,713		12,761
Rotork plc (Machinery)		200,023		5,412
RPS Group plc (Commercial services & supplies)		816,151		3,212
Scottish & Southern Energy plc (Electric utilities)		768,785		17,188


Issuer	Shares		Value

*Common Stocks—United Kingdom—20.3%—(continued)*
Spirax-Sarco Engineering plc (Machinery)		168,677	$	5,417
St James’s Place plc (Insurance)		445,903		2,433
*Telecity Group plc (Internet software & services)		496,884		4,418
*The Berkeley Group Holdings plc (Household durables)		365,768		7,561
The Weir Group plc (Machinery)		300,444		10,256
Tullow Oil plc (Oil, gas & consumable fuels)		260,162		5,178
Ultra Electronics Holdings plc (Aerospace & defense)		59,714		1,645
Victrex plc (Chemicals)		184,500		4,442
Vodafone Group plc (Wireless telecommunication services)		2,376,361		6,304
Whitbread plc (Hotels, restaurants & leisure)		289,946		7,515

				354,802


*Japan—16.6%*
Asics Corporation (Textiles, apparel & luxury goods)		290,000		4,312
CyberAgent, Inc. (Media)		1,741		6,075
Daito Trust Construction Co., Ltd. (Real estate management & development)		94,100		7,960
Dena Co., Ltd. (Internet & catalog retail)		245,200		10,523
Dr Ci:Labo Co., Ltd. (Personal products)		410		2,093
Exedy Corporation (Auto components)		161,100		5,503
F.C.C. Co., Ltd. (Auto components)		112,652		2,695
Fanuc, Ltd. (Machinery)		112,100		18,631
Fast Retailing Co., Ltd. (Specialty retail)		86,100		13,871
Gree, Inc. (Internet software & services)		459,400		9,992
K’s Holdings Corporation (Specialty retail)		181,100		7,817
Kakaku.com, Inc. (Internet software & services)		801		5,622
Kaken Pharmaceutical Co., Ltd. (Pharmaceuticals)		186,000		2,604
Keyence Corporation (Electronic equipment, instruments & components)		64,100		18,106
Komatsu, Ltd. (Machinery)		557,500		17,292
Makita Corporation (Machinery)		209,200		9,693
Miraca Holdings, Inc. (Health care providers & services)		94,100		3,805
MISUMI Group, Inc. (Trading companies & distributors)		178,100		4,595
Murata Manufacturing Co., Ltd. (Electronic equipment, instruments & components)		152,100		10,108
Nitori Co., Ltd. (Specialty retail)		125,580		11,902
Nitto Denko Corporation (Chemicals)		135,100		6,822
ORIX Corporation (Diversified financial services)		150,820		14,594
Osaka Securities Exchange Co., Ltd. (Diversified financial services)		349		1,554
Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		34,300		3,609
SMC Corporation (Machinery)		66,100		11,856
Softbank Corporation (Wireless telecommunication services)		759,600		28,589
Sumitomo Mitsui Financial Group, Inc. (Commercial banks)		657,500		20,157

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 7

Institutional International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Japan—16.6%—(continued)*
United Arrows, Ltd. (Specialty retail)		14,700	$	310
Yahoo! Japan Corporation (Internet software & services)		56,826		19,482
Yamada Denki Co., Ltd. (Specialty retail)		123,500		10,017

				290,189


*Emerging Asia—11.8%*
China—4.4%
AAC Technologies Holdings, Inc. (Communications equipment)		924,000		2,152
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		1,245,000		2,579
*China Minzhong Food Corporation, Ltd. (Food products)		968,000		1,182
China Overseas Land & Investment, Ltd. (Real estate management & development)		5,644,000		12,098
China Shenhua Energy Co., Ltd. (Oil, gas & consumable fuels)		2,016,500		9,614
CNOOC, Ltd. (Oil, gas & consumable fuels)		7,086,000		16,536
Haitian International Holdings, Ltd. (Machinery)		1,961,000		2,540
*Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		139,391		1,299
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		33,427,000		25,387
Lonking Holdings, Ltd. (Machinery)		5,627,000		3,073

				76,460

India—1.4%
Axis Bank, Ltd. (Commercial banks)		188,453		5,436
HDFC Bank, Ltd. (Commercial banks)		81,726		4,599
Infosys Technologies, Ltd. (IT services)		74,551		4,854
Shriram Transport Finance Co., Ltd. (Consumer finance)		221,933		3,062
Tata Consultancy Services, Ltd. (IT services)		274,203		7,264

				25,215

Indonesia—2.1%
PT Bank Rakyat Indonesia (Commercial banks)		9,773,000		7,408
PT Indo Tambangraya Megah (Oil, gas & consumable fuels)		991,000		5,171
PT Indofood Sukses Makmur Tbk (Food products)		11,594,500		7,774
PT Kalbe Farma Tbk (Pharmaceuticals)		10,178,500		4,006
PT United Tractors Tbk (Machinery)		4,241,651		12,316

				36,675

Philippines—0.2%
Alliance Global Group, Inc. (Industrial conglomerates)		16,347,300		4,127

South Korea—2.4%
Halla Climate Control Corporation (Auto components)		94,725		2,280
Hyundai Mobis (Auto components)		24,300		9,104


Issuer	Shares		Value

*Common Stocks—Emerging Asia—11.8%—(continued)*
South Korea—(continued)
Hyundai Motor Co. (Automobiles)		60,579	$	13,448
Samsung Engineering Co., Ltd. (Construction & engineering)		37,300		8,909
Samsung Fire & Marine Insurance Co., Ltd. (Insurance)		35,759		8,306

				42,047

Taiwan—0.8%
HTC Corporation (Communications equipment)		220,000		7,399
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		784,000		2,631
*TPK Holding Co., Ltd. (Electronic equipment, instruments & components)		114,000		3,473

				13,503

Thailand—0.5%
Bangkok Dusit Medical Services PCL (Health care providers & services)		919,500		1,578
Kasikornbank PCL (Commercial banks)		1,559,300		6,344

				7,922


*Canada—6.2%*
Alimentation Couche Tard, Inc. (Food & staples retailing)		310,062		9,040
*Bankers Petroleum, Ltd. (Oil, gas & consumable fuels)		324,460		2,315
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		714,842		23,711
Canadian Western Bank (Commercial banks)		145,103		4,634
CI Financial Corporation (Capital markets)		221,453		5,258
Crescent Point Energy Corporation (Oil, gas & consumable fuels)		145,201		6,710
Gildan Activewear, Inc. (Textiles, apparel & luxury goods)		177,100		6,242
Home Capital Group, Inc. (Thrifts & mortgage finance)		33,037		1,773
Intact Financial Corporation (Insurance)		104,666		6,001
Laurentian Bank of Canada (Commercial banks)		44,624		2,062
National Bank of Canada (Commercial banks)		126,313		10,244
PetroBakken Energy, Ltd. Class “A” (Oil, gas & consumable fuels)		312,845		4,295
Petrominerales, Ltd. (Oil, gas & consumable fuels)		107,973		3,169
Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		201,947		4,502
Saputo, Inc. (Food products)		185,471		8,944
Tim Hortons, Inc. (Hotels, restaurants & leisure)		179,106		8,745

				107,645

See accompanying Notes to Financial Statements.

8 Semi-Annual Report

June 30, 2011

Institutional International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—(continued)*

*Emerging Latin America—4.3%*
Brazil—2.3%
BM&F BOVESPA S.A. (Diversified financial services)		24,100	$	160
BR Malls Participacoes S.A. (Real estate management & development)		472,400		5,403
BR Properties S.A. (Real estate management & development)		246,600		2,765
Cia de Concessoes Rodoviarias (Transportation infrastructure)		223,300		6,646
Cia Hering (Specialty retail)		194,200		4,467
Drogasil S.A. (Food & staples retailing)		161,100		1,099
Iochpe-Maxion S.A. (Machinery)		179,700		2,453
Mills Estruturas e Servicos de Engenharia S.A. (Trading companies & distributors)		155,880		2,247
Natura Cosmeticos S.A. (Personal products)		86,300		2,157
OdontoPrev S.A. (Health care providers & services)		264,200		4,402
*OGX Petroleo e Gas Participacoes S.A. (Oil, gas & consumable fuels)		496,400		4,641
Sul America S.A. (Insurance)		279,200		3,506
*T4F Entretenimento S.A. (Media)		35,100		316

				40,262

Chile—0.7%
Banco Santander Chile—ADR (Commercial banks)		68,436		6,420
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		10,149,135		2,758
Parque Arauco S.A. (Real estate management & development)		1,139,457		2,548

				11,726

Colombia—0.5%
Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		294,189		7,885

Mexico—0.4%
Compartamos S.A.B. de C.V. (Consumer finance)		2,281,900		4,141
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		1,195,162		3,042
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		186,200		615

				7,798

Peru—0.4%
Credicorp, Ltd. (Commercial banks)†		83,988		7,231


*Asia—2.8%*
Australia—0.2%
Iluka Resources, Ltd. (Metals & mining)		205,248		3,694

Hong Kong—1.1%
China High Precision Automation Group, Ltd. (Electronic equipment, instruments & components)		1,410,000		1,103


Issuer	Shares		Value

*Common Stocks—Asia—2.8%—(continued)*
Hong Kong—(continued)
Hutchison Telecommunications Hong Kong Holdings, Ltd. (Diversified telecommunication services)		9,294,000	$	2,866
Noble Group, Ltd. (Trading companies & distributors)		5,895,000		9,455
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		1,020,000		1,518
Value Partners Group, Ltd. (Capital markets)		3,939,000		3,371

				18,313

Singapore—1.5%
CapitaMalls Asia, Ltd. (Real estate management & development)		5,304,000		6,348
*Global Logistic Properties, Ltd. (Real estate management & development)		5,354,000		8,979
Keppel Corporation, Ltd. (Industrial conglomerates)		1,211,300		10,927
Midas Holdings, Ltd. (Metals & mining)		297,000		157

				26,411


*Emerging Europe, Mid-East, Africa—2.4%*
Egypt—0.3%
Commercial International Bank Egypt S.A.E. (Commercial banks)		542,873		2,707
Egyptian Financial Group-Hermes Holding (Capital markets)		784,948		2,643

				5,350

South Africa—1.7%
Clicks Group, Ltd. (Multiline retail)		660,768		4,129
Life Healthcare Group Holdings, Ltd. (Health care providers & services)		1,447,708		3,766
Sasol, Ltd. (Oil, gas & consumable fuels)		146,039		7,688
Shoprite Holdings, Ltd. (Food & staples retailing)		438,166		6,597
*The Foschini Group, Ltd. (Specialty retail)		392,321		5,118
Wilson Bayly Holmes-Ovcon, Ltd. (Construction & engineering)		175,665		2,858

				30,156

Turkey—0.4%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		560,837		2,557
Turkiye Halk Bankasi A.S. (Commercial banks)		646,686		4,841

				7,398

Total Common Stocks—95.0% (cost $1,402,398)				1,659,617

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 9

Institutional International Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares or Principal Amount		Value

*Convertible Bond*
Brazil—0.0%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§	$	941	$	620

Total Convertible Bond—0.0% (cost $488)				620


*Exchange-Traded Fund*
China—0.8%
iShares FTSE/Xinhua A50 China Index		8,445,900		14,044

Total Exchange-Traded Fund—0.8% (cost $14,189)				14,044


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $24,274, collateralized by FHLMC, 2.000%, due 12/03/15	$	24,274		24,274

Total Repurchase Agreement—1.4% (cost $24,274)				24,274

Total Investments—97.2% (cost $1,441,349)				1,698,555
Cash and other assets, less liabilities—2.8%				49,273

Net assets—100.0%			$	1,747,828

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.04% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.04% of the net assets at June 30, 2011.

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials					20.1%
Industrials					17.4%
Consumer Discretionary					13.2%
Information Technology					10.5%
Materials					9.4%
Energy					9.0%
Health Care					7.4%
Consumer Staples					6.9%
Utilities					2.9%
Telecommunication Services					2.4%
Exchange-Traded Funds					0.8%

Total					100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


British Pound Sterling					22.4%
Euro					21.4%
Japanese Yen					17.3%
Hong Kong Dollar					5.8%
Canadian Dollar					5.5%
Swiss Franc					3.5%
U.S. Dollar					3.5%
South Korean Won					2.5%
Brazilian Real					2.5%
Swedish Krona					2.4%
Singapore Dollar					2.2%
Indonesian Rupiah					2.2%
South African Rand					1.8%
Indian Rupee					1.5%
Danish Krone					1.4%
All Other Currencies					4.1%

Total					100.0%

See accompanying Notes to Financial Statements.

10 Semi-Annual Report

June 30, 2011

LOGO

David Merjan

INSTITUTIONAL INTERNATIONAL EQUITY FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The Institutional International Equity Fund posted a 3.62% increase for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI World Ex-U.S. (net) Index, increased 4.72%.

June 30, 2011

William Blair Funds 11

Institutional International Equity Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year to Date			1 Year			3 Year			5 Year			Since Inception(a)
Institutional International Equity Fund		3.62	%		26.87	%		(4.52	)%		1.02	%		4.41	%
MSCI World Ex-U.S. (net)		4.72			30.33			(1.56	)		2.02			6.07
MSCI All Country World Ex-U.S. IMI (net)		3.52			30.26			0.31			3.96			7.63

(a)

For the period December 1, 2004 (Commencement of Operations) to June 30, 2011.

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)

LOGO

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

12 Semi-Annual Report

June 30, 2011

Institutional International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe, Mid-East—32.4%*
Belgium—1.8%
Anheuser-Busch InBev N.V. (Beverages)		79,300	$	4,600

Denmark—1.6%
Novo Nordisk A/S (Pharmaceuticals)		33,507		4,205

Finland—0.5%
Kone Oyj (Machinery)		20,839		1,309

France—7.4%
Air Liquide S.A. (Chemicals)		7,103		1,018
AXA S.A. (Insurance)		146,849		3,337
BNP Paribas (Commercial banks)		72,463		5,594
Cie Generale des Etablissements Michelin (Auto components)		28,016		2,740
L’Oreal S.A. (Personal products)		30,451		3,955
Schneider Electric S.A. (Electrical equipment)		16,560		2,766

				19,410

Germany—8.6%
BASF SE (Chemicals)		16,869		1,653
Bayer AG (Pharmaceuticals)		60,411		4,857
Fresenius Medical Care AG & Co. KGaA (Health care providers & services)		59,058		4,415
Infineon Technologies AG (Semiconductors & semiconductor equipment)		187,572		2,108
MAN SE (Machinery)		19,130		2,551
Muenchener Rueckversicherungs AG (Insurance)		21,052		3,219
SAP AG (Software)		60,266		3,649

				22,452

Ireland—1.3%
Ryanair Holdings plc—ADR (Airlines)		113,381		3,327

Israel—2.3%
*Check Point Software Technologies, Ltd. (Software)†		46,564		2,647
Teva Pharmaceutical Industries, Ltd.—ADR (Pharmaceuticals)		71,263		3,436

				6,083

Italy—2.1%
Saipem SpA (Energy equipment & services)		106,448		5,495

Spain—1.1%
Banco Santander S.A. (Commercial banks)		237,994		2,748

Sweden—1.8%
Atlas Copco AB (Machinery)		102,036		2,686
*Hexagon AB (Machinery)		76,350		1,881

				4,567

Switzerland—3.9%
*ABB, Ltd. (Electrical equipment)		128,497		3,332
*Julius Baer Group, Ltd. (Capital markets)		56,053		2,315
*Syngenta AG (Chemicals)		10,907		3,682
Xstrata plc (Metals & mining)		40,227		886

				10,215


Issuer	Shares		Value

*Common Stocks—(continued)*

*United Kingdom—21.6%*
Amlin plc (Insurance)		202,749	$	1,321
*Autonomy Corporation plc (Software)		97,603		2,674
Barclays plc (Commercial banks)		472,123		1,943
BG Group plc (Oil, gas & consumable fuels)		209,572		4,756
British Sky Broadcasting Group plc (Media)		202,138		2,746
Burberry Group plc (Textiles, apparel & luxury goods)		156,120		3,633
Centrica plc (Multi-utilities)		625,775		3,247
Compass Group plc (Hotels, restaurants & leisure)		266,641		2,572
Experian plc (Professional services)		219,635		2,797
HSBC Holdings plc (Commercial banks)		296,678		2,938
Johnson Matthey plc (Chemicals)		81,401		2,569
Pearson plc (Media)		141,381		2,668
Petrofac, Ltd. (Energy equipment & services)		128,026		3,111
Prudential plc (Insurance)		449,557		5,195
*Rolls-Royce Holdings plc (Aerospace & defense)		383,299		3,968
Rotork plc (Machinery)		43,135		1,167
Scottish & Southern Energy plc (Electric utilities)		117,669		2,631
Standard Chartered plc (Commercial banks)		129,096		3,394
Tullow Oil plc (Oil, gas & consumable fuels)		154,387		3,073

				56,403


*Canada—12.5%*
Agrium, Inc. (Chemicals)†		27,650		2,427
Brookfield Asset Management, Inc. Class “A” (Real estate management & development)†		117,287		3,890
Canadian National Railway Co. (Road & rail)†		66,394		5,305
Goldcorp, Inc. (Metals & mining)†		71,072		3,431
National Bank of Canada (Commercial banks)		39,393		3,195
Potash Corporation of Saskatchewan, Inc. (Chemicals)†		29,376		1,674
Saputo, Inc. (Food products)		46,627		2,248
The Toronto-Dominion Bank (Commercial banks)		61,965		5,254
Thomson Reuters Corporation (Media)		53,025		1,991
Tim Hortons, Inc. (Hotels, restaurants & leisure)		66,004		3,223

				32,638


*Japan—12.4%*
Chiyoda Corporation (Construction & engineering)		131,000		1,502
Fanuc, Ltd. (Machinery)		22,600		3,756
Keyence Corporation (Electronic equipment, instruments & components)		12,600		3,559
Komatsu, Ltd. (Machinery)		122,400		3,797
Mitsubishi Corporation (Trading companies & distributors)		151,100		3,754
Mitsubishi Electric Corporation (Electrical equipment)		216,000		2,495
Mitsubishi UFJ Financial Group, Inc. (Commercial banks)		817,500		3,960

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 13

Institutional International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Japan—12.4%—(continued)*
Nitori Co., Ltd. (Specialty retail)		14,850	$	1,408
Nitto Denko Corporation (Chemicals)		39,100		1,974
Softbank Corporation (Wireless telecommunication services)		115,000		4,328
Sony Financial Holdings, Inc. (Insurance)		103,100		1,856

				32,389


*Emerging Asia—10.1%*
China—3.0%
China Overseas Land & Investment, Ltd. (Real estate management & development)		954,000		2,045
China Shenhua Energy Co., Ltd. (Oil, gas & consumable fuels)		517,500		2,467
CNOOC, Ltd. (Oil, gas & consumable fuels)		1,370,000		3,197

				7,709

India—1.4%
Infosys Technologies, Ltd. (IT services)		54,449		3,545

Indonesia—0.8%
PT Bank Rakyat Indonesia (Commercial banks)		2,949,500		2,236

South Korea—4.0%
Hyundai Motor Co. (Automobiles)		17,624		3,912
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		4,072		3,150
Samsung Engineering Co., Ltd. (Construction & engineering)		13,653		3,261

				10,323

Taiwan—0.9%
HTC Corporation (Communications equipment)		66,000		2,220


*Emerging Latin America—3.6%*
Brazil—1.9%
BM&F BOVESPA S.A. (Diversified financial services)		70,171		465
Embraer S.A.—ADR (Aerospace & defense)		63,391		1,951
Petroleo Brasileiro S.A.—ADR (Oil, gas & consumable fuels)		60,935		2,063
Weg S.A. (Machinery)		48,600		554

				5,033

Mexico—1.1%
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		1,000,900		2,970

Panama—0.6%
Copa Holdings S.A. Class “A” (Airlines)†		22,949		1,532


*Asia—2.3%*
Australia—1.5%
BHP Billiton, Ltd.—ADR (Metals & mining)		41,893		3,965

Hong Kong—0.8%
Noble Group, Ltd. (Trading companies & distributors)		1,219,090		1,955


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*

*Emerging Europe, Mid-East, Africa—0.9%*
South Africa—0.9%
Sasol, Ltd. (Oil, gas & consumable fuels)		43,220	$	2,275

Total Common Stocks—95.8% (cost $197,901)				249,604


*Preferred Stock*
Brazil—1.1%
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		196,508		2,987

Total Preferred Stock—1.1% (cost $2,421)				2,987


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $10,625, collateralized by FHLMC, 2.000%, due 12/3/15	$	10,625		10,625

Total Repurchase Agreement—4.1% (cost $10,625)				10,625

Total Investments—101.0% (cost $210,947)				263,216
Liabilities, plus cash and other assets—(1.0)%				(2,691	)

Net assets—100.0%			$	260,525

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

See accompanying Notes to Financial Statements.

14 Semi-Annual Report

June 30, 2011

Institutional International Equity Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Industrials			22.0%
Financials			21.7%
Energy			11.7%
Consumer Discretionary			9.9%
Information Technology			9.3%
Materials			9.2%
Health Care			6.7%
Consumer Staples			5.5%
Utilities			2.3%
Telecommunication Services			1.7%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


Euro			22.2%
British Pound Sterling			21.5%
U.S. Dollar			14.1%
Japanese Yen			12.8%
Canadian Dollar			6.3%
Hong Kong Dollar			4.2%
South Korean Won			4.1%
Swiss Franc			3.7%
Swedish Krona			1.8%
Danish Krone			1.7%
Brazilian Real			1.6%
Indian Rupee			1.4%
Mexican Peso			1.2%
All Other Currencies			3.4%

Total			100.0%

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 15

LOGO

Jeffrey A. Urbina

INTERNATIONAL SMALL CAP GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGER

The International Small Cap Growth Fund increased 5.82% (Institutional Share Class) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI All Country World Ex-U.S. Small Cap Index (net), gained 1.51%.

Year to date performance was augmented by strong Discretionary, Industrials, Information Technology (IT) and Materials performance. Japanese Discretionary holdings performed particularly well, with social media and retailers rallying strongly. Auto-related and luxury holdings also performed well on strong operational results and IPO activity within the luxury arena. Industrials stock selection was bolstered by strong testing, defense and transportation performance. IT stock selection was strong across regions, with particular value added in Japan, as the Fund’s IT stocks were up over 50%, compared to the -2.46% Index returns. UK and Emerging Asian stock selection was strong within Materials during the first half of the year. Somewhat detracting from year to date results was Pacific Ex-Japan performance, coupled with underperformance by the Fund’s European Financials holdings.

The Fund maintained its significant focus on Discretionary holdings during the six month period, averaging 25% invested across auto-related companies, luxury and specialty retailers, and approximately 40% of the sector weighting invested directly in emerging markets. IT was also significantly overweighted at approximately 17% on average during the period, due to a focus on suppliers to smartphone and tablet manufacturers, social networking and business services companies. Healthcare was another area of focus versus the market, while Financials and Materials were significantly underweighted throughout the period: Financials due to the lower Japan and European banking exposure and Materials due to a lack of mining opportunities. Portfolio positioning did not change substantially at a regional level, with emerging markets averaging 26% over the period, above the market weighting. The UK at 20% was significantly overweighted due largely to UK Industrials holdings, while Pacific ex-Japan had minimal exposure throughout the period.

16 Semi-Annual Report

June 30, 2011

International Small Cap Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date		1 Year		3 Year			5 Year			Since Inception(a)
Institutional Class		5.82%		36.61%		3.29	%		5.24	%		8.26	%
MSCI All Country World Ex-U.S. Small Cap Index (net)		1.51		34.24		5.56			5.92			8.57

(a)

For the period November 1, 2005 (Commencement of Operations) to June 30, 2011.

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)

LOGO

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

June 30, 2011

William Blair Funds 17

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks*

*Europe—25.1%*
Finland—1.3%
Nokian Renkaat Oyj (Auto components)		202,154	$	10,143

Germany—6.3%
Aixtron AG (Semiconductors & semiconductor equipment)		395,468		13,494
Gerry Weber International AG (Textiles, apparel & luxury goods)		75,381		4,949
MTU Aero Engines Holding AG (Aerospace & defense)		190,585		15,223
Wincor Nixdorf AG (Computers & peripherals)		144,441		10,438
Wirecard AG (IT services)		262,235		4,687

				48,791

Ireland—1.9%
Paddy Power plc (Hotels, restaurants & leisure)		269,904		14,674

Italy—3.6%
De’Longhi SpA (Household durables)		288,832		3,365
DiaSorin SpA (Health care equipment & supplies)		145,433		6,981
*Salvatore Ferragamo Italia SpA		380,979		5,691
Tod’s SpA (Textiles, apparel & luxury goods)		85,472		11,434

				27,471

Luxembourg—0.9%
*L’Occitane International S.A. (Specialty retail)		2,733,000		7,305

Netherlands—1.1%
BinckBank N.V. (Capital markets)		142,650		1,956
Gemalto N.V. (Computers & peripherals)		139,461		6,669

				8,625

Norway—0.2%
Opera Software ASA (Internet software & services)		187,687		1,179

Poland—0.5%
*Lubelski Wegiel Bogdanka S.A. (Oil, gas & consumable fuels)		84,808		3,553

Spain—2.7%
Prosegur Cia de Seguridad S.A. (Commercial services & supplies)		120,842		6,426
*Viscofan S.A. (Food products)		362,597		14,434

				20,860

Sweden—3.6%
Elekta AB (Health care equipment & supplies)		197,373		9,349
JM AB (Household durables)		409,940		9,673
Mekonomen AB (Specialty retail)		78,944		2,733
NIBE Industrier AB (Building products)		322,100		5,576

				27,331

Switzerland—3.0%
*Meyer Burger Technology AG (Machinery)		168,546		7,447
*Orascom Development Holding AG (Hotels, restaurants & leisure)		11,402		376
Partners Group Holding AG (Capital markets)		85,024		15,048

				22,871


Issuer	Shares		Value

*Common Stocks—(continued)*

*United Kingdom—19.8%*
Abcam plc (Biotechnology)		1,010,249	$	6,757
Aveva Group plc (Software)		274,468		7,546
Babcock International Group plc (Commercial services & supplies)		1,505,734		17,206
*Blinkx plc (Internet software & services)		1,381,166		2,660
*Carphone Warehouse Group plc (Specialty retail)		874,590		5,938
Dunelm Group plc (Specialty retail)		474,514		2,963
*EnQuest plc (Oil, gas & consumable fuels)		1,883,379		3,718
Fenner plc (Machinery)		785,623		5,062
Fidessa Group plc (Software)		103,193		3,208
Halma plc (Electronic equipment, instruments & components)		561,801		3,736
Hargreaves Lansdown plc (Capital markets)		489,823		4,776
Hikma Pharmaceuticals plc (Pharmaceuticals)		303,744		3,705
IG Group Holdings plc (Diversified financial services)		427,893		2,997
*Imagination Technologies Group plc (Computers & peripherals)		543,044		3,287
Intertek Group plc (Professional services)		131,284		4,157
Lancashire Holdings, Ltd. (Insurance)		1,147,411		12,016
Meggitt plc (Aerospace & defense)		1,091,027		6,680
Michael Page International plc (Professional services)		440,010		3,778
Moneysupermarket.com Group plc (Internet software & services)		2,199,545		3,590
*Ocado Group plc (Internet & catalog retail)		382,267		1,118
Restaurant Group plc (Hotels, restaurants & leisure)		716,015		3,379
*Salamander Energy plc (Oil, gas & consumable fuels)		172,514		777
Serco Group plc (Commercial services & supplies)		797,509		7,072
Spirax-Sarco Engineering plc (Machinery)		294,154		9,447
*Sports Direct International plc (Specialty retail)		1,052,913		3,993
St James’s Place plc (Insurance)		996,070		5,435
*Telecity Group plc (Internet software & services)		434,970		3,868
Ultra Electronics Holdings plc (Aerospace & defense)		281,141		7,743
Victrex plc (Chemicals)		238,318		5,737

				152,349


*Emerging Asia—17.5%*
China—8.8%
AAC Technologies Holdings, Inc. (Communications equipment)		3,409,559		7,939
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		4,434,429		9,186
China Shanshui Cement Group, Ltd. (Construction materials)		4,109,000		4,747
Comba Telecom Systems Holdings, Ltd. (Communications equipment)		2,717,526		2,864
Great Wall Motor Co., Ltd. (Automobiles)		4,394,250		7,228
Haitian International Holdings, Ltd. (Machinery)		6,451,496		8,357
Hengdeli Holdings, Ltd. (Specialty retail)		13,632,000		7,200

See accompanying Notes to Financial Statements.

18 Semi-Annual Report

June 30, 2011

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—17.5%—(continued)*
China—(continued)
*Hollysys Automation Technologies, Ltd. (Electronic equipment, instruments & components)†		217,113	$	2,024
Lonking Holdings, Ltd. (Machinery)		15,078,000		8,235
Minth Group, Ltd. (Auto components)		3,241,384		5,240
*Noah Holdings, Ltd.—ADR (Capital markets)		106,979		1,202
*Simcere Pharmaceutical Group—ADR (Pharmaceuticals)		82,832		809
*WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		153,713		2,699

				67,730

India—2.6%
eClerx Services, Ltd. (Professional services)		257,570		4,864
Ipca Laboratories, Ltd. (Pharmaceuticals)		565,748		4,357
*Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		253,570		5,406
Motherson Sumi Systems, Ltd. (Auto components)		752,786		3,797
Oberoi Realty, Ltd. (Real estate management & development)		294,587		1,583

				20,007

Indonesia—2.7%
PT Harum Energy Tbk (Oil, gas & consumable fuels)		6,983,000		7,777
PT Indofood CBP Sukses Makmur Tbk (Food products)		4,792,000		3,017
PT Kalbe Farma Tbk (Pharmaceuticals)		15,742,500		6,196
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk (Food products)		14,399,500		3,904

				20,894

South Korea—0.5%
Daum Communications Corporation (Internet software & services)		39,833		4,141

Taiwan—2.5%
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		1,690,000		5,672
Simplo Technology Co., Ltd. (Computers & peripherals)		375,000		3,022
Tripod Technology Corporation (Electronic equipment, instruments & components)		313,000		1,297
TSRC Corporation (Chemicals)		2,224,000		6,542
TXC Corporation (Electronic equipment, instruments & components)		1,362,269		2,381

				18,914

Thailand—0.4%
Bangkok Dusit Medical Services PCL (Health care providers & services)		1,588,700		2,728


*Japan—15.7%*
Ain Pharmaciez, Inc. (Food & staples retailing)		119,900		4,915


Issuer	Shares		Value

*Common Stocks—Japan—15.7%—(continued)*
Asics Corporation (Textiles, apparel & luxury goods)		384,000		5,709
CyberAgent, Inc. (Media)		2,802		9,777
Dr Ci:Labo Co., Ltd. (Personal products)		1,011		5,161
Exedy Corporation (Auto components)		496,800		16,970
F.C.C. Co., Ltd. (Auto components)		346,509		8,290
Gree, Inc. (Internet software & services)		723,430		15,735
K’s Holdings Corporation (Specialty retail)		206,500		8,914
Kakaku.com, Inc. (Internet software & services)		780		5,474
Miraca Holdings, Inc. (Health care providers & services)		398,600		16,116
Nabtesco Corporation (Machinery)		173,000		4,165
Nitori Co., Ltd. (Specialty retail)		59,950		5,682
Osaka Securities Exchange Co., Ltd. (Diversified financial services)		585		2,605
Sawai Pharmaceutical Co., Ltd. (Pharmaceuticals)		83,800		8,817
United Arrows, Ltd. (Specialty retail)		101,100		2,135

				120,465


*Emerging Europe, Mid-East, Africa—5.0%*
Russia—0.3%
*Etalon Group Ltd.—144A—GDR (Real estate management & development)†		366,337		2,524

South Africa—3.2%
Capitec Bank Holdings, Ltd. (Commercial banks)		135,119		3,617
Clicks Group, Ltd. (Multiline retail)		1,606,486		10,038
Coronation Fund Managers, Ltd. (Capital markets)		941,647		2,688
Mr Price Group, Ltd. (Specialty retail)		791,515		7,983

				24,326

Turkey—1.1%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		992,081		4,523
Turkiye Sinai Kalkinma Bankasi A.S. (Commercial banks)		2,300,672		3,686

				8,209

United Arab Emirates—0.4%
Aramex Co. (Air freight & logistics)		7,033,580		3,370


*Canada—4.9%*
Canadian Western Bank (Commercial banks)		381,300		12,177
Dollarama, Inc. (Multiline retail)		61,408		2,080
Home Capital Group, Inc. (Thrifts & mortgage finance)		94,036		5,046
*Legacy Oil + Gas, Inc. (Oil, gas & consumable fuels)		360,301		4,375
Petrominerales, Ltd. (Oil, gas & consumable fuels)		240,600		7,062
Peyto Exploration & Development Corporation (Oil, gas & consumable fuels)		293,282		6,538

				37,278

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 19

International Small Cap Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*
*Emerging Latin America—4.6%*
Brazil—3.1%
*Arezzo Industria e Comercio S.A. (Textiles, apparel & luxury goods)		246,596	$	3,453
*CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		2,455		37
CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		333,400		5,159
Drogasil S.A. (Food & staples retailing)		423,500		2,890
OdontoPrev S.A. (Health care providers & services)		362,500		6,039
Restoque Comercio e Confeccoes de Roupas S.A. (Textiles, apparel & luxury goods)		201,200		2,578
*T4F Entretenimento S.A. (Media)		146,500		1,319
Tegma Gestao Logistica S.A. (Road & rail)		147,300		2,383

				23,858

Chile—0.5%
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		14,325,161		3,893

Mexico—1.0%
Compartamos S.A.B. de C.V. (Consumer finance)		665,828		1,208
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		1,830,020		4,658
Grupo Comercial Chedraui S.A. de C.V. (Food & staples retailing)		626,187		1,965

				7,831


*Asia—3.2%*
Australia—1.4%
Cochlear, Ltd. (Health care equipment & supplies)		68,660		5,302
Iress Market Technology, Ltd. (IT services)		547,781		5,294

				10,596

Hong Kong—1.6%
SmarTone Telecommunications Holdings, Ltd. (Wireless telecommunication services)		6,073,000		9,037
Value Partners Group, Ltd. (Capital markets)		3,943,000		3,375

				12,412

Singapore—0.2%
Goodpack, Ltd. (Air freight & logistics)		1,228,000		1,829

Total Common Stocks—95.8% (cost $619,162)				736,157


*Convertible Bond*
Brazil—0.1%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§	$	959		632

Total Convertible Bond—0.1% (cost $497)				632


Issuer	Shares or Principal Amount		Value

*Common Stocks—(continued)*

*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $21,114, collateralized by FHLMC, 2.000%, due 12/3/15	$	21,114	$	21,114

Total Repurchase Agreement—2.7% (cost $21,114)				21,114

Total Investments—98.6% (cost $640,773)				757,903
Cash and other assets, less liabilities—1.4%				10,696

Net assets—100.0%			$	768,599

ADR = American Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.08% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.08% of the net assets at June 30, 2011.

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Consumer Discretionary					28.2%
Industrials					17.6%
Information Technology					16.3%
Health Care					12.0%
Financials					11.9%
Consumer Staples					5.9%
Energy					4.6%
Materials					2.3%
Telecommunication Services					1.2%

Total					100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


British Pound Sterling					20.7%
Euro					17.7%
Japanese Yen					16.3%
Hong Kong Dollar					11.0%
Canadian Dollar					5.1%
Swedish Krona					3.7%
Brazilian Real					3.3%
South African Rand					3.3%
Swiss Franc					3.1%
Indonesian Rupiah					2.8%
Indian Rupee					2.7%
New Taiwan Dollar					2.6%
Australian Dollar					1.4%
U.S. Dollar					1.3%
Turkish Lira					1.1%
Mexican Peso					1.1%
All Other Currencies					2.8%

Total					100.0%

See accompanying Notes to Financial Statements.

20 Semi-Annual Report

June 30, 2011

LOGO

Todd M. McClone

LOGO

Jeffrey A. Urbina

EMERGING MARKETS GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Emerging Markets Growth Fund posted a 0.44% decrease (Institutional Share Class) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI Emerging Markets IMI Index (net), declined 0.32%.

Despite strong second quarter results, the Fund slightly trailed the Index year to date, due to underperformance in January and February. In particular, the Fund’s lack of Russian energy holdings detracted approximately 0.50% from relative results year to date, while a focus on higher growth exploration companies also detracted from results, as lower growth integrated oils outperformed. Moreover, Pacific Rubiales, the Colombian oil and gas company, lagged on production delays. In addition, the Fund’s investment in Commercial International Bank in Egypt detracted from results as the government was overthrown, along with Turkish Banks, which underperformed the broader market on monetary policy tightening. Somewhat offsetting these effects was the Fund’s weighting and stock selection in Consumer Discretionary, on auto-related and retail strength, coupled with strong Emerging Asian Financials performance on positive commercial bank, real estate and insurance stock selection. Information Technology (IT) and Materials also outperformed on strong performance by Baidu, the Chinese web search company on good results and a positive outlook, coupled with a focus on chemicals.

Over the six month period, the Fund maintained its significant exposure to Consumer stocks, well ahead of the Index weighting due largely to auto-related exposure and a higher Staples weightings. Conversely, the Energy and Materials sectors were significantly underweighted as the Fund had lower exposure in mining shares as well as Energy exploration and production companies. Financials were also underweighted during the period, given the increasing interest rate environment amidst inflationary concerns, and the impact on net interest margins and profitability. IT increased during the period from approximately 11% to 16% as corporate fundamentals improved given increased smartphone and tablet demand and a positive product cycle. Regionally, the Fund had a higher exposure than the Index in Latin America holdings, due largely to Brazil, at the expense of Emerging Europe, Middle East, and Africa, where there was no exposure in Resources and limited Russian and Eastern European holdings. Emerging Asia, while underweighted during the entire period, increased as the Fund invested in additional Korean companies on improving outlooks, Taiwanese tech on improving demand, and incrementally in China as its central bank moved further along in the tightening cycle.

June 30, 2011

William Blair Funds 21

Emerging Markets Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			5 Year			Since Inception(a)
Institutional Class		(0.44	)%		28.60	%		(0.76	)%		8.34	%		14.40	%
MSCI Emerging Markets IMI (net)		0.32			27.53			5.13			11.90			15.43

(a)

For the period June 6, 2005 (Commencement of Operations) to June 30, 2011.

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)

LOGO

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

22 Semi-Annual Report

June 30, 2011

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—57.3%*
China—15.5%
AAC Technologies Holdings, Inc. (Communications equipment)		1,205,949	$	2,808
Ajisen China Holdings, Ltd. (Hotels, restaurants & leisure)		1,500,078		3,107
Anhui Conch Cement Co., Ltd. (Construction materials)		2,124,500		9,938
Anta Sports Products, Ltd. (Textiles, apparel & luxury goods)		1,306,000		2,333
*Baidu, Inc.—ADR (Internet software & services)		106,759		14,960
Belle International Holdings, Ltd. (Specialty retail)		4,757,000		10,025
China Shanshui Cement Group, Ltd. (Construction materials)		1,909,000		2,205
China Vanke Co., Ltd. (Real estate management & development)		5,594,249		7,534
China Yurun Food Group, Ltd. (Food products)		1,232,000		3,467
CNOOC, Ltd. (Oil, gas & consumable fuels)		7,413,000		17,300
Comba Telecom Systems Holdings, Ltd. (Communications equipment)		2,084,496		2,197
Dongfeng Motor Group Co., Ltd. (Automobiles)		5,748,000		10,858
Great Wall Motor Co., Ltd. (Automobiles)		1,620,500		2,666
Haitian International Holdings, Ltd. (Machinery)		1,460,185		1,891
Hengdeli Holdings, Ltd. (Specialty retail)		5,724,000		3,023
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		22,936,580		17,420
Lonking Holdings, Ltd. (Machinery)		5,675,000		3,099
Minth Group, Ltd. (Auto components)		724,000		1,170
Tencent Holdings, Ltd. (Internet software & services)		166,600		4,522
Want Want China Holdings, Ltd. (Food products)		4,894,000		4,748
Weichai Power Co., Ltd. (Machinery)		578,088		3,373
*WuXi PharmaTech Cayman, Inc.—ADR (Life sciences tools & services)		96,496		1,695
*Youku.com, Inc.—ADR (Internet software & services)		102,085		3,507
Zhuzhou CSR Times Electric Co., Ltd. (Electrical equipment)		658,861		2,223

				136,069

India—9.4%
Asian Paints, Ltd. (Chemicals)		70,630		5,033
Axis Bank, Ltd. (Commercial banks)		222,205		6,410
Bajaj Auto, Ltd. (Automobiles)		116,007		3,652
Bharat Heavy Electricals, Ltd. (Electrical equipment)		148,377		6,806
Dabur India, Ltd. (Personal products)		867,230		2,212
Housing Development Finance Corporation (Thrifts & mortgage finance)		272,951		4,313
IndusInd Bank, Ltd. (Commercial banks)		346,602		2,109
Infosys Technologies, Ltd. (IT services)		310,940		20,244
ITC, Ltd. (Tobacco)		1,602,902		7,277
*Jubilant Foodworks, Ltd. (Hotels, restaurants & leisure)		157,714		3,362
Lupin, Ltd. (Pharmaceuticals)		301,509		3,030


Issuer	Shares		Value

*Common Stocks—Emerging Asia—57.3%—(continued)*
India—(continued)
Motherson Sumi Systems, Ltd. (Auto components)		467,205	$	2,356
Nestle India, Ltd. (Food products)		59,028		5,425
Shriram Transport Finance Co., Ltd. (Consumer finance)		92,800		1,280
Tata Consultancy Services, Ltd. (IT services)		191,892		5,083
Tata Motors, Ltd. (Machinery)		191,020		4,248

				82,840

Indonesia—6.2%
PT Astra International Tbk (Automobiles)		2,169,000		16,074
PT Bank Rakyat Indonesia (Commercial banks)		13,474,500		10,213
PT Indo Tambangraya Megah (Oil, gas & consumable fuels)		1,376,500		7,183
PT Indofood Sukses Makmur Tbk (Food products)		6,788,000		4,551
PT Kalbe Farma Tbk (Pharmaceuticals)		8,234,500		3,241
PT Perusahaan Gas Negara (Gas utilities)		9,405,500		4,415
PT Unilever Indonesia Tbk (Household products)		2,572,000		4,469
PT United Tractors Tbk (Machinery)		967,257		2,808
PT XL Axiata Tbk (Diversified telecommunication services)		2,409,500		1,728

				54,682

Malaysia—3.5%
Axiata Group Bhd (Wireless telecommunication services)		5,319,900		8,827
CIMB Group Holdings Bhd (Commercial banks)		4,764,300		14,090
Genting Bhd (Hotels, restaurants & leisure)		1,154,300		4,289
Kuala Lumpur Kepong Bhd (Food products)		450,800		3,309

				30,515

Papua New Guinea—1.2%
Oil Search, Ltd. (Oil, gas & consumable fuels)		1,479,460		10,552

Philippines—0.2%
Alliance Global Group, Inc. (Industrial conglomerates)		8,233,100		2,078

South Korea—11.2%
Honam Petrochemical Corporation (Chemicals)		12,098		4,482
Hyundai Mobis (Auto components)		45,849		17,178
Hyundai Motor Co. (Automobiles)		79,477		17,642
LG Household & Health Care, Ltd. (Household products)		19,445		8,360
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		33,315		25,775
Samsung Engineering Co., Ltd. (Construction & engineering)		64,433		15,389
Samsung Fire & Marine Insurance Co., Ltd. (Insurance)		31,780		7,382
Samsung Heavy Industries Co., Ltd. (Machinery)		54,491		2,429

				98,637

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 23

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—57.3%—(continued)*
Taiwan—7.8%
Hon Hai Precision Industry Co., Ltd. (Electronic equipment, instruments & components)		5,860,992	$	20,099
HTC Corporation (Communications equipment)		580,000		19,506
Powertech Technology, Inc. (Semiconductors & semiconductor equipment)		1,080,000		3,625
Simplo Technology Co., Ltd. (Computers & peripherals)		793,000		6,391
*TPK Holding Co., Ltd. (Electronic equipment, instruments & components)		241,000		7,341
Tripod Technology Corporation (Electronic equipment, instruments & components)		190,000		787
TSRC Corporation (Chemicals)		1,324,000		3,895
Yuanta Financial Holding Co., Ltd. (Capital markets)		9,877,000		6,843

				68,487

Thailand—2.3%
CP ALL PCL (Food & staples retailing)		7,411,100		10,673
Kasikornbank PCL (Commercial banks)		2,192,700		8,921
Minor International PCL (Hotels, restaurants & leisure)		1,966,700		730

				20,324


*Emerging Latin America—24.1%*
Brazil—13.7%
BR Malls Participacoes S.A. (Real estate management & development)		602,300		6,889
BR Properties S.A. (Real estate management & development)		187,345		2,101
CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		299,600		4,636
*CETIP S.A.—Balcao Organizado de Ativos e Derivativos (Capital markets)		2,889		43
Cia de Bebidas das Americas—ADR (Beverages)		811,836		27,383
Cia de Concessoes Rodoviarias (Transportation infrastructure)		229,300		6,825
Cia Hering (Specialty retail)		234,400		5,392
CPFL Energia S.A.—ADR (Electric utilities)		101,881		8,853
Drogasil S.A. (Food & staples retailing)		261,600		1,785
Embraer S.A.—ADR (Aerospace & defense)		311,752		9,596
Lojas Renner S.A. (Multiline retail)		201,300		7,675
Natura Cosmeticos S.A. (Personal products)		29,100		727
OdontoPrev S.A. (Health care providers & services)		142,900		2,381
*OGX Petroleo e Gas Participacoes S.A. (Oil, gas & consumable fuels)		410,900		3,841
Sul America S.A. (Insurance)		197,257		2,477
Totvs S.A. (Software)		198,000		3,654
Tractebel Energia S.A. (Independent power producers & energy traders)		565,300		9,961
Vale S.A.—ADR (Metals & mining)		500,156		15,980

				120,199

Chile—2.8%
Banco Santander Chile—ADR (Commercial banks)		154,427		14,487
*CFR Pharmaceuticals S.A. (Pharmaceuticals)		8,816,489		2,396
Sociedad Quimica y Minera de Chile S.A.—ADR (Chemicals)		71,213		4,609
Sonda S.A. (IT services)		1,079,025		2,976

				24,468


Issuer	Shares		Value

*Common Stocks—Emerging Latin America—24.1%—(continued)*
Colombia—0.6%
Pacific Rubiales Energy Corporation (Oil, gas & consumable fuels)		215,522	$	5,777

Mexico—6.5%
America Movil S.A.B. de C.V. (Wireless telecommunication services)		16,570,500		22,347
Coca-Cola Femsa S.A.B. de C.V.—ADR (Beverages)		65,200		6,064
*Genomma Lab Internacional S.A.B. de C.V. (Pharmaceuticals)		1,266,134		3,222
Grupo Comercial Chedraui S.A. de C.V. (Food & staples retailing)		360,966		1,133
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		1,763,228		5,822
Mexichem S.A.B. de C.V. (Chemicals)		398,400		1,614
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		5,621,700		16,685

				56,887

Peru—0.5%
Credicorp, Ltd. (Commercial banks)†		49,504		4,262


*Emerging Europe, Mid-East, Africa—14.2%*
Poland—0.4%
Eurocash S.A. (Food & staples retailing)		388,230		4,176

Qatar—1.7%
Industries Qatar QSC (Industrial conglomerates)		229,427		8,581
Qatar National Bank S.A.Q. (Commercial banks)		162,184		6,280

				14,861

Russia—1.9%
* Etalon Group Ltd.—144A—GDR (Real estate management & development)		328,708		2,265
Magnit OAO (Food & staples retailing)†		73,220		9,858
*X5 Retail Group N.V.—GDR (Food & staples retailing)		113,593		4,441

				16,564

South Africa—8.9%
Clicks Group, Ltd. (Multiline retail)		956,170		5,974
Life Healthcare Group Holdings, Ltd. (Health care providers & services)	��	1,256,331		3,268
Mr Price Group, Ltd. (Specialty retail)		466,397		4,704
MTN Group, Ltd. (Wireless telecommunication services)		915,239		19,478
Naspers, Ltd. (Media)		118,109		6,672
Sasol, Ltd. (Oil, gas & consumable fuels)		293,110		15,431
Shoprite Holdings, Ltd. (Food & staples retailing)		348,941		5,253
Standard Bank Group, Ltd. (Commercial banks)		451,232		6,671
*The Foschini Group, Ltd. (Specialty retail)		353,142		4,607
Truworths International, Ltd. (Specialty retail)		579,601		6,282

				78,340

See accompanying Notes to Financial Statements.

24 Semi-Annual Report

June 30, 2011

Emerging Markets Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares or Principal Amount		Value

Common Stocks—Emerging Europe, Mid-East, Africa—14.2%—(continued)
Turkey—1.3%
Tofas Turk Otomobil Fabrikasi A.S. (Automobiles)		630,894	$	2,877
Turkiye Halk Bankasi A.S. (Commercial banks)		1,121,029		8,392

				11,269

Total Common Stocks—95.6% (cost $719,190)				840,987


*Preferred Stocks*
Brazil—3.1%
Itau Unibanco Holding S.A. (Commercial banks)		393,254		9,185
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		1,178,615		17,913

				27,098

Total Preferred Stocks—3.1% (cost $26,521)				27,098


*Convertible Bond*
Brazil—0.1%
Lupatech S.A., 6.500%, due 4/15/18 (Machinery)**§ $	$	1,602		1,055

Total Convertible Bond—0.1% (cost $831)				1,055

Total Investments—98.8% (cost $746,542)				869,140
Cash and other assets, less liabilities—1.2%				10,449

Net assets—100.0%			$	879,589

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.12% of the Fund’s net assets at June 30, 2011.

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.12% of the net assets at June 30, 2011.

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials			17.7%
Information Technology			16.5%
Consumer Discretionary			16.4%
Consumer Staples			15.2%
Energy			9.0%
Industrials			8.1%
Materials			6.2%
Telecommunication Services			6.0%
Utilities			2.7%
Health Care			2.2%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


U.S. Dollar			14.7%
Hong Kong Dollar			13.3%
South Korean Won			11.4%
Brazilian Real			10.0%
Indian Rupee			9.5%
South African Rand			9.0%
New Taiwan Dollar			7.9%
Indonesian Rupiah			6.3%
Mexican Peso			5.9%
Malaysian Ringgit			3.5%
Thai Baht			2.3%
Qatari Rial			1.7%
Turkish Lira			1.3%
Australian Dollar			1.2%
All Other Currencies			2.0%

Total			100.0%

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 25

LOGO

Todd M. McClone

LOGO

Jeffrey A. Urbina

EMERGING LEADERS GROWTH FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

The Emerging Leaders Growth Fund posted a 2.32% decrease (Institutional Share Class) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the MSCI Emerging Markets Large Cap Index (net) increased by 0.97%.

Over the six month period, the Fund maintained significant exposure in Consumer Discretionary stocks, well ahead of the Index weighting, due largely to auto-related exposure and Consumer Staples weightings, in addition to select specialty retailers, as these companies benefited from increased disposable income as wages increased. Conversely, the Fund was underweighted in Financials, given tightening monetary policy on inflationary concerns and the impact on net interest margins and profitability. During the six month period, we reduced Materials holdings. The Energy reduction followed the spike in energy prices earlier in the year and as valuations increased, while Materials was reduced largely due to individual company issues, although also resulting from moderating commodity prices. Conversely, Information Technology (IT) increased from approximately 10% as of year end to 16% mid year, as corporate fundamentals improved given increased smart phone and tablet demand and a consumer driven product cycle. Regionally, the Fund remained overweighted in Emerging Latin America throughout the six month period, with a lower exposure in Emerging Europe, Middle East, and Africa as there were no Energy and Materials holdings in the region, coupled with lower Eastern European and Russian weightings. Emerging Asia increased during the period due to higher IT weightings.

26 Semi-Annual Report

June 30, 2011

Emerging Leaders Growth Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			Since Inception(a)
Institutional Class		(2.32	)%		23.46	%		1.11	%
MSCI Emerging Markets Large Cap (net)		0.97			27.87			3.19

(a)

For the period March 26, 2008 (Commencement of Operations) to June 30, 2011.

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

Sector Diversification (unaudited)

LOGO

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

June 30, 2011

William Blair Funds 27

Emerging Leaders Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

*Common Stocks—Emerging Asia—55.6%*
China—16.6%
*Baidu, Inc.—ADR (Internet software & services)		21,584	$	3,025
Belle International Holdings, Ltd. (Specialty retail)		921,973		1,943
China Vanke Co., Ltd. (Real estate management & development)		633,771		853
CNOOC, Ltd. (Oil, gas & consumable fuels)		811,000		1,893
Dongfeng Motor Group Co., Ltd. (Automobiles)		1,018,790		1,924
Industrial and Commercial Bank of China, Ltd. Class “H” (Commercial banks)		2,513,000		1,909
Ping An Insurance Group Co. of China, Ltd. Class “H” (Insurance)		145,609		1,503
Shandong Weigao Group Medical Polymer Co., Ltd. (Health care equipment & supplies)		280,000		404
Tencent Holdings, Ltd. (Internet software & services)		68,905		1,870
Want Want China Holdings, Ltd. (Food products)		1,428,948		1,386

				16,710

India—13.6%
Bajaj Auto, Ltd. (Automobiles)		15,628		492
HDFC Bank, Ltd. (Commercial banks)		26,533		1,493
Housing Development Finance Corporation (Thrifts & mortgage finance)		64,930		1,026
Infosys Technologies, Ltd. (IT services)		28,535		1,858
ITC, Ltd. (Tobacco)		437,650		1,987
Larsen & Toubro, Ltd. (Construction & engineering)		37,647		1,536
Nestle India, Ltd. (Food products)		5,046		463
Sun Pharmaceutical Industries, Ltd. (Pharmaceuticals)		128,025		1,426
Tata Consultancy Services, Ltd. (IT services)		74,018		1,961
Tata Motors, Ltd. (Machinery)		64,514		1,435

				13,677

Indonesia—5.9%
PT Astra International Tbk (Automobiles)		387,500		2,872
PT Bank Rakyat Indonesia (Commercial banks)		2,470,000		1,872
PT Indofood Sukses Makmur Tbk (Food products)		1,707,500		1,145

				5,889

Malaysia—1.9%
CIMB Group Holdings Bhd (Commercial banks)		646,457		1,912

South Korea—11.6%
Hyundai Mobis (Auto components)		7,009		2,626
Hyundai Motor Co. (Automobiles)		12,804		2,842
LG Household & Health Care, Ltd. (Household products)		3,331		1,432
Samsung Electronics Co., Ltd. (Semiconductors & semiconductor equipment)		3,601		2,786
Samsung Engineering Co., Ltd. (Construction & engineering)		8,192		1,957

				11,643


Issuer	Shares		Value

*Common Stocks—Emerging Asia—55.6%—(continued)*
Taiwan—4.6%
Hon Hai Precision Industry Co., Ltd. (Electronic equipment, instruments & components)		605,000	$	2,075
HTC Corporation (Communications equipment)		76,000		2,556

				4,631

Thailand—1.4%
CP ALL PCL (Food & staples retailing)		959,300		1,381


*Emerging Latin America—22.9%*
Brazil—10.4%
BR Malls Participacoes S.A. (Real estate management & development)		127,800		1,462
Cia de Bebidas das Americas—ADR (Beverages)		95,253		3,213
Cia de Concessoes Rodoviarias (Transportation infrastructure)		32,100		955
CPFL Energia S.A.—ADR (Electric utilities)		11,178		971
Embraer S.A.—ADR (Aerospace & defense)		31,129		958
Natura Cosmeticos S.A. (Personal products)		3,000		75
Tractebel Energia S.A. (Independent power producers & energy traders)		73,600		1,297
Vale S.A.—ADR (Metals & mining)		46,249		1,478

				10,409

Chile—4.1%
Banco Santander Chile—ADR (Commercial banks)		20,583		1,931
S.A.C.I. Falabella (Multiline retail)		115,302		1,214
Sociedad Quimica y Minera de Chile S.A.—ADR (Chemicals)		15,360		994

				4,139

Mexico—7.9%
America Movil S.A.B. de C.V.—ADR (Wireless telecommunication services)		54,908		2,958
Grupo Financiero Banorte S.A.B. de C.V. (Commercial banks)		425,200		1,931
Grupo Mexico S.A.B. de C.V. Series “B” (Metals & mining)		329,626		1,088
Wal-Mart de Mexico S.A.B. de C.V. (Food & staples retailing)		668,500		1,984

				7,961

Peru—0.5%
Credicorp, Ltd. (Commercial banks)†		5,443		469


*Emerging Europe, Mid-East, Africa—15.2%*
Qatar—1.0%
Industries Qatar QSC (Industrial conglomerates)		28,493		1,066

Russia—3.1%
Magnit OJSC—144A—GDR (Food & staples retailing)†		44,538		1,200
Sberbank of Russian Federation (Commercial banks)†		272,972		1,004
*X5 Retail Group N.V.—GDR (Food & staples retailing)		23,074		902

				3,106

See accompanying Notes to Financial Statements.

28 Semi-Annual Report

June 30, 2011

Emerging Leaders Growth Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Shares		Value

Common Stocks—Emerging Europe, Mid-East, Africa—15.2%—(continued)
South Africa—9.4%
MTN Group, Ltd. (Wireless telecommunication services)		135,628	$	2,886
Naspers, Ltd. (Media)		44,803		2,531
Sasol, Ltd. (Oil, gas & consumable fuels)		29,140		1,534
Shoprite Holdings, Ltd. (Food & staples retailing)		95,140		1,432
Truworths International, Ltd. (Specialty retail)		96,000		1,041

				9,424

Turkey—1.7%
Turkiye Garanti Bankasi A.S. (Commercial banks)		379,052		1,719

Total Common Stocks—93.7% (cost $84,854)				94,136


*Preferred Stocks*
Brazil—4.1%
Itau Unibanco Holding S.A. (Commercial banks)		84,485		1,973
Petroleo Brasileiro S.A. (Oil, gas & consumable fuels)		141,655		2,153

				4,126

Total Preferred Stocks—4.1% (cost $3,865)				4,126


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $174, collateralized by FHLMC, 2.000%, due 12/3/15 $	$	174	$	174

Total Repurchase Agreement—0.2% (cost $174)				174

Total Investments—98.0% (cost $88,893)				98,436
Cash and other assets, less liabilities—2.0%				1,966

Net assets—100.0%			$	100,402

ADR = American Depository Receipt

GDR = Global Depository Receipt

* Non-income producing securities

† = U.S. listed foreign security

At June 30, 2011, the Fund’s Portfolio of Investments includes the following industry categories:


Financials			21.4%
Consumer Discretionary			17.8%
Consumer Staples			16.9%
Information Technology			16.4%
Industrials			8.1%
Telecommunication Services			5.9%
Energy			5.7%
Materials			3.6%
Utilities			2.3%
Health Care			1.9%

Total			100.0%

At June 30, 2011, the Fund’s Portfolio of Investments includes the following currency categories:


U.S. Dollar			19.4%
Hong Kong Dollar			13.9%
Indian Rupee			13.9%
South Korean Won			11.9%
South African Rand			9.6%
Brazilian Real			8.1%
Indonesian Rupiah			6.0%
Mexican Peso			5.1%
New Taiwan Dollar			4.7%
Malaysian Ringgit			1.9%
Turkish Lira			1.8%
Thai Baht			1.4%
Chilean Peso			1.2%
Qatari Rial			1.1%

Total			100.0%

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 29

FIXED-INCOME MARKET OVERVIEW

Summary

Outlook

30 Semi-Annual Report

June 30, 2011

LOGO

Christopher T. Vincent

LOGO

Paul J. Sularz

BOND FUND

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

AN OVERVIEW FROM THE PORTFOLIO MANAGERS

Bond Fund

The Bond Fund posted a 3.17% increase on a total return basis (Institutional Share Class) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Barclays Capital Aggregate Index, gained 2.72%.

The Fund posted positive performance results, in spite of what could be considered headwinds to our style of investing. Security selection was the main driver of Fund performance.

The Fund has been defensively positioned against rising interest rates, which worked well for the Fund in the first quarter but worked against it during the second.

We believe the Fund’s investment strategy is designed to help the Fund hold its ground in market conditions such as those just experienced in the first half of the year, and the Fund did just that.

June 30, 2011

William Blair Funds 31

Within our Mortgage-backed securities holdings, we favor securities that we believe are less likely to be refinanced through emphasizing specified pools with low loan balances and above-market coupon rates. Put simply, we are seeking pools least likely to be “called away,” or pre-paid as interest rates decline and refinancings increase. The Fund has benefited from this strategy, especially given the fact that lenders have more stringent financial criteria in place for borrowers to refinance their existing mortgages. Higher coupon mortgages, in turn, provide a cushion through better convexity characteristics, because they typically do not decline as much when interest rates fall. Finally, this strategy enables the Fund to generate and maintain the Fund’s cash flow and current income.

32 Semi-Annual Report

June 30, 2011

Bond Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			3 Year			Since Inception(a)
Institutional Class		3.17	%		5.81	%		7.85	%		6.74	%
Barclays Capital U.S. Aggregate Bond Index		2.72			3.90			6.46			6.07

(a)

For the period May 1, 2007 (Commencement of Operations) to June 30, 2011.

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

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

Sector Diversification (unaudited)

LOGO

The sector diversification shown is based on the total investments.

June 30, 2011

William Blair Funds 33

Bond Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—49.0%*
U.S. Treasury Inflation Indexed Notes/Bonds—7.8%
U.S. Treasury Inflation Indexed Bond, 3.875%, due 4/15/29	$	8,207	$	11,245
U.S. Treasury Inflation Indexed Note, 1.875%, due 7/15/13		735		781
U.S. Treasury Inflation Indexed Note, 2.375%, due 1/15/17		3,345		3,816

Total U.S. Treasury Inflation Indexed Notes/Bonds				15,842

U.S. Treasury—1.0%
U.S. Treasury Bond, 3.875%, due 8/15/40		500		458
U.S. Treasury Strip Principal, 0.000%, due 5/15/20		2,000		1,512

Total U.S. Treasury Obligations				1,970

Government National Mortgage Association (GNMA)—4.6%
GNR 2004-2 M5, 4.891%, due 7/16/34		125		136
GNR 2006-67 GB, 4.588%, due 9/16/34, VRN		1,540		1,663
#699118, 6.000%, due 9/15/38		6,702		7,527

Total GNMA Mortgage Obligations				9,326

Federal Home Loan Mortgage Corp. (FHLMC)—9.0%
#G90024, 7.000%, due 1/20/13		22		23
#G30093, 7.000%, due 12/1/17		34		38
#G30255, 7.000%, due 7/1/21		73		84
#G12792, 4.500%, due 12/1/21		391		418
#D95897, 5.500%, due 3/1/23		205		221
#G30372, 5.000%, due 9/1/27		512		551
#G01728, 7.500%, due 7/1/32		290		339
#C01385, 6.500%, due 8/1/32		346		392
#G02141, 6.000%, due 3/1/36		1,714		1,909
#A62179, 6.000%, due 6/1/37		971		1,082
#A63539, 6.000%, due 7/1/37		1,175		1,309
#A62858, 6.500%, due 7/1/37		622		702
#G03170, 6.500%, due 8/1/37		1,654		1,867
#A66843, 6.500%, due 10/1/37		2,303		2,620
#A78138, 5.500%, due 6/1/38		1,264		1,384
#A81799, 6.500%, due 9/1/38		2,771		3,153
#C03665, 9.000%, due 4/1/41		1,916		2,357

Total FHLMC Mortgage Obligations				18,449

Federal National Mortgage Association (FNMA)—26.6%
#535559, 7.500%, due 9/1/12		31		31
#689612, 5.000%, due 5/1/18		360		387
#695910, 5.000%, due 5/1/18		744		809
#747903, 4.500%, due 6/1/19		330		353
#745735, 5.000%, due 3/1/21		801		867
#253847, 6.000%, due 5/1/21		215		236
#900725, 6.000%, due 8/1/21		184		202
#AD8164, 4.000%, due 8/1/25		1,267		1,330
#545437, 7.000%, due 2/1/32		181		209
#545759, 6.500%, due 7/1/32		1,927		2,193
#254548, 5.500%, due 12/1/32		761		829
#684601, 6.000%, due 3/1/33		1,946		2,184
#190340, 5.000%, due 9/1/33		1,627		1,739
#254868, 5.000%, due 9/1/33		806		861
#739243, 6.000%, due 9/1/33		1,814		2,023


Issuer	NRSRO Rating		Principal Amount		Value

*U.S. Government and U.S. Government Agency—(continued)*
Federal National Mortgage Association (FNMA)—(continued)
#739331, 6.000%, due 9/1/33			$	844	$	941
#555800, 5.500%, due 10/1/33				341		371
#725027, 5.000%, due 11/1/33				635		678
#555880, 5.500%, due 11/1/33				410		447
#555946, 5.500%, due 11/1/33				763		837
#756153, 5.500%, due 11/1/33				2,126		2,330
#725231, 5.000%, due 2/1/34				662		708
#725205, 5.000%, due 3/1/34				1,417		1,514
#725220, 5.000%, due 3/1/34				610		652
#725232, 5.000%, due 3/1/34				3,049		3,259
#725238, 5.000%, due 3/1/34				1,412		1,509
#763798, 5.500%, due 3/1/34				445		486
#725424, 5.500%, due 4/1/34				441		480
#725611, 5.500%, due 6/1/34				433		472
#786546, 6.000%, due 7/1/34				843		935
#787816, 6.000%, due 7/1/34				875		975
#190353, 5.000%, due 8/1/34				465		497
#357883, 5.000%, due 5/1/35				994		1,062
#745092, 6.500%, due 7/1/35				1,024		1,165
#357944, 6.000%, due 9/1/35				113		125
#829306, 6.000%, due 9/1/35				308		341
#843487, 6.000%, due 10/1/35				260		289
#849191, 6.000%, due 1/1/36				162		180
#848782, 6.500%, due 1/1/36				732		831
#745349, 6.500%, due 2/1/36				1,065		1,213
#895637, 6.500%, due 5/1/36				448		508
#831540, 6.000%, due 6/1/36				183		203
#745802, 6.000%, due 7/1/36				603		672
#886220, 6.000%, due 7/1/36				1,250		1,393
#893318, 6.500%, due 8/1/36				228		259
#909480, 6.000%, due 2/1/37				1,295		1,436
#928561, 6.000%, due 8/1/37				726		809
#948689, 6.000%, due 8/1/37				1,681		1,857
#888967, 6.000%, due 12/1/37				1,651		1,840
#962058, 6.500%, due 3/1/38				4,293		4,907
#934006, 6.500%, due 9/1/38				1,512		1,728
#986856, 6.500%, due 9/1/38				987		1,120
#991911, 7.000%, due 11/1/38				724		848

Total FNMA Mortgage Obligations						54,130


*Non-Agency Mortgage-Backed Obligations—0.3%*
First Plus Home Loan Trust, 1997-4, Tranche M1, 7.640%, 9/11/23§**		D		199		179
First Horizon Asset Securities, Inc., 2004-AR4, Tranche 3A1, 3.815%, 8/25/34, VRN		AAA		432		386

Total Non-Agency Mortgage-Backed Obligations						565


*Asset-Backed Securities—4.2%*
Avis Budget Rental Car Funding AESOP LLC—144A, 2009-1A, Tranche A, 9.310%, 10/20/13		Aa1		2,000		2,167
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A1, 4.260%, 3/25/14		Aaa		2,230		2,330
Centre Point Funding LLC—144A, 2010-1A, Tranche 1, 5.430%, 7/20/16		A2		2,255		2,395
Sierra Receivables Funding Co. LLC—144A, 2011-1A, Tranche A, 3.350%, 4/20/26		A		1,712		1,717

Total Asset-Backed Securities						8,609

See accompanying Notes to Financial Statements.

34 Semi-Annual Report

June 30, 2011

Bond Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating			Principal Amount		Value

*Corporate Obligations—45.5%*
CME Group, Inc., 5.750%, due 2/15/14		AA		$	700	$	778
Bank of America Corporation, 7.375%, due 5/15/14		A	+		700		787
American Express Co., 7.250%, due 5/20/14		A	+		500		572
AT&T, Inc., 5.100%, due 9/15/14		A2			1,250		1,374
D.R. Horton, Inc., 5.625%, due 9/15/14		BB			1,500		1,556
Corporation Nacional del Cobre de Chile—144A, 4.750%, due 10/15/14		A1			1,350		1,447
The Kroger Co., 4.950%, due 1/15/15		BBB			1,175		1,291
Yum! Brands, Inc., 4.250%, due 9/15/15		BBB-			350		372
Yum! Brands, Inc., 6.250%, due 4/15/16		BBB-			700		803
Owens-Brockway Glass Container, Inc., 7.375%, due 5/15/16		BB	+		1,250		1,359
Fiserv, Inc., 3.125%, due 6/15/16		Baa2			1,825		1,815
FUEL Trust—144A, 3.984%, due 6/15/16		Baa2			2,000		1,984
SABMiller plc—144A, 6.500%, due 7/1/16		BBB	+		700		810
Petrobras International Finance Co., 6.125%, due 10/6/16		A3			1,350		1,503
EI du Pont de Nemours & Co., 5.250%, due 12/15/16		A			500		565
Comcast Corporation, 6.500%, due 1/15/17		BBB	+		350		408
Corrections Corporation of America, 7.750%, due 6/1/17		Ba1			1,250		1,361
ERP Operating L.P., 5.750%, due 6/15/17		BBB	+		2,000		2,217
JPMorgan Chase & Co., 6.125%, due 6/27/17		A1			600		670
Smithfield Foods, Inc., 7.750%, due 7/1/17		B	+		1,000		1,037
American Express Co., 6.150%, due 8/28/17		A	+		1,000		1,140
Capital One Financial Corporation, 6.750%, due 9/15/17		A-			1,775		2,052
Exelon Generation Co. LLC, 6.200%, due 10/1/17		A3			1,100		1,241
Toll Brothers Finance Corporation, 8.910%, due 10/15/17		BBB-			1,000		1,172
Motorola Solutions, Inc., 6.000%, due 11/15/17		BBB			1,500		1,707
Triumph Group, Inc., 8.000%, due 11/15/17		B	+		1,500		1,579
Union Pacific Corporation, 5.750%, due 11/15/17		BBB	+		800		919
Wells Fargo & Co., 5.625%, due 12/11/17		AA-			1,000		1,105
Kohl’s Corporation, 6.250%, due 12/15/17		BBB	+		350		411
American Tower Corporation, 4.500%, due 1/15/18		Baa3			1,150		1,149
Morgan Stanley, 6.625%, due 4/1/18		A			2,000		2,203
General Electric Capital Corporation, 5.625%, due 5/1/18		AA	+		1,250		1,367
Philip Morris International, Inc., 5.650%, due 5/16/18		A			1,000		1,125
Simon Property Group L.P., 6.125%, due 5/30/18		A-			1,750		1,962


Issuer	NRSRO Rating			Principal Amount		Value

*Corporate Obligations—(continued)*
Time Warner Cable, Inc., 6.750%, due 7/1/18		BBB		$	1,000	$	1,160
Petrohawk Energy Corporation, 7.250%, due 8/15/18		B	+		1,000		1,026
Merrill Lynch & Co., Inc., 6.875%, due 11/15/18		A	+		1,075		1,179
Anheuser-Busch InBev Worldwide, Inc., 7.750%, due 1/15/19		A-			1,000		1,258
FedEx Corporation, 8.000%, due 1/15/19		BBB			750		943
CSX Corporation, 7.375%, due 2/1/19		BBB			800		975
Honeywell International, Inc., 5.000%, due 2/15/19		A			1,000		1,099
Pfizer, Inc., 6.200%, due 3/15/19		AA			1,250		1,462
BHP Billiton Finance USA, Ltd., 6.500%, due 4/1/19		A	+		1,300		1,556
Owens Corning, 9.000%, due 6/15/19		BBB-			1,000		1,194
Discovery Communications LLC, 5.625%, due 8/15/19		BBB			500		553
Roper Industries, Inc., 6.250%, due 9/1/19		Baa2			1,225		1,387
Republic Services, Inc., 5.500%, due 9/15/19		BBB			1,650		1,799
Boston Properties L.P., 5.875%, due 10/15/19		A-			1,500		1,643
Crown Castle International Corporation, 7.125%, due 11/1/19		BB-			1,000		1,052
Toll Brothers Finance Corporation, 6.750%, due 11/1/19		BBB-			500		517
Ford Motor Credit Co. LLC, 8.125%, due 1/15/20		Ba2			1,515		1,755
Jarden Corporation, 7.500%, due 1/15/20		B			1,500		1,560
Johnson Controls, Inc., 5.000%, due 3/30/20		BBB	+		1,625		1,727
United Technologies Corporation, 4.500%, due 4/15/20		A	+		1,500		1,588
The Goldman Sachs Group, Inc., 6.000%, due 6/15/20		A1			1,800		1,937
Commonwealth Edison Co., 4.000%, due 8/1/20		A-			1,000		990
Alcoa, Inc., 6.150%, due 8/15/20		BBB-			1,775		1,880
Omnicom Group, Inc., 4.450%, due 8/15/20		A-			2,000		1,984
The Goodyear Tire & Rubber Co., 8.250%, due 8/15/20		B	+		1,000		1,080
BE Aerospace, Inc., 6.875%, due 10/1/20		BB			1,000		1,047
Georgia-Pacific LLC—144A, 5.400%, due 11/1/20		BBB			1,500		1,529
Progress Energy, Inc., 4.400%, due 1/15/21		BBB			1,625		1,643
Wyndham Worldwide Corporation, 5.625%, due 3/1/21		BBB-			1,000		997
Ball Corporation, 5.750%, due 5/15/21		BB	+		1,000		1,003
Energizer Holdings, Inc.—144A, 4.700%, due 5/19/21		BBB-			2,000		1,975

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 35

Bond Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating			Principal Amount		Value

*Corporate Obligations—(continued)*
Discovery Communications LLC, 4.375%, due 6/15/21		BBB		$	1,000	$	990
Southwest Airlines Co. 2007-1 Pass Through Trust, 6.150%, due 8/1/22		A2			649		701
The Kroger Co., 8.000%, due 9/15/29		BBB			425		533
Conoco Funding Co., 7.250%, due 10/15/31		A1			400		493
Kohl’s Corporation, 6.000%, due 1/15/33		BBB	+		1,000		1,034
Wisconsin Electric Power Co., 5.700%, due 12/1/36		A	+		500		530
Comcast Corporation, 6.450%, due 3/15/37		BBB	+		650		695
Yum! Brands, Inc., 6.875%, due 11/15/37		BBB-			600		681
JPMorgan Chase & Co., 6.400%, due 5/15/38		Aa3			900		1,016
COX Communications, Inc.—144A, 6.950%, due 6/1/38		Baa2			350		394
General Electric Capital Corporation, 6.875%, due 1/10/39		AA	+		750		849

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

VRN = Variable Rate Note

§ = Deemed illiquid pursuant to Liquidity Procedures approved by the Board of Trustees. This holding represents 0.09% of the net assets at June 30, 2011.

** = Fair valued pursuant to Valuation Procedures adopted by the Board of Trustees. This holding represents 0.09% of the Fund’s net assets at June 30, 2011.


Issuer	NRSRO Rating		Principal Amount		Value

*Corporate Obligations—(continued)*
Burlington Northern Santa Fe LLC, 5.750%, due 5/1/40		A3	$	1,515	$	1,561

Total Corporate Obligations						92,816

Total Long-Term Investments—99.0% (cost $191,646)						201,707


*Repurchase Agreement*
Fixed Income Clearing Corporation, 0.010% dated 6/30/11, due 7/1/11, repurchase price $2,256, collateralized by Federal National Mortgage Association, 3.420%, due 11/24/20		AAA		2,256		2,256

Total Repurchase Agreement—1.1% (cost $2,256)						2,256

Total Investments—100.1% (cost $193,902)						203,963
Liabilities, plus cash and other assets—(0.1)%						(155	)

Net assets—100.0%					$	203,808

See accompanying Notes to Financial Statements.

36 Semi-Annual Report

June 30, 2011

LOGO

Christopher T. Vincent

LOGO

Paul J. Sularz

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

The Low Duration Fund posted a 1.38% increase on a total return basis (Institutional Share Class) for the six months ended June 30, 2011. By comparison, the Fund’s benchmark, the Merrill Lynch 1-Year U.S. Treasury Note Index, gained 0.35%.

The Fund kept its exposure to cash and cash equivalents extremely low, given the very low rates currently available from money market instruments.

June 30, 2011

William Blair Funds 37

Low Duration Fund

Performance Highlights (unaudited)

LOGO

Average Annual Total Return at 6/30/2011


	Year To Date			1 Year			Since Inception(a)
Institutional Class		1.38	%		1.87	%		1.86	%
Merrill Lynch 1-Year U.S. Treasury Note Index		0.35			0.67			0.65

(a)

For the period December 1, 2009 (Commencement of Operations to June 30, 2011.

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)

LOGO

The sector diversification shown is based on the total investments.

38 Semi-Annual Report

June 30, 2011

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—47.2%*
U.S. Treasury Inflation Indexed Notes/Bonds—2.2%
U.S. Treasury Inflation Indexed Note, 2.000%, due 7/15/14	$	2,982	$	3,252

Government National Mortgage Association (GNMA)—0.5%
#781567, 5.000%, due 2/15/18		118		127
#606406, 5.000%, due 4/15/18		183		198
#003438, 4.500%, due 9/20/18		293		316
#003465, 4.500%, due 11/20/18		87		93

Total GNMA Mortgage Obligations				734

Federal Home Loan Mortgage Corp. (FHLMC)—13.1%
#M80931, 5.500%, due 8/1/11		9		9
#M80953, 4.000%, due 12/1/11		221		224
#M80970, 4.500%, due 5/1/12		44		44
#B18053, 5.000%, due 3/1/15		80		84
#G11885, 5.000%, due 1/1/16		251		269
#E86134, 5.000%, due 11/1/16		231		248
#E96536, 5.000%, due 3/1/18		391		423
#E95355, 5.000%, due 4/1/18		492		531
#E01377, 4.500%, due 5/1/18		486		517
#G11618, 4.500%, due 5/1/18		2,288		2,445
#E01411, 5.000%, due 7/1/18		246		264
#E01424, 4.000%, due 8/1/18		6		7
#E99963, 4.500%, due 10/1/18		140		150
#E01488, 5.000%, due 10/1/18		524		564
#E99895, 5.000%, due 10/1/18		1,027		1,110
#G12093, 4.500%, due 12/1/18		630		673
#B11386, 5.000%, due 12/1/18		227		246
#B11362, 5.500%, due 12/1/18		33		35
#G13367, 5.500%, due 12/1/18		182		198
#E01545, 5.000%, due 1/1/19		300		323
#B12826, 4.500%, due 3/1/19		429		459
#G11766, 5.000%, due 3/1/19		214		231
#G18001, 4.500%, due 7/1/19		280		299
#G11596, 5.500%, due 8/1/19		240		261
#B16291, 5.000%, due 9/1/19		1,803		1,949
#G11690, 4.000%, due 2/1/20		41		44
#G18045, 5.000%, due 3/1/20		234		253
#G11892, 4.000%, due 4/1/20		248		263
#B19078, 5.000%, due 4/1/20		158		171
#G18048, 5.000%, due 4/1/20		158		171
#J08152, 5.000%, due 5/1/20		201		217
#G11720, 4.500%, due 8/1/20		51		55
#G12394, 5.000%, due 5/1/21		298		322
#G13296, 5.000%, due 5/1/21		794		858
#G12113, 5.500%, due 5/1/21		395		431
#G12286, 5.000%, due 7/1/21		164		177
#E02322, 5.500%, due 5/1/22		44		49
#J06484, 5.500%, due 11/1/22		927		1,011
#C00351, 8.000%, due 7/1/24		145		172
#G00363, 8.000%, due 6/1/25		175		208
#C80329, 8.000%, due 8/1/25		44		52
#J13022, 4.000%, due 9/1/25		2,936		3,081

Total FHLMC Mortgage Obligations				19,098


Issuer	Principal Amount		Value

*U.S. Government and U.S. Government Agency—(continued)*
Federal National Mortgage Association (FNMA)—31.4%
#255325, 4.500%, due 7/1/11	$	41	$	41
#256224, 5.500%, due 4/1/16		44		48
#256559, 5.500%, due 1/1/17		24		25
#256606, 5.500%, due 2/1/17		32		34
#256646, 5.500%, due 3/1/17		23		26
#545898, 5.500%, due 9/1/17		668		726
#545899, 5.500%, due 9/1/17		765		831
#257067, 5.000%, due 1/1/18		111		117
#663692, 5.000%, due 1/1/18		317		343
#674713, 5.000%, due 1/1/18		25		27
#679305, 5.000%, due 1/1/18		107		116
#254591, 5.500%, due 1/1/18		499		540
#677680, 4.500%, due 2/1/18		18		19
#681310, 4.500%, due 2/1/18		405		434
#683100, 5.500%, due 2/1/18		623		681
#254684, 5.000%, due 3/1/18		35		38
#675717, 5.000%, due 3/1/18		481		520
#681361, 5.000%, due 3/1/18		125		135
#656564, 5.000%, due 4/1/18		2,288		2,473
#696677, 5.000%, due 4/1/18		164		178
#702888, 5.000%, due 4/1/18		154		167
#929388, 4.500%, due 5/1/18		595		634
#254721, 5.000%, due 5/1/18		380		410
#702332, 5.000%, due 5/1/18		80		87
#704049, 5.500%, due 5/1/18		1,167		1,279
#735357, 5.500%, due 5/1/18		1,899		2,079
#254785, 4.000%, due 6/1/18		292		309
#555622, 4.500%, due 6/1/18		498		533
#656573, 5.000%, due 6/1/18		331		358
#709848, 5.000%, due 6/1/18		292		316
#713380, 4.000%, due 7/1/18		273		289
#254802, 4.500%, due 7/1/18		413		442
#713807, 4.500%, due 7/1/18		243		260
#735003, 5.500%, due 7/1/18		1,781		1,949
#254840, 4.000%, due 8/1/18		137		145
#711991, 5.000%, due 8/1/18		277		299
#254919, 4.000%, due 9/1/18		35		37
#740444, 4.500%, due 9/1/18		395		422
#734741, 4.000%, due 10/1/18		27		29
#743183, 5.000%, due 10/1/18		120		130
#255003, 4.000%, due 11/1/18		17		18
#747823, 4.000%, due 11/1/18		734		777
#749596, 5.000%, due 11/1/18		424		458
#745237, 5.000%, due 12/1/18		101		109
#725171, 4.000%, due 1/1/19		17		18
#255079, 5.000%, due 2/1/19		50		54
#766276, 5.000%, due 3/1/19		524		566
#MA0045, 4.000%, due 4/1/19		613		648
#255233, 4.000%, due 5/1/19		625		661
#725445, 4.500%, due 5/1/19		1,123		1,202
#785259, 5.000%, due 8/1/19		522		565
#725953, 5.000%, due 10/1/19		146		159
#745240, 4.500%, due 12/1/19		646		691
#735401, 5.500%, due 3/1/20		401		436
#735646, 4.500%, due 7/1/20		764		817
#745440, 4.500%, due 7/1/20		14		14
#825912, 4.000%, due 9/1/20		78		82
#MA0517, 4.000%, due 9/1/20		1,278		1,352

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 39

Low Duration Fund

Portfolio of Investments, June 30, 2011 (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)
#836016, 4.500%, due 9/1/20			$	994	$	1,063
#MA0548, 3.500%, due 10/1/20				2,311		2,407
#879607, 5.500%, due 4/1/21				170		186
#881284, 4.500%, due 12/1/21				1,434		1,529
#190988, 9.000%, due 6/1/24				227		268
#AC9560, 5.000%, due 1/1/25				4,815		5,217
#AD0855, 4.000%, due 3/1/25				196		206
#932723, 4.000%, due 4/1/25				881		925
#935995, 4.000%, due 6/1/25				247		259
#AD4677, 4.000%, due 6/1/25				1,997		2,097
#AD8164, 4.000%, due 8/1/25				2,157		2,265
#AE1176, 4.000%, due 8/1/25				1,066		1,120
#AH2671, 4.000%, due 1/1/26				2,025		2,127

Total FNMA Mortgage Obligations						45,822


*Asset-Backed Securities—39.4%*
Volkswagen Auto Lease Trust, 2009-A, Tranche A3, 3.410%, 4/16/12		AAA		342		343
Ford Credit Auto Owner Trust, 2007-B, Tranche A4A, 5.240%, 7/15/12		AAA		226		228
Daimler Chrysler Auto Trust, 2008-B, Tranche A3A, 4.710%, 9/10/12		AAA		31		31
BMW Vehicle Lease Trust, 2010-1, Tranche A2, 0.580%, 9/17/12		Aaa		428		428
BMW Vehicle Owner Trust, 2010-A, Tranche A2, 0.680%, 9/25/12		AAA		406		406
Capital Auto Receivables Asset Trust, 2008-2, Tranche A3B, 1.637%, 10/15/12, VRN		AAA		200		200
Ford Credit Auto Owner Trust, 2010-B, Tranche A2, 0.650%, 12/15/12		Aaa		736		736
Chrysler Financial Auto Securitization Trust, 2010-A, Tranche A2, 0.690%, 1/8/13		AAA		878		879
Honda Auto Receivables Owner Trust, 2009-2, Tranche A3, 2.790%, 1/15/13		AAA		398		401
CarMax Auto Owner Trust, 2009-1, Tranche A3, 4.120%, 3/15/13		AAA		197		199
Nissan Auto Lease Trust, 2010-A, Tranche A2, 1.100%, 3/15/13		AAA		345		345
Ford Credit Auto Owner Trust, 2009-A, Tranche A3A, 3.960%, 5/15/13		AAA		215		217
Ford Credit Auto Owner Trust, 2009-A, Tranche A3B, 2.687%, 5/15/13, VRN		AAA		538		541
Harley-Davidson Motorcycle Trust, 2007-1, Tranche A4, 5.210%, 6/17/13		AAA		383		387
USAA Auto Owner Trust, 2009-1, Tranche A3, 3.020%, 6/17/13		AAA		392		395
American Express Issuance Trust, 2007-2, Tranche A, 0.437%, 7/15/13, VRN		AAA		373		373
Ally Auto Receivables Trust, 2010-3, Tranche A2, 0.287%, 8/15/13, VRN		AAA		726		726
BMW Vehicle Lease Trust, 2009-1, Tranche A4, 3.660%, 8/15/13		AAA		500		502


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(continued)*
Ford Credit Auto Owner Trust, 2009-B, Tranche A3, 2.790%, 8/15/13		AAA	$	308	$	311
Ford Credit Auto Owner Trust, 2009-D, Tranche A3, 2.170%, 10/15/13		AAA		791		798
John Deere Owner Trust, 2009-A, Tranche A3, 2.590%, 10/15/13		AAA		712		716
John Deere Owner Trust, 2009-B, Tranche A3, 1.570%, 10/15/13		AAA		540		542
Avis Budget Rental Car Funding AESOP LLC—144A, 2009-1A, Tranche A, 9.310%, 10/20/13		Aa1		2,000		2,166
Harley-Davidson Motorcycle Trust, 2009-1, Tranche A3, 3.190%, 11/15/13		AAA		1,272		1,282
CNH Equipment Trust, 2009-C, Tranche A3, 1.850%, 12/16/13		AAA		222		222
Volkswagen Auto Loan Enhanced Trust, 2010-1, Tranche A3, 1.310%, 1/20/14		AAA		864		868
USAA Auto Owner Trust, 2008-3, Tranche A4, 4.710%, 2/18/14		AAA		45		45
Harley-Davidson Motorcycle Trust, 2009-2, Tranche A3, 2.620%, 3/15/14		AAA		496		500
Citibank Credit Card Issuance Trust, 2009-A1, Tranche A1, 1.937%, 3/17/14, VRN		AAA		200		202
Volkswagen Auto Lease Trust, 2009-A, Tranche A4, 4.590%, 3/17/14		AAA		2,000		2,013
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A1, 4.260%, 3/25/14		Aaa		1,765		1,844
BMW Vehicle Owner Trust, 2010-A, Tranche A3, 1.390%, 4/25/14		AAA		300		302
Citibank Credit Card Issuance Trust, 2009-A2, Tranche A2, 1.737%, 5/15/14, VRN		AAA		500		506
Ford Credit Auto Owner Trust, 2010-A, Tranche A3, 1.320%, 6/15/14		AAA		500		503
Chase Issuance Trust, 2007-A9, Tranche A, 3.151%, 6/16/14, VRN		AAA		2,000		1,999
Nissan Auto Receivables Owner Trust, 2008-A, Tranche A4, 4.280%, 6/16/14		AAA		71		72
Capital Auto Receivables Asset Trust, 2008-1, Tranche A4B, 1.537%, 7/15/14, VRN		AAA		605		608
CNH Equipment Trust, 2010-A, Tranche A3, 1.540%, 7/15/14		AAA		837		841
Nissan Auto Receivables Owner Trust, 2010-A, Tranche A3, 0.870%, 7/15/14		Aaa		500		500
Daimler Chrysler Auto Trust, 2008-A, Tranche A4, 4.480%, 8/8/14		AAA		1,495		1,513
American Express Credit Account Master Trust, 2009-1, Tranche A, 1.537%, 12/15/14, VRN		AAA		450		455
Nissan Master Owner Trust Receivables—144A, 2010-AA, Tranche A, 1.337%, 1/15/15, VRN		AAA		2,000		2,022

See accompanying Notes to Financial Statements.

40 Semi-Annual Report

June 30, 2011

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Asset-Backed Securities—(continued)*
Capital One Multi-Asset Execution Trust, 2007-A4, Tranche A4, 0.217%, 3/16/15, VRN		AAA	$	1,778	$	1,776
CNH Equipment Trust, 2010-C, Tranche A3, 1.170%, 5/15/15		AAA		500		502
Discover Card Master Trust, 2007-A2, Tranche A2, 0.587%, 6/15/15, VRN		AAA		192		193
MBNA Credit Card Master Note Trust, 2006-A2, Tranche A2, 0.247%, 6/15/15, VRN		AAA		200		200
Discover Card Master Trust I, 2005-4, Tranche A2, 0.277%, 6/16/15, VRN		AAA		77		77
FPL Recovery Funding LLC, 2007-A, Tranche A2, 5.044%, 8/1/15		AAA		852		893
Chase Issuance Trust, 2008-A10, Tranche A10, 0.937%, 8/17/15, VRN		AAA		2,000		2,026
Bank of America Credit Card Trust, 2010-A1, Tranche A1, 0.487%, 9/15/15, VRN		AAA		2,000		2,005
Discover Card Master Trust, 2010-A1, Tranche A1, 0.837%, 9/15/15, VRN		Aaa		347		350
Ford Credit Floorplan Master Owner Trust, 2010-A5, Tranche A2, 0.887%, 9/15/15, VRN		AAA		1,800		1,806
USAA Auto Owner Trust, 2010-1, Tranche A4, 2.140%, 9/15/15		AAA		685		700
American Express Credit Account Master Trust, 2010-1, Tranche A, 0.437%, 11/16/15, VRN		AAA		500		501
Ford Credit Floorplan Master Owner Trust, 2011-1, Tranche A2, 0.787%, 2/15/16, VRN		AAA		1,000		996
Chase Issuance Trust, 2008-A3, Tranche A, 1.287%, 3/15/16, VRN		AAA		2,000		2,051
Hertz Vehicle Financing LLC—144A, 2009-2A, Tranche A2, 5.290%, 3/25/16		Aaa		2,250		2,467
Ally Master Owner Trust, 2011-3, Tranche A1, 0.817%, 5/15/16, VRN		Aaa		1,100		1,100
CNH Equipment Trust, 2010-C, Tranche A4, 1.750%, 5/16/16		AAA		60		60
Avis Budget Rental Car Funding AESOP LLC—144A, 2010-3A, Tranche A, 4.640%, 5/20/16		Aaa		1,400		1,506
Centre Point Funding LLC—144A, 2010-1A, Tranche 1, 5.430%, 7/20/16		A2		1,721		1,828
Discover Card Master Trust, 2011-A1, Tranche A1, 0.537%, 8/15/16, VRN		Aaa		1,400		1,405
Enterprise Fleet Financing LLC—144A, 2011-2, Tranche A2, 1.430%, 10/20/16		AAA		2,000		2,000
GE Capital Credit Card Master Note Trust, 2011-1, Tranche A, 0.737%, 1/15/17, VRN		Aaa		500		503
Discover Card Master Trust, 2010-A2, Tranche A2, 0.767%, 3/15/18, VRN		AAA		350		353
Citibank Omni Master Trust—144A, 2009-A14A, Tranche A14, 2.937%, 8/15/18, VRN		Aaa		2,000		2,103


Issuer	NRSRO Rating			Principal Amount		Value

*Asset-Backed Securities—(continued)*
Capital One Multi-Asset Execution Trust, 2007-A2, Tranche A2, 0.267%, 12/16/19, VRN		AAA		$	215	$	212
MBNA Credit Card Master Note Trust, 2004-A3, Tranche A3, 0.447%, 8/16/21, VRN		AAA			300		298
Sierra Receivables Funding Co. LLC—144A, 2011-1A, Tranche A, 3.350%, 4/20/26		A			1,498		1,502

Total Asset-Backed Securities							57,580


*Corporate Obligations—12.9%*
American Express Bank FSB, 0.316%, due 5/29/12, VRN		A	+		500		499
General Electric Capital Corporation, 3.500%, due 8/13/12		AA	+		1,000		1,030
Bank of America Corporation, 5.375%, due 9/11/12		A	+		1,000		1,048
ConocoPhillips, 4.750%, due 10/15/12		A1			1,000		1,052
Citigroup, Inc., 5.300%, due 10/17/12		A	+		1,000		1,050
Wells Fargo & Co., 5.250%, due 10/23/12		AA-			1,000		1,055
The Procter & Gamble Co., 0.301%, due 11/14/12, VRN		AA-			700		701
The Walt Disney Co., 4.700%, due 12/1/12		A			1,000		1,056
Hewlett-Packard Co., 4.500%, due 3/1/13		A	+		1,000		1,059
General Electric Capital Corporation, 0.418%, due 5/8/13, VRN		AA	+		1,000		996
American Express Co., 4.875%, due 7/15/13		A	+		1,000		1,063
Barclays Bank plc, 1.323%, due 1/13/14, VRN		AA-			500		502
JPMorgan Chase & Co., 1.074%, due 1/24/14, VRN		Aa3			1,000		1,003
Morgan Stanley, 1.874%, due 1/24/14, VRN		A			1,000		1,007
Bank of America Corporation, 1.693%, due 1/30/14, VRN		A	+		1,000		1,002
MetLife, Inc., 2.375%, due 2/6/14		A-			1,000		1,019
The Boeing Co., 5.000%, due 3/15/14		A			375		412
Shell International Finance BV, 4.000%, due 3/21/14		Aa1			1,142		1,229
Citigroup, Inc., 1.176%, due 4/1/14, VRN		A			1,000		986
Morgan Stanley, 6.000%, due 5/13/14		A			1,000		1,089

Total Corporate Obligations							18,858

Total Long-Term Investments—99.5% (cost $144,761)							145,344

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 41

Low Duration Fund

Portfolio of Investments, June 30, 2011 (all dollar amounts in thousands) (unaudited)


Issuer	NRSRO Rating		Principal Amount		Value

*Repurchase Agreement*
State Street Bank and Trust Company, 0.010% dated 6/30/11, due 7/1/11, repurchase price $3,243, collateralized by U.S. Treasury Bill, 0.020%, due 8/11/11		AAA	$	3,243	$	3,243

Total Repurchase Agreement—2.2% (cost $3,243)						3,243

Total Investments—101.7% (cost $148,004)						148,587
Liabilities, plus cash and other assets—(1.7)%						(2,552	)

Net assets—100.0%					$	146,035

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

VRN = Variable Rate Note

See accompanying Notes to Financial Statements.

42 Semi-Annual Report

June 30, 2011

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands)


	Institutional International Growth Fund			Institutional International Equity Fund			International Small Cap Growth Fund
*Assets*
Investments in securities, at cost	$	1,441,349		$	210,947		$	640,773

Investments in securities, at value	$	1,698,555		$	263,216		$	757,903
Foreign currency, at value (cost $7,494; $485; $5,547)		7,512			486			5,572
Receivable for securities sold		24,569			10,225			7,313
Receivable for fund shares sold		68,491			—			2,434
Dividend and interest receivable		4,392			592			1,350
Unrealized appreciation on forward foreign currency contracts		2,148			—			—

Total assets		1,805,667			274,519			774,572
*Liabilities*
Payable for investment securities purchased		55,047			5,983			4,890
Payable for fund shares redeemed		525			7,699			231
Unrealized depreciation on forward foreign currency contracts		714			22			30
Investment advisory fee payable		1,278			228			610
Distribution and shareholder service fee payable		—			—			60
Other payables and accrued expenses		275			62			152

Total liabilities		57,839			13,994			5,973

Net Assets	$	1,747,828		$	260,525		$	768,599

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	119		$	23		$	55
Capital paid in excess of par value		1,647,067			341,554			709,028
Accumulated net investment income (loss)		14,619			2,700			4,319
Accumulated net realized gain (loss)		(172,619	)		(136,002	)		(61,930	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		258,642			52,250			117,127

Net Assets	$	1,747,828		$	260,525		$	768,599


Net Assets	$	1,747,828		$	260,525
Shares Outstanding		119,079,011			23,329,016
Net Asset Value Per Share		14.68			11.17
Institutional Share Class
Net Assets							$	305,052
Shares Outstanding								21,774,191
Net Asset Value Per Share							$	14.01

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 43

Statements of Operations

for the Period Ended June 30, 2011 (dollar amounts in thousands)


	Institutional International Growth Fund			Institutional International Equity Fund			International Small Cap Growth Fund
*Investment income*
Dividends	$	30,847		$	5,044		$	9,805
Less foreign tax withheld		(2,603	)		(423	)		(816	)
Interest		94			1			90

Total income		28,338			4,622			9,079
*Expenses*
Investment advisory fees		8,438			1,449			3,524
Distribution fees		—			—			28
Shareholder services fees		—			—			313
Custodian fees		168			54			93
Transfer agent fees		16			4			15
Sub-transfer agent fees
Class N		—			—			17
Class I		—			—			57
Professional fees		58			31			33
Registration fees		19			9			48
Shareholder reporting fees		16			2			24
Trustee fees		30			6			9
Other expenses		40			10			13

Total expenses		8,785			1,565			4,174

Net investment income (loss)		19,553			3,057			4,905
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments		120,027			24,379			51,734
Foreign currency transactions		(14,581	)		(344	)		1,996

Total net realized gain (loss)		105,446			24,035			53,730
Change in net unrealized appreciation (depreciation) of:
Investments		(87,341	)		(17,517	)		(18,159	)
Foreign currency translations		1,401			88			(61	)

Total change in net unrealized appreciation (depreciation)		(85,940	)		(17,429	)		(18,220	)

Net increase (decrease) in net assets resulting from operations	$	39,059		$	9,663		$	40,415

See accompanying Notes to Financial Statements.

44 Semi-Annual Report

June 30, 2011

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 and the Year Ended December 31, 2010 (dollar amounts in thousands)


	Institutional International Growth Fund						Institutional International Equity Fund						International Small Cap Growth Fund
	2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	19,553		$	17,077		$	3,057		$	3,226		$	4,905		$	3,235
Net realized gain (loss) on investments and foreign currency transactions		105,446			220,735			24,035			44,790			53,730			57,094
Change in net unrealized appreciation (depreciation) on investments and foreign currency transactions		(85,940	)		68,599			(17,429	)		(14,220	)		(18,220	)		62,315

Net increase (decrease) in net assets resulting from operations		39,059			306,411			9,663			33,796			40,415			122,644
*Distributions to shareholders from*
Net investment income		—			(35,383	)		—			(4,059	)		—			(2,781	)
Net realized gain		—			—			—			—			—			—

		—			(35,383	)		—			(4,059	)		—			(2,781	)
*Capital stock transactions*
Net proceeds from sale of shares		182,240			585,127			10,029			31,823			136,913			222,392
Shares issued in reinvestment of income dividends and capital gain distributions		—			33,238			—			3,868			—			2,417
Less cost of shares redeemed		(359,688	)		(379,024	)		(50,635	)		(139,231	)		(55,680	)		(88,572	)

Net increase (decrease) in net assets resulting from capital share transactions		(177,448	)		239,341			(40,606	)		(103,540	)		81,233			136,237

Increase (decrease) in net assets		(138,389	)		510,369			(30,943	)		(73,803	)		121,648			256,100
Net assets
Beginning of period	$	1,886,217		$	1,375,848		$	291,468		$	365,271		$	646,951		$	390,851

End of period	$	1,747,828		$	1,886,217		$	260,525		$	291,468		$	768,599		$	646,951

Accumulated net investment income (loss) at the end of the period	$	14,619		$	(4,934	)	$	2,700		$	(357	)	$	4,319		$	(586	)

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 45

Statements of Assets and Liabilities

June 30, 2011 (dollar amounts in thousands)


	Emerging Markets Growth Fund			Emerging Leaders Fund		Bond Fund			Low Duration Fund
*Assets*
Investments in securities, at cost	$	746,542		$	88,893	$	193,902		$	148,004

Investments in securities, at value	$	869,140		$	98,436	$	203,963		$	148,587
Foreign currency, at value (cost $4,854 and $2,617)		4,854			2,629		—			1,061
Receivable for securities sold .		16,083			2,138		252			—
Receivable for fund shares sold		101			99		1,071			5
Receivable from Advisor .		—			11		12			—
Dividend and interest receivable .		2,645			286		1,862			486
Unrealized appreciation on forward foreign currency contracts		—			—		—			—

Total assets		892,823			103,599		207,160			150,139
*Liabilities*
Payable for investment securities purchased		9,754			2,937		2,167			3,209
Payable for fund shares redeemed		1,015			112		1,044			798
Payable to custodian		1,102			—		—			—
Investment advisory fee payable		963			86		50			36
Distribution and shareholder service fee payable		32			4		19			10
Other payables and accrued expenses		368			58		72			51

Total liabilities		13,234			3,197		3,352			4,104

Net Assets	$	879,589		$	100,402	$	203,808		$	146,035

*Capital*
Composition of Net Assets
Par value of shares of beneficial interest	$	56		$	10	$	19		$	15
Capital paid in excess of par value		644,901			84,117		192,598			147,214
Accumulated net investment income (loss)		(5,429	)		336		(388	)		(710	)
Accumulated net realized gain (loss)		117,446			6,390		1,518			(1,067	)
Net unrealized appreciation (depreciation) of investments and foreign currencies		122,615			9,549		10,061			583

Net Assets	$	879,589		$	100,402	$	203,808		$	146,035


Institutional Share Class
Net Assets	$	676,263		$	67,935	$	53,437		$	69,695
Shares Outstanding		42,567,873			6,718,394		5,019,179			7,041,233
Net Asset Value Per Share	$	15.89		$	10.11	$	10.65		$	9.90

See accompanying Notes to Financial Statements.

46 Semi-Annual Report

June 30, 2011

Statements of Operations

for the Period Ended June 30, 2011 (dollar amounts in thousands)


	Emerging Markets Growth Fund			Emerging Leaders Fund			Bond Fund			Low Duration Fund
*Investment income*
Dividends	$	14,909		$	1,185		$	—		$	—
Less foreign tax withheld		(1,112	)		(99	)		—			—
Interest		148			—			4,839			1,623

Total income		13,945			1,086			4,839			1,623
*Expenses*
Investment advisory fees		6,374			530			294			220
Distribution fees		39			—			4			5
Shareholder services fees		164			18			113			64
Custodian fees		258			66			27			30
Transfer agent fees		24			7			11			8
Sub-transfer agent fees
Class N		14			—			2			—
Class I		28			—			4			—
Professional fees		58			34			17			14
Registration fees		28			27			28			42
Shareholder reporting fees		11			1			4			2
Trustee fees		21			2			3			2
Other expenses		28			4			8			6

Total expenses before waiver		7,047			689			515			393
Expenses waived by the Advisor		—			(70	)		(55	)		(32	)

Net expenses		7,047			619			460			361

Net investment income (loss)		6,898			467			4,379			1,262
*Realized and unrealized gain (loss)*
Net realized gain (loss) on transactions from:
Investments		135,105			5,902			1,281			37
Foreign currency transactions		(885	)		(177	)		—			—

Total net realized gain (loss)		134,220			5,725			1,281			37
Change in net unrealized appreciation (depreciation) of:
Investments		(162,150	)		(8,084	)		258			683
Foreign currency translations		(29	)		11			—			—

Total change in net unrealized appreciation (depreciation)		(162,179	)		(8,073	)		258			683

Net increase (decrease) in net assets resulting from operations	$	(21,061	)	$	(1,881	)	$	5,918		$	1,982

See accompanying Notes to Financial Statements.

June 30, 2011

William Blair Funds 47

Statements of Changes in Net Assets

for the Period Ended June 30, 2011 (dollar amounts in thousands)


	Emerging Markets Growth Fund						Emerging Leaders Fund						Bond Fund						Low Duration Fund
	2011			2010			2011			2010			2011			2010			2011			2010
*Operations*
Net investment income (loss)	$	6,898		$	4,305		$	467		$	468		$	4,379		$	8,051		$	1,262		$	1,915
Net realized gain (loss) on investments and foreign currency transactions		134,220			245,341			5,725			33,656			1,281			2,212			37			(60	)
Change in net unrealized appreciation (depreciation) on investments and foreign currency transactions		(162,179	)		13,556			(8,073	)		(16,315	)		258			3,290			683			468

Net increase (decrease) in net assets resulting from operations		(21,061	)		263,202			(1,881	)		17,809			5,918			13,553			1,982			2,323
*Distributions to shareholders from*
Net investment income		—			(13,461	)		—			(255	)		(4,768	)		(8,566	)		(1,972	)		(2,958	)
Net realized gain		—			—			—			(505	)		—			(494	)		—			—

		—			(13,461	)		—			(760	)		(4,768	)		(9,060	)		(1,972	)		(2,958	)
*Capital stock transactions*
Net proceeds from sale of shares		125,492			357,761			17,588			14,224			51,086			90,709			69,555			149,882
Shares issued in reinvestment of income dividends and capital gain distributions		—			12,072			—			681			3,450			6,013			1,574			2,297
Less cost of shares redeemed		(475,385	)		(407,291	)		(10,206	)		(52,189	)		(44,654	)		(55,783	)		(68,574	)		(103,208	)

Net increase (decrease) in net assets resulting from capital share transactions		(349,893	)		(37,458	)		7,382			(37,284	)		9,882			40,939			2,555			48,971

Increase (decrease) in net assets		(370,954	)		212,283			5,501			(20,235	)		11,032			45,432			2,565			48,336
Net assets
Beginning of year	$	1,250,543		$	1,038,260		$	94,901		$	115,136		$	192,776		$	147,344		$	143,470		$	95,134

End of year	$	879,589		$	1,250,543		$	100,402		$	94,901		$	203,808		$	192,776		$	146,035		$	143,470

Accumulated net investment income (loss) at the end of the year	$	(5,429	)	$	(12,327	)	$	336		$	(131	)	$	(388	)	$	1		$	(710	)	$	—

See accompanying Notes to Financial Statements.

48 Semi-Annual Report

June 30, 2011

Notes to Financial Statements

(1) Significant Accounting Policies

(a) Description of the Fund

The Fund is a diversified mutual fund registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company. The number of shares authorized for this Fund is unlimited. The Fund currently consists of the following nineteen portfolios (the “Portfolios”), each with its own investment objective and policies.

Equity Portfolios

International Equity Portfolios

Growth

Large Cap Growth

Small Cap Growth

Mid Cap Growth

Small-Mid Cap Growth

Small Cap Value

Mid Cap Value

Global Equity Portfolio

Global Growth

International Growth

International Equity

Institutional International Growth

Institutional International Equity

International Small Cap Growth

Emerging Markets Growth

Emerging Leaders Growth

Fixed-Income Portfolios

Bond

Income

Low Duration

Money Market Portfolio

Ready Reserves

The investment objectives of the Portfolios are as follows:


Equity		Long-term capital appreciation.
Global Equity		Long-term capital appreciation.
International Equity		Long-term capital appreciation.
Fixed-Income		High level of current income with relative stability of principal. (Maximize total return—Low Duration)
Money Market		Current income, a stable share price and daily liquidity.

The Institutional International Growth Portfolio, the Institutional International Equity Portfolio and the Institutional Share Classes of the International Small Cap Growth Portfolio, the Emerging Markets Growth Portfolio, the Emerging Leaders Growth Portfolio, Bond Portfolio, and the Low Duration Portfolio are the only Portfolios covered in this report.

(b) Share Classes

Three different classes of shares of the International Small Cap Growth Fund, Emerging Markets Growth Fund, Emerging Leaders Growth Fund, Bond Fund and the Low Duration Fund currently exist: N, I and Institutional. This report includes financial information for only the Institutional Class. The Institutional share class is sold to institutional investors, including but not limited to employee benefit plans, endowments, foundations, trusts and corporations, who are able to meet the Fund’s high minimum investment requirement. The minimum initial investment required is $5 million.

Investment income realized and unrealized gains and losses, and certain Portfolio 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 Portfolios have equal rights with respect to voting subject to class specific arrangements.

June 30, 2011

William Blair Funds 49

(c) Investment Valuation

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 latest bid price. The Board of Trustees has determined that the passage of time between when the foreign exchanges or markets close and when the Portfolios 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 Portfolios may use an independent pricing service to fair value the security as of the close of regular trading on the New York Stock Exchange. As a result, a Portfolio’s value for a security may be different from the last sale price (or the latest bid price).

Other securities, and all other assets, including securities for which a market price is not available or is deemed unreliable, (e.g., securities affected by unusual or extraordinary events, such as natural disasters or securities affected by market or economic events, such as bankruptcy filings), or the value of which is affected by a significant valuation event, are valued at a fair value as determined in good faith by, or under the direction of, the Board of Trustees and in accordance with the Trust’s valuation procedures. The value of fair valued securities may be different from the last sale price (or the latest bid price), and there is no guarantee that a fair valued security will be sold at the price at which a Portfolio is carrying the security.

Investments in other funds are valued at the underlying fund’s net asset value on the date of valuation. As of June 30, 2011, there were securities held in the Institutional International Growth, International Small Cap Growth, Emerging Markets Growth and Bond Portfolios requiring fair valuation pursuant to the Funds’ Valuation Procedures.

(d) Investment income and transactions

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

Interest income is recorded on an accrual basis, adjusted for amortization of premium or discount. Variable rate bonds and floating rate notes earn interest at coupon rates that fluctuate at specific time intervals. The interest rate shown on the Portfolio of Investments for the Bond Fund and Low Duration Fund were the rates in effect on June 30, 2011. Put bonds may be redeemed at the discretion of the holder on specified dates prior to maturity.

Premiums and discounts are accreted and amortized on a straight-line basis for short-term investments and on an effective interest method for long-term investments.

Paydown gains and losses on mortgage and asset-backed securities are treated as an adjustment to interest income. For the period ended June 30, 2011, the Bond and Low Duration Portfolios recognized an increase of interest income and a decrease of net realized loss of $(390) and $(709), respectively (in thousands). This reclassification had no effect on the net asset value or the net assets of the Portfolios.

50 Semi-Annual Report

June 30, 2011

Awards from class action litigation may be recorded as a reduction of cost. If the Portfolios no longer own the applicable securities, the proceeds are recorded as realized gains.

(e) Share Valuation and Dividends to Shareholders

Shares are sold and redeemed on a continuous basis at net asset value. The net asset value per share is determined by dividing the Portfolio’s net assets by the number of shares outstanding as of the close of regular trading on the New York Stock Exchange, which is generally 4:00 p.m. Eastern time, on each day the Exchange is open.

Dividends from net investment income, if any, are declared at least annually for the Institutional International Growth, Institutional International Equity, International Small Cap Growth, Emerging Markets Growth and Emerging Leaders Growth Portfolio. Dividends from the Bond and Low Duration Portfolio are declared daily and paid monthly. Dividends payable to shareholders are recorded on the ex-dividend date.

(f) Foreign Currency Translation and Foreign Currency Forward Contracts

The Portfolios (excluding the Bond Portfolio and the Low Duration Portfolio) 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, forward open foreign currency contracts, and cash denominated in foreign currencies are translated into U.S. dollars using a spot market rate of exchange as of the time of the determination of each Fund’s net asset value, typically 4:00 p.m. Eastern time on days when there is regular trading on the New York Stock Exchange (the “Exchange”). Payables and receivables for securities transactions, dividends, interest income and tax reclaims are translated into U.S. dollars using a spot market rate of exchange as of 4:00 p.m. Eastern time. Settlement of purchases and sales and dividend and interest receipts are translated into U.S. dollars using a spot market rate of exchange as of 11:00 a.m. Eastern time.

(g) Income Taxes

The Institutional International Growth, Institutional International Equity, International Small Cap Growth, Emerging Markets Growth, and Emerging Leaders Growth Portfolios may be subject to a tax imposed on net realized gains on securities of certain foreign countries.

The statute of limitations on the Portfolios’ tax returns for each of the tax years in the four year period ended December 31, 2010 remains open and the returns are subject to examination.

June 30, 2011

William Blair Funds 51

The Portfolios have elected to mark-to-market their investments in Passive Foreign Investment Companies (“PFICs”) for federal income tax purposes. The Portfolios also treat the deferred loss associated with current and prior year wash sales as an adjustment to the cost of investments for tax purposes. The cost of investments for federal income tax purposes and related gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) at June 30, 2011 were as follows (in thousands):


Portfolio	Cost of Investments		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Appreciation/ Depreciation
Institutional International Growth		$1,444,706	$	283,899	$	28,614	$	255,285
Institutional International Equity		213,753		51,600		2,156		49,444
International Small Cap Growth		641,583		124,962		8,645		116,317
Emerging Markets Growth		753,870		127,720		12,433		115,287
Emerging Leaders Growth		89,549		9,746		853		8,893
Bond		193,902		10,501		440		10,061
Low Duration		148,004		918		335		583

The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal income tax regulations that may differ from U.S. generally accepted accounting principles. As a result, net investment income or loss and net realized gain or loss for a reporting period may differ from the amount distributed during such period. In addition, the Portfolios may periodically record reclassifications among certain capital accounts to reflect differences between financial reporting and income tax basis distributions. The reclassifications were reported in order to reflect the tax treatment for certain permanent differences that exist between income tax regulations and U.S. generally accepted accounting principles. The reclassifications generally relate to Section 988 currency gains and losses, PFIC gains and losses and redemptions in-kind. These reclassifications have no impact on the net asset values of the Portfolios. Accordingly, at December 31, 2010 (the Funds’ most recent fiscal year end), the following reclassifications were recorded (in thousands):


Portfolio	Accumulated Net Investment Income (Loss)			Accumulated Net Realized Gain/(Loss)			Capital Paid in Excess of Par Value
Institutional International Growth	$	17,554		$	(17,554	)	$	-
Institutional International Equity		475			(475	)		-
International Small Cap Growth		(849	)		849			-
Emerging Markets Growth		4,413			(33,541	)		29,128
Emerging Leaders Growth		(47	)		51			(4	)
Bond		516			(516	)		-
Low Duration		1,043			(1,043	)		-


	Distributions Paid in 2010						Distributions Paid in 2009
Portfolio	Ordinary Income		Long-Term Capital Gains		Total Distributions		Ordinary Income		Long-Term Capital Gains		Total Distributions
Institutional International Growth		$35,383	$	-		$35,383		$18,261	$	-		$18,261
Institutional International Equity		4,059		-		4,059		2,719		-		2,719
International Small Cap Growth		2,781		-		2,781		778		-		778
Emerging Markets Growth		13,461		-		13,461		11,127		-		11,127
Emerging Leaders Growth		255		505		760		1,588		-		1,588
Bond		8,566		494		9,060		6,213		-		6,213
Low Duration		2,958		-		2,958		86		-		86

As of December 31, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):


Portfolio	Undistributed Ordinary Income		Accumulated Capital and Other Losses			Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ Depreciation
Institutional International Growth	$	1,998	$	(270,900	)	$	-	$	330,485
Institutional International Equity		23		(155,726	)		-		64,988
International Small Cap Growth		5,932		(113,021	)		-		126,190
Emerging Markets Growth		-		(5,861	)		-		261,554

52 Semi-Annual Report

June 30, 2011


Portfolio	Undistributed Ordinary Income		Accumulated Capital and Other Losses			Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ Depreciation
Emerging Leaders Growth		987		(14	)		539		16,644
Bond		2		-			236		9,803
Low Duration		-		(1,104	)		-		(100	)

As of December 31, 2010, the Portfolios have unused capital loss carry forwards available for federal income tax purposes to be applied against future gains, if any. If not applied, the carryforward will expire as follows (in thousands):


Portfolio	2011		2012		2013		2014		2015		2016		2017		2018		Total
Institutional International Growth	$	-	$	-	$	-	$	-	$	-	$	-	$	270,881	$	-	$	270,881
Institutional International Equity		-		-		-		-		-		42,759		113,087		-		155,846
International Small Cap Growth		-		-		-		-		-		26,723		86,330		-		113,053
Emerging Markets Growth		-		-		-		-		-		-		5,572		-		5,572
Emerging Leaders Growth		-		-		-		-		-		-		-		-		-
Bond		-		-		-		-		-		-		-		-		-
Low Duration		-		-		-		-		-		-		-		955		955


Portfolio	Capital Amount		Currency Amount
Institutional International Growth	$	-	$	-
Institutional International Equity		-		-
International Small Cap Growth		-		-
Emerging Markets Growth		-		324
Emerging Leaders Growth		-		-
Bond		-		-
Low Duration		149		-

(h) Repurchase Agreements

In a repurchase agreement, a Portfolio buys a security at one price and at the time of sale, the seller agrees to repurchase the obligation at a mutually agreed upon time and price (usually within seven days). The repurchase agreement thereby determines the yield during the purchaser’s holding period, while the seller’s obligation to repurchase is secured by the value of the underlying security. William Blair & Company, L.L.C. (the “Advisor”) will monitor, on an ongoing basis, the value of the underlying securities to ensure that the value always equals or exceeds the repurchase price plus accrued interest. Repurchase agreements could involve certain risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon a Portfolio’s ability to dispose of the underlying securities. The risk to a Portfolio 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 Portfolio is entitled to sell the underlying collateral. The loss, if any, to a Portfolio 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 Portfolio may be delayed or limited. Although no definitive creditworthiness criteria are used, the Advisor reviews the creditworthiness of the banks and non-bank dealers with which a Portfolio enters into repurchase agreements to evaluate those risks. A Portfolio may, for tax purposes, deem repurchase agreements collateralized by U.S. Government securities to be investments in U.S. Government securities.

(i) Use of Estimates

June 30, 2011

William Blair Funds 53

(j) Fair Value Measurements

The Portfolios are subject to ASC 820, Fair Value measurement and Disclosures, formally known as SFAS (Statement of Financial Accounting Standards) No. 157, “Fair Value Measurements”. In accordance with ASC 820, “fair value” is defined as the price that a Portfolio 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 Portfolio’s investments. ASC 820 establishes a three-tier hierarchy of inputs to classify fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

•

Level 1—Quoted prices in active markets for an identical security.

•

Level 2—Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. In addition, other observable inputs such as foreign exchange rates, benchmark securities indices and foreign futures contracts may be utilized in the valuation of certain foreign securities when significant events occur between the last sale on the foreign securities exchange and the time the net asset value of the Portfolio is calculated.

•

Any transfers between Level 1 and Level 2 are disclosed, effective beginning of the period, in the tables below with the reasons for the transfers disclosed in a note to the tables, if applicable.

At June 30, 2011, the Portfolios held no other financial instruments, such as options or futures, that required fair valuation.

As of June 30, 2011, the hierarchical input levels of securities in each Portfolio, segregated by security class, are as follows (in thousands):


	Institutional International Growth		Institutional International Equity		International Small Cap Growth		Emerging Markets Growth		Emerging Leaders Growth
Investments in securities
Level 1—Quoted prices
Common Stocks	$	1,659,617	$	249,604	$	736,157	$	840,987	$	94,136
Preferred Stocks		—		2,987		—		27,098		4,126
Rights		—		—		—		—		—
Exchange traded funds		14,044		—		—		—		—
Level 2—Other significant observable inputs
Convertible Bonds		620		—		632		1,055		—
Short-Term Investments		24,274		10,625		21,114		—		174
Level 3—Significant unobservable inputs
None		—		—		—		—		—

Total investments in securities	$	1,698,555	$	263,216	$	757,903	$	869,140	$	98,436

Other financial instruments—Assets
Level 2—Other significant observable inputs
Forward foreign currency contracts	$	2,148	$	—	$	—	$	—	$	—

Other financial instruments—Liabilities
Level 2—Other significant observable inputs
Forward foreign currency contracts	$	714	$	22	$	30	$	—	$	—

54 Semi-Annual Report

June 30, 2011


	Bond		Low Duration Fund
Investments in securities
Level 1—Quoted Prices
None	$	—	$	—
Level 2—Other significant observable inputs
US Government and Agency Bonds		99,717		68,906
Corporate Bonds		92,816		18,858
Asset Backed Bonds		8,995		57,580
Short-Term Investments		2,256		3,243
Level 3—Significant unobservable inputs
Asset Backed Bonds		179		—

Total investments in securities	$	203,963	$	148,587

Level 1 Common Stocks are exchange-traded securities with a quoted price. See Portfolio of Investments for Sector Classification.

The following is a reconciliation of Level 3 securities for which significant unobservable inputs were used to determine fair value:

Balance

January 1, 2011

(Sales)

Purchases

Transfers
to

Level 3

Transfers
(from)
Level 3

Change in
Unrealized

Gain (Loss)

Realized

Gain (Loss)

Balance
June 30, 2011

Bond

170

—

179

The fair value estimate for the Level 3 security in the Bond Portfolio was determined in good faith by the Pricing Committee in consultation with the Valuation Committee, pursuant to the Valuation Procedures adopted by the Board of Trustees. There were various factors considered in reaching this fair value determination, including, but not limited to, the following: the type of security, the extent of public trading of the security, information obtained from a broker-dealer for the security, analysis of the company’s performance, market trends that influence its performance and the potential for an adverse outcome in pending litigation. At June 30, 2011, this security represented 0.09%, of the net assets of the Bond Portfolio. The change in unrealized gain (loss) related to the security held at June 30, 2011 was $9, in thousands, and is included in the change in unrealized appreciation (depreciation) of investments on the Statement of Operations.

The First Plus Home Loan Trust bond held in the Bond Portfolio transferred from Level 2 to Level 3 during the period due to the lack of significant other observable inputs.

(k) Redemptions In- Kind

In accordance with the Funds’ prospectus, the Portfolios may distribute portfolio securities rather than cash as payment for a redemption of fund shares (in-kind redemption). For financial reporting purposes, the Portfolio recognizes a gain or loss on the transfer of securities depending on the market value of those securities on the date of redemption. Gains and losses realized on in-kind redemptions are not recognized for tax purposes and are reclassified from undistributed realized gain (loss) to paid-in capital. During the period ended June 30, 2011, the Emerging Markets Growth Fund transferred in-kind (in thousands) $74,711 for a realized gain of $32,340.

(2) Accounting Pronouncement and Regulations

June 30, 2011

William Blair Funds 55

both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 modifies the criteria for determining effective control of transferred assets and as a result certain agreements may not be accounted for as secured borrowings. ASU 2011-03 is effective prospectively for new transfers and existing transitions that are modified in the first interim or annual period beginning on or after December 15, 2011. At this time, management is evaluating the implication of this change and its impact on the financial statements has not been determined.

(3) Transactions with Affiliates

(a) Management and Expense Limitation Agreements

Each Portfolio has a management agreement with the “Advisor” for investment advisory, clerical, bookkeeping and administrative services. Each Portfolio pays the Advisor an annual fee, payable monthly, based on a specified percentage of its average daily net assets. A Summary of the annual rates expressed as a percentage of average daily net assets is as follows:


International Portfolios:		Fixed-Income Portfolios
Institutional International Growth:		Bond	0.30%
First $500 million	1.00%	Low Duration	0.35%
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%
Institutional International Equity:
First $500 million	1.000%
Next $500 million	0.950%
In excess of $1 billion	0.900%
International Small Cap Growth	1.00%
Emerging Markets Growth	1.10%
Emerging Leaders	1.10%

All of the Portfolios, except Institutional International Growth Fund, have also entered into Expense Limitation Agreements with the Advisor. Under the terms of these agreements, the Advisor will waive its management fee and/or reimburse the Portfolio for expenses in excess of the agreed upon rate. The amount the Advisor owes a Portfolio as of the report date is recorded as the Receivable from Advisor on the Statement of Assets and Liabilities. The Advisor reimburses the Portfolios on an annual basis. Under the terms of these Agreements, the Advisor has agreed to waive its advisory fees and/or absorb other operating expenses through April 30, 2012, if total expenses of the Portfolios exceed the following rates (as a percentage of average daily net assets):


Portfolio	Effective May 1, 2011 through April 30, 2012			Effective May 1, 2010 through April 30, 2011
Institutional International Equity		1.10	%		1.10	%
International Small Cap Growth		1.25	%		1.25	%
Emerging Markets Growth		1.30	%		1.30	%
Emerging Leaders Growth		1.25	%		1.25	%
Bond		0.35	%		0.35	%
Low Duration		0.40	%		0.40	%

56 Semi-Annual Report

June 30, 2011

For a period of three years subsequent to the Commencement of Operations of the Portfolio, the Advisor is entitled to reimbursement from the Emerging Leaders Growth and Low Duration Portfolios for previously waived fees and expenses to the extent the overall expense ratio remains below the percentages indicated. The total amount available for recapture at June 30, 2011 is $144 (in thousands) for the Low Duration Bond Portfolio. As a result, the total expense ratio for a Portfolio during the period the agreement is in effect will not fall below the percentage indicated.

For the period ended June 30, 2011, the fees incurred by the Portfolio and related fee waivers and/or reimbursements were as follows (in thousands):


Portfolio	Fund Level Waiver		Class Specific Waiver		Total Waiver
Emerging Leaders Growth	$	70	$	—	$	70
Bond		48		7		55
Low Duration		31		1		32

(4) Investment Transactions

Investment transactions, excluding money market instruments, for the period ended June 30, 2011 were as follows (in thousands):


Portfolio	Purchases		Sales
Institutional International Growth	$	975,834	$	(1,158,684	)
Institutional International Equity		117,210		(160,580	)
International Small Cap Growth		372,888		(304,131	)
Emerging Markets Growth		571,199		(879,959	)
Emerging Leaders Growth		105,072		(98,650	)
Bond		52,814		(40,488	)
Low Duration		59,628		(50,537	)

(5) Forward Foreign Currency Contracts

The Portfolios (excluding the Bond and Low Duration Portfolios) from time to time may enter into forward foreign currency contracts with the Fund’s custodian and other counterparties in an attempt to hedge against a decline in the value of foreign currency against the U.S. dollar. The Portfolios bear the market risk that arises from changes in foreign currency rates and bear the credit risk if the counterparty fails to perform under the contract.

For the period ended June 30, 2011, the Institutional International Growth, Institutional International Equity, and International Small Cap Growth Portfolios engaged in forward foreign currency contracts with notional volume (in thousands) of $2,997,201, $115,039 and $222,182, respectively.

The following tables present the value of forward foreign currency contracts as of June 30, 2011 and their respective location on the Statement of Assets and Liabilities (values in thousands):

Assets

Liabilities

Portfolio

Statement of Assets and
Liabilities Location

Value

Statement of Assets and
Liabilities Location

Value

Institutional International Growth

Unrealized appreciation on foreign
forward currency contracts

2,148

Unrealized depreciation on foreign
forward currency contracts

714

Institutional International Equity

Unrealized appreciation on foreign
forward currency contracts

—

Unrealized depreciation on foreign
forward currency contracts

Institutional International Small Cap Growth

Unrealized appreciation on foreign
forward currency contracts

—

Unrealized depreciation on foreign
forward currency contracts

June 30, 2011

William Blair Funds 57

The effect of forward contracts on the Statements of Operations for the period ended June 30, 2011 (values in thousands) are as follows:


Realized gain (loss) recognized in foreign currency transactions
Portfolio	Value
Institutional International Growth	$	(12,354	)
Institutional International Equity		(271	)
Institutional International Small Cap Growth		2,660

Change in unrealized gain (loss) recognized in foreign currency translations
Portfolio	Value
Institutional International Growth	$	1,434
Institutional International Equity		205
Institutional International Small Cap Growth		(30	)

The following table presents open forward foreign currency contracts as of June 30, 2011 (values in thousands):


Institutional International Growth
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
State Street Bank and Trust	Canadian Dollar		9/22/2011		23,442		24,258		(379	)
Northern Trust Corporation	Swiss Franc		9/20/2011		19,393		23,078		(5	)
State Street Bank and Trust	European Monetary Unit		9/19/2011		80,793		116,912		(330	)
Morgan Stanley and Company	Great British Pound		9/23/2011		68,534		109,887		2,019
Bank of New York	Japanese Yen		9/21/2011		10,709,033		133,081		129

Institutional International Equity
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
Northern Trust Corporation	Japanese Yen		7/20/2011		670,013		8,323		(22	)

Institutional International Small Cap Growth
Counterparty	Short Contracts	Settlement Date		Local Currency		Current Value		Unrealized Gain/(Loss)
Northern Trust Corporation	Swiss Franc		9/20/2011		2,402		2,858		(9	)
Bank of New York	Japanese Yen		9/21/2011		2,314,926		28,768		(21	)

58 Semi-Annual Report

June 30, 2011

(6) Fund Share Transactions

The following table summarizes the activity in capital shares of each Portfolio (in thousands):


	Dollars
	For the period ended June 30, 2011
Portfolio	Sales		Reinvested Distributions		Redemptions		Net change in Net Assets relating to fund share activity
Institutional International Growth	$	182,240	$	—	$	359,688	$	(177,448	)
Institutional International Equity		10,029		—		50,635		(40,606	)
International Small Cap Growth		33,031		—		20,592		12,439
Emerging Markets Growth		109,094		—		434,669		(325,575	)
Emerging Leaders Growth		—		—		8,633		(8,633	)
Bond		29,858		875		18,052		12,681
Low Duration		43,888		820		23,037		21,671

	Dollars
	For the year ended December 31, 2010
Portfolio	Sales		Reinvested Distributions		Redemptions		Net change in Net Assets relating to fund share activity
Institutional International Growth	$	585,127	$	33,238	$	379,024	$	239,341
Institutional International Equity		31,823		3,868		139,231		(103,540	)
International Small Cap Growth		76,119		1,301		20,893		56,527
Emerging Markets Growth		299,213		10,490		331,182		(21,479	)
Emerging Leaders Growth		2,611		602		45,497		(42,284	)
Bond		23,201		1,159		620		23,740
Low Duration		65,503		1,032		31,723		34,812

	Shares
	For the period ended June 30, 2011
Portfolio	Sales		Reinvested Distributions		Redemptions		Net change in Net Assets relating to fund share activity
Institutional International Growth		12,592		—		24,731		(12,139	)
Institutional International Equity		940		—		4,651		(3,711	)
International Small Cap Growth		2,454		—		1,472		982
Emerging Markets Growth		7,041		—		28,470		(21,429	)
Emerging Leaders Growth		—		—		867		(867	)
Bond		2,809		82		1,698		1,193
Low Duration		4,438		83		2,326		2,195

	Shares
	For the year ended December 31, 2010
Portfolio	Sales		Reinvested Distributions		Redemptions		Net change in Net Assets relating to fund share activity
Institutional International Growth		45,848		2,351		29,748		18,451
Institutional International Equity		3,407		365		13,836		(10,064	)
International Small Cap Growth		6,879		100		1,893		5,086
Emerging Markets Growth		22,585		677		23,038		224
Emerging Leaders Growth		271		60		5,354		(5,023	)
Bond		2,199		109		58		2,250
Low Duration		6,561		104		3,179		3,486

June 30, 2011

William Blair Funds 59

Financial Highlights

Institutional International Growth Fund


	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year		$14.37	$	12.20	$	8.66	$	19.20		$	19.39	$	18.11
Income (loss) from investment operations:
Net investment income (loss)(a)		0.16		0.14		0.10		0.25			0.15		0.11
Net realized and unrealized gain (loss) on investments		0.15		2.31		3.61		(10.24	)		3.30		4.09

Total from investment operations		0.31		2.45		3.71		(9.99	)		3.45		4.20
Less distributions from:
Net investment income		—		0.28		0.17		—			0.35		0.38
Net realized gain		—		—		—		0.55			3.29		2.54

Total distributions		—		0.28		0.17		0.55			3.64		2.92

Net asset value, end of year		$14.68	$	14.37	$	12.20	$	8.66		$	19.20	$	19.39

Total Return (%)*		2.16		20.10		42.83		(51.99	)		18.49		23.45
Ratios to average daily net assets (%):**
Expenses		0.98		0.99		1.01		0.98			1.02		1.03
Net investment income (loss)		2.18		1.12		0.95		1.68			0.74		0.54


	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008		2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	1,747,828	$	1,886,217	$	1,375,848	$	998,266	$	2,145,312	$	1,875,341
Portfolio turnover rate (%)*		55		99		125		86		61		74

(a)

Excludes $0.09, $0.05, $(0.10), $0.06, and $0.29 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007, and 2006, respectively.

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

Rates are annualized for periods that are less than a year.

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

60 Semi-Annual Report

June 30, 2011

Financial Highlights

Institutional International Equity Fund


	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	10.78	$	9.84	$	7.44	$	15.03		$	14.27	$	12.04
Income (loss) from investment operations:
Net investment income (loss)(a)		0.12		0.10		0.09		0.15			0.13		0.07
Net realized and unrealized gain (loss) on investments		0.27		0.99		2.38		(7.60	)		2.42		2.37

Total from investment operations		0.39		1.09		2.47		(7.45	)		2.55		2.44
Less distributions from:
Net investment income		—		0.15		0.07		—			0.22		0.16
Net realized gain		—		—		—		0.14			1.57		0.05

Total distributions		—		0.15		0.07		0.14			1.79		0.21

Net asset value, end of year	$	11.17	$	10.78	$	9.84	$	7.44		$	15.03	$	14.27

Total Return (%)*		3.62		11.12		33.27		(49.57	)		18.36		20.22
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.08		1.07		1.09		1.05			1.09		1.10
Expenses, before waivers and reimbursements		1.08		1.07		1.09		1.05			1.06		1.12
Net investment income (loss), net of waivers and reimbursements		2.11		0.97		1.04		1.26			0.86		0.50
Net investment income (loss), before waivers and reimbursements		2.11		0.97		1.04		1.26			0.89		0.48
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	260,525	$	291,468	$	365,271	$	—		$	618,179	$	598,375
Portfolio turnover rate (%)*		41		73		78		91			66		79

(a)

Excludes $0.04, $0.00, $0.00, $(0.07), and $0.01 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007 and 2006 respectively.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 61

Financial Highlights

International Small Cap Growth Fund


			Institutional Class Shares
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Net asset value, beginning of year	$	13.24	$	10.53	$	6.69	$	14.04		$	13.43	$	11.16
Income (loss) from investment operations:
Net investment income (loss)(a)		0.10		0.09		0.04		0.03			0.05		(0.01	)
Net realized and unrealized gain (loss) on investments		0.67		2.69		3.83		(7.26	)		1.72		2.34

Total from investment operations		0.77		2.78		3.87		(7.23	)		1.77		2.33
Less distributions from:
Net investment income		—		0.07		0.03		—			0.12		0.01
Net realized gain		—		—		—		0.12			1.04		0.05

Total distributions		—		0.07		0.03		0.12			1.16		0.06

Net asset value, end of year	$	14.01	$	13.24	$	10.53	$	6.69		$	14.04	$	13.43

Total Return (%)*		5.82		26.40		57.84		(51.53	)		13.53		20.86
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.07		1.08		1.13		1.14			1.14		1.25
Expenses, before waivers and reimbursements		1.07		1.08		1.13		1.11			1.14		1.31
Net investment income (loss), net of waivers and reimbursements		1.50		0.77		0.48		0.28			0.32		(0.12	)
Net investment income (loss), before waivers and reimbursements		1.50		0.77		0.48		0.32			0.32		(0.18	)
	Period Ended June 30,		Years Ended December 31,
	2011		2010		2009		2008			2007		2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	768,599	$	646,951	$	390,851	$	291,988		$	401,459	$	231,969
Portfolio turnover rate (%)*		44		85		136		78			88		109

(a)

Excludes $0.15, $0.01, $(0.02), $0.05, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007, and 2006, respectively.

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

Rates are annualized for periods that are less than a year.

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

62 Semi-Annual Report

June 30, 2011

Financial Highlights

Emerging Markets Growth Fund


				Institutional Class Shares
	Period Ended June 30,			Years Ended December 31,
	2011			2010		2009		2008			2007			2006
Net asset value, beginning of year	$	15.96		$	13.03	$	7.56	$	22.07		$	19.54		$	14.20
Income (loss) from investment operations:
Net investment income (loss) (a)		0.09			0.06		0.06		0.17			(0.01	)		0.02
Net realized and unrealized gain (loss) on investments		(0.16	)		3.05		5.55		(13.74	)		7.27			5.44

Total from investment operations		(0.07	)		3.11		5.61		(13.57	)		7.26			5.46
Less distributions from:
Net investment income		—			0.18		0.14		—			0.19			0.01
Net realized gain		—			—		—		0.94			4.54			0.11

Total distributions		—			0.18		0.14		0.94			4.73			0.12

Net asset value, end of year	$	15.89		$	15.96	$	13.03	$	7.56		$	22.07		$	19.54

Total Return (%)*		(0.44	)		23.91		74.33		(61.51	)		38.21			38.49
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.17			1.17		1.22		1.22			1.25			1.25
Expenses, before waivers and reimbursements		1.17			1.17		1.22		1.20			1.25			1.32
Net investment income (loss), net of waivers and reimbursements		1.22			0.43		0.54		1.08			(0.05	)		0.09
Net investment income (loss), before waivers and reimbursements		1.22			0.43		0.54		1.10			(0.05	)		0.02

	Period Ended June 30,			Years Ended December 31,
	2011			2010		2009		2008			2007			2006
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	879,589		$	1,250,543	$	1,038,260	$	385,588		$	1,165,854		$	813,649
Portfolio turnover rate (%)*		53			121		113		118			100			113

(a)

Excludes $0.11,$0.15, $(0.09), $0.21, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, 2008, 2007 and 2006 respectively.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 63

Financial Highlights

Emerging Leaders Growth Fund


				Institutional Class Shares
	Period Ended June 30,			Periods Ended December 31,
	2011			2010		2009		2008(a)
Net asset value, beginning of year	$	10.35		$	8.43	$	4.78	$	10.00
Income (loss) from investment operations:
Net investment income (loss) (c)		0.05			0.04		0.04		0.04
Net realized and unrealized gain (loss) on investments		(0.29	)		1.97		3.73		(5.26	)

Total from investment operations		(0.24	)		2.01		3.77		(5.22	)
Less distributions from:
Net investment income		—			0.03		0.12		0.00	^
Net realized gain		—			0.06		—		—

Total distributions		—			0.09		0.12		0.00	^

Net asset value, end of year	$	10.11		$	10.35	$	8.43	$	4.78

Total Return (%)*		(2.32	)		23.84		78.93		(52.11	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		1.25			1.26		1.25		1.25
Expenses, before waivers and reimbursements		1.39			1.35		1.36		1.41
Net investment income (loss), net of waivers and reimbursements		0.97			0.50		0.58		0.70
Net investment income (loss), before waivers and reimbursements		0.83			0.83		0.47		0.54
	Period Ended June 30,			Periods Ended December 31,
	2011			2010		2009		2008(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	100,402		$	94,901	$	115,136	$	46,676
Portfolio turnover rate (%)*		102			176		176		151

(a)

For the period May 3, 2010 (Commencement of Operations) to December 31, 2010.

(c)

Excludes $0.96, $1.29, and $0.00 of PFIC mark to market which is treated as ordinary income for Federal tax purposes for the years 2010, 2009, and 2008 respectively.

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

Rates are annualized for periods that are less than a year.

Amount is less than $0.005 per share.

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

64 Semi-Annual Report

June 30, 2011

Financial Highlights

Bond Fund


			Institutional Class Shares
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009		2008			2007(a)
Net asset value, beginning of year	$	10.58	$	10.30	$	9.72	$	10.00		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.24		0.48		0.51		0.50			0.32
Net realized and unrealized gain (loss) on investments		0.07		0.34		0.58		(0.31	)		0.03

Total from investment operations		0.31		0.82		1.09		0.19			0.35
Less distributions from:
Net investment income		0.24		0.51		0.51		0.47			0.35
Net realized gain		—		0.03		—		—			0.00

Total distributions		0.24		0.54		0.51		0.47			0.35

Net asset value, end of year	$	10.65	$	10.58	$	10.30	$	9.72		$	10.00

Total Return (%)*		3.17		8.06		11.47		1.95			3.57
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.35		0.35		0.34		0.35			0.35
Expenses, before waivers and reimbursements		0.40		0.40		0.43		0.56			0.52
Net investment income (loss), net of waivers and reimbursements		4.56		4.54		5.07		5.04			5.09
Net investment income (loss), before waivers and reimbursements		4.51		4.49		4.98		4.83			4.92
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009		2008			2007(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	203,808	$	192,776	$	147,344	$	74,613		$	68,483
Portfolio turnover rate (%)*		17		25		29		52			38

(a)

For the period May 1, 2007 (Commencement of Operations) to December 31, 2007.

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

Rates are annualized for periods that are less than a year.

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

June 30, 2011

William Blair Funds 65

Financial Highlights

Low Duration Fund


			Institutional Class Shares
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009(a)
Net asset value, beginning of year	$	9.90	$	9.93	$	10.00
Income (loss) from investment operations:
Net investment income (loss)		0.09		0.16		0.01
Net realized and unrealized gain (loss) on investments		0.03		0.05		(0.07	)

Total from investment operations		0.12		0.21		(0.06	)
Less distributions from:
Net investment income		0.12		0.24		0.01
Net realized gain		—		—		—

Total distributions		0.12		0.24		0.01

Net asset value, end of year	$	9.90	$	9.90	$	9.93

Total Return (%)*		1.38		2.15		(0.58	)
Ratios to average daily net assets (%):**
Expenses, net of waivers and reimbursements		0.40		0.40		0.40
Expenses, before waivers and reimbursements		0.43		0.48		0.64
Net investment income (loss), net of waivers and reimbursements		1.80		1.61		1.54
Net investment income (loss), before waivers and reimbursements		1.77		1.53		1.30
	Period Ended June 30,		Periods Ended December 31,
	2011		2010		2009(a)
Supplemental data for all classes:
Net assets at end of year (in thousands)	$	146,035	$	143,470	$	95,134
Portfolio turnover rate (%)*		17		51		—

(a)

For the period December 1, 2009 (Commencement of Operations) to December 31, 2009.

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

Rates are annualized for periods that are less than a year.

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

66 Semi-Annual Report

June 30, 2011


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer
Interested Trustees
Michelle R. Seitz, 1965*	Chairperson of the Board of Trustees and President	Trustee since 2002; Chairperson since 2010 Since 2007	Principal, William Blair & Company, L.L.C.; Limited Partner, WB Holdings, L.P. (since November 2008); Member, WBC GP, L.L.P. (since November 2008)	19	Director, William Blair SI CAV

Richard W. Smirl, 1967	Trustee and Senior Vice President	Trustee since 2010 and Senior Vice President since 2007	Principal, William Blair & Company, L.L.C.	19	Director, William Blair SI CAV

Non-Interested Trustees
Ann P. McDermott, 1939	Trustee	Since 1996	Board member and officer for various civic and charitable organizations over the past thirty years; professional experience prior thereto, registered representative for New York Stock Exchange firm	19	Northwestern University, Women’s Board; Rush Presbyterian St. Luke’s Medical Center, Women’s Board; University of Chicago, Women’s Board; Visiting Nurses Association, Honorary Director

Phillip O. Peterson, 1944	Trustee	Since 2007	Retired; formerly, President, Strong Mutual Funds, 2004-2005; formerly, Partner, KPMG LLP	19	The Hartford Group of Mutual Funds (87 portfolios)

Lisa A. Pollina, 1965	Trustee	Since 2011	Senior Advisor to head of RBC Financial Group’s International Banking and Insurance division since 2010; formerly, Bank of America Corporation, Global Financial Institutions Executive from 2006-2008 and multiple Advisory from 2008-2010; prior thereto, Managing Partner, Bordeaux Capital from 2002-2006.	19	Darkstrand, high-speed fiber optic network provider (2009 to 2010); Jane Addams Hull House Association, Board of Trustees (2003 to 2009)

Donald J. Reaves, 1946	Trustee	Since 2004	Chancellor, Winston-Salem State University since 2007; formerly, Vice President for Administration and Chief Financial Officer, University of Chicago 2002-2007.	19	American Student Assistance Corp., guarantor of student loans; Amica Mutual Insurance Company

June 30, 2011

William Blair Funds 67

68 Semi-Annual Report

June 30, 2011


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee/Officer
Donald L. Seeley, 1944	Trustee	Since 2003	Retired; formerly, Director, Applied Investment Management Program, University of Arizona Department of Finance, prior there to, Vice Chairman and Chief Financial Officer, True North Communications, Inc., marketing communications and advertising firm	19	Warnaco Group, Inc., intimate apparel, sportswear, and swimwear manufacturer; Center for Furniture Craftsmanship (not-for-profit)

Thomas J. Skelly, 1951	Trustee	Since 2007	Advisory Board member for various U.S. companies; Director and Investment Committee Chairman of the US Accenture Foundation, Inc.; prior to 2005, Managing Partner of various divisions at Accenture	19	Mutual Trust Financial Group, provider of insurance and investment products; Board Member, First MetLife Investors Insurance Company, NY Chartered Company for Metropolitan Life Insurance
Officers
Michael P. Balkin, 1959	Senior Vice President	Since 2009	Principal, William Blair & Company, L.L.C.		N/A

	Vice President	2008-2009	Associate, William Blair & Company, L.L.C.; former Partner, Magnetar Capital

Karl W. Brewer, 1966	Senior Vice President	Since 2000	Principal, William Blair & Company, L.L.C.		N/A

David C. Fording, 1967	Senior Vice President	Since 2009	Principal, William Blair & Company, L.L.C.		N/A

	Vice President	2006-2009	Associate, William Blair & Company, L.L.C.; former Portfolio Manager, TIAA-CREF.

James S. Golan, 1961	Senior Vice President	Since 2005	Principal, William Blair & Company, L.L.C.		N/A

W. George Greig, 1952	Senior Vice President	Since 1996	Principal, William Blair & Company, L.L.C.		N/A

Michael A. Jancosek, 1959	Senior Vice President	Since 2004	Principal, William Blair & Company L.L.C.		N/A

John F. Jostrand, 1954	Senior Vice President	Since 1999	Principal, William Blair & Company, L.L.C.		N/A

Chad M. Kilmer, 1975	Senior Vice President	Since 2011	Associate, William Blair & Company, L.L.C.; former analyst and Portfolio		N/A

	Vice President	Since 2006	Manager U.S. Bancorp Asset Management.

Robert C. Lanphier, IV, 1956	Senior Vice President	Since 2003	Principal, William Blair & Company, L.L.C.		Chairman, AG. Med, Inc.


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Other Directorships Held by Trustee/Officer
Mark T. Leslie, 1967	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

	Vice President	2005-2008	Associate, William Blair & Company, L.L.C.

Matthew A. Litfin, 1972	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

Kenneth J. McAtamney 1966	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

Todd M. McClone, 1968	Senior Vice President	Since 2006	Principal, William Blair & Company, L.L.C.	N/A

	Vice President	2005-2006	Associate, William Blair & Company, L.L.C.	N/A

Tracy McCormick, 1954	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

David Merjan, 1960	Senior Vice President	Since 2008	Principal, William Blair & Company, L.L.C.	N/A

David S. Mitchell, 1960	Senior Vice President	Since 2004	Principal, William Blair & Company, L.L.C.	N/A

David P. Ricci, 1958	Senior Vice President	Since 2006	Principal, William Blair & Company, L.L.C.	N/A

Richard W. Smirl, 1967	Senior Vice President	Since 2004	Principal, William Blair & Company, L.L.C.	N/A

Jeffrey A. Urbina, 1955	Senior Vice President	Since 1998	Principal, William Blair & Company, L.L.C.	N/A

Christopher T. Vincent, 1956	Senior Vice President	Since 2004	Principal, William Blair & Company, L.L.C.	N/A

Kathleen M. Lynch, 1971	Vice President	Since 2010	Associate, William Blair & Company, L.L.C.	N/A

Paul J. Sularz, 1967	Vice President	Since 2009	Associate, William Blair & Company, L.L.C.; Vice President, J.P. Morgan Securities, Inc.	N/A

Walter R. Randall, Jr., 1960	Chief Compliance Officer and Assistant Secretary	Since 2009	Associate, William Blair & Company, L.L.C.; Associate Counsel and Chief Compliance Officer, Calamos Investments; Assistant General Counsel, American Century Investments.	N/A

Colette M. Garavalia, 1961	Treasurer	Since 2009	Associate, William Blair & Company, L.L.C.	N/A

	Secretary	2000-2009	Associate, William Blair & Company, L.L.C.;	N/A

June 30, 2011

William Blair Funds 69


Name and Year of Birth	Position(s) Held with Fund	Term of Office and Length of Time Served(1)	Principal Occupation(s) During Past 5 Years(2)	Other Directorships Held by Trustee/Officer
Andrew T. Pfau, 1970	Secretary	Since 2009	Associate, William Blair & Company, L.L.C.; Associate, Bell, Boyd & Lloyd, LLP; Associate, Sidley Austin LLP	N/A

John M. Raczek, 1970	Assistant Treasurer	Since 2010	Associate, William Blair & Company, L.L.C.; Manager, Calamos Investments

(1)

(2)

In November 2008, all principals of William Blair & Company, L.L.C. also became limited partners in WB Holdings, L.P.

70 Semi-Annual Report

June 30, 2011

Renewal of the Trust’s Management Agreement

On April 26, 2011, the Board of Trustees (the “Board”) of the William Blair Funds (the “Trust”), including the Trustees who are not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), approved the renewal for an additional one-year term of the Trust’s Management Agreement with William Blair & Company, L.L.C. (the “Advisor”), on behalf of each of the William Blair Global Growth Fund, the William Blair Institutional International Growth Fund, the William Blair Institutional International Equity Fund, the William Blair International Small Cap Growth Fund, the William Blair Emerging Markets Growth Fund, the William Blair Emerging Leaders Growth Fund, the William Blair Bond Fund and the William Blair Low Duration Fund (each, a “Fund” and collectively, the “Funds”). In deciding to approve the renewal of the Management Agreement, the Board did not identify any single factor or group of factors as all-important or controlling and considered all factors together.

Nature, Quality and Extent of Services. In evaluating the nature, quality and extent of the services provided by the Advisor to the Funds, the Board noted that the Advisor is a quality firm with a reputation for integrity and honesty that employs high quality people and has a long association with the Funds, in each case other than the Growth Fund, since the inception of the Funds. The Trustees believe that a long-term relationship with a capable, conscientious advisor is in the best interests of shareholders and that shareholders have invested in the Funds knowing that the Advisor managed the Funds and knowing the investment advisory fee. The Board considered biographical information about the Trust’s officers and the Funds’ portfolio managers, including information on the portfolio managers’ investments in the Funds. The Board also considered the administrative services performed by the Advisor, financial information regarding the Advisor, the Advisor’s execution quality and use of soft dollars, the compliance regime overseen by the Advisor, and the Advisor’s expense limitations in

June 30, 2011

William Blair Funds 71

place for certain Funds. The Board was also provided with information pertaining to the Advisor’s organizational structure and senior management. The Board noted that the Advisor pays the compensation of all of the officers and the interested Trustees of the Trust.

The Board reviewed information on the annualized total returns of each Fund for the one, three, five and ten year periods ended December 31, 2010, as applicable, along with annualized total return information for the Lipper performance peer universe of funds and one or more relevant securities indexes. The Lipper performance peer universe for each Fund included all funds with a similar investment style as classified by Lipper regardless of asset size or primary channel of distribution. With respect to the comparative performance information generally, the Board considered the Advisor’s statement that it is committed to managing each Fund consistently with the Fund’s stated investment strategies through all market environments and that, as a result, the Funds’ relative performance compared to the Lipper performance peer universe and relevant securities indexes from year to year will be affected by whether the market environment favors or disfavors the Advisor’s investment strategies. The Board also considered the Advisor’s statement that its investment strategies are intended to produce superior performance over the long term. The Trustees reviewed each Fund’s ranking in its Lipper performance peer universe during the applicable periods, and based on that review, requested and discussed with the Advisor additional information regarding the performance of the Institutional International Equity Fund, the Emerging Markets Growth Fund and the Low Duration Fund. With respect to the Institutional International Equity Fund, the Board noted that, except for 2008, the Fund had positive absolute performance for each full year since its inception and also considered the Advisor’s statement that the Fund’s lower allocations to emerging markets and small-cap securities relative to its peer funds had contributed to underperformance in recent periods. With respect to the Emerging Markets Growth Fund, the Board considered the Advisor’s statement that the Fund’s underperformance during the economic downturn in 2008 and 2009 continued to negatively impact the Fund’s three- and five-year rankings within its Lipper performance peer universe and noted that the Fund ranked in the 20th percentile of its Lipper performance peer universe over the most recent one-year period. With respect to the Low Duration Fund, the Board considered supplemental information presented by the Advisor comparing the Fund’s performance to the performance of a different peer group of funds that the Advisor believed to be more representative of the Fund’s investment style and portfolio characteristics, including the Fund’s average duration and average credit quality. The Board considered the Advisor’s statement that the Fund’s lower average duration and higher average credit quality as compared to the funds in its Lipper performance peer universe negatively impacted its comparative performance.

Based upon all relevant factors, the Board concluded that the nature, quality and extent of the services provided by the Advisor to each Fund were satisfactory.

Fees and Expenses. The Board reviewed each Fund’s advisory fee and expense ratio and reviewed information comparing the advisory fee and expense ratio to those of a Lipper expense peer group and Lipper expense peer universe for each Fund. The Lipper expense peer group for each Fund consisted of a group of funds with a similar investment style as classified by Lipper, distribution channel and asset size as the Fund. The Lipper expense peer universe for each Fund consisted of all funds with a similar investment style as classified by Lipper and distribution channel as the Fund. The Board considered that the Advisor had proposed to contractually limit total expenses for the Global Growth Fund, the Institutional International Equity Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Leaders Growth Fund, the Bond Fund and the Low Duration Fund. For each Fund, the Board also reviewed amounts charged by the Advisor to other pooled investment vehicles, including other registered funds for which the Advisor acts as a subadvisor, and the Advisor’s fee schedule for institutional separate accounts. With respect to other pooled investment vehicles and institutional separate accounts, the Board considered the Advisor’s statement that both the mix of services provided to the Funds and the additional regulatory responsibilities associated with sponsoring registered investment companies were greater as compared to the work involved for other pooled investment vehicles and separate accounts. In addition, the Board considered the Advisor’s statement that institutional separate accounts are distributed differently, operate under different investment and regulatory structures and have different business risks as compared to the Funds.

In considering the information, the Board noted that the advisory fees for the Global Growth Fund, the Institutional International Growth Fund, the International Small Cap Growth Fund, the Emerging Markets Growth Fund, the Emerging Leaders Growth Fund, the Bond Fund and the Low Duration Fund were below or within an acceptable range of the average advisory fees of their Lipper expense peer group. The Board also noted that the advisory fees for the Institutional International Equity Fund were above the average advisory fees of their Lipper expense peer group, but that such advisory fees were within an acceptable range of the average advisory fees of their Lipper expense peer group and consistent with reasonable expectations in light of the nature, quality and extent of services provided by the Advisor. On the basis of the information provided, the Board concluded that each Fund’s advisory fee, coupled with applicable expense limitations, was reasonable in light of the nature, quality and extent of services provided by the Advisor.

72 Semi-Annual Report

June 30, 2011

William Blair Funds 73

(unaudited)

Proxy Voting

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund 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

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, 2010:


Emerging Leaders Growth		Bond
$505,181		$493,757

The following table provides the percentage of the 2010 year-end distributions that qualify for the dividend received deduction, and the qualified dividend income percentage:


Portfolio	Dividend Received Deduction%			Qualified Dividend Income%
Institutional International Growth		0.00	%		80.38	%
Institutional International Equity		0.31	%		100.00	%
International Small Cap Growth		0.13	%		100.00	%
Emerging Markets Growth		0.16	%		83.93	%
Emerging Leaders Growth		0.00	%		100.00	%
Bond		0.00	%		0.00	%
Low Duration		0.00	%		0.00	%

In January 2011, you were notified on IRS Form 1099-Div or substitute 1099 DIV as to the Federal tax status of the distributions received by you in the calendar year 2010.

74 Semi-Annual Report

June 30, 2011

Useful Information About Your Report (unaudited)

Please refer to this information when reviewing the Expense Example for each Portfolio.

Expense Example

As a shareholder of a Portfolio, you incur ongoing costs, including management fees and other Portfolio expenses. The example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. To do so, compare the Portfolio’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, 2011 to June 30, 2011.

Actual Expenses

Hypothetical Example for Comparison Purposes

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. These fees are fully described in the prospectus. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative costs of owning different funds.

June 30, 2011

William Blair Funds 75

Fund Expenses; (unaudited)

The example below shows you the ongoing costs (in dollars) of investing in your fund and allows you to compare these costs with those of other mutual funds. Please refer to the previous page for a detailed explanation of the information presented in these charts.


Expense Example	Beginning Account Value 1/1/2011		Ending Account Value 6/30/2011		Expenses Paid During the Period(a)		Annualized Expense Ratio
Institutional International Growth Fund
Institutional Class—actual return	$	1,000.00	$	1,021.60	$	4.92		0.98	%
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,019.93	$	4.91		0.98
Institutional International Equity Fund
Class I-actual return	$	1,000.00	$	1,036.20	$	5.45		1.08
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,019.44	$	5.41		1.08
International Small Cap Growth Fund
Institutional Class—actual return	$	1,000.00	$	1,058.20	$	5.44		1.07
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,019.51	$	5.34		1.07
Emerging Markets Growth Fund
Institutional Class—actual return	$	1,000.00	$	995.60	$	5.81		1.17
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,018.97	$	5.88		1.17
Emerging Leaders Growth Fund
Institutional Class—actual return	$	1,000.00	$	976.80	$	6.13		1.25
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,018.60	$	6.26		1.25
Bond Fund
Institutional Class—actual return	$	1,000.00	$	1,031.70	$	1.75		0.35
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,023.07	$	1.74		0.35
Low Duration Fund
Institutional Class—actual return	$	1,000.00	$	1,013.80	$	1.97		0.40
Institutional Class—hypothetical 5% return	$	1,000.00	$	1,022.83	$	1.98		0.40

(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).

76 Semi-Annual Report

June 30, 2011

BOARD OF TRUSTEES

Ann P. McDermott

Director and Trustee

Profit and not-for-profit organizations

Phillip O. Peterson

Retired Partner, KPMG LLP

Lisa A. Pollina

Senior Advisor to RBC Financial Group-International Banking and Insurance Division.

Donald J. Reaves

Chancellor, Winston-Salem State University

Donald L. Seeley

Retired Adjunct Lecturer and Director, University of Arizona Department of Finance

Michelle R. Seitz, Chairperson and President

Principal, William Blair & Company, L.L.C.

Thomas J. Skelly

Retired Managing Partner, Accenture U.S.

Richard W. Smirl, Senior Vice President

Principal, William Blair & Company, L.L.C.

Officers

Michael P. Balkin, Senior Vice President

Karl W. Brewer, Senior Vice President

David C. Fording, Senior Vice President

James S. Golan, Senior Vice President

W. George Greig, Senior Vice President

Michael A. Jancosek, Senior Vice President

John F. Jostrand, Senior Vice President

Chad M. Kilmer, Senior Vice President

Robert C. Lanphier, IV, Senior Vice President

Mark T. Leslie, Senior Vice President

Matthew A. Litfin, Senior Vice President

Kenneth J. McAtamney, Senior Vice President

Todd M. McClone, Senior Vice President

Tracy McCormick, Senior Vice President

David Merjan, Senior Vice President

David S. Mitchell, Senior Vice President

David P. Ricci, Senior Vice President

Jeffrey A. Urbina, Senior Vice President

Christopher T. Vincent, Senior Vice President

Kathleen M. Lynch, Vice President

Paul J. Sularz, Vice President

Walter R. Randall, Jr., Chief Compliance Officer an Assistant Secretary

Colette M. Garavalia, Treasurer

Andrew T. Pfau, Secretary

John Raczek, Assistant Treasurer

Investment Advisor

William Blair & Company, L.L.C.

Legal Counsel

Vedder Price P.C.

Transfer Agent

Boston Financial Data Services, Inc.

P.O. Box 8506

Boston, MA 02266-8506

For customer assistance, call 1-800-635-2886

(Massachusetts 1-800-635-2840)

June 30, 2011

William Blair Funds 77

LOGO

INSTITUTIONALFUNDS

Institutional International Growth Fund

Institutional International Equity Fund

International Small Cap Growth Fund - Institutional Class Shares

Emerging Markets Growth Fund - Institutional Class Shares

Emerging Leaders Growth Fund - Institutional Class Shares

Bond Fund - Institutional Class Shares

Low Duration Fund - Institutional Class Shares

LOGO

222 West Adams Street

Chicago, IL 60606

800.742.7272 Ÿ www.williamblairfunds.com

Item 2.

Code of Ethics

Not applicable to this filing.

Item 3.

Audit Committee Financial Expert

Not applicable to this filing.

Item 4.

Principal Accountant Fees and Services

Not applicable to this filing.

Item 5.

Audit Committee of Listed Registrants

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

Item 6.

Schedule of Investments

See Schedule of Investments in Item 1

Item 7.

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

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

Item 8.

Portfolio Managers of Closed Investment Companies

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

Item 9.

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

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

Item 10.

Submission of Matters to a Vote of Security Holders

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

Item 11.

Controls and Procedures

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

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

Item 12.

Exhibits

12. (a) (1) Code of Ethics

Not applicable because it is posted on Registrant’s website.

12. (a) (2) (1)

Certification of Principal Executive Officer Required by Rule 30a-2(a) of the Investment Company Act

12. (a) (2) (2)

Certification of Principal Financial Officer Required by Rule 30a-2(a) of the Investment Company Act.

12. (a) (3)

Not applicable to this Registrant.

12. (b)

Certification of Chief Executive Officer and Certification of Chief Financial Officer Required by Rule 30a-2(b) of the Investment Company Act

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/ Michelle R. Seitz
By:		Michelle R. Seitz
		President (Chief Executive Officer)

Date: August 25, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated


		/s/ Michelle R. Seitz

By:

Michelle R. Seitz

President

(Chief Executive Officer)

Date: August 25, 2011


		/s/ Colette M. Garavalia

By:

Colette M. Garavalia

Treasurer

(Chief Financial Officer)

Date: August 25, 2011

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