SEMI-ANNUAL SHAREHOLDER REPORT | June 30, 2024
What were the Fund costs for the last
six
months?(Based on a hypothetical $10,000 investment)
Fund | Cost of $10,000 Investment | Cost of $10,000 Investment as a percentage | |
| Growth Fund Class I | $ |
Management’s Discussion of Fund Performance
SUMMARY OF RESULTS
The Fund returned 13.86% (net of fees) for the 6 months ended June 30, 2024. The Fund underperformed its benchmark, the Russell 3000
®
Growth Index, which returned 19.90% and underperformed the S&P 500®
Index, a broad measure of market performance, which returned 15.29%.Relative performance in the Fund was driven by a combination of stock-specific dynamics and style factors. From a sty
le
perspective, our typical bias towards small and mid-caps was a headwind as mega caps outperformed in the period. From a sector perspective, stock selection in Information Technology, including our underweight position in NVIDIA, and Health Care, including our position in UnitedHealth Group and not owning Eli Lilly, were detractors. Other individual laggards included Five Below (Consumer Discretionary), New Fortress (Energy) and Nike (Consumer Discretionary). Not owning Meta Platforms (Communication Services) also detracted from relative performance. Our top individual contributors included Vital Farms (Consumer Staples), Pure Storage (Information Technology), Alphabet (Communication Services) and Intuitive Surgical (Health Care). Our underweight to Apple (Information Technology) and not owning Tesla (Consumer Discretionary) also contributed positively to relative performance in the year-to-date period. TOP PERFORMANCE CONTRIBUTORS
Vital Farms
is the leader in the U.S. pasture-raised egg market. During the period, Vital Farms reported strong sales growth driven by a combination of volume and pricing as well as materially higher than expected earnings. We continue to believe Vital Farms will be a significant beneficiary as the broader egg industry evolves to cage-free production and Vital further builds out their farmer network. Apple
designs, manufactures and sells information technology hardware and related services and subscriptions, with the iPhone as the single largest driver of revenue. The high-end smart phone industry is likely to experience outsized growth in coming years and we believe Apple is likely to gain share of the smart phone market over our investment horizon. We initiated a position in June. Following a period of lackluster iPhone volume growth, the stock began to underperform mid-2023, which continued through Spring of 2024, thus our underweight exposure was a tailwind in the period.TOP PERFORMANCE DETRACTORS
Five Below
is a U.S. retailer offering on-trend merchandise at extreme value price-points. Shares were pressured as recent quarterly results were disappointing, with sales, margins, and earnings falling short of expectations. While total unit growth was strong during the period, same-store sales were negative due to weaker traffic trends. Despite near-term headwinds, we believe the duration of unit growth remains intact.New Fortress Energy
develops, finances and constructs liquified natural gas (“LNG”) assets and related infrastructure. While the company reported solid earnings results, first LNG deliveries from one of the company’s projects was delayed and the corresponding cash flow pushed out. We continue to believe New Fortress is entering a phase where capital spending should trend lower, driving attractive returns through capital deployment and new projects.Fund Performance
The following graph compares the initial and subsequent account values for the 10-year period ended June 30, 2024 (or for the life of the Fund, if shorter). It assumes a $500,000 initial investment at the beginning of the period in a broad-based securities market index and an additional index for the same period. The additional index is generally representative of the market sectors or types of investments in which the Fund invests.
GROWTH OF $500,000
Average Annual Total Returns | 6 Months | 1 Year | 5 Years | 10 Years |
Growth Fund Class I | ||||
S&P 500® Index | ||||
Russell 3000® Growth Index |
Key Fu
n
d Statistics Fund net assets (in $000s) | $ |
Number of portfolio holdings | |
Net advisory fees paid (in $000s) | $ |
Portfolio turnover rate (six months) |
Graphical Representation of Holdings
The tables below show the investment makeup of the Fund, representing percentage of the total net assets of the Fund.
Top Ten Holdings
| Microsoft Corp. | |
| Amazon.com, Inc. | |
| Alphabet, Inc. | |
| NVIDIA Corp. | |
| Advanced Micro Devices, Inc. | |
| Mastercard, Inc. | |
| Apple, Inc. | |
| UnitedHealth Group, Inc. | |
| Palo Alto Networks, Inc. | |
| ServiceNow, Inc. |
Sector Allocation
Availability of Additional Information
You can find additional information about the Fund such a
s
the prospectus, financial information, holdings and proxy voting information at www.williamblairfunds.com
. You can also request this information by contacting us at 1-800-742-7272.Householding
In order to reduce expenses, we will deliver a si
ngle
copy of prospectuses, proxies, financial reports and other communication to shareholders with the same residential address, provided they have the same last name or we reasonably believe them to be members of the same family. Unless we are notified otherwise, we will continue to send recipients only one copy of these materials for as long as they remain a shareholder of the Fund. If you would like to receive individual mailings, please call 1-800-742-7272 and we will begin sending you separate copies of these materials within 30 days after receiving your request.
For additional information, please scan the QR code at left to navigate to additional hosted material at
www.williamblairfunds.com
.
