International Leaders Fund - Quarterly Review March 2021 Portfolio Managers - William Blair Funds
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International Leaders Fund
Quarterly Review
March 2021
Simon Fennell, Partner
Kenneth J. McAtamney, Partner
Portfolio Managers
12678798William Blair International Leaders Fund Important Disclosures March 2021
Risks:
The views expressed in this report and the information about the holdings are as of the date of this material, unless otherwise
noted, and are subject to change. Information about the Fund’s holdings should not be considered investment advice. There is
no guarantee that the Fund will continue to hold any one particular security or stay invested in any one particular sector.
Holdings are subject to change at any time.
The Fund’s returns will vary, and you could lose money by investing in the Fund. International investing involves special
risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Because the Fund may focus
its investments in a limited number of securities, its performance may be more volatile than a fund that invests in a greater
number of securities. Investing in emerging markets can increase these risks, including higher volatility and lower liquidity.
Investing in smaller and medium capitalization companies involves special risks, including higher volatility and lower
liquidity. Small and mid-cap stocks are also more sensitive to purchase/sale transactions and changes in the issuer’s financial
condition. Convertible securities may be called before intended, which may have an adverse effect on investment objectives.
Diversification does not ensure against loss.
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 with market and
economic conditions and you may have a gain or loss when you sell shares. For the most current month end
performance information, please call 1‐877‐962‐5247, or visit our Web site at www.williamblairfunds.com. Class N
shares are available to the general public without a sales load. Class I and Class R6 shares are available only to
investors who meet certain eligibility requirements.
This content is for informational and educational purposes only and is not intended as investment advice or a
recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful
consideration of an investor’s objectives, guidelines and restrictions.
Please carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. This and other
information is contained in the Fund’s prospectus and summary prospectus, which you may obtain by calling +1 800 742
7272. Read the prospectus and summary prospectus carefully before investing. Investing includes the risk of loss.
Copyright © 2021 William Blair & Company, L.L.C. “William Blair” is a registered trademark of William Blair & Company, L.L.C.
Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.
2 12678798William Blair International Leaders Fund Summary & Outlook March 2021
Market Review rose to its record high level (62.5) as business activity
rebounded in March.
Global equities advanced in the first quarter (the MSCI
ACWI IMI gained +5.14% in USD terms) amid increased Emerging markets underperformed on a relative basis
optimism of vaccine rollouts and gradual reopening of (MSCI EM IMI +2.86%) primarily driven by weakness in
economies. The prospect of a return to normality coupled Latin America (-5.12%) and China (0.00%). Within Latin
with an improving outlook for a strong economic recovery America, Brazil weighed on performance primarily due to a
drove a sharp style rotation out of defensive technology resurgence in new Covid infections, higher inflation
names in favor of value-oriented stocks which had expectations and currency headwinds (the MSCI Brazil IMI
underperformed in 2020. This style rotation was evident in declined 9.48% in US dollars and 1.65% in local terms).
global sector performance, as Energy (+18.57%) and Despite strong returns to start the year, Chinese equities
Financials (+11.99%) significantly outperformed, while plunged in mid-February amid dampened investor
Consumer Staples (-0.13%) and Health Care (+0.30%) sentiment over elevated valuations and concern over
underperformed on a relative basis. tightening liquidity.
US equities gained (+6.18% as measured by the MSCI USA Performance
IMI) as investors welcomed news of additional federal
Underperformance of the International Leaders Fund
spending to revive the economy. The $1.9 trillion Covid
(Class N) versus the MSCI ACWI ex U.S. IMI index was
relief plan introduced by the newly inaugurated Biden
primarily driven by negative stock selection across most
administration promised additional stimulus for eligible
sectors. The Financials, Industrials and Energy sectors
individuals as well as increased support for the national
were the largest sources of relative results.
vaccination program. Towards the end of the quarter,
President Biden also introduced a $2 trillion infrastructure Within Financials, London Stock Exchange hurt relative
plan which emphasized the need to upgrade roads and performance as the company communicated expectations
bridges in the US, while also seeking to address climate for increased capex spending and operating expenses in
change. 2021, raising doubts around underinvestment and the
growth potential of Refinitiv, a recent acquisition. We
European equities advanced (+4.25% as measured by the
believe these concerns will be transitory, and the merits of
MSCI Europe IMI) despite a third wave of infections leading
Refinitiv remain intact. The combined company is uniquely
to new lockdown measures across several major European
positioned across the entire financial markets value chain,
countries. The UK has been one of the few exceptions
with strong competitive advantages including a powerful
within Europe that has had some success with the vaccine
global presence, leading proprietary data and analytics
rollout, supporting outperformance (the MSCI UK gained
capabilities, and multi-asset class coverage.
+6.34% in the quarter). Investor sentiment was bolstered
on positive economic data, specifically the Eurozone Rational, a manufacturer of software-enabled food
manufacturing purchasing manager’s index (PMI) which preparation appliances for professional users within the
3 12678798William Blair International Leaders Fund Summary & Outlook March 2021
Industrials sector, hindered relative performance. its ability to monetize engagement across its platform,
Management expects sales in the first quarter to be down which has resulted in a sustained growth rate in the mid
approximately 10% on a higher pre-pandemic base, but 20% range despite its significant size. Advertising revenue
then expects a return to growth in the second quarter on a trends ran ahead of expectations on continued strength in
lower year-over-year comparison. Encouragingly, Rational social media, and cloud revenue improved following
is seeing an acceleration in orders in regions with several quarters of delays due to COVID-19. Sea, which
successful vaccination rollouts, notably in the U.S., U.K. and operates in Southeast Asia, India, Russia and Latin America,
Asia. In the near-term, we see opportunities for a catch-up is a market leader in both gaming and e-commerce in many
effect triggered by a sudden increase in demand of its markets. Current game success coupled with a robust
particularly in the travel industry and supported by pipeline are driving higher revenue growth and
government aid programs. Longer term, we believe profitability expectations, and e-commerce operating
Rational remains well positioned to capitalize on a metrics continue to be strong.
significant growth opportunity as it penetrates markets
Positioning
around the world. While the company was unlucky with
the timing of the launch of the new iCombi oven, it will During the period, Industrials exposure was increased
come out of the crisis with a major product refresh that through the purchase of Ryanair. Ryanair is the largest low
strengthens the value proposition—including 50% more cost carrier in Europe servicing approximately 240
cooking capacity, faster cleaning, improved cooking destinations in 40 countries. The company offers low fare,
intelligence, and connectivity. no-frills flights primarily catering to leisure travelers, and
enjoys the lowest cost structure of all global airlines with a
Within the Energy sector, Neste weighted on relative simple operating model and high productivity. Advantages
returns. Neste is the world’s largest producer of renewable include point-to-point routes that maximize aircraft
diesel and jet fuel refined from waste and residues. It offers productivity, single fleet operations that reduce costs,
a superior product compared to petroleum diesel as it not newer and more fuel efficient fleets, the use of lower cost
only helps meet carbon reduction targets, but it also burns secondary airports, and a more productive labor force. It
cleaner in internal combustion engines, resulting in lower has generated solid returns on capital that are amongst the
emissions and engine maintenance cost. The COVID-19 best in global airlines, with fare revenue increasingly
pandemic is anticipated to have a negative impact on supplemented by ancillary revenues from offerings such as
demand in 2021, but we expect it will have limited impact checked bag and early boarding fees. Ryanair has a strong
on longer-term growth. and improving market position that we feel should result in
significant market share gains post the COVID-19 crisis.
Partially offsetting these effects were an overweight
Coupled with a benign cost environment, we believe the
allocation to Industrials and positive selection in
market is underestimating the earnings power of the
Communication Services. Within Communication Services,
company. The pandemic will likely depress reported
Tencent and Sea Ltd. aided relative performance. Tencent’s
returns, but the recovery should be swift and we expect
market dominance of the online Chinese ecosystem drives
4 12678798William Blair International Leaders Fund Summary & Outlook March 2021
strong cost control to result in ROIC returning to previous must increase from depressed levels, it will be driven by
levels. healthy growth and will likely remain in a manageable
range of +2%-3%, without much risk of overshooting.
Exposures to the Information Technology and Utilities
Think of this as reflation back to normal long-term historic
sectors were reduced during the period in order to fund
levels, rather than overheating to levels of concern.
more attractive risk-reward opportunities in cyclical
sectors that should benefit from the post-COVID-19 In a related manner, interest rates should continue to creep
recovery. up as well, but again this is a bounce from unusually low
levels, or what can be characterized as a “reasonable” move
From a geographic perspective, notable adjustments were
in rates.
increases to Developed Europe, offset by decreases to Japan
and Emerging Asia. The portfolio's weighting in Emerging For corporations, the focus will be on earnings growth and
Markets approximated +19% at the end of the period, down leverage to the economic cycle. While consensus earnings
from +21% at the beginning of the period. estimates have been inching up, we believe analysts largely
under-appreciate the magnitude of profit growth we will
Outlook
see this year.
The economy and stock market are behaving as expected
Cyclical areas of the economy—consumer and industrial
thus far in 2021. We’ve been referring to the post-
alike—will likely have the greatest upside potential to
pandemic economy as the “Mother of All Recoveries”
estimates this year. Industrial sectors like machinery and
(MOFAR), with yearly growth at a level not seen in decades.
building products, and consumer services such as travel
And we expect this recovery/expansion cycle to ultimately
and leisure are most interesting to us.
be measured in years not months or quarters.
It’s important to put this into context of what the market
Unlike the post-GFC recovery, this cycle will likely be
expects in the form of valuations. In an economic recovery
driven by domestic demand, not relying on China’s stimulus
the market typically rewards economically-sensitive stocks,
to drive the global economy.
with little regard to earnings quality or longevity. These
As we pass the one-year anniversary of the first several stocks are typically cheap relative to the rest of the stock
weeks of the 2020 global lockdowns, we are seeing market.
evidence of strong business and consumer activity with
That is precisely what we began to see in the middle of the
PMIs showing significant growth acceleration in the US and
fourth quarter, post the announcement of vaccine
Europe, and consumer spending accelerating in kind. This
approvals and the result of the US presidential election.
continues from the already strong sequential growth
The market was collectively relieved enough to start
demonstrated in the latter part of last year.
pricing in strong economic growth. This has continued
This economic activity naturally leads to concerns about apace in 2021, as mentioned previously.
inflation and interest rates. We believe that while inflation
5 12678798William Blair International Leaders Fund Summary & Outlook March 2021
With higher interest rates, the value of future corporate This current relationship between the economy and style
cash flows are reduced as well; and as expected, we are performance is consistent with past cycles, and thus we
seeing the valuation multiples of long-duration earners believe it will be a difficult period for our investment style
contract. The result is a tempering of the multiple gap which targets companies with high and sustainable long-
between classic Growth stocks as compared to Value term growth. Most of our investment strategies
stocks. Broad-based, abundant growth also reduces the underperformed their broad core benchmarks during the
scarcity premium for those special companies who are in quarter but fared much better compared to growth indices.
greater control of their own destiny regardless of the
As the economy moves from recovery to expansion, these
economic climate. Many observers have commented about
headwinds should become much more manageable. We
the unsustainably wide margin between the two, and it is
look forward to the Mother of All Recoveries quickly giving
not surprising to now see a bit of a contraction.
way to what might be the Mother of All Expansions.
6 12678798Market Performance March 2021
QTD 2020 2019 2018
AC World (DM+EM) 5.1 16.3 26.4 -10.1
Developed Markets (DM) 5.5 15.9 27.5 -9.4
Pacific ex JP 4.5 8.5 18.3 -11.2
Japan 1.9 13.1 19.6 -13.5
Europe ex UK 3.6 12.1 25.0 -15.7
Regions
UK 6.3 -9.0 23.2 -15.0
Canada 9.5 6.9 27.9 -17.6
USA 6.2 20.5 30.4 -5.7
Emerging Markets (EM) 2.9 18.4 17.6 -15.0
Asia 2.9 28.5 17.8 -15.9
EMEA 8.1 -5.6 15.8 -16.8
Latin America -5.1 -14.1 19.4 -7.2
Frontier Markets (FM) 1.8 2.1 13.8 -16.6
Large Cap 4.4 16.5 26.7 -8.6
Size
Small Cap 9.2 16.3 24.7 -14.4
Communication Svcs 6.6 23.2 24.2 -10.9
Discretionary 4.0 34.5 26.8 -9.8
Staples -0.1 8.5 20.8 -10.5
Energy 18.6 -28.4 11.6 -14.9
Sectors
Financials 12.0 -3.5 22.9 -15.7
Healthcare 0.3 17.5 23.2 1.2
Industrials 8.3 12.2 26.7 -15.5
IT 2.0 45.2 46.5 -6.2
Materials 6.9 21.5 20.0 -17.3
Real Estate 5.6 -6.4 24.6 -7.8
Utilities 1.0 4.1 21.3 0.9
Quality -3.6 -5.4 5.6 13.9
Valuation 10.3 -17.4 -0.1 2.4
Style
Etrend 5.6 13.8 5.2 5.4
Momentum 0.5 24.6 4.9 3.4
Growth -5.8 10.5 4.1 -3.0
Composite 4.4 -6.6 4.3 11.9
Past performance is not a reliable indicator of future results Regional performance is based on IMI region/country indexes. Sector and style values are
based on the MSCI ACWI IMI Index. Size values are based on the MSCI ACWI Index. Style values reflect the Quintile 1 minus Quintile 5 spread of William
Blair’s proprietary quantitative models. Sectors are based on Global Industry Classification (GICS) sectors. Large Cap and Small Cap based on MSCI Global
Investable Market Index Methodology. Data in blue reflects the top 20% (highest) values by region, country, sector, and style. Data in red reflects the bottom
20% (lowest) values by region, country, sector, and style. A direct investment in an unmanaged index is not possible. Name change from Telecommunication
Services to Communication Services effective after close of business on 9/28/18; industry and subindustry reclassifications effective 10/1/18.
7 12678798William Blair International Leaders Fund Performance March 2021
Since Since
Periods ended 3/31/2021 March Quarter 1 Year 3 Year 5 Year Inception* Inception**
International Leaders Fund (WILNX) -1.45% -1.41% 53.33% 12.82% 13.80% 11.11% --
Class N
International Leaders Fund (WILIX) -1.40% -1.36% 53.71% 13.11% 14.10% 11.38% --
Class I
International Leaders Fund (WILJX) Class -1.45% -1.36% 53.75% 13.16% 14.17% -- 11.48%
R6
MSCI AC World ex US IMI (net) 1.37% 3.77% 51.94% 6.51% 9.84% 7.34% 7.06%
*Inception 8/16/2012
**Inception 11/2/2012
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 with market and economic conditions and you may have a gain or loss when you sell shares. For the most
current month end performance information, please call 1‐877‐962‐5247, or visit our Web site at www.williamblairfunds.com. Class N shares
are available to the general public without a sales load. Class I and Class R6 shares are available only to investors who meet certain eligibility
requirements.
International Leaders Fund Expense Ratios:
Gross Net
Class N Shares 1.30% 1.15%
Class I Shares 0.99% 0.90%
Class R Shares 0.91% 0.85%
The Fund’s Adviser has contractually agreed to waive fees and/or reimburse expenses to limit fund operating expenses until 4/30/21.
Expenses shown are as of the most recent prospectus.
A direct investment in an index is not possible. The MSCI AC World ex-US IMI Index 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 U.S.
8 12678798William Blair International Leaders Fund Performance Analysis (by sector) March 2021
The table below shows the calculated sector attribution of the International Leaders Fund vs. its benchmark.
International Leaders Fund vs. MSCI AC World ex US IMI (net)
01/01/2021 to 03/31/2021
International Leaders Fund MSCI AC World ex US IMI (net) Attribution Analysis
Issue
Average Total Contrib to Average Total Contrib to Allocation Selection Total
GICS Sector Weight Return Return Weight Return Return Effect Effect Effect
Communication Services 5.9% 8.2% 0.6% 6.9% 4.7% 0.3% 0.0% 0.3% 0.3%
Consumer Discretionary 13.7% -2.7% -0.4% 13.8% 3.1% 0.4% 0.0% -0.8% -0.8%
Consumer Staples 3.8% -4.8% -0.2% 8.1% -1.9% -0.2% 0.2% -0.1% 0.2%
Energy 3.7% -10.9% -0.4% 4.2% 9.7% 0.4% 0.0% -0.8% -0.8%
Financials 7.3% -4.3% -0.3% 17.3% 8.6% 1.5% -0.5% -1.0% -1.4%
Health Care 13.2% -6.3% -0.9% 8.9% -3.6% -0.3% -0.3% -0.4% -0.7%
Industrials 26.1% 2.4% 0.7% 12.8% 5.7% 0.7% 0.3% -0.8% -0.5%
Information Technology 19.3% 1.1% 0.2% 12.8% 3.6% 0.4% 0.1% -0.6% -0.5%
Materials 1.9% 1.7% 0.0% 8.5% 5.4% 0.5% -0.1% -0.1% -0.2%
Real Estate 1.3% 1.5% 0.0% 3.6% 2.5% 0.1% 0.0% 0.0% 0.0%
Utilities 1.6% -19.8% -0.4% 3.2% -0.9% 0.0% 0.1% -0.3% -0.3%
Cash 2.2% - 0.0% 0.0% 0.0% 0.0% -0.1% 0.0% -0.1%
Total 100.0% -1.0% -1.0% 100.0% 3.8% 3.8% -0.3% -4.5% -4.8%
Past performance does not guarantee future results. Performance cited represents past performance and current performance may be lower or higher than the
data quoted. Gross investment performance assumes reinvestment of dividends and capital gains, is gross of investment management fees and net of transaction costs.
Attribution by segment is based on estimated returns of equities held within the segments listed. All stocks held during a measurement period, including purchases and sales,
are included. Cash is not allocated among segments. Calculations are for attribution analysis only and are not intended to represent simulated performance history. The
actual returns may be higher or lower. We calculate attribution using our proprietary attribution system. Our proprietary attribution system runs transactions-based
attribution, taking into account all trading activity. Interaction effect is reallocated into Selection effect. Sectors are based on Global Industry Classification (GICS) Sectors.
International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk.
9 12678798William Blair International Leaders Fund Performance Analysis (by region) March 2021
The table below shows the calculated regional attribution of the International Leaders Fund vs. its benchmark.
International Leaders Fund vs. MSCI AC World ex US IMI (net)
01/01/2021 to 03/31/2021
International Leaders Fund MSCI AC World ex US IMI (net) Attribution Analysis
Issue
Average Total Contrib to Average Total Contrib to Allocation Selection Total
Region Weight Return Return Weight Return Return Effect Effect Effect
Pacific Ex Japan 6.3% -2.0% -0.2% 7.6% 4.2% 0.3% 0.0% -0.4% -0.4%
Japan 9.7% -14.8% -1.6% 16.3% 1.9% 0.3% 0.1% -1.8% -1.7%
Europe+ME Ex U.K. 45.4% 1.3% 0.6% 30.4% 3.6% 1.1% 0.0% -1.0% -1.0%
U.K. 11.9% 0.8% 0.1% 8.7% 6.2% 0.5% 0.1% -0.7% -0.6%
W Hemisphere 3.1% -0.3% 0.0% 6.4% 9.5% 0.6% -0.2% -0.3% -0.5%
EM Asia 19.8% -0.4% 0.1% 24.6% 2.9% 0.7% 0.0% -0.5% -0.4%
EMEA 0.0% 0.0% 0.0% 3.8% 8.1% 0.3% -0.2% 0.0% -0.2%
Latin America 1.6% -12.2% -0.1% 2.3% -4.9% -0.1% 0.0% 0.0% 0.1%
Cash 2.2% - 0.0% 0.0% 0.0% 0.0% -0.1% 0.0% -0.1%
Total 100.0% -1.0% -1.0% 100.0% 3.8% 3.8% -0.2% -4.6% -4.8%
Past performance does not guarantee future results. Performance cited represents past performance and current performance may be lower or higher than the
data quoted. . Gross investment performance assumes reinvestment of dividends and capital gains, is gross of investment management fees and net of transaction costs.
Attribution by segment is based on estimated returns of equities held within the segments listed. All stocks held during a measurement period, including purchases and sales,
are included. Cash is not allocated among segments. Calculations are for attribution analysis only and are not intended to represent simulated performance history. The
actual returns may be higher or lower. We calculate attribution using our proprietary attribution system. Our proprietary attribution system runs transactions-based
attribution, taking into account all trading activity. Interaction effect is reallocated into Selection effect. International investing involves special risk considerations,
including currency fluctuations, lower liquidity, economic and political risk.
10 12678798William Blair International Leaders Fund Top Contributors/Detractors March 2021
The tables below show the top contributors and detractors for the International Leaders Fund portfolio vs. its benchmark.
Top Five Contributors (%) for the Period: 01/01/2021 to 03/31/2021
Issuer Sector Country Contribution To
Relative Return
Ashtead Group PLC Industrials United Kingdom 0.45
Atlas Copco AB Industrials Sweden 0.25
Kingspan Group PLC Industrials Ireland 0.23
ASML Holding NV Information Technology Netherlands 0.21
Infineon Technologies AG Information Technology Germany 0.17
Top Five Detractors (%) for the Period: 01/01/2021 to 03/31/2021
Issuer Sector Country Contribution To
Relative Return
Neste Oyj Energy Finland -0.51
TAL Education Group Consumer Discretionary China -0.49
Keyence Corp Information Technology Japan -0.48
London Stock Exchange Group PL Financials United Kingdom -0.42
Orsted AS Utilities Denmark -0.40
Index: MSCI AC World ex US IMI (net)
Past performance does not guarantee future results. Performance cited represents past performance and current performance may be lower or higher
than the data quoted. Gross investment performance assumes reinvestment of dividends and capital gains, is gross of investment management fees and net of
transaction costs. Performance results will be reduced by the fees incurred. Attribution by is based on estimated returns of all equities held during a measurement
period, including purchases and sales. We calculate attribution using our proprietary attribution system. Our proprietary attribution system runs transactions-
based attribution, taking into account all trading activity. Sectors are based on Global Industry Classification (GICS) Sectors. Individual securities listed in this report
are for informational purposes only. Holdings are subject to change at any time. This information does not constitute, and should not be construed as, investment
advice or recommendations with respect to the securities listed. Specific securities identified and described do not represent all of the securities purchased, sold, or
recommended and you should not assume that investments in the securities identified were or will be profitable.
11 12678798William Blair International Leaders Fund Positioning March 2021
Regional Exposure Sectoral Exposure
6.5 Communication Services 5.4
Asia Ex-Japan 0.5 6.7 -0.2
7.6
Consumer Discretionary 13.4
13.6 -0.1
9.0
Japan -1.8 3.5
16.1 Consumer Staples -0.7
8.0
47.8 3.5
Europe+ME Ex U.K. 2.3 Energy -0.1
30.8 4.2
Financials 7.3
12.4 17.8 0.2
United Kingdom 1.0
8.8 Health Care 13.2
8.7 -0.1
3.4 28.8
Western Hemisphere 0.3 Industrials 3.8
6.7 13.0
Information Technology 18.8
18.2 12.6 -1.4
EM Asia -1.0
23.8 1.9
Materials -0.1
8.6
--
EMEA 0.0 Real Estate 1.3
3.9 3.7 0.0
Utilities 1.3
1.2 3.2 -0.9
Latin America -0.8
2.3 --
Other 0.0
--
1.6
Cash & Equivalents -0.4 1.6
-- Cash & Equivalents -0.4
--
William Blair International Leaders Fund
William Blair International Leaders Fund
Portfolio Diff Prev QTR MSCI AC World ex US IMI (net) Portfolio Diff Prev QTR
MSCI AC World ex US IMI (net)
Source: William Blair.
Cash & Equivalents includes: cash and dividend accruals.
12 12678798William Blair International Leaders Fund Top Holdings by Market Cap March 2021
The table below shows the International Leaders Fund portfolio’s largest holdings as of 3/31/2021 by market cap as well as the sub-totals
by market cap for the portfolio and index. The stocks are listed by country and by the sector that defines each one’s role in the portfolio.
% of Total % of Total
Net Assets in Net Assets in
Country Sector Portfolio Index*
Large Cap(>$20b) 77.8% 53.6%
LVMH Moet Hennessy Louis Vuitt France Consumer Discretionary 3.5% 0.6%
Airbus SE France Industrials 2.8% 0.2%
Taiwan Semiconductor Manufactu Taiwan Information Technology 2.8% 1.7%
Ashtead Group PLC United Kingdom Industrials 2.7% 0.1%
Tencent Holdings Ltd China Communication Services 2.7% 1.5%
Mid Cap($5-20b) 19.9% 25.5%
Straumann Holding AG Switzerland Health Care 2.3% 0.0%
Kingspan Group PLC Ireland Industrials 1.7% 0.0%
Aristocrat Leisure Ltd Australia Consumer Discretionary 1.7% 0.0%
Coloplast A/S Denmark Health Care 1.4% 0.1%
Segro PLC United Kingdom Real Estate 1.3% 0.1%
Small Cap(William Blair International Leaders Fund Top Portfolio Changes March 2021
Top Portfolio Changes During the Period: 01/01/2021 to 03/31/2021
Security Name Country Sector
Ryanair Holdings Plc-Sp Adr Ireland Industrials
Purchases
New
Liquidations
None
Sectors are based on Global Industry Classification (GICS) Sectors. Individual securities listed in this report are for informational purposes only. Holdings are subject
to change at any time. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities
listed. Specific securities identified and described do not represent all of the securities purchased, sold, or recommended and you should not assume that investments
in the securities identified were or will be profitable.
14 12678798William Blair International Leaders Fund Characteristics March 2021
International Leaders Fund MSCI AC World ex US IMI (net) Difference
Quality
Return on Equity (%) 15.3 11.5 33%
Cash Flow ROIC (%) 18.7 16.0 17%
Debt/Equity (%) 73.9 93.5 -21%
Growth
Long-Term Growth (%) 15.1 13.2 14%
5-Year Historic EPS Growth (%) 8.7 7.5 17%
Reinvestment Rate (%) 11.0 7.8 41%
Earnings Trend
EPS Revision Breadth (%) 0.1 6.1 -6.0
Valuation
P/E (next 12 months) 35.3 16.4 115%
Other
Float Adjusted Weighted Average Market Cap ($m) 80,734 63,021 28%
Number of Holdings 64 6,570
Active Share (%) 88 --
Characteristics have been calculated by William Blair.
Please refer to the ‘Important Disclosures’ section of this document for further information on investment risks and returns.
15 12678798William Blair International Leaders Fund Holdings March 2021
Portfolio Portfolio Portfolio
Weight Weight Weight
Pacific Ex Japan 6.51 Europe+ME Ex UK (continued) W Hemisphere 3.37
Australia 3.83 Germany 4.14 Canada 3.37
Aristocrat Leisure Ltd 1.66 Infineon Technologies AG 2.41 Canadian Natl Railway Co 2.31
Csl Ltd 1.38 Rational AG 1.15 Lululemon Athletica Inc 1.05
Atlassian Corp Plc-Class A 0.79 Teamviewer AG 0.59 EM Asia 18.21
Hong Kong 1.90 Ireland 2.85 China 10.24
Aia Group Ltd 1.90 Kingspan Group PLC 1.68 Tencent Holdings Ltd 2.62
New Zealand 0.78 Ryanair Holdings Plc-Sp Adr 1.17 Alibaba Group Holding Ltd 2.44
Fisher & Paykel Healthcare C 0.78 Netherlands 4.13 Netease Inc 1.77
Japan 8.96 Asml Holding NV 2.26 Tal Education Group- Adr 1.38
Japan 8.96 Adyen NV 1.87 Kweichow Moutai Co Ltd-A 1.20
Keyence Corp 1.90 Norway 0.85 Foshan Haitian Flavouring -A 0.83
Daikin Industries Ltd 1.80 Tomra Systems Asa 0.85 India 4.20
Smc Corp 1.65 Spain 1.98 Reliance Industries Ltd 2.16
Hoya Corp 1.55 Amadeus It Group SA 1.98 Housing Development Finance 1.98
Nihon M&A Center Inc 0.92 Sweden 5.39 Reliance Industries-Partly P 0.06
Asahi Intecc Co Ltd 0.57 Atlas Copco Ab-A Shs 2.22 Taiwan 2.80
M3 Inc 0.56 Hexagon Ab-B Shs 2.12 Taiwan Semiconductor Manufac 2.80
Europe+ME Ex UK 47.79 Nibe Industrier Ab-B Shs 1.05 Thailand 0.98
Denmark 5.88 Switzerland 8.78 Sea Ltd-Adr 0.98
Novo Nordisk A/S-B 1.53 Straumann Holding Ag-Reg 2.25 Latin America 1.19
Coloplast-B 1.41 Lonza Group Ag-Reg 1.93 Argentina 1.19
Dsv Panalpina A/S 1.32 Partners Group Holding AG 1.82 Mercadolibre Inc 1.19
Orsted A/S 1.28 Sika Ag-Reg 1.57 Cash 1.58
Chr Hansen Holding A/S 0.34 Temenos Ag - Reg 1.21 Total 100.00
Finland 1.32 UK 12.39
Neste Oyj 1.32 United Kingdom 12.39
France 12.47 Ashtead Group PLC 2.67
Lvmh Moet Hennessy Louis Vui 3.43 London Stock Exchange Group 1.62
Airbus Se 2.80 Experian PLC 1.58
Safran SA 2.47 Segro PLC 1.30
L'Oreal 1.50 Compass Group PLC 1.22
Sartorius Stedim Biotech 1.22 Spirax-Sarco Engineering PLC 1.06
Teleperformance 1.05 Trainline PLC 1.03
Rentokil Initial PLC 0.99
Halma PLC 0.92
As of 3/31/2021. Information about the Fund’s holdings should not be considered investment advice. There is no guarantee that the Fund will continue to hold any one
particular security or stay in any one particular sector. Holdings are subject to change at any time. Cash includes cash equivalents and accruals.
16 12678798Glossary - Terms
1 Month EPS Revision Breadth: 1-month factor representing the trend in the direction of estimate changes. Range from -100% to +100%, it is calculated
as the number of positive revisions minus the number of negative revisions divided by the total number of estimates.
Active Share: A measure of the percentage of equity holdings in a portfolio that differ from the benchmark index. It is calculated by taking the sum of the
absolute value of the differences of the weight of each holding in a portfolio versus the weight of each holding in the index and dividing by two.
Alpha: A measure of a portfolio’s return in excess of the market return, after both have been adjusted for risk. It is a mathematical estimate of the amount
of return expected from a portfolio above and beyond the market return at any point in time. For example, an alpha of 1.25 indicates that a stock is
projected to rise 1.25% in price in a year over the return of the market, or the return when the market return is zero. When an investment price is low
relative to its alpha, it is undervalued, and considered a good selection.
Beta: A quantitative measure of the volatility of the portfolio relative to the overall market, represented by a comparable benchmark. A beta above 1 is
more volatile than the overall market, while a beta below 1 is less volatile, and could be expected to rise and fall more slowly than the market.
Cash Flow Return on Invested Capital (ROIC): A measure of how effectively a company generates cash flow based on legacy capital investment.
Developed Markets: Using the Morgan Stanley Capital International (MSCI) geographic definition, this region includes: United Kingdom, Europe (Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland), Japan, Pacific Asia (Australia,
Hong Kong, New Zealand, and Singapore) and the Western Hemisphere (Canada and other Americas).
Debt to Total Capital Ratio: This figure is the percentage of each company’s invested capital that consists of debt. Companies with a high Debt to Total
Capital level may be considered more risky. From a portfolio perspective, the portfolio Debt to Total Capital Ratio is a weighted average of the individual
holdings' Debt to Total Capital Ratio.
Emerging Markets: Using MSCI’s geographic definition, this region includes: Emerging Markets Asia (China, India, Indonesia, Malaysia, S Korea, Taiwan,
and Thailand), Emerging Markets Europe, Mid-East and Africa (Czech Republic, Hungary, Poland, Russia, Turkey, Egypt, Morocco, and S Africa), and Latin
America (Argentina, Brazil, Chile, Columbia, Mexico, Peru and Venezuela).
EPS (Earnings Per Share) Growth Rate (Projected): This measure represents the weighted average of forecasted growth in earnings expected to be
experienced by the stocks within the portfolio over the next 3-5 years. From a portfolio perspective, the portfolio P/E ratio and EPS Growth Rate are
weighted averages of the individual holdings’ P/E ratios and EPS Growth Rates. Data calculated in FactSet.
EPS Growth Rate - 5-Year Historic: The weighted average earnings per share growth for stock within the portfolio over the past 5 years.
EV/EBITDA: (Enterprise Value / Earnings Before Interest, Taxes and Depreciation-Amortization): The EV/EBITDA ratio is useful for global
comparisons because it ignores the distorting effects of individual countries' taxation policies. It's used to find attractive takeover candidates. Enterprise
value is a better measure than market cap for takeovers because it takes into account the debt which the acquirer will have to assume. Therefore, a
company with a low EV/EBITDA ratio can be viewed as a good takeover candidate.
EV/IC: (Enterprise Value / Invested Capital) Ratio: Enterprise Value (EV), which is market capitalization minus cash plus debt divided by Invested
Capital (IC), which is the sum of common stock, preferred stock and long-term debt. This number will get you a simple multiple. If it is below 1.0, then it
means that the company is selling below book value and theoretically below its liquidation value.
17 12678798Glossary - Terms
Information Coefficient: A measure of the correlation between expected and actual returns.
Information Ratio: A measure of risk-adjusted return. The annualized excess return of the portfolio relative to a respective benchmark, divided by the
annualized tracking error relative to that same benchmark. The higher the measure, the higher the risk-adjusted return.
PBV: (Price/Book Value) Ratio: The PBV Ratio measures the value of a company's common stock relative to its shareholder's equity. A price-to-book
multiple above one means that the price of the company's common stock is higher than its common shareholder's equity. A price-to-book multiple below
one means that the price of the company's common stock are less than its break-up value, and the shares may be undervalued.
PCF: (Price/CashFlow): Some analysts favor the price/cash flow over the price-earnings (PE) ratio as a measure of a company’s value. Cash flow is a
measure of a company's financial health. It equals cash receipts minus cash payments over a given period of time.
P/E: (Price/Earnings) Ratio: This is the most common measure of how expensive a stock is. Simply, it is the cost an investor in a given stock must pay
per dollar of current annual earnings. A high P/E generally indicates that the market is paying more to obtain the stock because it has confidence in the
company’s ability to increase its earnings. Conversely, a low P/E often indicates that the market has less confidence that the company’s earnings will
increase rapidly or steadily, and therefore will not pay as much for its stock.
R-squared: A measurement of how closely the portfolio’s performance correlates with the performance of its benchmark, such as the MSC AC World Free
ex US Index. In other words, it is a measurement of what portion of a portfolio’s performance can be explained by the performance of the overall market or
index. Ranges from 0 to 1, where 0 indicates no correlation and 1 indicates perfect correlation.
Risk (Standard Deviation): A measure of the portfolio’s risk. A higher standard deviation represents a greater dispersion of returns, and thus a greater
amount of risk. The annualized standard deviation is calculated using monthly returns.
Sharpe-Ratio: A risk-adjusted measure calculated using standard deviation and excess return (Portfolio return – Risk Free Rate) to determine reward per
unit of risk. The higher the Sharpe ratio, the better the portfolio’s historic risk-adjusted performance.
Tracking Error: Tracking Error measures the extent to which a portfolio tracks its benchmark. The tracking error of an index portfolio should be lower
than that of an active portfolio. The tracking error will always be greater than zero if the portfolio is anything other than a replication of the benchmark.
Trailing 1-Year Turnover: This figure reflects the portfolio’s trading activity by calculating the amount of the portfolio’s holdings bought or sold over the
prior year, expressed as a percentage of the portfolio’s average market value. Turnover figures may be related to the amount of trading costs experienced
by the portfolio.
Weighted Average Market Capitalization: Market capitalization refers to the total market value of each company's outstanding shares. The Weighted
Average Market Capitalization for a portfolio is calculated as the average market capitalization of the stocks within the portfolio, weighted by the amount of
each stock owned.
Weighted Median Market Capitalization: This calculation represents the median market capitalization of the stocks in the portfolio, weighted by the
amount of each stock owned.
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