WILLIAM BLAIR MUTUAL FUNDS, INC.
Supplement to Prospectus dated May 1, 1996
The prospectus is supplemented as follows:
Management of the Fund: International Growth Fund
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The Board of Directors has approved a change in the
portfolio management of the International Growth Fund. The
change is expected to occur during the fourth quarter of 1996,
and the day-to-day management of the portfolio will thereafter
be performed by William Blair & Company, L.L.C. ("William
Blair") under its existing management agreement with the Fund.
The sub-management agreement between William Blair and
Framlington Overseas Investment Management Limited is to be
terminated.
Upon the change in portfolio management, asset allocation
decisions and portfolio strategies for the International
Growth Fund will be made by Norbert W. Truderung and George
Greig. Mr. Truderung has performed such a role since the
portfolio's inception. In addition, Mr. Greig will be
responsible for the selection of portfolio investments. Mr.
Greig previously performed these functions for the portfolio
when he was chief investment officer of Framlington Overseas
Investment Management Limited from the portfolio's inception
until March 1993. Mr. Truderung is a principal and has been a
member of the Investment Management Services Department of
William Blair since 1986. Prior to joining the firm, he was a
Vice President, senior investment research analyst and a
member of the Investment Policy Committee for The Northern
Trust Company. Mr. Truderung has a B.A. from Baldwin-Wallace
College. Mr. Greig joined William Blair's Investment
Management Services Department as a Portfolio Manager in July
1996 from Provident Capital Management, where he was head of
International Equities. From 1993 through 1995, Mr. Greig
managed Akamai, a partnership with Framlington Investment
Management Limited and Pilgram, Baxter & Greig, of which he
was a founding partner. In 1988 he joined Framlington
Investment Management Limited. His education includes a S.B.
from Massachusetts Institute of Technology and an M.B.A. from
Wharton School of the University of Pennsylvania.
The disclosure on pages 26 and 27 is amended to reflect
these changes.
Determination of Net Asset Value: Income Fund
---------------------------------------------
The disclosure on page 21 for the Income Fund is changed
to reflect that the net asset value per share for the Income
Fund is determined as of the same time (normally 3:00 p.m.
instead of 2:00 p.m.) Chicago time, and on the same days as it
is determined for the Growth Fund and the International Growth
Fund.
How to Purchase
---------------
The second paragraph on page 28 is amended to read as
follows:
All purchases are made at a price based upon the net
asset value per share that is next computed after receipt of
the order in proper form by the Distributor, the Transfer
Agent or a designated agent thereof. The Distributor or the
Transfer Agent may in certain cases make advance arrangements
with shareholders for telephone processing of purchase orders
with the payment made by wire transfer of Federal Funds. If
an order is not paid for, the purchaser will be liable for any
loss to the Fund and, if the purchaser is a shareholder, the
Fund may redeem shares to pay such loss. For the Ready
Reserves Fund, the net asset value per share will normally be
$1.00. Ready Reserves Fund shares purchased will normally
begin accruing dividends on the day following the date of
purchase.
Investment Objectives and Policies: Ready Reserves Fund
--------------------------------------------------------
The disclosure on page 19 regarding commercial paper
obligations issued under Section 4(2) of the Securities Act of
1933 is revised as follows:
The portfolio may invest in commercial paper
issued in reliance upon the so-called "private
placement" exemption from registration afforded by
Section 4(2) of the Securities Act of 1933 ("Section
4(2) paper"). Section 4(2) paper is restricted as
to disposition under the federal securities laws,
and generally is sold to institutional investors
such as the portfolio. Any resale by the purchaser
must be in an exempt transaction. Section 4(2)
paper normally is resold to other institutional
investors such as the portfolio through or with the
assistance of the issuer or investment dealers who
make a market in the Section 4(2) paper, thus
providing liquidity. The Adviser considers the
legally restricted but readily saleable Section 4(2)
paper to be liquid; however, pursuant to the
procedures approved by the Board of the Fund, if a
particular investment in Section 4(2) paper is not
determined to be liquid, that investment will be
included within the limitation on illiquid
securities. The Adviser monitors the liquidity of
each investment in Section 4(2) paper on a
continuing basis.
The date of this Supplement is August 14, 1996.
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WILLIAM BLAIR MUTUAL FUNDS, INC.
Supplement to Statement of Additional Information
dated May 1, 1996
The Statement of Additional Information is supplemented as
follows:
Management of the Fund
----------------------
During the fourth quarter of 1996 it is
expected that the sub-investment management
agreement with Framlington Overseas Investment
Management Limited will be terminated and that all
investment advisory services to the International
Growth Fund will be provided by William Blair &
Company, L.L.C. under its investment management
agreement.
The date of this Supplement is August 14, 1996.
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