7
Morningstar FundInvestor
January 2
014
Morningstar Analyst Rating
10-31-13
Œ
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
Positive
Neutral
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
73.22
51.60
61.03
60.86
47.90
93.46
84.64
65.05
61.01
51.64
38.04
47.51
Total Return %
24.89
-11.49
5.01
32.04
-44.67
13.93
33.57
9.36
20.96
38.84
-17.85
.
+/-MSCI WexUS
9.60
-28.32
18.72
20.89
-86.12
59.46
16.92
-17.29
4.34
17.93
-58.68
.
+/-MSCI Eur
-0.34
-30.61
16.07
28.16
-80.50
60.35
19.71
-24.36
11.54
17.96
-56.39
.
Income Return %
3.39
3.92
4.70
4.97
3.87
3.47
3.45
2.75
2.72
2.94
2.05
.
Capital Return %
21.50
-15.41
0.31
27.07
-48.54
10.46
30.12
6.61
18.24
35.90
-19.90
.
Total Rtn % Rank Cat
60
32
82
54
23
40
41
72
32
37
47
.
Income $
2.03
2.39
2.86
2.38
3.62
2.94
2.24
1.68
1.41
1.12
0.98
1.04
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Expense Ratio %
0.12
0.12
0.14
0.14
0.16
0.12
0.12
0.17
0.18
0.18
0.23
0.23
Income Ratio %
3.16
3.89
3.58
3.10
3.91
3.92
3.45
3.45
2.93
2.76
2.84
2.41
Turnover Rate %
10
7
6
11
18
15
9
6
5
. .
15
Net Assets $mil
3,645
2,644
2,311
2,826
1,751
1,402
2,851
2,419
1,474
726
520
329
Performance
12-31-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-16.79 26.37 22.75 2.29 -44.67
-1.35 -15.72 20.40 4.91 32.04
6.08 2.81 -23.36 5.90
5.01
11.43 -7.32
8.69 7.79 -11.49
2.07 -0.11 13.33 8.08 20.99
Trailing
Total +/- MSCI
+/- MSCI
%Rank Growth of
Return% WexUS
Eur
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
8.08 3.31
0.20
61 10,808
22.48 7.14
-0.09
30 12,248
24.89 9.60
-0.34
61 12,489
10.18 5.04
0.29
62 13,375
13.15 0.34
-0.21
57 18,547
7.52 -0.05
0.24
57 20,649
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
9.30
51
0.80
72
12.23
60
0.81
83
6.72
54
0.74
26
Potential Capital Gain Exposure: -12% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
24.89
3 Yr
10.18
Avg
Avg
5 Yr
13.15
Avg
+Avg
10 Yr
7.52
Avg
Avg
Incept
6.92
Other Measures
Standard Index
Best Fit Index
MSCI WexUS
MSCI Eur
Alpha
4.5
0.4
Beta
1.09
0.99
R-Squared
94
99
Standard Deviation
18.52
Mean
10.18
Sharpe Ratio
0.61
Morningstar’s Take
by Alex Bryan 10-31-13
Although Europe is fraught with risk, Vanguard
European Stock Index is a compelling vehicle for
investors looking to take advantage of attractive
valuations, profit from a potential European recovery,
or improve diversification.
The fund invests in large- and mid-cap stocks across
16 developed countries in Europe, representing more
than 86% of the investable market. However, British
and Swiss stocks account for nearly half the portfolio.
This is the cheapest broad European-stock fund with
one of the most comprehensive portfolios available.
Consequently, it is one of the best options for passive
exposure to European equities and is a suitable core
holding. Its largest holdings are quality multinational
names, such as Novartis NVS, Vodafone VOD, Total
SA TOT, and Nestle NSRGY.
European stocks can offer meaningful diversification
benefits to U.S. investors. The FTSE Developed Europe
and Russell 1000 Indexes were 0.90 correlated over the
past decade. The fund offers greater exposure to
basic-materials stocks than most broad U.S. funds,
which tend to under-represent them. It also owns
more financial services stocks. While European banks
still face significant risks, these stocks may enhance
the fund’s diversification benefits. Like most
international funds, the fund does not hedge its
currency exposure. Consequently, it may help hedge
against a decline in the value of the U.S. dollar
relative to the euro and pound sterling.
This fund is also available as an exchange-traded
fund, Vanguard European ETF VGK. This hybrid
structure allows the fund’s managers to transfer
low-cost-basis shares out of the fund in a tax-free
transaction with the ETF’s market makers, known as
authorized participants. Low turnover further enhances
the fund’s tax efficiency. It has not distributed any
capital gains over the past decade.
In March 2013, Vanguard moved the fund from the
MSCI Europe Index to the FTSE Developed Europe
Index, citing potential cost savings. These indexes
offer nearly identical exposure. The fund’s low fees
and full index replication has kept tracking error low.
Address:
PO Box 2600
Valley Forge, PA 19482
800-662-7447
Web Address:
Inception:
08-13-01
Advisor:
Vanguard Group, Inc.
Subadvisor:
None
NTF Plans:
Vanguard NTF
Minimum Purchase:
$10000
Add: $100 IRA: $0
Min Auto Inv Plan:
$0
Add:
.
Sales Fees:
No-load
Management Fee:
0.09%
Actual Fees:
Mgt:0.09% Dist:
.
Expense Projections:
3Yr:$39
5Yr:$68 10Yr:$154
Income Distribution:
Quarterly
Data through December 31, 2013
Vanguard European Stock Index Adm
Ticker
Status Yield Total Assets
Mstar Category
VEUSX Open
2.8% $19,604 mil
Europe Stock
97% 97% 98% 98% 95% 97% 99% 99% 96%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 12-13
Historical Profile
Return
Risk
Rating
Average
Average
Neutral
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
MSCI WexUS
Performance Quartile
(within Category)
History
10.0
7.0
14.0
18.0
22.8
Portfolio Analysis
11-30-13
Share change since 10-13 Total Stocks:474 Sector
Country
% Assets
Nestle SA
Cnsmr Def
Switzerland
2.70
HSBC Holdings PLC
Finan Svs U.K.
2.39
Roche Holding AG
Hlth care Switzerland
2.25
Novartis AG
Hlth care Switzerland
2.11
Vodafone Group PLC
Comm Svs U.K.
2.07
BP PLC
Energy
U.K.
1.70
GlaxoSmithKline PLC
Hlth care U.K.
1.50
Royal Dutch Shell PLC Cl
Energy
U.K.
1.46
Total SA
Energy
France
1.41
Sanofi
Hlth care France
1.39
Bayer AG
Hlth care Germany
1.27
Siemens AG
Utilities
Germany
1.20
British American Tobacco
Cnsmr Def
U.K.
1.17
Basf SE
Basic Mat
Germany
1.13
Banco Santander SA
Finan Svs Spain
1.13
Royal Dutch Shell PLC Cl
Energy
U.K.
1.01
Daimler AG
Cnsmr Cyc Germany
0.95
Anheuser-Busch Inbev SA
Cnsmr Def
Belgium
0.93
Diageo PLC
Cnsmr Def
U.K.
0.92
Allianz SE
Finan Svs Germany
0.91
Current Investment Style
Market Cap %
Giant
61.1
Large
28.6
Mid
10.2
Small
0.0
Micro
0.0
Avg $mil:
48,716
Value Blnd Growth
Large Mid Small
Country Exposure
% Stock
U.K.
31
France
15
Switzerland 14
Germany
14
Spain
5
Regional Exposure
% Stock
UK/W. Europe100
Japan
0
Asia X Japan 0
N. America 0
Latn America 0
Other
0
Sector
Weightings
% of
Stocks
Rel MSCI
WexUS High
3 Year
Low
Cyclical 40.06
.
BasicMat 9.00
.
10 8
CnsmrCyc 9.30
.
10 7
FinanSvs 20.93
.
21 17
Real Est 0.83
.
1 1
Sensitive 28.98
.
CommSrvs 6.20
.
7 5
Energy 9.16
.
13 9
Industrl
9.57
.
12 10
Technlgy 4.05
.
4 3
Defensive30.96
.
CnsmrDef13.52
.
15 12
Hlthcare 12.55
.
13 9
Utilities 4.89
.
5 4
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
0.4
Stocks
96.3
Bonds
0.0
Other
3.3
Foreign
99.9
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
8.81
-2.76
-0.07
-1.12
-14.14
0.76
NMF
NMF
NMF
NMF
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
15.09
1.61
0.97
5.06
2.90
1.10
0.93
0.97
0.90
0.97
©
2013Morningstar, Inc.All rights reserved.The informationherein is not represented orwarranted to be accurate, correct, complete or
timely. Pastperformance is no guarantee of future results.Accessupdated reportsat
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