Vanguard European Stock Index Fund (VEURX) Investor Class

International stock funds don’t do very well during 2011. To achieve better performance, investor needs to choose the right international stock fund. One of the best ways is to pick the international stock index fund. One of this index funds is Vanguard European Stock Index fund.

Note: International stock funds can be categorized into various categories such as Europe stock fund, emerging market stock fund, global stock fund, and more.

Vanguard European Stock Index Investor (VEURX)

The Vanguard European Stock Index fund objective is to track the performance of a benchmark index, MSCI Europe Index.  This MSCI Europe Index benchmark measures the investment return of stocks issued by companies located in the major markets of Europe. This international stock fund uses passive management strategy or indexing investment approach. This index is made up of approximately 467 common stocks of companies located in 16 European countries. These companies are located in the United Kingdom, Germany, France, and Switzerland.

Fund Details

Vanguard European Stock Index

• Fund Inception Date: 06/18/1990
• Ticker Symbol: VEURX (investor shares)
• CUSIP: 922042205
• Beta (3yr): 1.18
• Rank in category (YTD): 35%
• Category: Europe Stock
• Distribution Rate: 4.25%
• Capital Gains: 0%
• Expense Ratio: 0.26%  
• Net Assets: $ 6.43 billion
• Number of Years Up: 15 years
• Number of Years Down: 5 years
• Annual Turnover Rate: 16%

Updated on 01/22/2012

The current lead manager of this index investment fund is Gerard C. O’Reilly. He has passively managed this fund since August 2008. This Vanguard fund is in the Europe Stock category. The total net assets of this fund are $6.42 billion. The fund has 4.25% dividend yield. The most recent distribution of the dividend was in December 2011 ($0.99). The annual expense ratio of this international stock fund is quite low (0.26%). This ratio is 84% lower than the average expense ratio of funds with similar holdings. The average expense ratio in the Europe Stock category is 1.65%. This is a no-load fund, meaning there is no front-end sales load fee for investing in this fund. There is also no 12b1 fee.

Best European Stock Mutual Funds 2012

Morningstar gave this fund 3-star rating for its performance. Since its inception in 1990, this fund has recorded 15 years of positive return among its 20 years in the market. The best 1-year achievement of this Europe stock fund was recorded in 2003 with 38.70%. The fund uses MSCI Europe Index and MSCI All Country World Index ex USA as the fund benchmarks for volatility benchmark purposes. Based on load adjusted returns, the fund performance is as follow:

• 1-year: -1.58%
• 3-year: 10.35%
• 5-year: -4.18%
• 10-year: 4.93%

To buy this Vanguard fund, investor will need a minimum of $3,000 for either brokerage or IRA account. The minimum subsequent investment for both accounts is $100. There are 76 brokerages that sell this top performer fund. They are JP Morgan, Vanguard, EP Fee Small, Protected Investors of America, E Trade Financial, Ameriprise Brokerage, Fidelity Retail Funds Network, Schwab Retail, etc. The other class of this fund besides Investor Shares is the Admiral Shares (VEUSX).

Fund Composition

As of December 2011, the top 10 largest holdings are Royal Dutch Shell PLC, Nestle SA, HSBC Holdings PLC, Vodafone Group PLC, BP PLC, Novartis AG, GlaxoSmithKline PLC, Roche Holding AG, Total SA, and British American Tobacco PLC. These top 10 holdings represent 22.0% of the total net assets. The top 8 countries in this fund are: United Kingdom (34%), France (14.9%), Switzerland (12.4%), Germany (13.1%), Spain (5%), Sweden (5%), Italy (4.1%), and Netherlands (3.9%).

Principal investment risks include: Stock Market risk, Country/ Regional risk, Currency risk, tracking error risk, etc.

Pros:

• It is an index fund and has low cost
• Low holding turnover rate

Cons:

• none

Disclosure: No Position

Other posts:

• Top Performer International Stock Mutual Funds of 2011