Vanguard Tax-Managed International Fund Annual Report ...
Vanguard Tax-Managed International Fund Annual Report ...
Vanguard Tax-Managed International Fund Annual Report ...
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2<br />
Chairman’s Letter<br />
Dear Shareholder,<br />
For the year ended December 31, 2009,<br />
<strong>Vanguard</strong> <strong>Tax</strong>-<strong>Managed</strong> <strong>International</strong><br />
<strong>Fund</strong> and its exchange-traded share<br />
class, <strong>Vanguard</strong> Europe Pacific ETF,<br />
returned about 28%, the fund’s secondbest<br />
performance since its inception<br />
in 1999.<br />
The fund closely followed the performance<br />
of its benchmark, the MSCI EAFE Index,<br />
although temporary price differences<br />
made it appear to diverge more than usual<br />
from the index at year-end. This difference<br />
largely reflected fair-value pricing policies<br />
(see page 6 for an explanation). Over the<br />
past 12 months, in fact, these policies<br />
explained just about all of the fund’s<br />
deviation from the index return. The fund<br />
also trailed the average return of its peer<br />
group, which includes funds that invest<br />
in emerging markets; as a group, those<br />
markets outperformed developed markets<br />
in 2009.<br />
For the fiscal period, the fund met its<br />
tax-efficiency objective, as it has since<br />
inception. As you can see in the<br />
Performance at a Glance table on page 1,<br />
the fund’s advisor, <strong>Vanguard</strong> Quantitative<br />
Equity Group, continued to avoid distributing<br />
taxable capital gains to shareholders.
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