Vanguard International Stock Index Funds Annual Report

4
President’s Letter
Dear Shareholder,
As the world emerged from the worst
global financial crisis since the 1930s,
international stocks outpaced U.S.
equities for the 2009 fiscal year.
Governments’ fiscal policy and
stimulus programs played key roles
in the recovery. The recession receded
in several major European countries,
while the developing world’s economies,
which had avoided much of the financial
crisis fallout, continued to expand.
For the fiscal year ended October 31, 2009,
the Vanguard International Stock Index
Funds rallied strongly. The funds include
three separate index funds: European,
Pacific, and Emerging Markets. Vanguard
Developed Markets Index Fund and its
institutional counterpart, which previously
were included in this report and invest in
both European and Pacific markets, now
are covered in a separate report.
Most international bourses participated in
the rally, with emerging markets leading
the charge. Vanguard Emerging Markets
Stock Index Fund climbed about 60%.
Although not as dramatic, the results
of the European and Pacific developed
markets were also notable. Vanguard
European Stock Index Fund rose about
26%, and Vanguard Pacific Stock Index
Fund returned about 23%. Also during
the period, the U.S. dollar depreciated
13% against the euro and 9% against
the yen, an advantage for our funds’
U.S.-based investors in European and
Pacific markets, respectively.