Vanguard International Growth Fund

Scorecard
3 / 5 Stars
Lipper
5 5 2 5 2
Zacks Investment Research
2 (Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
D- (Sell)

U.S. News evaluated 76 Foreign Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 18.91 percent over the past year, 7.57 percent over the past three years, 20.43 percent over the past five years, and 8.27 percent over the past decade.

Trailing Returns Updated 02.28.2014
Year to date -0.6%
1 Year 18.9%
3 Years (Annualized) 7.6%
5 Years (Annualized) 20.4%
10 Years (Annualized) 8.3%

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Summary

The Vanguard International Growth fund takes a mutifaceted approach to global stocks.

As of March 05, 2014, the fund has assets totaling $22.83 billion. Its portfolio consists of common stocks in large companies outside the United States that are considered to have above-average potential for growth.

While the fund has the brunt of its portfolio in developed markets, it also has sizeable positions in emerging markets. The fund's emerging-markets stake left it exposed during the 2008 downturn, when developing-world shares took a huge hit as investors fled to safer assets. However, in 2009 investors returned to the asset class, and emerging-markets bets rebounded handily. Compared with its benchmark, the fund had a smaller stake in troubled financials during the credit crisis, and its stock selections in the financial sector helped in 2009. The fund outpaced its peers in 2010 despite hefty exposure to ailing Europe thanks in part to large positions in China's Baidu and mining giant Rio Tinto. The fund has returned 18.91 percent over the past year and 7.57 percent over the past three years.

The fund has outperformed roughly 80 percent of its peers over the trailing five years, according to Morningstar. In December 2009, Simon Webber replaced Matthew Dobbs as a portfolio manager for Schroeder Investment Management, and will work with Virginie Maisonneuve, who has managed a portion of the fund since 2005. The fund has returned 20.43 percent over the past five years and 8.27 percent over the past decade.

Investment Strategy

Its strategy is to buy high-quality, reasonably priced international securities with high growth prospects.

Role in Portfolio

Morningstar calls this fund a core player in an investment portfolio.

Management

The fund is run by three subadvisers who are overseen by Vanguard. Each subadviser applies fundamental research with differing styles that align with the fund’s overall growth-focused investment strategy. Comanagers Virginie Maisonneuve and Simon Webber manage about half of the fund’s assets. The fund’s second subadviser, Baillie Gifford, is run by James Anderson, who became a comanager in 2003 and manages approximately 42 percent of the fund’s assets. M&G Investment Management Limited, run by Greg Aldridge and Graham French, manages about 8 percent of assets, according to Morningstar.  

Fees

Vanguard International Growth Fund has an expense ratio of 0.35 percent.

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Risk

With international investments, there is risk of regional, political, economic, and currency changes. The fund carries some risk because of its larger-than-average stake in emerging markets, which tend to be more volatile than developed markets.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 4 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 3 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 4 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-03-12

The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.

Money 70 2011-01-21

In the 2009 Award Winners edition of The Independent Adviser for Vanguard Investors, Dan Wiener says, "With growth stocks presenting some decent opportunities, this fund is a good option as a core foreign holding."

2010-01-26

In the annual Lipper/Barron’s Fund Families Survey for 2009, Vanguard ranks 40th out of 61 fund families surveyed.

2010-02-17

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “This isn’t Jack Bogle’s Vanguard, but it’s still a fine steward of shareholders’ wealth. The family’s mutual ownership structure helps it offer low fees and keep investor interests paramount. A blemish-free regulatory record and loyal fund owners and employees also help make this a trustworthy fund.”

Morningstar 2010-02-17

In the annual Lipper/Barron’s Fund Families Survey for 2009, Vanguard ranks 40th out of 61 fund families surveyed.

2010-02-17

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “This isn’t Jack Bogle’s Vanguard, but it’s still a fine steward of shareholders’ wealth. The family’s mutual ownership structure helps it offer low fees and keep investor interests paramount. A blemish-free regulatory record and loyal fund owners and employees also help make this a trustworthy fund.”

Morningstar 2010-02-17