Primary Risks
An investment in the Fund could lose money over short or even long periods. You should expect the Funds share price and total return to fluctuate within a wide range, like the fluctuations of global stock markets. The Fund is subject to the following risks, which could affect the Funds performance:
Stock market risk
, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. The Funds investments in foreign stocks can be riskier than U.S. stock investments. The prices of foreign stocks and the prices of U.S. stocks have, at times, moved in opposite directions. In addition, the Funds target index may, at times, become focused in stocks of a particular market sector, which would subject the Fund to proportionately higher exposure to the risks of that sector.
Country/regional risk,
which is the chance that world eventssuch as political upheaval, financial troubles, or natural disasterswill adversely affect the value of securities issued by companies in foreign countries or regions. The Indexs, and therefore the Funds, heavy exposure to four countries (the United Kingdom, France, Switzerland, and Germany) subjects the Fund to a higher degree of country risk than that of more geographically diversified international funds.
Currency risk
, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. Because ETF Shares are traded on an exchange, they are subject to additional risks:
The Funds ETF Shares are listed for trading on NYSE Arca and are bought and sold on the secondary market at market prices. Although it is expected that the market price of an ETF Share typically will approximate its net asset value (NAV), there may be times when the market price and the NAV differ significantly. Thus, you may pay more or less than NAV when you buy ETF Shares on the secondary market, and you may receive more or less than NAV when you sell those shares.
Although the Funds ETF Shares are listed for trading on NYSE Arca, it is possible that an active trading market may not be maintained.
Trading of the Funds ETF Shares may be halted by the activation of individual or marketwide circuit breakers (which halt trading for a specific period of time when the price of a particular security or overall market prices decline by a specified percentage). Trading of the Funds ETF Shares may also be halted if (1) the shares are delisted from NYSE Arca without first being listed on another exchange or (2) NYSE Arca officials determine that such action is appropriate in the interest of a fair and orderly market or for the protection of investors.
An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
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Annual Total Returns
The following bar chart and table are intended to help you understand the risks of investing in the Fund. The bar chart shows how the performance of the Funds ETF Shares (based on NAV) has varied from one calendar year to another over the periods shown. The table shows how the average annual total returns of the ETF Shares compare with those of the Funds target index and other comparative indexes, which have investment characteristics similar to those of the Fund. Effective March 27, 2013, the Fund began tracking the FTSE Developed Europe Index as its target index. The Funds board of trustees believes that tracking the current index will result in considerable savings for the Funds shareholders over time. FTSE Developed Europe Index returns are adjusted for withholding taxes applicable to U.S.-based mutual funds organized as Delaware statutory trusts. MSCI Europe Index returns are adjusted for withholding taxes. Keep in mind that the Funds past performance (before and after taxes) does not indicate how the Fund will perform in the future. Updated performance information is available on our website at
vanguard.com/performance
or by calling Vanguard toll-free at 800-662-7447.
During the periods shown in the bar chart, the highest return for a calendar quarter was 26.37% (quarter ended June 30, 2009), and the lowest return for a quarter was 23.35% (quarter ended September 30, 2011).
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