Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.

In theory, actively managed overseas funds stand a better chance of shining against international index funds because foreign markets tend to be less efficient than ours, giving managers a better chance to shine. In practice, Vanguard Total International Stock Index has more than held its own against actively managed funds. Total International, which invests in three narrow Vanguard overseas index funds, got off to a sluggish start, invests in three Vanguard regional index funds, got off to a sluggish start but has now outpaced the average diversified foreign fund six straight years.

It also beat its benchmark, the MSCI EAFE index, each year between 2001 and 2005 and was running neck and neck with it in 2006 through December 21.

One big difference between Total International and the EAFE index is that the fund has significant exposure to emerging markets and the index doesn't. In addition to its holdings in Vanguard European Stock Index (59% of assets at last report) and Vanguard Pacific Stock Index (26%), Total International also has a 15% in Vanguard Emerging Markets Stock Index. None of the funds hedges its exposure to foreign currencies, which means that investors benefit when the dollar falls and suffer when it appreciates.

The fund's low fees give it a big edge over the competition. Total International's expense ratio of 0.31% is 1.2 percentage points below the average expense ratio of diversified overseas funds (not including those that focus on small-company stocks). BUY this fund for low-cost, no-fuss exposure to foreign stock markets.

FUND FACTS

Vanguard Total International Stock Index (VGTSX) Assets: $19.1 billion Managers: Michael Buek (Pacific Stock Index) and Duane Kelly (European Stock Index and Emerging Markets Index) Returns (vs. MSCI EAFE)* Year to date: 25.8% (25.0%) One year: 25.3% (24.4%) Three years annualized: 21.5% (20.4%) Five years annualized: 16.6% (15.4%) Ten years annualized: 7.3% (7.2%) Expense ratio: 0.31% Portfolio turnover: 3% Initial minimum investment: $3,000 Phone: 800-635-1511 Web site: www.vanguard.com *Returns through December 27 Fund Fact sources: Standard & Poor's, Morningstar

View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.

Go to A Close Look at the 20 Biggest No-Load Stock Funds.

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