1. Heat oven to 350 degrees F. Grease baking sheet.
2. Beat butter and sugar in a medium-size bowl until smooth and creamy, about 3 minutes. Blend in the flour, vanilla, pecans and coconut.
3. Break off pieces of dough by tablespoons. Roll on floured surface into small log. Shape into horseshoes. Place on prepared baking sheet.
4. Bake in 350 degrees F oven 7 to 10 minutes or until lightly browned. Remove to wire rack to cool.
5. Roll in confectioners sugar and serve.