Vanguard Closes Convertible Securities Fund

Business Wire, May 14, 2004

Business Editors

VALLEY FORGE, Pa.--(BUSINESS WIRE)--May 14, 2004

The Vanguard Group has closed Vanguard(R) Convertible Securities Fund (VCVSX) to new investments, effective immediately. This is the third fund that Vanguard has closed in 2004. The Convertible Securities Fund will not accept any new retail accounts nor additional purchases or exchanges into existing retail accounts.

"The board of trustees regularly monitors asset size and cash-flow activity across Vanguard's family of funds. The board's objective is to keep fund assets at reasonable and practical levels so that the advisors are able to execute their investment strategies effectively," said John J. Brennan, Vanguard chairman and CEO. "In this case, it was clear that continued strong cash flow, coupled with market appreciation, could make it increasingly difficult for the advisor to implement its disciplined, bottom-up approach in selecting convertible securities."

In the past 12 months, the Convertible Securities Fund's assets have more than doubled, from $481 million to $1.1 billion, through a combination of net cash flow and market appreciation. The decision to close the fund was made in conjunction with the fund's sole investment advisor, Oaktree Capital Management, LLC, of Los Angeles. Oaktree has managed the fund since 1996.

Four other Vanguard funds are currently closed: Vanguard(R) Capital Opportunity Fund (March 2004), Vanguard(R) PRIMECAP Fund (March 2004), Vanguard(R) Global Equity Fund (December 2003), and Vanguard(R) Precious Metals Fund (June 2002).

The Vanguard Group, headquartered in Valley Forge, Pennsylvania, is the nation's second-largest mutual fund firm and a leading provider of company-sponsored retirement plan services. Vanguard serves 18 million shareholder accounts and manages more than $720 billion in U.S. mutual fund assets, including more than $205 billion in employer-sponsored retirement plans. Vanguard offers 126 funds to U.S. investors and more than 40 additional funds in foreign markets.

For more information about Vanguard funds, visit www.vanguard.com, or call 800-662-7447, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; consider and read it carefully before investing. Vanguard Marketing Corporation, Distributor.