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FUND PROFILE
FOR
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NOVEMBER 1, 1996
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1 OBJECTIVE
Vanguard/Wellington Fund seeks to conserve the value of your investment and to
provide moderate capital growth and moderate income. The Fund may not meet
these objectives.
2 INVESTMENT STRATEGIES
The Fund's adviser uses a balanced investment approach. Approximately 60% to
70% of the Fund's total assets is invested in common stocks (with emphasis on
dividend-paying stocks of large and medium-size companies). The remaining 30%
to 40% of assets is invested in high-grade long-term corporate bonds as well as
U.S. Treasury, Government agency, and mortgage-backed securities.
3 RISKS
The Fund's total return will fluctuate, so an investor could lose money over
short or extended periods. Because of its balanced approach, Wellington Fund is
subject to less investment risk than a fund made up entirely of stocks but more
risk than an all-bond fund.
More specifically, investors in the Fund are exposed to . . .
o A HIGH degree of stock market risk (the possibility that stock prices
in general will decline over short or extended periods) because of the
Fund's significant investment in common stocks.
o A HIGH degree of interest rate risk (the possibility that bond prices
will fall as interest rates rise--and vice versa) because of the
Fund's bond holdings. For instance, a 2% increase in interest rates
would cause a 20-year bond to drop approximately 20% in value, while a
2% decrease in rates would cause the same bond to rise about 22% in
value.
o A LOW degree of credit risk (the possibility that a bond's issuer will
fail to repay interest and principal) because of the high quality of
the Fund's bond holdings.
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4 APPROPRIATENESS
This Fund may be suitable for investors who . . .
o Are seeking a balanced and diversified investment program that
includes both stocks and bonds.
o Plan to invest for at least five years.
o Want a fund that offers less investment risk and share-price
fluctuation than a fund made up entirely of stocks.
The Fund is not suitable for investors who . . .
o Cannot tolerate fluctuating share prices.
5 FEES AND EXPENSES
Vanguard/Wellington Fund--like all Vanguard Funds--is offered on a pure
no-load basis (that is, the Fund has no 12b-1 fees or charges to buy or sell
shares).
The Fund's operating expenses are deducted from its total assets before daily
share prices and income distributions are calculated. The Fund's expense ratio
for fiscal year 1995 was 0.33% of assets.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSE
-----------------------------
<S> <C>
Investment Advisory Fees . . . . . . . . . . . . . . . . . . 0.05%
Distribution Costs . . . . . . . . . . . . . . . . . . . . . 0.02
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . 0.26
-----
Total Operating Expenses . . . . . . . . . . . . . . . . . . 0.33%
=====
</TABLE>
The following example illustrates the expenses that you would incur on a $1,000
investment over various periods, assuming (1) a 5% annual rate of return and
(2) redemption at the end of each period.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------
<S> <C> <C> <C>
$3 $11 $19 $42
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be higher or lower than those
shown.
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6 PAST PERFORMANCE
PERFORMANCE
ANNUAL RETURNS (%) 1986-1995
<TABLE>
<CAPTION>
VANGUARD/WELLINGTON COMPOSITION STOCK/
FUND BOND INDEX*
-------- --------
<S> <C> <C>
1986 . . . . . . . . . . . . . . . . . 18.4 19.1
1987 . . . . . . . . . . . . . . . . . 2.3 5.0
1988 . . . . . . . . . . . . . . . . . 16.1 14.2
1989 . . . . . . . . . . . . . . . . . 21.6 26.0
1990 . . . . . . . . . . . . . . . . . -2.8 0.5
1991 . . . . . . . . . . . . . . . . . 23.6 27.0
1992 . . . . . . . . . . . . . . . . . 7.9 8.0
1993 . . . . . . . . . . . . . . . . . 13.5 11.1
1994 . . . . . . . . . . . . . . . . . -0.5 -1.2
1995 . . . . . . . . . . . . . . . . . 32.9 33.7
</TABLE>
PERFORMANCE SUMMARY
(PERIODS ENDED SEPTEMBER 30, 1996)
<TABLE>
<CAPTION>
Average Annual Total Return
Wellington Composite
Fund Stock/Bond Index*
<S> <C> <C>
1 Year 15.4% 14.3%
5 Years 13.4% 13.0%
10 Years 12.3% 13.3%
</TABLE>
Note: In evaluating past performance, it is important to consider that returns
from stocks and bonds were close to their highest levels in history during the
past ten years. Past performance is not indicative of future performance.
Performance figures include the reinvestment of all dividends and any capital
gains distributions. All returns are net of expenses. The performance data
quoted represent past performance. The investment return and principal value of
an investment will fluctuate so that investors' shares, when redeemed, may be
worth more or less than their original cost.
* For comparative purposes, 65% of the Composite Stock/Bond Index is made up of
the Standard & Poor's 500 Composite Stock Price Index (a diversified group of
500 securities used to measure U.S. stock market performance), and 35% is made
up of the Lehman Brothers Long-Term Corporate AA or Better Bond Index (a
barometer of corporate bonds rated AA or better). An index is unmanaged; you
cannot invest in an index.
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7 INVESTMENT ADVISER
The Fund is managed by Wellington Management Company, LLP, which oversees more
than $119 billion in total assets.
Ernst H. von Metzsch, Senior Vice President of Wellington Management Company,
LLP, has been portfolio manager since November 1995. Previously, he served as
the Fund's assistant portfolio manager for 20 years. Mr. von Metzsch is
assisted by Paul D. Kaplan, Senior Vice President of Wellington Management
Company, LLP, who began managing the Fund's fixed-income investments in 1994.
8 PURCHASES
You may purchase shares by mail, wire, or exchange from another Vanguard Fund.
The minimum initial investment is $3,000 ($1,000 for IRAs and custodial
accounts for minors).
9 REDEMPTIONS
You may redeem shares by sending a letter to or calling Vanguard. The Fund's
share price is expected to fluctuate and, at redemption, may be higher or lower
than at the time of initial purchase, resulting in a taxable gain or loss.
10 DISTRIBUTIONS
The Fund expects to pay dividends quarterly. Capital gains distributions, if
any, are paid annually. Dividend and capital gains distributions can be
automatically reinvested or received in cash. Both dividend and capital gains
distributions are taxable to you whether reinvested in additional shares or
received in cash.
11 OTHER SERVICES
o Vanguard Fund Express(R)--electronic transfers between your bank
account and the Fund.
o Vanguard Tele-Account(R)--around-the-clock access to Vanguard Fund
information, account balances, and some transactions by calling
1-800-662-6273 (ON-BOARD).
o Investor Information--toll-free access to Vanguard Associates by
calling 1-800-662-7447 (SHIP).
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This Fund Profile contains key information about the
Fund. If you would like more information before you
invest, please consult the Fund's accompanying
prospectus. For details about the Fund's holdings
or recent investment strategies, please review the
Fund's most recent annual or semi-annual report.
The prospectus and reports may be obtained at no cost
by calling 1-800-662-7447.
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