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VANGUARD/
WELLINGTON
FUND
Fund Profile
April 24, 1997
THE VANGUARD GROUP
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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 STRATEGY
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 1996 was 0.31% of assets.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
------------------------------
<S> <C>
Investment Advisory Fees..... 0.04%
Distribution Costs........... 0.02
Other Expenses............... 0.25
----
Total Operating Expenses .... 0.31%
====
</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 $10 $17 $39
</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
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------
WELLINGTON COMPOSITE
FUND STOCK/BOND INDEX*
-------------- -----------------
<S> <C> <C>
1 Year 13.0% 14.2%
5 Years 14.0% 13.5%
10 Years 11.2% 12.0%
</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 $136 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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[LOGO]
Post Office Box 2600
Valley Forge, PA 19482
Toll-Free Investor
Information
1-800-662-7447
World Wide Web
http://www.vanguard.com
E-mail
[email protected]
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 semiannual report.
The prospectus and reports may be obtained at no cost by calling Vanguard.
(C)1997 Vanguard Marketing
Corporation, Distributor
FP21.0497-30A
