VANGUARD/WELLINGTON FUND INC, 485BPOS, 1998-03-05

VANGUARD/WELLINGTON FUND INC
485BPOS, 1998-03-05

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<PAGE> 1

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT (NO. 2-11444) UNDER
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [X]
POST-EFFECTIVE AMENDMENT NO. 78 [X]
AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 78 [X]

VANGUARD/WELLINGTON FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

P.O. BOX 2600, VALLEY FORGE, PA 19482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER (610) 669-1000

RAYMOND J. KLAPINSKY, ESQUIRE
P.O. BOX 876
VALLEY FORGE, PA 19482

IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE:

on March 19, 1998, pursuant to paragraph (b) of Rule 485.

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Registration Statement becomes effective.

WE HAVE ELECTED TO REGISTER AN INDEFINITE NUMBER OF SHARES PURSUANT TO
REGULATION 24f-2 UNDER THE INVESTMENT COMPANY ACT OF 1940. WE FILED OUR RULE
24f-2 NOTICE FOR THE PERIOD ENDED NOVEMBER 30, 1997 ON FEBRUARY 27, 1998.

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<PAGE> 2

VANGUARD/WELLINGTON FUND, INC.

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
FORM N-1A
ITEM NUMBER LOCATION IN PROSPECTUS
<C> <S> <C>
Item 1. Cover Page........................................... Cover Page
Item 2. Synopsis............................................. Not Applicable
Item 3. Condensed Financial Information...................... Financial Highlights; Fund
Expenses
Item 4. General Description of Registrant.................... Investment Strategy; Investment
Limitations; Investment
Policies; General Information;
Investment Risks
Item 5. Management of the Fund............................... Management of the Fund; The Fund
and Vanguard
Item 5A. Management's Discussion of Fund Performance.......... Herein incorporated by reference
to Registrant's Annual Report to
Shareholders dated November 30,
1997 filed with the Securities &
Exchange Commission's EDGAR
system on January 20, 1998
Item 6. Capital Stock and Other Securities................... Investing with Vanguard; Buying
Shares; Redeeming Shares; The
Share Price; Dividends, Capital
Gains and Taxes; General
Information
Item 7. Purchase of Securities Being Offered................. Cover Page; Investing in
Vanguard; Buying Shares
Item 8. Redemption or Repurchase............................. Redeeming shares
Item 9. Pending Legal Proceedings............................ Not Applicable
FORM N-1A LOCATION IN STATEMENTS
ITEM NUMBER OF ADDITIONAL INFORMATION
Item 10. Cover Page........................................... Cover Page
Item 11. Table of Contents.................................... Cover Page
Item 12. General Information and History...................... Investment Objectives and
Policies; General Information
Item 13. Investment Objective and Policies.................... Investment Objectives and
Policies; Investment Limitations
Item 14. Management of the Registrant......................... Management of the Fund;
Investment Management
Item 15. Control Persons and Principal Holders of
Securities........................................... Management of the Fund; General
Information
Item 16. Investment Advisory and Other Services............... Management of the Fund;
Investment Management
Item 17. Brokerage Allocation................................. Not Applicable
Item 18. Capital Stock and Other Securities................... General Information; Financial
Statements
Item 19. Purchase, Redemption and Pricing of Securities Being
Offered.............................................. Purchase of Shares; Redemption
of Shares
Item 20. Tax Status........................................... Not Applicable
Item 21. Underwriters......................................... Not Applicable
Item 22. Calculations of Performance Data..................... Not Applicable
Item 23. Financial Statements................................. Financial Statements
</TABLE>

<PAGE> 3
VANGUARD/
WELLINGTON FUND

Prospectus
March 19, 1998

This prospectus contains financial data for the Fund through the fiscal year
ended November 30, 1997.

[THE VANGUARD GROUP LOGO]
<PAGE> 4
VANGUARD/WELLINGTON FUND A BALANCED MUTUAL FUND

CONTENTS

Fund Profile 1

Fund Expenses 2

Financial Highlights 3

A Word About Risk 4

The Fund's Objectives 4

Who Should Invest 4

Investment Strategy 5

Investment Policies 8

Investment Limitations 10

Investment
Performance 10

Share Price 11

Dividends, Capital
Gains, and Taxes 11

The Fund and
Vanguard 12

Investment Adviser 13

General Information 14

Investing
with Vanguard 15

Services and
Account Features 15

Types of Accounts 16

Distribution Options 17

Buying Shares 18

Redeeming Shares 19

Transferring
Registration 22

Fund and Account
Updates 22

Prospectus Postscript 24

Glossary Inside Back Cover

INVESTMENT OBJECTIVES AND POLICIES

Vanguard/Wellington Fund (the "Fund") is a diversified open-end investment
company, or mutual fund, that seeks to conserve capital and to provide moderate
long-term capital growth and moderate income.

The Fund invests approximately 60% to 70% of its assets in dividend-paying
stocks of established, large- and medium-sized companies that, in the adviser's
opinion, are undervalued but whose prospects are improving. The remaining 30% to
40% of assets are invested primarily in high-quality, longer-term corporate
bonds with some exposure to U.S. Treasury, government agency, and
mortgage-backed bonds.

IT IS IMPORTANT TO NOTE THAT THE FUND'S SHARES ARE NOT GUARANTEED OR
INSURED BY THE FDIC OR ANY OTHER AGENCY OF THE U.S. GOVERNMENT. AS WITH ANY
INVESTMENT IN STOCKS (WHICH ARE SUBJECT TO WIDE FLUCTUATIONS IN MARKET VALUE)
AND BONDS (WHICH ARE SENSITIVE TO CHANGES IN INTEREST RATES), YOU COULD LOSE
MONEY BY INVESTING IN THE FUND.

FEES AND EXPENSES

The Fund is offered on a no-load basis, which means that you pay no sales
commissions or 12b-1 marketing fees. You will, however, incur expenses for
investment advisory, management, administrative, and distribution services,
which are included in the expense ratio.

ADDITIONAL INFORMATION ABOUT THE FUND

A Statement of Additional Information (dated March 19, 1998) containing more
information about the Fund is, by reference, part of this prospectus and may be
obtained without charge by writing to Vanguard, calling our Investor Information
Department at 1-800-662-7447, or visiting the Securities and Exchange
Commission's website (www.sec.gov).

WHY READING THIS PROSPECTUS IS IMPORTANT

This prospectus explains the objectives, risks, and strategy of
Vanguard/Wellington Fund. To highlight terms and concepts important to mutual
fund investors, we have provided "Plain Talk" explanations along the way.
Reading the prospectus will help you to decide whether the Fund is the right
investment for you. We suggest that you keep it for future reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<PAGE> 5
FUND PROFILE Vanguard/Wellington Fund

WHO SHOULD INVEST (page 4)

- - Investors seeking moderate long-term capital growth and moderate income.

- - Investors willing to invest for the long term -- at least five years.

WHO SHOULD NOT INVEST

- - Investors seeking significant dividend income.

- - Investors unwilling to accept significant share-price fluctuations.

RISKS OF THE FUND (pages 4 - 10)

The Fund's total return will fluctuate within a wide range, so an investor could
lose money over short or even extended periods. The Fund is subject to -- among
other risks -- stock market risk (the chance that stock prices in general will
decline, sometimes suddenly and sharply) and interest rate risk (the chance that
bond prices will decline because of rising interest rates).

DIVIDENDS AND CAPITAL GAINS (page 11)

Dividends are paid in March, June, September, and December. Capital gains, if
any, are paid in December.

INVESTMENT ADVISER (page 13)

Wellington Management Company, LLP,
Boston, Mass.

INCEPTION DATE: July 1, 1929

NET ASSETS AS OF 11/30/1997: $21.3 billion

FUND'S EXPENSE RATIO FOR THE
YEAR ENDED 11/30/1997: 0.29%

LOADS, 12b-1 MARKETING FEES: None

SUITABLE FOR IRAS: Yes

MINIMUM INITIAL INVESTMENT: $3,000; $1,000 for IRAs and custodial accounts for
minors

NEWSPAPER ABBREVIATION: Welltn

VANGUARD FUND NUMBER: 021

CUSIP NUMBER: 921935102

QUOTRON SYMBOL: VWELX.Q

ACCOUNT FEATURES (page 15)

- - Telephone Redemption

- - Vanguard Direct Deposit Service(TM)

- - Vanguard Automatic Exchange Service(SM)

- - Vanguard Fund Express(R)

- - Vanguard Dividend Express(SM)

AVERAGE ANNUAL TOTAL RETURNS--
PERIODS ENDED NOVEMBER 30, 1997

<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
Wellington Fund 18.6% 16.6% 15.1%
Composite Index* 21.7 16.4 16.0
</TABLE>

*65% stocks, 35% bonds. See page 11 for details.

QUARTERLY RETURNS (%) 1988 - 1997 (intended to show volatility of returns)

<TABLE>
<CAPTION>
QUARTERLY RETURN QUARTER FUND/PORTFOLIO BENCHMARK
- ---------------- ------- -------------- ---------

*65% stocks, 35% bonds. See page 11 for details.

In evaluating past performance, remember that it is not indicative of future
performance and that returns from stocks before adjusting for inflation were
relatively high during the periods shown. Performance figures include the
reinvestment of any dividend and capital gains distributions. The returns shown
are net of expenses for the Fund, but they do not reflect income taxes an
investor would have incurred. The Composite Index is a theoretical portfolio,
incurring none of the advisory fees, operating expenses, and portfolio
transaction costs that are borne by an operating mutual fund. Note, too, that
both the return and principal value of an investment will fluctuate, so
investors' shares, when redeemed, may be worth more or less than their original
cost.

1
<PAGE> 6
PLAIN TALK ABOUT

THE COSTS OF INVESTING

Costs are an important consideration in choosing a mutual fund. That's because
you, as a shareholder, pay the costs of operating a fund plus any transaction
costs associated with buying, selling, or exchanging shares. These costs can
erode a substantial portion of the gross income or capital appreciation a fund
achieves. Even seemingly small differences in fund expenses can, over time, have
a dramatic impact on a fund's performance.

PLAIN TALK ABOUT

FUND EXPENSES

All mutual funds have operating expenses. These expenses, which are deducted
from a fund's gross income, are expressed as a percentage of the net assets of
the fund. Vanguard/Wellington Fund's expense ratio in fiscal year 1997 was
0.29%, or $2.90 per $1,000 of average net assets. The average balanced mutual
fund had expenses in 1997 of 1.34%, or $13.40 per $1,000 of average net assets,
according to Lipper Analytical Services, which reports on the mutual fund
industry.

FUND EXPENSES

The examples below are designed to help you understand the various costs you
would bear, directly or indirectly, as an investor in the Fund.

As noted in this table, you do not pay fees of any kind when you buy,
sell, or exchange shares of the Fund:

<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases: None
Sales Load Imposed on Reinvested Dividends: None
Redemption Fees: None
Exchange Fees: None
</TABLE>

The next table illustrates the operating expenses that you would incur as
a shareholder of the Fund. These expenses are deducted from the Fund's income
before it is paid to you. Expenses include investment advisory fees as well as
the costs of maintaining accounts, administering the Fund, providing shareholder
services, and other activities. The expenses shown in the table are based upon
those incurred in the fiscal year ended November 30, 1997.

<TABLE>
<CAPTION>
<S> <C> <C>
ANNUAL FUND OPERATING EXPENSES
Management and Administrative Expenses: 0.22%
Investment Advisory Expenses: 0.04%
12b-1 Marketing Fees: None
Other Expenses
Marketing and Distribution Costs: 0.02%
Miscellaneous Expenses (e.g., Taxes, Auditing): 0.01%
-----
Total Other Expenses: 0.03%
-----
TOTAL OPERATING EXPENSES (EXPENSE RATIO): 0.29%
=====
</TABLE>

The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds, by
illustrating the hypothetical expenses that you would incur on a $1,000
investment over various periods. The example assumes that (1) the Fund provides
a return of 5% a year and (2) you redeem your investment at the end of each
period.

<TABLE>
<CAPTION>
---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------
<S> <C> <C> <C> <C>
$3 $9 $16 $37
---------------------------------------------
</TABLE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE, WHICH MAY BE HIGHER OR LOWER THAN
THOSE SHOWN.

2
<PAGE> 7
FINANCIAL HIGHLIGHTS

The following financial highlights table shows the results for a share
outstanding of the Fund for each of the fiscal years in the decade ended
November 30, 1997. The financial statements that include these financial
highlights were audited by Price Waterhouse LLP, independent accountants. You
should read this information in conjunction with the Fund's financial statements
and accompanying notes, which appear, along with the audit report from Price
Waterhouse, in the Fund's most recent annual report to shareholders. The annual
report is incorporated by reference in the Statement of Additional Information
and in this prospectus, and contains a more complete discussion of the Fund's
performance. You may have the report sent to you without charge by writing to
Vanguard or by calling our Investor Information Department.

<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
--------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 28.34 $ 24.57 $ 19.33 $20.78 $19.34 $17.95 $16.29 $18.40 $16.82 $14.92
--------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS

Net Investment Income 1.11 1.02 .96 .88 .92 .93 .96 1.01 1.02 .96
Net Realized and Unrealized
Gain (Loss) on Investments 3.77 4.00 5.19 (1.03) 1.62 1.65 1.71 (1.46) 2.12 2.06
TOTAL FROM INVESTMENT
OPERATIONS 4.88 5.02 6.15 (.15) 2.54 2.58 2.67 (.45) 3.14 3.02
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS

Dividends from Net Investment
Income (1.06) (.97) (.88) (.92) (.94) (.96) (1.01) (1.06) (.98) (.98)
Distributions from Realized
Capital Gains (1.11) (.28) (.03) (.38) (.16) (.23) -- (.60) (.58) (.14)

TOTAL DISTRIBUTIONS (2.17) (1.25) (.91) (1.30) (1.10) (1.19) (1.01) (1.66) (1.56) (1.12)
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 31.05 $28.34 $ 24.57 $19.33 $20.78 $19.34 $17.95 $16.29 $18.40 $16.82
==================================================================================================================================
TOTAL RETURN 18.60% 21.26% 32.70% -0.82% 13.62% 14.99% 16.81% -2.65% 19.98% 21.03%
==================================================================================================================================
RATIOS/SUPPLEMENTAL DATA

Net Assets, End of Period (Millions) $21,340 $16,505 $12,333 $8,638 $7,917 $5,359 $3,473 $2,317 $2,035 $1,527
Ratio of Total Expenses
to Average Net Assets 0.29% 0.31% 0.33% 0.35% 0.34% 0.33% 0.35% 0.43% 0.42% 0.47%
Ratio of Net Investment Income
to Average Net Assets 3.97% 4.08% 4.37% 4.35% 4.55% 4.98% 5.39% 5.99% 5.77% 5.88%
Portfolio Turnover Rate 27% 30% 24% 32% 34% 24% 35% 33% 30% 28%
Average Commission Rate Paid $ .0571 $ .0287 N/A N/A N/A N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

From time to time, the Vanguard funds advertise yield and total return
figures. Yield is a historical measure of dividend income, and total return is a
measure of past dividend income (assuming that it has been reinvested) plus
realized and unrealized capital appreciation (depreciation). Neither yield nor
total return should be used to predict the future performance of a fund.

PLAIN TALK ABOUT

HOW TO READ THE FINANCIAL
HIGHLIGHTS TABLE

The Fund began fiscal 1997 with a net asset value (price) of $28.34 per share.
During the year, the Fund earned $1.11 per share from investment income
(interest and dividends) and $3.77 per share from investments that had
appreciated in value or that were sold for higher prices than the Fund paid for
them. Of those total earnings of $4.88 per share, $1.06 per share was returned
to shareholders in the form of dividend distributions, and $1.11 per share in
the form of capital gains distributions. The earnings ($4.88 per share) less
total distributions ($2.17 per share) resulted in a share price of $31.05 at the
end of the year, an increase of $2.71 per share (from $28.34 at the beginning of
the period to $31.05 at the end of the period). Assuming that the shareholder
had reinvested the distributions in the purchase of more shares, total return
from the Fund was 18.60% for the year.

As of November 30, 1997, the Fund had $21.3 billion in net assets; an
expense ratio of 0.29% ($2.90 per $1,000 of net assets); and net investment
income amounting to 3.97% of its average net assets. It sold and replaced
securities valued at 27% of its total net assets.

3
<PAGE> 8
PLAIN TALK ABOUT

BALANCED FUNDS
Balanced funds are "middle-of-the-road" investments that seek to provide some
combination of growth, income, and conservation of capital by investing in a mix
of stocks, bonds, and/or money market instruments. Because stocks and bonds tend
to move in different directions, balanced funds are able to use the rewards from
one type of investment to help offset the risks from another.

A WORD ABOUT RISK

This prospectus describes the risks you would face as an investor in
Vanguard/Wellington Fund. It is important to keep in mind one of the main axioms
of investing: The higher the risk of losing money, the higher the potential
reward. The reverse, also, is generally true: The lower the risk, the lower the
potential reward. However, as you consider an investment in Vanguard/Wellington
Fund, you should also take into account your personal tolerance for the daily
fluctuations of both the stock and bond markets.

Look for the "warning flag" symbol [flag] throughout the prospectus. It
is used to mark detailed information about each type of risk that you, as a
shareholder of the Fund, would confront.

THE FUND'S OBJECTIVES

The Fund seeks to conserve capital and to provide moderate long-term capital
growth and moderate income. These objectives are not fundamental, which means
that they can be changed by the Fund's Board of Directors without shareholder
approval. However, before making any important change in its objectives, the
Fund will give shareholders 30 days' notice, in writing.

[FLAG] BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED ON THE FOLLOWING PAGES,
YOUR INVESTMENT IN THE FUND, AS WITH ANY INVESTMENT IN STOCKS AND BONDS,
COULD LOSE MONEY.

WHO SHOULD INVEST

The Fund may be a suitable investment for you if:

- - You wish to add a balanced fund to your existing holdings, which could
include other stock and bond -- as well as money market and tax-exempt --
investments.

- - You are seeking moderate growth of your capital over the long term -- at
least five years -- while, at the same time, conserving your capital as
much as possible.

- - You are seeking moderate current income.

- - You want a simple way to invest in a relatively fixed percentage of stocks
and bonds.

This Fund is not an appropriate investment if you are a market-timer.
Investors who engage in excessive in-and-out trading activity generate
additional costs that are borne by all of the Fund's shareholders. To minimize
such costs, which reduce the ultimate returns achieved by you and other
shareholders, the Fund has adopted the following policies:

4
<PAGE> 9
- - The Fund reserves the right to reject any purchase request -- including
exchanges from other Vanguard funds -- that it regards as disruptive to
the efficient management of the Fund. This could be because of the timing
of the investment or because of a history of excessive trading by the
investor.

- - There is a limit on the number of times you can exchange into or out of
the Fund (see "Redeeming Shares" in the INVESTING WITH VANGUARD section).

- - The Fund reserves the right to stop offering shares at any time.

INVESTMENT STRATEGY

This section explains how the investment adviser pursues the Fund's objectives
of conservation of capital, moderate long-term capital growth, and moderate
current income. It also explains important risks -- stock market risk, interest
rate risk, manager risk, and credit risk -- faced by investors in the Fund. Like
the Fund's objectives, the adviser's investment strategy is not fundamental and
can be changed by the Fund's Board of Directors without shareholder approval.
However, before making any important change in its strategy, the Fund will give
shareholders 30 days' notice, in writing.

MARKET EXPOSURE

STOCKS
Roughly two-thirds of the Fund's assets are invested in common stocks. At times,
the Fund may also invest in securities that are convertible into common stocks.

[FLAG] THE FUND IS SUBJECT TO STOCK MARKET RISK, WHICH IS THE POSSIBILITY THAT
STOCK PRICES OVERALL WILL DECLINE OVER SHORT OR EVEN EXTENDED PERIODS.
STOCK MARKETS TEND TO MOVE IN CYCLES, WITH PERIODS OF RISING STOCK PRICES
AND PERIODS OF FALLING STOCK PRICES.

To illustrate the volatility of stock prices, the following table shows the
best, worst, and average total returns (dividend income plus change in market
value) for the U.S. stock market over various periods as measured by the
Standard & Poor's 500 Composite Stock Price Index, a widely used barometer of
stock market activity. Note that the returns shown do not include the costs of
buying and selling stocks or other expenses that a real-world investment
portfolio would incur. Note, also, how the gap between best and worst tends to
narrow over the long term.

PLAIN TALK ABOUT

COSTS AND MARKET-TIMING

Some investors try to profit from "market-timing" -- switching money into
investments when they expect prices to rise, and taking money out when they
expect the market to fall. As money is shifted in and out, a fund incurs
expenses for buying and selling securities. These costs are borne by all fund
shareholders, including long-term investors who do not generate the costs.
Therefore, the Fund discourages short-term trading by, among other things,
limiting the number of exchanges it permits.

5
<PAGE> 10
PLAIN TALK ABOUT

BONDS AND INTEREST RATES

As a rule, when interest rates rise, bond prices fall. The opposite is also
true: Bond prices go up when interest rates fall. Why do bond prices and
interest rates move in opposite directions? Let's assume that you hold a bond
offering a 5% yield. A year later, interest rates are on the rise and bonds are
offered with a 6% yield. With higher-yielding bonds available, you would have
trouble selling your 5% bond for the price you paid -- causing you to lower your
asking price. On the other hand, if interest rates were falling and 4% bonds
were being offered, you would be able to sell your 5% bond for more than you
paid.

PLAIN TALK ABOUT

BOND MATURITIES

A bond is issued with a specific maturity date -- the date when the bond's
issuer, or seller, must pay back the bond's initial value (known as its "face
value"). Bond maturities generally range from less than one year (short term) to
30 years (long term). The longer a bond's maturity, the more risk you, as a bond
investor, face as interest rates rise -- but also the more interest you could
receive. Long-term bonds are more suitable for investors willing to take greater
risks in hope of higher yields; short-term bond investors should be willing to
accept lower yields in return for less fluctuation in the value of their
investment.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------
U.S. STOCK MARKET RETURNS (1926 - 1997)
- -----------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS 20 YEARS
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
Best 53.9% 23.9% 20.1% 16.9%
Worst -43.3 -12.5 -0.9 3.1
Average 13.0 10.5 10.9 10.9
- -----------------------------------------------------------------
</TABLE>

The table covers all of the 1-, 5-, 10-, and 20-year periods from 1926
through 1997. For example, while the average return on stocks for all of the
5-year periods was 10.5%, returns for these 5-year periods ranged from a -12.5%
average (from 1928 through 1932), to 23.9% (from 1950 through 1954). These
average returns reflect past performance of common stocks and should not be
regarded as an indication of future returns from either the stock market as a
whole or this Fund in particular.

Finally, because Vanguard/Wellington Fund does not hold the same
securities held in the S&P 500 Index or any other market index, the performance
of the Fund will not mirror the returns of any particular index.

BONDS

Approximately one-third of the Fund's assets are invested in bonds.

[FLAG] THE FUND IS SUBJECT TO INTEREST RATE RISK, WHICH IS THE POSSIBILITY THAT
BOND PRICES OVERALL WILL DECLINE OVER SHORT, OR EVEN EXTENDED, PERIODS
DUE TO RISING INTEREST RATES. INTEREST RATE RISK SHOULD BE MODEST FOR
SHORTER-TERM BONDS AND HIGH FOR LONGER-TERM BONDS.

Although bonds are often thought to be less risky than stocks, there have
been periods when bond values have fallen significantly due to rising interest
rates. For instance, prices of long-term bonds fell by almost 48% between
December 1976 and September 1981.

To illustrate the relationship between bond prices and interest rates, the
following table shows the impact of a 2% change (both up and down) in interest
rates on three bonds of different maturities, each with a face value of $1,000.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
HOW INTEREST RATE CHANGES AFFECT BONDS*
- ------------------------------------------------------------------------------
VALUE OF A $1,000 BOND VALUE OF A $1,000 BOND
AFTER A 2% INCREASE AFTER A 2% DECREASE
MATURITY IN INTEREST RATES IN INTEREST RATES
- ------------------------------------------------------------------------------
<S> <C> <C>
Short-Term (2.5 years) $956 $1,046
Intermediate-Term (10 years) $870 $1,156
Long-Term (20 years) $816 $1,251
- ------------------------------------------------------------------------------
</TABLE>

*Assuming a 7% yield.

These figures are for illustrative purposes only and should not be
regarded as an indication of future returns from the bond market as a whole, or
the Fund in particular.

6
<PAGE> 11
Finally, because stock and bond prices often move in different directions,
the Fund's bond holdings help to dampen -- but not eliminate -- some of the
stock market volatility experienced by the Fund. Likewise, changes in interest
rates may not have as dramatic an effect on the Fund as they would on a fund
made up entirely of bonds.

SECURITY SELECTION

Wellington Management Company, LLP (WMC), adviser to the Fund, invests
approximately 60% to 70% of the Fund's assets in dividend-paying common stocks
and the remaining 30% to 40% of assets in high-quality bonds. While the mix of
stocks and bonds varies from time to time depending on the adviser's views of
economic and market conditions, the stock portion can be expected to represent
at least 60% of the Fund's holdings.

The Fund is run by WMC according to traditional methods of active
investment management. Securities are bought and sold based on WMC's judgments
about companies and their financial prospects, and about bond issuers and the
general level of interest rates. To achieve the Fund's objectives of
conservation of capital, moderate long-term growth, and moderate income, the
adviser follows specific strategies for stock and bond selection.

[FLAG] THE FUND IS SUBJECT TO MANAGER RISK, WHICH IS THE POSSIBILITY THAT WMC
MAY DO A POOR JOB OF SELECTING STOCKS AND BONDS.

STOCKS

WMC uses extensive research to find what it considers to be undervalued stocks
of established, large- and medium-sized companies. WMC considers a stock to be
undervalued if company earnings, or potential earnings, are not fully reflected
in the stock's share price. In other words, the current prices of these large-
and mid-cap stocks may be less than what the adviser thinks they are truly
worth.

The adviser's goal is to identify and purchase these securities before
their value is recognized by other investors. The adviser emphasizes stocks
that, on average, provide a higher level of dividend income than stocks in the
overall market generally provide. By adhering to this stock selection strategy
and by investing in a wide variety of companies and industries, the adviser
expects to moderate overall risk.

The Fund's top ten stock holdings (which amounted to 15% of the Fund's net
assets) as of November 30, 1997, follow:

1. Allstate Corp.
2. U.S. Bancorp
3. Citicorp
4. Union Pacific Corp.
5. Wachovia Corp.
6. Xerox Corp.
7. Ford Motor Co.
8. Kimberly-Clark Corp.
9. General Electric Co.
10. AT&T Corp.

PLAIN TALK ABOUT

LARGE-CAP, MID-CAP, AND SMALL-CAP STOCKS

Stocks of publicly traded companies -- and mutual funds that hold these stocks
- -- can be classified by the companies' market value, or capitalization. Vanguard
defines large-capitalization, or large-cap, funds as those holding stocks of
companies with a median market value of their outstanding shares exceeding $7.5
billion. Mid-cap funds hold stocks of companies with a median market value
between $1 billion and $7.5 billion. Small-cap funds hold stocks of companies
with a median market value of less than $1 billion. Historically, large-cap
funds have exhibited lower volatility than mid-cap and small-cap funds. Note
that a fund's capitalization parameters (that is, what constitutes a large-,
mid-, or small-cap stock) may vary from the parameters set by a particular
index.

7
<PAGE> 12
PLAIN TALK ABOUT

TYPES OF BONDS

Bonds are issued (sold) by many sources: corporations issue corporate bonds; the
federal government issues U.S. Treasury bonds; agencies of the federal
government issue agency bonds; and mortgage holders issue "mortgage-backed"
bonds such as those of the Government National Mortgage Association (GNMA). Each
issuer is responsible for paying back the bond's initial value as well as
periodic interest payments.

PLAIN TALK ABOUT

CREDIT QUALITY

A bond's credit quality depends on the issuer's ability to pay interest on the
bond and, ultimately, to repay the debt. The lower the rating by one of the
independent bond-rating agencies (for example, Moody's or Standard & Poor's),
the greater the chance (in the rating agency's opinion) that the bond issuer
will default, or fail to meet its payment obligations. All things being equal,
the lower a bond's credit rating, the higher the yield the bond seeks to pay (as
compensation for the risks an investor must take).

PLAIN TALK ABOUT

PORTFOLIO TURNOVER

Before investing in a mutual fund, you should review its portfolio turnover rate
for an indication of the potential effect of transaction costs on the fund's
future returns. In general, the greater the volume of buying and selling by the
fund, the greater the impact that brokerage commissions and other transaction
costs will have on its return. Also, funds with high portfolio turnover rates
may be more likely than low-turnover funds to generate capital gains that must
be distributed to shareholders as taxable income. The average turnover rate for
all domestic stock funds is approximately 80%.

Keep in mind that, because the stock makeup of the Fund changes daily,
this listing is only a "snapshot" at one point in time.

BONDS

WMC selects high-quality bonds that, it believes, will generate a high and
sustainable level of income. These bonds would include intermediate- and
long-term corporate bonds, U.S. Treasury, government agency, and mortgage-backed
and asset-backed bonds.

A breakdown of the Fund's bond holdings (which amounted to 35% of the
Fund's total net assets) as of November 30, 1997, follows:

<TABLE>
<CAPTION>
--------------------------------------------------
PERCENTAGE OF
TYPE OF BOND FUND'S ASSETS
--------------------------------------------------
<S> <C>
Corporate 21%
U.S. Treasury and government agency 9
Foreign issuers 5
Other 0
--------------------------------------------------
</TABLE>

[FLAG] THE FUND IS SUBJECT, TO A LIMITED EXTENT, TO CREDIT RISK, WHICH IS THE
POSSIBILITY THAT A BOND ISSUER WILL FAIL TO REPAY INTEREST AND PRINCIPAL
IN A TIMELY MANNER.

WMC purchases bonds that are primarily investment-grade quality -- that
is, bonds that are rated at least Baa by Moody's Investors Service, Inc., or BBB
by Standard & Poor's Corporation. The average quality of bonds held by the Fund,
as of November 30, 1997, was Aa2, according to Moody's.

The U.S. government guarantees the timely payment of interest and
principal for its Treasury bonds, but does not guarantee its bonds' prices. In
other words, while the Treasury bonds enjoy the highest credit ratings, their
prices -- like the prices of other bonds in the Fund -- will fluctuate with
changes in interest rates.

PORTFOLIO TURNOVER

Although the Fund generally seeks to invest for the long term, it retains the
right to sell securities regardless of how long they have been held. It is not
expected that the Fund's turnover rate will exceed 50% in the future. (A
turnover rate of 100% would occur, for example, if the Fund sold and replaced
securities valued at 100% of its total net assets within a one-year period.)

INVESTMENT POLICIES

Besides investing in stocks of large- and medium-sized companies and
high-quality intermediate- and long-term bonds issued by corporations, the U.S.
government, and its agencies, the Fund may follow a number of investment
policies to achieve its objectives.

Up to 20% of the Fund's equity assets may be invested in the common stocks of
foreign companies as well as in securities that are

8
<PAGE> 13
convertible into foreign stocks. The Fund may engage in currency transactions
with respect to these securities. The Fund may also invest without limit in
fixed-income securities issued by foreign governments and non-U.S.-based
companies; however, these securities must be valued in U.S. dollars and meet the
Fund's credit quality standards.

Because of its investments in foreign securities, the Fund is subject to
foreign market risk. Investments in foreign stock markets can be as volatile, if
not more volatile, than investments in U.S. stock markets. Over the years, the
prices of foreign stocks and the prices of U.S. stocks have often moved in
opposite directions. However, a portfolio that invests in both U.S. and foreign
stocks may benefit from diversification and have less volatility than a
portfolio made up strictly of foreign stocks.

In addition, the Fund is subject to country and currency risk. Country
risk is the possibility that political events (such as a war), financial
problems (such as government default), or natural disasters (such as an
earthquake) will weaken a country's economy and cause investments in that
country to lose money. Currency risk is the possibility that a "stronger" U.S.
dollar will reduce returns for Americans investing overseas. Generally, when the
dollar rises in value against a foreign currency, your investment in that
country loses value because its currency is worth fewer U.S. dollars. On the
other hand, a "weaker" U.S. dollar generally leads to higher returns for
Americans holding foreign investments.

The Fund may invest up to 15% of its assets in restricted securities with
limited marketability or other illiquid securities.

The Fund may also invest in derivatives.

{FLAG] THE FUND RESERVES THE RIGHT TO INVEST, TO A LIMITED EXTENT, IN STOCK AND
BOND (INTEREST RATE) FUTURES AND OPTIONS CONTRACTS, WHICH ARE TRADITIONAL
TYPES OF DERIVATIVES. THE FUND MAY ALSO INVEST MODESTLY IN LESS RISKY
CLASSES OF COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs).

Losses (or gains) involving futures can sometimes be substantial -- in
part because a relatively small price movement in a futures contract may result
in an immediate and substantial loss (or gain) for a fund. This Fund will not
use futures and options for speculative purposes or as leveraged investments
that magnify the gains or losses of an investment. Rather, the Fund will keep
separate cash reserves or other liquid portfolio securities in the amount of the
obligation underlying the futures or options contract. Only a limited percentage
of the Fund's assets -- 5% -- may be applied toward the deposits required on
futures contracts, and the value of all futures contracts in which the Fund
acquires an interest cannot exceed 20% of the Fund's total assets.

The reasons for which the Fund may use futures and options are:

- - To keep cash on hand to meet shareholder redemptions or other needs while
simulating full investment in stocks and bonds.

PLAIN TALK ABOUT

THE RISKS OF
INTERNATIONAL INVESTING

Because foreign stock markets operate differently from the U.S. market,
Americans investing abroad will encounter risks not typically associated with
U.S. companies. For instance, foreign companies are not subject to the same
accounting, auditing, and financial reporting standards and practices as U.S.
companies; and their stock may not be as liquid as the stock of similar U.S.
companies. In addition, foreign stock exchanges, brokers, and companies
generally have less government supervision and regulation than their
counterparts in the United States. These factors, among others, could negatively
impact the returns Americans receive from a foreign investment. For more
information, see the Statement of Additional Information.

PLAIN TALK ABOUT

DERIVATIVES

A derivative is a financial contract whose value is based on (or "derived" from)
a traditional security (such as a stock or a bond), an asset (such as a
commodity like gold), or a market index (such as the S&P 500 Index). Futures and
options are derivatives that have been trading on regulated exchanges for more
than two decades. These "traditional" derivatives are standardized contracts
that can easily be bought and sold, and whose market values are determined and
published daily. It is these characteristics that differentiate futures and
options from the relatively new, exotic types of derivatives -- some of which
can carry considerable risks.

9
<PAGE> 14
PLAIN TALK ABOUT

PAST PERFORMANCE

Whenever you see information on a fund's performance, do not consider the
figures to be an indication of the performance you could expect by making an
investment in the fund today. The past is an imperfect guide to the future;
history does not repeat itself in neat, predictable patterns.

- - To reduce the Fund's transaction costs by buying futures instead of actual
stocks and bonds.

- - To add value to the Fund by buying futures instead of actual stocks and
bonds when futures are cheaper.

Please see the Statement of Additional Information for a more detailed
discussion of the Fund's investments in derivatives. The Fund will usually hold
only a small percentage of its assets in cash reserves, although if the
investment adviser believes that market conditions warrant a temporary defensive
measure, the Fund may hold cash reserves without limit.

INVESTMENT LIMITATIONS

The Fund has adopted limitations on some of its investment policies. Some of
these limitations are that the Fund will not:

- - Invest more than 5% of its assets in the securities of companies that have
been in business for less than three years.

- - Invest more than 25% of its assets in any one industry.

- - Borrow money, except for the purpose of meeting shareholder requests to
redeem shares. Amounts borrowed will not exceed 10% of the Fund's net
assets.

With respect to 75% of its assets, this Fund will not:

- - Invest more than 5% in the securities of any one company.

- - Buy more than 10% of the outstanding voting securities of any company.

A complete list of the Fund's investment limitations can be found in the
Statement of Additional Information. These limitations are fundamental and may
be changed only by approval of a majority of the Fund's shareholders.

INVESTMENT PERFORMANCE

As a balanced fund, Vanguard/Wellington Fund invests primarily in stocks, with a
sizable holding of bonds -- so Fund performance is closely tied to both the
stock and bond markets. Historically, stock market performance has been
characterized by sharp up-and-down swings in the short term, and by more stable
growth over the long term. Bond market performance has been -- and remains --
strongly influenced by changes in interest rates.

10
<PAGE> 15
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDED NOVEMBER 30, 1997

[BAR GRAPH]

<TABLE>
<CAPTION> 1 Year 3 Years 5 Years 10 Years 20 Years
------ ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Wellington Fund ............... 18.6% 24.0% 16.6% 15.1% 14.8%
Wellington Composite Index .... 21.7% 24.7% 16.4% 16.0% 14.5%
</TABLE>

The results shown represent the Fund's "average annual total return"
performance, which assumes that any distributions of capital gains and dividends
were reinvested for the indicated periods. Also included is comparative
information on the unmanaged Wellington Composite Index of 65% stocks and 35%
bonds. The S&P 500 Index represents the stock portion of the Composite Index,
while the Lehman Long Corporate AA or Better Bond Index makes up the bond
portion. The chart does not make any allowance for federal, state, or local
income taxes that shareholders must pay on a current basis.

SHARE PRICE

The Fund's share price, also called its net asset value, or NAV, is calculated
each business day after the close of trading (generally 4 p.m. Eastern time) on
the New York Stock Exchange. Net asset value per share is calculated by adding
up the total assets of the Fund, subtracting all of its liabilities, or debts,
and then dividing by the total number of Fund shares outstanding:

TOTAL ASSETS - LIABILITIES
NET ASSET VALUE = ----------------------------------
NUMBER OF SHARES OUTSTANDING

The daily net asset value is useful to you as a shareholder because the
NAV, multiplied by the number of Fund shares you own, gives you the dollar
amount you would have received had you sold all of your shares back to the Fund
that day.

The Fund's share price can be found daily in the mutual fund listings of
most major newspapers under the heading "Vanguard Funds." Different newspapers
use different abbreviations of the Fund's name, but the most common is WELLTN.

DIVIDENDS, CAPITAL GAINS, AND TAXES

Each March, June, September, and December, the Fund distributes to shareholders
virtually all of its income from interest and dividends. Any capital gains
realized from the sale of securities are

PLAIN TALK ABOUT

"BUYING A DIVIDEND"

Unless you are investing in a tax-deferred retirement account (such as an IRA),
it is not to your advantage to buy shares of a fund shortly before it makes a
distribution, because part of your investment will come back to you as a taxable
distribution. This is known as "buying a dividend." For example: On December 15,
you invest $5,000, buying 250 shares for $20 each. If the fund pays a
distribution of $1 per share on December 16, its share price would drop to $19
(not counting market change). You would still only have $5,000 (250 shares x $19
= $4,750 in share value, plus 250 shares x $1 = $250 in distributions), but you
would owe tax on the $250 distribution you received, even if you had reinvested
the dividends in more shares. To avoid "buying a dividend," check a fund's
distribution schedule before you invest.

11
<PAGE> 16
PLAIN TALK ABOUT

DISTRIBUTIONS

As a shareholder, you are entitled to your share of the fund's income from
interest and dividends, and gains from the sale of investments. You receive such
earnings as either an income dividend or capital gains distribution. Income
dividends come from interest the fund earns from its money market and bond
investments as well as dividends it receives from its stock investments. Capital
gains are realized whenever the fund sells securities for higher prices than it
paid for them. These capital gains are either short-term or long-term depending
on whether the fund held the securities for less than or more than one year.

PLAIN TALK ABOUT

VANGUARD'S UNIQUE CORPORATE STRUCTURE

The Vanguard Group, Inc. is the only MUTUAL mutual fund company. It is owned
jointly by the funds it oversees and by the shareholders in those funds. Other
mutual funds are operated by for-profit management companies that may be owned
by one person, by a group of individuals, or by investors who bought the
management company's publicly traded stock. Because of its structure, Vanguard
operates its funds at cost. Instead of distributing profits from operations to a
separate management company, Vanguard returns profits to fund shareholders in
the form of lower operating expenses.

distributed in December. In addition, the Fund may occasionally be required to
make supplemental dividend or capital gains distributions at some other time
during the year. You can choose to receive your distributions of income and
capital gains (or of income alone) in cash, or you can have them automatically
invested in more shares of the Fund. In either case, these distributions are
taxable to you. It is important to note that distributions of dividends and
capital gains that are declared in December -- if paid to you by the end of
January -- are taxed as if they had been paid to you in December. Vanguard will
send you a statement each year showing the tax status of all your distributions.

- - The dividends and short-term capital gains that you receive are taxable to
you as ordinary income. Any distributions of net long-term capital gains by
the Fund are taxable to you as long-term capital gains, no matter how long
you've owned shares in the Fund. Long-term capital gains may be taxed at
different rates depending on how long the Fund held the securities. Although
the Fund does not seek to realize any particular amount of capital gains
during a year, such gains are realized from time to time as by-products of
the ordinary investment activities of the Fund. Consequently, distributions
may vary considerably from year to year.

- - If you sell or exchange shares, any gain or loss you have is a taxable
event, which means you may have a capital gain to report as income, or a
capital loss to report as a deduction, when you complete your federal income
tax return.

- - Distributions of dividends or capital gains, and capital gains or losses
from your sale or exchange of Fund shares, may be subject to state and local
income taxes as well.

The tax information in this prospectus is provided as general information
and will not apply to you if you are investing in a tax-deferred account such as
an IRA. You should consult your tax adviser about the tax consequences of an
investment in the Fund.

THE FUND AND VANGUARD

The Fund is a member of The Vanguard Group, a family of more than 30 investment
companies with more than 95 distinct investment portfolios and total net assets
of more than $330 billion. All of the Vanguard funds share in the expenses
associated with business operations, such as personnel, office space, equipment,
and advertising.

Vanguard also provides marketing services to the funds. Although
shareholders do not pay sales commissions or 12b-1 marketing fees, each fund
pays its allocated share of The Vanguard Group's costs.

A list of the Fund's Directors and officers, and their present positions
and principal occupations during the past five years, can be found in the
Statement of Additional Information.

12
<PAGE> 17
INVESTMENT ADVISER

The Fund employs Wellington Management Company, LLP (WMC), 75 State Street,
Boston, MA 02109, as its investment adviser. WMC manages the Fund subject to the
control of the Directors and officers of the Fund.

Each quarter, WMC is paid an advisory fee based on average month-end net
assets of the Fund and a sliding percentage scale:

<TABLE>
<CAPTION>
--------------------------------------------
ASSETS MANAGED FEE
--------------------------------------------
<S> <C>
First $1 billion 0.10%
Next $2 billion 0.05
Next $7 billion 0.04
Assets over $10 billion 0.03
--------------------------------------------
</TABLE>

The advisory fee can be increased or decreased based on the difference
between the Fund's total return performance and that of the unmanaged Wellington
Composite Index, which is made up of the S&P 500 Index (65% of the Composite
Index) and the Lehman Long Corporate AA or Better Bond Index (35% of the
Composite Index). Under the fee schedule, the base fee may be increased or
decreased by up to 30%. The incentive/penalty fee will not be in full operation
until the quarter ending February 28, 1999. Until that date, the
incentive/penalty fee will be calculated using certain transition rules that are
explained in the Statement of Additional Information.

For the year ended November 30, 1997, the advisory fee represented an
effective annual basic rate of 0.04% of the Fund's average net assets before a
decrease of .0013% based on performance.

The agreement authorizes WMC to choose brokers or dealers to handle the
purchase and sale of the Fund's securities, and directs WMC to get the best
available price and most favorable execution from these brokers with respect to
all transactions. At times, WMC may choose brokers who charge higher commissions
in the interest of obtaining better execution of a transaction. If more than one
broker can obtain the best available price and favorable execution of a
transaction, then WMC is authorized to choose a broker who, in addition to
executing the transaction, will provide research services to WMC or the Fund.
However, WMC will not pay higher commissions specifically for the purpose of
obtaining research services. The Fund may direct WMC to use a particular broker
for certain transactions in exchange for commission rebates or research services
provided to the Fund.

The Board of Directors may, without prior approval from shareholders,
change the terms of the advisory agreement or hire a new investment adviser,
either as a replacement for WMC or as an additional adviser. However, no such
change would be made before giving shareholders 30 days' notice, in writing.

PLAIN TALK ABOUT

THE FUND'S ADVISER

Wellington Management Company, LLP (WMC), an investment advisory firm founded in
1928, currently manages more than $169 billion in stock and bond portfolios,
including 13 Vanguard funds. The managers responsible for overseeing
Vanguard/Wellington Fund are:

ERNST H. VON METZSCH, CFA, Senior Vice President of WMC; has worked in
investment management since 1970; with WMC since 1973; M.Sc., The University of
Leiden, The Netherlands, Ph.D., Harvard University.

PAUL D. KAPLAN, Senior Vice President of WMC; has worked in investment
management since 1974; with WMC since 1978; B.S., Dickinson College, M.S., The
Sloan School of Management, Massachusetts Institute of Technology.

13
<PAGE> 18
GENERAL INFORMATION

Vanguard/Wellington Fund is a corporation organized under the laws of the state
of Maryland. Shareholders of the Fund have rights and privileges similar to
those enjoyed by other corporate shareholders. For example, shareholders will
not be responsible for any liabilities of the corporation. If any matters are to
be voted on by shareholders (such as the election of Directors), each Fund share
outstanding at that point would be entitled to one vote. Annual meetings will
not be held by the Fund except as required by the Investment Company Act of
1940. A meeting will be scheduled to vote on the removal of a Director if the
holders of at least 10% of the Fund's shares request a meeting in writing.

"Standard & Poor's," "Standard & Poor's 500," "S&P 500," "S&P," and "500" are
trademarks of The McGraw-Hill Companies, Inc.

14
<PAGE> 19
INVESTING WITH VANGUARD

Are you looking for the most convenient way to open or add money to a Vanguard
account? Obtain instant access to fund information? Establish an account for a
minor child or for your retirement savings?

Vanguard can help. Our goal is to make it easy and pleasant for you to do
business with us.

The following sections of the prospectus briefly explain the many services
we offer you as a Vanguard/Wellington Fund shareholder. Booklets providing
detailed information are available on the services marked with a [BOOK GRAPHIC].
Please call us to request copies.

SERVICES AND ACCOUNT FEATURES

Vanguard offers many services that make it convenient to buy, sell, or exchange
shares.

<TABLE>
<CAPTION>
<S> <C>
TELEPHONE REDEMPTIONS Automatically set up for this Fund unless you notify
(SALES AND EXCHANGES) us otherwise.

VANGUARD DIRECT DEPOSIT Automatic method for depositing your paycheck or U.S.
SERVICE(TM) government payment (including Social Security and
[BOOK GRAPHIC] government pension checks) into your account.

VANGUARD AUTOMATIC EXCHANGE SERVICE(SM) Automatic method for moving a fixed amount of money
[BOOK GRAPHIC] from one Vanguard fund account to another.*

VANGUARD FUND EXPRESS(R) Electronic method for buying or selling shares. You
[BOOK GRAPHIC) can transfer money between your Vanguard fund account
and an account at your bank, savings and loan, or
credit union on a systematic schedule or whenever you
wish.*

VANGUARD DIVIDEND EXPRESS(SM) Electronic method for transferring dividend and/or
[BOOK GRAPHIC] capital gains distributions directly from your
Vanguard fund account to your bank, savings and loan,
or credit union account.

VANGUARD BROKERAGE SERVICES A cost-effective way to trade stocks, bonds, and
(VBS) options on major exchanges, Nasdaq, and other
[BOOK GRAPHIC] domestic over-the-counter markets at reduced rates,
and to buy and sell shares of non-Vanguard mutual
funds. Call VBS (1-800-992-8327) for additional
information and the appropriate forms.
</TABLE>

*Can be used to "dollar-cost average" [BOOK GRAPHIC] or to contribute to an IRA
or other retirement plan.

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

15
<PAGE> 20
TYPES OF ACCOUNTS

INDIVIDUAL OR OTHER ENTITY
Vanguard's account registration form can be used to establish a variety of
nonretirement accounts.

<TABLE>
<CAPTION>
<S> <C>
FOR ONE OR MORE PEOPLE To open an account in the name of one (individual) or
[BOOK GRAPHIC] more (joint tenants) people. $3,000 minimum initial
investment.

FOR A MINOR CHILD To open an account as an UGMA/UTMA (Uniform
[BOOK GRAPHIC] Gifts/Transfers to Minors Act) Age of majority and
other requirements are set by state law. $1,000
minimum initial investment.

FOR A MINOR CHILD To open an account as an Education IRA. Eligibility
(Vanguard Fiduciary Trust and other requirements are established by federal tax
Company is the custodian.) law. (Note: You should establish this type of account
[BOOK GRAPHIC] with a Vanguard adoption agreement -- not an account
registration form.) Please call Investor Information
to request the appropriate brochure and forms. $500
minimum initial investment.

FOR HOLDING TRUST ASSETS To invest assets held in an existing trust. $3,000
[BOOK GRAPHIC] minimum initial investment.

FOR THIRD-PARTY TRUSTEE RETIREMENT To open an account as a retirement trust or plan
INVESTMENTS based on an existing corporate or institutional plan.
(Vanguard is not the custodian These accounts are established by the custodian or
or trustee.) trustee of the existing plan. $1,000 minimum initial
1-800-662-2003 investment.
Individual Retirement Plans

FOR AN ORGANIZATION To open an account as a corporation, partnership, or
other entity. These accounts may require a corporate
resolution or other documents to name the individuals
authorized to act. $3,000 minimum initial investment.
</TABLE>

RETIREMENT

You establish these accounts with a Vanguard adoption agreement -- not a
Vanguard account registration form. To request the appropriate adoption
agreement and forms, or to ask questions about investing for retirement, call
Investor Information.

<TABLE>
<CAPTION>
<S> <C>
FOR A TRADITIONAL INDIVIDUAL To open a retirement account in the name of an
RETIREMENT ACCOUNT individual. Traditional IRAs can be established with
(TRADITIONAL IRA) a contribution, a direct rollover from an employer's
(Vanguard Fiduciary Trust plan, such as a 401(k), or an asset transfer or
Company is the custodian.) rollover from another financial institution, such as
a bank or mutual fund company. $1,000 minimum initial
investment.

FOR A ROTH INDIVIDUAL To open an after-tax retirement savings account in
RETIREMENT ACCOUNT the name of an individual. Roth IRAs can be
(ROTH IRA) established with an after-tax contribution, an asset
(Vanguard Fiduciary Trust transfer or rollover from another financial
Company is the custodian.) institution such as a bank or mutual fund company, or
a conversion of an existing IRA. Eligibility and
other requirements are established by federal tax
law. $1,000 minimum initial investment.
</TABLE>

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

16
<PAGE> 21
TYPES OF ACCOUNTS (continued)

<TABLE>
<CAPTION>
<S> <C>
FOR A SIMPLIFIED EMPLOYEE To open a retirement account in the name of an
PENSION PLAN ACCOUNT (SEP - IRA) employee. SEPs allow employers to make deductible
(Vanguard Fiduciary contributions directly to IRAs established by their
Trust Company is the custodian.) employees. A SEP can be established by people who are
1-800-662-2003 self-employed, small-business owners, partnerships,
Individual Retirement Plans or corporations.

FOR A SAVINGS INCENTIVE MATCH To open a retirement account in the name of an
PLAN FOR EMPLOYEES ACCOUNT employee. Created as part of the Small Business Job
(SIMPLE IRA) Protection Act of 1996, SIMPLEs replace SAR - SEPs.
(Vanguard Fiduciary Trust SIMPLEs are exclusively for employers that had 100 or
Company is the custodian.) fewer employees in the most recent calendar year and
1-800-662-2003 that do not maintain another employer-sponsored
Individual Retirement Plans retirement plan. SIMPLEs can be established by people
who are self-employed, small-business owners,
partnerships, or corporations. Salary reduction
contributions may be made by the employee, with
matching or nonmatching contributions from the
employer.

FOR A QUALIFIED RETIREMENT To open a retirement account that allows
PROGRAM ACCOUNT small-business owners or people who are self-employed
(Vanguard Fiduciary Trust to make tax-deductible retirement contributions for
Company can be the trustee.) themselves and their employees into Profit-Sharing
1-800-662-2003 and Money Purchase Pension (Keogh) plans.
Individual Retirement Plans

FOR A 403(b)(7) CUSTODIAL ACCOUNT To open a retirement account that allows employees of
(Vanguard Fiduciary Trust tax-exempt institutions (for example, schools or
Company is the custodian.) hospitals) to make pretax retirement contributions.
1-800-662-2003
Individual Retirement Plans
</TABLE>

DISTRIBUTION OPTIONS

You can receive distributions of dividends and/or capital gains in a number of
ways:

<TABLE>
<CAPTION>
<S> <C>
REINVESTMENT Dividends and capital gains are automatically
reinvested in additional shares of the Fund
unless you request a different distribution
method.

DIVIDENDS IN CASH Dividends are paid by check and mailed to your
account's address of record, and capital gains
are reinvested in additional shares of the
Fund.

CAPITAL GAINS IN CASH Capital gains distributions are paid by check
and mailed to your account's address of
record, and dividends are reinvested in
additional shares of the Fund.

DIVIDENDS AND CAPITAL GAINS Both dividends and capital gains distributions
IN CASH are paid by check and mailed to your account's
address of record.
</TABLE>

To electronically transfer cash dividends and/or capital gains to your bank,
savings and loan, or credit union account, see Vanguard Dividend Express under
"Services and Account Features."

If you have elected to receive dividend and/or capital gains distributions in
cash, but the Postal Service is unable to make delivery to your address of
record, your distribution option will be changed to reinvestment. No interest
will accrue on amounts represented by uncashed distribution checks.

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

17
<PAGE> 22
BUYING SHARES

You buy your shares at the Fund's next-determined net asset value after Vanguard
receives your request, provided we receive your request before the close of
trading on the New York Stock Exchange (generally 4 p.m. Eastern time). The Fund
is offered on a no-load basis, meaning that you do not pay sales commissions or
12b-1 marketing fees.

<TABLE>
<CAPTION>
OPEN A NEW ACCOUNT ADD TO AN EXISTING ACCOUNT
<S> <C> <C>
MINIMUM INVESTMENT $3,000 (regular account); $1,000 $100 by mail or exchange;
(Traditional IRAs, Roth IRAs, $1,000 by wire.
and custodial accounts for
minors); $500 (Education IRAs).

BY MAIL Complete and sign the application Mail your check with an
[ENVELOPE] form. Invest-By-Mail form detached
FIRST-CLASS mail to: from your confirmation
The Vanguard Group statement to the address listed
P.O. Box 2600 on the form.
Valley Forge, PA 19482-2600 Make your check payable to: Make your check payable to:
The Vanguard Group - 21 The Vanguard Group - 21

EXPRESS or REGISTERED mail to: All purchases must be made in All purchases must be made in
The Vanguard Group U.S. dollars, and checks must U.S. dollars, and checks must
455 Devon Park Drive be drawn on U.S. banks. be drawn on U.S. banks.
Wayne, PA 19087-1815
</TABLE>

IMPORTANT NOTE: To prevent check fraud, Vanguard will not accept checks made
payable to third parties.

<TABLE>
<CAPTION>
<S> <C> <C>
BY TELEPHONE Call Vanguard Tele-Account* 24 Call Vanguard Tele-Account* 24
[TELEPHONE] hours a day -- or Client hours a day -- or Client
Services during business hours Services during business hours
1-800-662-6273 -- to exchange from another -- to exchange from another
Vanguard Tele-Account(R) Vanguard fund account with the Vanguard fund account with the
same registration (name, same registration (name,
1-800-662-2739 address, taxpayer I.D., and address, taxpayer I.D., and
Client Services account type). account type).

Use Vanguard Fund Express (see
"Services and Account
Features") to transfer assets
from your bank account. Call
Client Services before your
first use to verify that this
option is in place.
</TABLE>

*You must obtain a Personal Identification Number
through Tele-Account at least seven days before
you request your first exchange.

IMPORTANT NOTE: Once a telephone transaction has been approved by you and a
confirmation number assigned, it cannot be revoked. We reserve the right to
refuse any purchase.

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

18
<PAGE> 23
BUYING SHARES (continued)

<TABLE>
<CAPTION>
OPEN A NEW ACCOUNT ADD TO AN EXISTING ACCOUNT
<S> <C> <C>
BY WIRE Call Client Services to arrange Call Client Services to arrange
[WIRE] your wire transaction. your wire transaction.
Wire to:
CoreStates Bank, N.A. Wire transactions are not Wire transactions are not
ABA 031000011 available for retirement available for retirement
CoreStates No. 0101 9897 accounts, except for asset accounts, except for asset
[Temporary Account Number] transfers and direct rollovers. transfers and direct rollovers.
Vanguard/Wellington Fund
[Account Registration]
Attention: Vanguard

AUTOMATICALLY Vanguard offers a variety of
[GRAPHIC OF ARROWS IN A CIRCLE] ways that you can add to your
account automatically. See
"Services and Account
Features."
</TABLE>

You can redeem (that is, sell or exchange) shares purchased by check or Vanguard
Fund Express at any time. However, while your redemption request will be
processed at the next-determined net asset value after it is received, your
redemption proceeds will not be available until payment for your purchase is
collected, which may take up to ten calendar days.

IMPORTANT NOTE: If you buy Fund shares through a registered broker/dealer or
investment adviser, the broker/dealer or adviser may charge you a service fee.

It is important that you call Vanguard before you invest a large dollar
amount by wire or check. We must consider the interests of all Fund shareholders
and so reserve the right to delay or refuse any purchase that will disrupt the
Fund's operation or performance.

REDEEMING SHARES

IMPORTANT TAX NOTE: Any sale or exchange of shares in a nonretirement account
could result in a taxable gain or a loss.

The ability to redeem (that is, sell or exchange) Fund shares by telephone is
automatically established for your nonretirement account unless you tell us in
writing that you do not want this option.

To protect your account from unauthorized or fraudulent telephone
instructions, Vanguard follows specific security procedures. When we receive a
call requesting an account transaction, we require the caller to provide:

[check mark] Fund name.
[check mark] 10-digit account number.
[check mark] Name and address exactly as registered on that account.
[check mark] Social Security or employer identification number as registered on
that account.

If you call to sell shares, the sale proceeds will be made payable to you, as
the registered shareholder, and mailed to your account's address of record.

If we follow reasonable security procedures, neither the Fund nor Vanguard
will be responsible for the authenticity of transaction instructions received by
telephone. We believe that these procedures are reasonable and that, if we
follow them, you bear the risk of any losses resulting from unauthorized or
fraudulent telephone transactions on your account.

Investor Information 1-800-662-7447
Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

19
<PAGE> 24
REDEEMING SHARES (continued)

HOW TO SELL SHARES
You may withdraw any part of your account, at any time, by selling shares. Sale
proceeds are normally mailed within two business days after Vanguard receives
your request. The sale price of your shares will be the Fund's next-determined
net asset value after Vanguard receives all required documents in good order.

Good order means that the request includes:

[check mark] Fund name and account number.

[check mark] Amount of the transaction (in dollars or shares).

[check mark] Signatures of all owners exactly as registered on the account.

[check mark] Signature guarantees (if required).

[check mark] Any supporting legal documentation that may be required.

[check mark] Any certificates you are holding for the account.

Sales or exchange requests received after the close of trading on the New
York Stock Exchange (generally 4 p.m. Eastern time) are processed at the next
business day's net asset value. No interest will accrue on amounts represented
by uncashed redemption checks. The Fund will not cancel any trade (e.g.,
purchase, redemption, or exchange) believed to be authentic once the trade
request has been received in writing or by telephone.

The Fund reserves the right to close any nonretirement or UGMA/UTMA account
in which the balance falls below the minimum initial investment. The Fund will
deduct a $10 annual fee in either June or December if your nonretirement account
balance falls below $2,500 or if your UGMA/UTMA account balance falls below
$500. The fee is waived if your total Vanguard account assets are $50,000 or
more.

Some written requests require a signature guarantee from a bank, broker, or
other acceptable financial institution. A notary public cannot provide a
signature guarantee.

HOW TO EXCHANGE SHARES

An exchange is the selling of shares of one Vanguard fund to purchase shares of
another.

Although we make every effort to maintain the exchange privilege, Vanguard
reserves the right to revise or terminate the exchange privilege, limit the
amount of an exchange, or reject any exchange, at any time, without notice.

Because excessive exchanges can potentially disrupt the management of the
Fund and increase transaction costs, Vanguard limits exchange activity to TWO
SUBSTANTIVE EXCHANGE REDEMPTIONS (at least 30 days apart) from the Fund during
any 12-month period. "Substantive" means either a dollar amount or a series of
movements between Vanguard funds that Vanguard determines, in its sole
discretion, could have an adverse impact on the management of the Fund.

Before you exchange into a new Vanguard fund, be sure to read its prospectus.
For a copy and for answers to questions you might have, call Investor
Information.

Investor Information 1-800-662-7447
Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

20
<PAGE> 25
REDEEMING SHARES (continued)

<TABLE>
<CAPTION>
SELLING OR EXCHANGING SHARES ACCOUNT TYPE
<S> <C>
ALL TYPES EXCEPT RETIREMENT:
BY TELEPHONE Call Vanguard Tele-Account* 24 hours a day -- or Client
[TELEPHONE RECEIVER] Services during business hours -- to sell or exchange shares.
1-800-662-6273 You can exchange shares from this Fund to open an account in
Vanguard Tele-Account another Vanguard fund or to add to an existing Vanguard fund
account with an identical registration.

1-800-662-2739 RETIREMENT:
Client Services You can exchange -- but not sell -- shares by calling
Tele-Account or Client Services.

*You must obtain a Personal Identification Number through
Tele-Account at least seven days before you request your first
redemption.

BY MAIL ALL TYPES EXCEPT RETIREMENT:
[ENVELOPE] Send a letter of instruction signed by all registered account
FIRST-CLASS mail to: holders. Include the fund name and account number and (if you
The Vanguard Group are selling) a dollar amount or number of shares OR (if you are
Vanguard/Wellington Fund exchanging) the name of the fund you want to exchange into and
P.O. Box 1120 a dollar amount or number of shares. To exchange into an
Valley Forge, PA 19482-1120 account with a different registration (including a different
name, address, or taxpayer identification number), you must
provide Vanguard with written instructions that include the
EXPRESS or REGISTERED mail to: guaranteed signatures of all current account owners.
The Vanguard Group
Vanguard/Wellington Fund
455 Devon Park Drive RETIREMENT:
Wayne, PA 19087-1815 For information on how to request distributions from:
- Traditional IRAs, Roth IRAs, Education IRAs -- call Client
Services.
- SEP - IRAs, SIMPLE IRAs, 403(b)(7) custodial accounts, and
Profit-Sharing and Money Purchase Pension (Keogh) Plans -- call
Individual Retirement Plans at 1-800-662-2003.

Depending on your account registration type, additional
documentation may be required.

EXCHANGING SHARES ONLINE You may use your personal computer to exchange shares of most
[COMPUTER GRAPHIC] Vanguard funds by accessing our website (www.vanguard.com). To
establish this service for your account, you must first
register through the website. We will then send to you, by
mail, an account access password that will enable you to make
online exchanges.

The Vanguard funds that you cannot purchase or sell through
online exchange are VANGUARD INDEX TRUST, VANGUARD BALANCED
INDEX FUND, VANGUARD INTERNATIONAL EQUITY INDEX FUND, VANGUARD
REIT INDEX PORTFOLIO, VANGUARD TOTAL INTERNATIONAL PORTFOLIO,
and VANGUARD GROWTH AND INCOME PORTFOLIO (formerly known as
Vanguard Quantitative Portfolios). These funds do permit online
exchanges within IRAs and other retirement accounts.

AUTOMATICALLY ALL TYPES EXCEPT RETIREMENT:
[GRAPHIC OF ARROWS IN A CIRCLE] Vanguard offers several ways to sell or exchange shares
automatically (see "Services and Account Features"). Call
Investor Information for the appropriate booklet and
application if you did not elect this feature when you opened
your account.
</TABLE>

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

21
<PAGE> 26
REDEEMING SHARES (continued)

It is important that you call Vanguard before you redeem a large dollar
amount. We must consider the interests of all Fund shareholders and so reserve
the right to delay delivery of your redemption proceeds -- up to seven days --
if the amount will disrupt the Fund's operation or performance.

A NOTE ON UNUSUAL CIRCUMSTANCES

Vanguard reserves the right to revise or terminate the telephone redemption
privilege at any time, without notice. In addition, Vanguard can stop selling
shares or postpone payment at times when the New York Stock Exchange is closed
or under any emergency circumstances as determined by the United States
Securities and Exchange Commission. If you experience difficulty making a
telephone redemption during periods of drastic economic or market change, you
can send us your request by regular or express mail. Follow the instructions on
selling or exchanging shares by mail in the "Redeeming Shares" section.

TRANSFERRING REGISTRATION

HOW TO TRANSFER SHARES
You may transfer the registration of your Fund shares to another owner by
completing a transfer form and sending it to: The Vanguard Group, Attention:
Transfer Department, P.O. Box 1110, Valley Forge, PA 19482-1110.

FUND AND ACCOUNT UPDATES

STATEMENTS AND REPORTS
We will send you clear, concise account and tax statements to help you keep
track of your Vanguard/Wellington Fund account throughout the year as well as
when you are preparing your income tax returns.

In addition, you will receive financial reports about the Fund twice a year.
These comprehensive reports include an assessment of the Fund's performance (and
a comparison to its industry benchmark), an overview of the markets, a report
from the adviser, as well as a listing of the Fund's holdings and other
financial statements.

<TABLE>
<CAPTION>
<S> <C>
CONFIRMATION STATEMENT Sent each time you buy, sell, or exchange shares;
confirms the trade date and the amount of your
transaction.

PORTFOLIO SUMMARY Mailed quarterly; shows the market value of your
[BOOK] account at the close of the statement period, as well
as distributions, purchases, sales, and exchanges for
the current calendar year.

FUND FINANCIAL REPORTS Mailed in January and July for this Fund.

TAX STATEMENTS Generally mailed in January; report previous year's
dividend distributions, proceeds from the sale of
shares, and distributions from IRAs or other
retirement accounts.

AVERAGE COST STATEMENT Issued quarterly for most taxable accounts
[BOOK] (accompanies your Portfolio Summary); shows the
average cost of shares that you redeemed during the
calendar year, using the average cost single category
method.
</TABLE>

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

22
<PAGE> 27
FUNDS AND ACCOUNT UPDATES (continued)

AUTOMATED TELEPHONE ACCESS

<TABLE>
<CAPTION>
<S> <C>
VANGUARD TELE-ACCOUNT Toll-free access to Vanguard fund and account
1-800-662-6273 information -- as well as some transactions --
through any Touch-Tone(TM) telephone. Tele- Account
Any time, seven days a week, from provides total return, share price, price change, and
anywhere in the continental United yield quotations for all Vanguard funds; gives your
States. account balances and history (e.g., last transaction,
[BOOK] latest dividend distribution); and allows you to sell
or exchange fund shares.

COMPUTER ACCESS Use your personal computer to learn more about
Vanguard's funds and services; keep in touch with
VANGUARD ONLINE(R) your Vanguard accounts; map out a long-term
www.vanguard.com investment strategy; initiate certain transactions;
and ask questions, make suggestions, and send
messages to Vanguard.

Our education-oriented website provides timely news
and information about Vanguard's funds and services;
an online "university" that offers a variety of
mutual fund classes; and easy-to-use, interactive
tools to help you create your own investment and
retirement strategies.
</TABLE>

Investor Information 1-800-662-7447 -- Client Services 1-800-662-2739
Tele-Account 1-800-662-6273

23
<PAGE> 28
PLAIN TALK ABOUT

KEEPING YOUR PROSPECTUS

Reading this prospectus will help you to decide whether Vanguard/Wellington
Fund is suitable for your investment goals. If you decide to invest, don't throw
the prospectus out; you will no doubt need it for future reference.

PROSPECTUS POSTSCRIPT

This prospectus is designed to provide you with pertinent information about
Vanguard/Wellington Fund, including its investment objectives, risks, strategy,
and expenses, as well as services available to you as a shareholder.

It is important that you understand these facts so that you can decide
whether an investment in this Fund is right for you. The following questions
offer a quick review of some of the subjects covered by this prospectus.

IN READING THE PROSPECTUS, DID YOU LEARN:

- The Fund's objectives? (page 4)

- The Fund's investment strategy? (page 5)

- Who should invest in the Fund? (page 4)

- The risks associated with the Fund? (pages 4 - 10)

- Whether the Fund is federally insured?
(inside front cover)

- The Fund's expenses? (page 2)

- The backgrounds of the Fund's investment managers?
(page 13)

- How to open an account? (page 16)

- How to sell or exchange shares? (pages 19 - 22)

- How often you'll receive statements and financial reports?
(page 22)

24
<PAGE> 29
GLOSSARY OF INVESTMENT TERMS

BALANCED FUND
A mutual fund that seeks to provide some combination of income, capital growth,
and conservation of capital by investing in stocks, bonds, and/or money market
instruments.

BOND
A debt security (IOU) issued by a corporation, government, or government agency
in exchange for the money you lend it. In most instances, the issuer agrees to
pay back the loan by a specific date and to make regular interest payments until
that date.

CAPITAL GAINS DISTRIBUTION
Payment to mutual fund shareholders of gains realized during the year on
securities that the fund has sold at a profit, minus any realized losses.

CASH RESERVES
Cash deposits as well as short-term bank deposits, money market instruments,
U.S. Treasury bills, bank certificates of deposit (CDs), repurchase agreements,
commercial paper, and banker's acceptances.

COMMON STOCK
A security representing ownership rights in a corporation. A stockholder is
entitled to share in the company's profits, some of which may be paid out as
dividends.

CREDIT QUALITY
A measure of a bond issuer's ability to repay interest and principal in a timely
manner.

DIVIDEND INCOME
Payment to shareholders of income from interest or dividends generated by a
fund's investments.

EXPENSE RATIO
The percentage of a fund's average net assets used to pay its expenses. The
expense ratio includes management fees, administrative fees, and any 12b-1
marketing fees.

FACE VALUE
The value of a bond at the time it was issued (that is, initially sold).

FIXED-INCOME SECURITIES
Investments, such as bonds, that have a fixed payment schedule. While the level
of income offered by these securities is predetermined, their prices may
fluctuate.

INVESTMENT GRADE
Bonds whose credit quality is considered to be among the highest by independent
bond-rating agencies.

MATURITY
The date when a bond issuer agrees to repay the bond's principal, or face value,
to the bond's buyer.

MUTUAL FUND
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.

NET ASSET VALUE (NAV)
The market value of a mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.

PORTFOLIO DIVERSIFICATION
Holding a variety of securities so that a portfolio's return is not hurt by the
poor performance of a single security or industry.

PRICE/EARNINGS (P/E) RATIO
The current share price of a stock, divided by its per-share earnings (profits)
from the past year. A stock selling for $20, with earnings of $2 per share, has
a price/earnings ratio of 10.

TOTAL RETURN
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.

VOLATILITY
The fluctuations in value of a mutual fund or other security. The greater a
fund's volatility, the wider the fluctuations between its high and low prices.

YIELD
Current income (interest or dividends) earned by an investment, expressed as a
percentage of the investment's price.
<PAGE> 30
[THE VANGUARD GROUP LOGO]

Post Office Box 2600
Valley Forge, PA 19482

INVESTOR INFORMATION
DEPARTMENT
1-800-662-7447 (SHIP)

TEXT TELEPHONE:
1-800-952-3335
For information on our funds,
fund services, and retirement accounts; requests for
literature

CLIENT SERVICES DEPARTMENT
1-800-662-2739 (CREW)

TEXT TELEPHONE:
1-800-662-2738
For information on your account,
account transactions, and account statements

VANGUARD BROKERAGE
SERVICES
1-800-992-8327
For information on trading stocks, bonds, and options
at reduced commissions

VANGUARD TELE-ACCOUNT(R)
1-800-662-6273 (ON-BOARD)
For 24-hour automated access to price and yield,
information on your account,
certain transactions

ELECTRONIC ACCESS TO THE
VANGUARD MUTUAL FUND
EDUCATION AND INFORMATION
CENTER
World Wide Web
www.vanguard.com

E-mail
[email protected]

<PAGE> 31

VANGUARD/
WELLINGTON FUND

Institutional Prospectus
March 19, 1998

This prospectus contains financial data for the Fund through the fiscal year
ended November 30, 1997.

[THE VANGUARD GROUP LOGO]
<PAGE> 32
VANGUARD/WELLINGTON FUND

A Balanced Mutual Fund

CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Fund Profile 1

Fund Expenses 2

Financial Highlights 3

A Word About Risk 4

The Fund's Objectives 4

Who Should Invest 4

Investment Strategy 5

Investment Policies 8

Investment Limitations 10

Investment
Performance 10

Share Price 11

Dividends, Capital
Gains, and Taxes 11

The Fund and
Vanguard 12

Investment Adviser 12

General Information 13

Investing
with Vanguard

- - For Plan Participants 15

- - For Other
Institutional Investors 15

Accessing Fund
Information
by Computer 16

Glossary Inside Back Cover
</TABLE>

INVESTMENT OBJECTIVES AND POLICIES
Vanguard/Wellington Fund (the "Fund") is a diversified open-end investment
company, or mutual fund, that seeks to conserve capital and to provide moderate
long-term capital growth and moderate income.

IT IS IMPORTANT TO NOTE THAT THE FUND'S SHARES ARE NOT GUARANTEED OR INSURED
BY THE FDIC OR ANY OTHER AGENCY OF THE U.S. GOVERNMENT. AS WITH ANY INVESTMENT
IN STOCKS (WHICH ARE SUBJECT TO WIDE FLUCTUATIONS IN MARKET VALUE) AND BONDS
(WHICH ARE SENSITIVE TO CHANGES IN INTEREST RATES), YOU COULD LOSE MONEY BY
INVESTING IN THE FUND.

FEES AND EXPENSES

IMPORTANT NOTE

This prospectus is intended for institutional clients and for participants in
employer-sponsored retirement or savings plans. Another version -- for investors
who would like to open a personal investment account -- can be obtained by
calling Vanguard at 1-800-662-7447.

ADDITIONAL INFORMATION ABOUT THE FUND

A Statement of Additional Information (dated March 19, 1998) containing more
information about the Fund is, by reference, part of this prospectus and may be
obtained without charge by contacting Vanguard (see back cover) or visiting the
Securities and Exchange Commission's website (www.sec.gov).

WHY READING THIS PROSPECTUS IS IMPORTANT

This prospectus explains the objectives, risks, and strategy of
Vanguard/Wellington Fund. To highlight terms and concepts important to mutual
fund investors, we have provided "Plain Talk" explanations along the way.
Reading the prospectus will help you to decide whether the Fund is the right
investment for your needs. We suggest that you keep it for future reference.

<PAGE> 33
FUND PROFILE

Vanguard/Wellington Fund

WHO SHOULD INVEST (page 4)

- - Investors seeking moderate long-term capital growth and moderate income.
- - Investors willing to invest for the long term -- at least five years.

WHO SHOULD NOT INVEST

- - Investors seeking significant dividend income.
- - Investors unwilling to accept significant share-price fluctuations.

RISKS OF THE FUND (pages 4 - 10)

DIVIDENDS AND CAPITAL GAINS (page 11)

Dividends are paid in March, June, September, and December. Capital gains, if
any, are paid in December. In participant accounts, all distributions are
automatically reinvested.

INVESTMENT ADVISER (page 12)

Wellington Management Company, LLP,
Boston, Mass.

INCEPTION DATE: July 1, 1929

NET ASSETS AS OF 11/30/1997: $21.3 billion

FUND'S EXPENSE RATIO FOR THE
YEAR ENDED 11/30/1997: 0.29%

NEWSPAPER ABBREVIATION: Welltn

VANGUARD FUND NUMBER: 021

CUSIP NUMBER: 921935102

QUOTRON SYMBOL: VWELX.Q

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS --
PERIODS ENDED NOVEMBER 30, 1997

1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C>
Wellington Fund 18.6% 16.6% 15.1%
Composite Index* 21.7 16.4 16.0
*65% stocks, 35% bonds. See page 11 for details.
</TABLE>

QUARTERLY RETURNS (%) 1988 - 1997 (intended to show volatility of returns)
[Bar Graph]

<TABLE>
<CAPTION>
QUARTERLY RETURN QUARTER FUND/PORTFOLIO BENCHMARK
- ---------------- ------- -------------- ---------

</TABLE>

*65% stocks, 35% bonds. See page 11 for details.

In evaluating past performance, remember that it is not indicative of future
performance and that returns from stocks before adjusting for inflation were
relatively high during the periods shown. Performance figures include the
reinvestment of any dividend and capital gains distributions. The returns shown
are net of expenses for the fund, but they do not reflect income taxes an
investor would have incurred. The composite index is a theoretical portfolio,
incurring none of the advisory fees, operating expenses, and portfolio
transaction costs that are borne by an operating mutual fund. Note, too, that
both the return and principal value of an investment will fluctuate, so
investors' shares, when redeemed, may be worth more or less than their original
cost.

1
<PAGE> 34
PLAIN TALK ABOUT

THE COSTS OF INVESTING

FUND EXPENSES

The examples below are designed to help you understand the various costs you
would bear, directly or indirectly, as an investor in the Fund.
As noted in this table, you do not pay fees of any kind when you buy, sell,
or exchange shares of the Fund:

SHAREHOLDER TRANSACTION EXPENSES

Sales Load Imposed on Purchases: None
Sales Load Imposed on Reinvested Dividends: None
Redemption Fees: None
Exchange Fees: None

The next table illustrates the operating expenses that you would incur as a
shareholder of the Fund. These expenses are deducted from the Fund's income
before it is paid to you. Expenses include investment advisory fees as well as
the costs of maintaining accounts, administering the Fund, providing shareholder
services, and other activities. The expenses shown in the table are based upon
those incurred in the fiscal year ended November 30, 1997.

PLAIN TALK ABOUT

FUND EXPENSES

ANNUAL FUND OPERATING EXPENSES
<S> <C> <C>
Management and Administrative Expenses: 0.22%
Investment Advisory Expenses: 0.04%
12b-1 Marketing Fees: None
Other Expenses
Marketing and Distribution Costs: 0.02%
Miscellaneous Expenses (e.g., Taxes, Auditing): 0.01%
-----
Total Other Expenses: 0.03%
-----
TOTAL OPERATING EXPENSES (EXPENSE RATIO): 0.29%
=====
</TABLE>
The following example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds, by illustrating
the hypothetical expenses that you would incur on a $1,000 investment over
various periods. The example assumes that (1) the Fund provides a return of 5% a
year and (2) you redeem your investment at the end of each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$3 $9 $16 $37
</TABLE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE, WHICH MAY BE HIGHER OR LOWER THAN
THOSE SHOWN.

2
<PAGE> 35
FINANCIAL HIGHLIGHTS

YEAR ENDED NOVEMBER 30,
-----------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $28.34 $24.57 $19.33 $20.78 19.34 $17.95 $16.29 $18.40 $16.82 $14.92
- ------------------------------------ ------ ------ ------ ------ ----- ------ ------ ------ ------ ------
INVESTMENT OPERATIONS
Net Investment Income 1.11 1.02 .96 .88 .92 .93 .96 1.01 1.02 .96
Net Realized and Unrealized
Gain (Loss) on Investments 3.77 4.00 5.19 (1.03) 1.62 1.65 1.71 (1.46) 2.12 2.06
TOTAL FROM INVESTMENT
OPERATIONS 4.88 5.02 6.15 (.15) 2.54 2.58 2.67 (.45) 3.14 3.02
---------- ---- ---- ---- ----- ---- ---- ---- ----- ---- ----
DISTRIBUTIONS
Dividends from Net Investment Income (1.06) (.97) (.88) (.92) (.94) (.96) (1.01) (1.06) (.98) (.98)
Distributions from Realized
Capital Gains (1.11) (.28) (.03) (.38) (.16) (.23) -- (.60) (.58) (.14)
- ------------------------------------ ------ ------ ------ ------ ----- ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (2.17) (1.25) (.91) (1.30) (1.10) (1.19) (1.01) (1.66) (1.56) (1.12)
------------------- ------ ------ ----- ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $31.05 $28.34 $24.57 $19.33 $20.78 $19.34 $17.95 $16.29 $18.40 $16.82
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN 18.60% 21.26% 32.70% -0.82% 13.62% 14.99% 16.81% -2.65% 19.98% 21.03%
===== ===== ===== ==== ===== ===== ===== ==== ===== =====
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (Millions) $21,340 $16,505 $12,333 $8,638 $7,917 $5,359 $3,473 $2,317 $2,035 $1,527
Ratio of Total Expenses
to Average Net Assets 0.29% 0.31% 0.33% 0.35% 0.34% 0.33% 0.35% 0.43% 0.42% 0.47%
Ratio of Net Investment Income
to Average Net Assets 3.97% 4.08% 4.37% 4.35% 4.55% 4.98% 5.39% 5.99% 5.77% 5.88%
Portfolio Turnover Rate 27% 30% 24% 32% 34% 24% 35% 33% 30% 28%
Average Commission Rate Paid $.0571 $.0287 N/A N/A N/A N/A N/A N/A N/A N/A
- ---------------------------- ------ ------ --- --- --- --- --- --- --- ---
</TABLE>

PLAIN TALK ABOUT

HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE

As of November 30, 1997, the Fund had $21.3 billion in net assets; an expense
ratio of 0.29% ($2.90 per $1,000 of net assets); and net investment income
amounting to 3.97% of its average net assets. It sold and replaced securities
valued at 27% of its total net assets.

3
<PAGE> 36
PLAIN TALK ABOUT
BALANCED FUNDS

Balanced funds are "middle-of-the-road" investments that seek to provide some
combination of growth, income, and conservation of capital by investing in a
mix of stocks, bonds, and/or money market instruments. Because stocks and
bonds tend to move in different directions, balanced funds are able to use the
rewards from one type of investment to help offset the risks from another.

A WORD ABOUT RISK

Look for the "warning flag" symbol [FLAG] throughout the prospectus. It is
used to mark detailed information about each type of risk that you, as a
shareholder of the Fund, would confront.

THE FUND'S OBJECTIVES

[FLAG] BECAUSE OF THE SEVERAL TYPES OF RISK DESCRIBED ON THE FOLLOWING PAGES,
YOUR INVESTMENT IN THE FUND, AS WITH ANY INVESTMENT IN STOCKS AND BONDS,
COULD LOSE MONEY.

WHO SHOULD INVEST

The Fund may be a suitable investment for you if:

- - You wish to add a balanced fund to your existing holdings, which could
include other stock and bond -- as well as money market and tax-exempt --
investments.

- - You are seeking moderate growth of your capital over the long term -- at
least five years -- while, at the same time, conserving your capital as much
as possible.

- - You are seeking moderate income.

- - You want a simple way to invest in a relatively fixed percentage of stocks
and bonds.

This Fund is not an appropriate investment if you are a market-timer. Investors
who engage in excessive in-and-out trading activity generate additional costs
that are borne by all of the Fund's shareholders. To minimize such costs, which
reduce the ultimate returns achieved by you and other shareholders, the Fund has
adopted the following policies:

4
<PAGE> 37
- - The Fund reserves the right to reject any purchase request -- including
exchanges from other Vanguard funds -- that it regards as disruptive to the
efficient management of the Fund. This could be because of the timing of the
investment or because of a history of excessive trading by the investor.

- - There is a limit on the number of times you can exchange into or out of the
Fund. If you own shares of the Fund as an investment option in an
employer-sponsored retirement or savings plan, your plan dictates the rules
governing exchanges. Contact your plan administrator for details.

- - The Fund reserves the right to stop offering shares at any time.

INVESTMENT STRATEGY

MARKET EXPOSURE

STOCKS

Roughly two-thirds of the Fund's assets are invested in common stocks. At times,
the Fund may also invest in securities that are convertible into common stocks.

[FLAG] THE FUND IS SUBJECT TO STOCK MARKET RISK, WHICH IS THE POSSIBILITY
THAT STOCK PRICES OVERALL WILL DECLINE OVER SHORT OR EVEN EXTENDED
PERIODS. STOCK MARKETS TEND TO MOVE IN CYCLES, WITH PERIODS OF RISING
STOCK PRICES AND PERIODS OF FALLING STOCK PRICES.

PLAIN TALK ABOUT

COSTS AND MARKET-TIMING

5
<PAGE> 38
PLAIN TALK ABOUT

BONDS AND INTEREST RATES

PLAIN TALK ABOUT

BOND MATURITIES

U.S. STOCK MARKET RETURNS (1926 - 1997)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS 20 YEARS
<S> <C> <C> <C> <C>
Best 53.9% 23.9% 20.1% 16.9%
Worst -43.3 -12.5 -0.9 3.1
Average 13.0 10.5 10.9 10.9
</TABLE>
The table covers all of the 1-, 5-, 10-, and 20-year periods from 1926
through 1997. For example, while the average return on stocks for all of the
5-year periods was 10.5%, returns for these 5-year periods ranged from a -12.5%
average (from 1928 through 1932), to 23.9% (from 1950 through 1954). These
average returns reflect past performance of common stocks and should not be
regarded as an indication of future returns from either the stock market as a
whole or this Fund in particular.

Finally, because Vanguard/Wellington Fund does not hold the same securities
held in the S&P 500 Index or any other market index, the performance of the Fund
will not mirror the returns of any particular index.

BONDS

Approximately one-third of the Fund's assets are invested in bonds.

[FLAG] THE FUND IS SUBJECT TO INTEREST RATE RISK, WHICH IS THE
POSSIBILITY THAT BOND PRICES OVERALL WILL DECLINE OVER SHORT, OR EVEN
EXTENDED, PERIODS DUE TO RISING INTEREST RATES. INTEREST RATE RISK SHOULD
BE MODEST FOR SHORTER-TERM BONDS AND HIGH FOR LONGER -TERM BONDS.

<TABLE>
<CAPTION>
HOW INTEREST RATE CHANGES AFFECT BONDS*
VALUE OF A $1,000 BOND VALUE OF A $1,000 BOND
AFTER A 2% INCREASE AFTER A 2% DECREASE
MATURITY IN INTEREST RATES IN INTEREST RATES
<S> <C> <C>
Short-Term (2.5 years) $956 $1,046
Intermediate-Term (10 years) $870 $1,156
Long-Term (20 years) $816 $1,251
</TABLE>
*Assuming a 7% yield.

These figures are for illustrative purposes only and should not be regarded
as an indication of future returns from the bond market as a whole, or the Fund
in particular.

6
<PAGE> 39
Finally, because stock and bond prices often move in different
directions, the Fund's bond holdings help to dampen -- but not eliminate -- some
of the stock market volatility experienced by the Fund. Likewise, changes in
interest rates may not have as dramatic an effect on the Fund as they would on a
fund made up entirely of bonds.

SECURITY SELECTION

[FLAG] THE FUND IS SUBJECT TO MANAGER RISK, WHICH IS THE POSSIBILITY THAT WMC
MAY DO A POOR JOB OF SELECTING STOCKS AND BONDS.

STOCKS

The Fund's top ten stock holdings (which amounted to 15% of the Fund's
net assets) as of November 30, 1997, follow:

1. Allstate Corp.
2. U.S. Bancorp
3. Citicorp
4. Union Pacific Corp.
5. Wachovia Corp.
6. Xerox Corp.
7. Ford Motor Co.
8. Kimberly-Clark Corp.
9. General Electric Co.
10. AT&T Corp.

PLAIN TALK ABOUT

LARGE-CAP, MID-CAP, AND SMALL-CAP STOCKS

7
<PAGE> 40
PLAIN TALK ABOUT

TYPES OF BONDS

PLAIN TALK ABOUT

CREDIT QUALITY

PLAIN TALK ABOUT

PORTFOLIO TURNOVER

Before investing in a mutual fund, you should review its portfolio turnover rate
for an indication of the potential effect of transaction costs on the fund's
future returns. In general, the greater the volume of buying and selling by the
fund, the greater the impact that brokerage commissions and other transaction
costs will have on its return. The average turnover rate for all domestic stock
funds is approximately 80%.

Keep in mind that, because the stock makeup of the Fund changes daily,
this listing is only a "snapshot" at one point in time.

BONDS

A breakdown of the Fund's bond holdings (which amounted to 35% of the
Fund's total net assets) as of November 30, 1997, follows:

<TABLE>
<CAPTION>
------------------------------------------------
PERCENTAGE OF
TYPE OF BOND FUND'S ASSETS
------------------------------------------------
<S> <C>
Corporate 21%
U.S. Treasury and government agency 9
Foreign issuers 5
Other 0
------------------------------------------------
</TABLE>

[FLAG] THE FUND IS SUBJECT, TO A LIMITED EXTENT, TO CREDIT RISK, WHICH IS THE
POSSIBILITY THAT A BOND ISSUER WILL FAIL TO REPAY INTEREST AND
PRINCIPAL IN A TIMELY MANNER.

PORTFOLIO TURNOVER

INVESTMENT POLICIES

Up to 20% of the Fund's equity assets may be invested in the common
stocks of foreign companies as well as in securities that are

8
<PAGE> 41
convertible into foreign stocks. The Fund may engage in currency transactions
with respect to these securities. The Fund may also invest without limit in
fixed-income securities issued by foreign governments and non-U.S.-based
companies; however, these securities must be valued in U.S. dollars and meet the
Fund's credit quality standards.

Because of its investments in foreign securities, the Fund is subject
to foreign market risk. Investments in foreign stock markets can be as volatile,
if not more volatile, than investments in U.S. stock markets. Over the years,
the prices of foreign stocks and the prices of U.S. stocks have often moved in
opposite directions. However, a portfolio that invests in both U.S. and foreign
stocks may benefit from diversification and have less volatility than a
portfolio made up strictly of foreign stocks.

The Fund may invest up to 15% of its assets in restricted securities
with limited marketability or other illiquid securities.

The Fund may also invest in derivatives.

[FLAG] THE FUND RESERVES THE RIGHT TO INVEST, TO A LIMITED EXTENT, IN STOCK
AND BOND (INTEREST RATE) FUTURES AND OPTIONS CONTRACTS, WHICH ARE
TRADITIONAL TYPES OF DERIVATIVES. THE FUND MAY ALSO INVEST MODESTLY IN
LESS RISKY CLASSES OF COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs).

The reasons for which the Fund may use futures and options are:

- - To keep cash on hand to meet shareholder redemptions or other needs
while simulating full investment in stocks and bonds.

PLAIN TALK ABOUT

THE RISKS OF
INTERNATIONAL INVESTING

BECAUSE FOREIGN STOCK MARKETS OPERATE DIFFERENTLY FROM THE U.S. MARKET,
AMERICANS INVESTING ABROAD WILL ENCOUNTER RISKS NOT TYPICALLY ASSOCIATED WITH
U.S. COMPANIES. FOR INSTANCE, FOREIGN COMPANIES ARE NOT SUBJECT TO THE SAME
ACCOUNTING, AUDITING, AND FINANCIAL REPORTING STANDARDS AND PRACTICES AS U.S.
COMPANIES; AND THEIR STOCK MAY NOT BE AS LIQUID AS THE STOCK OF SIMILAR U.S.
COMPANIES. IN ADDITION, FOREIGN STOCK EXCHANGES, BROKERS, AND COMPANIES
GENERALLY HAVE LESS GOVERNMENT SUPERVISION AND REGULATION THAN THEIR
COUNTERPARTS IN THE UNITED STATES. THESE FACTORS, AMONG OTHERS, COULD NEGATIVELY
IMPACT THE RETURNS AMERICANS RECEIVE FROM A FOREIGN INVESTMENT. FOR MORE
INFORMATION, SEE THE STATEMENT OF ADDITIONAL INFORMATION.

PLAIN TALK ABOUT

DERIVATIVES

A DERIVATIVE IS A FINANCIAL CONTRACT WHOSE VALUE IS BASED ON (OR "DERIVED" FROM)
A TRADITIONAL SECURITY (SUCH AS A STOCK OR A BOND), AN ASSET (SUCH AS A
COMMODITY LIKE GOLD), OR A MARKET INDEX (SUCH AS THE S&P 500 INDEX). FUTURES AND
OPTIONS ARE DERIVATIVES THAT HAVE BEEN TRADING ON REGULATED EXCHANGES FOR MORE
THAN TWO DECADES. THESE "TRADITIONAL" DERIVATIVES ARE STANDARDIZED CONTRACTS
THAT CAN EASILY BE BOUGHT AND SOLD, AND WHOSE MARKET VALUES ARE DETERMINED AND
PUBLISHED DAILY. IT IS THESE CHARACTERISTICS THAT DIFFERENTIATE FUTURES AND
OPTIONS FROM THE RELATIVELY NEW, EXOTIC TYPES OF DERIVATIVES -- SOME OF WHICH
CAN CARRY CONSIDERABLE RISKS.

9
<PAGE> 42
PLAIN TALK ABOUT

PAST PERFORMANCE

WHENEVER YOU SEE INFORMATION ON A FUND'S PERFORMANCE, DO NOT CONSIDER THE
FIGURES TO BE AN INDICATION OF THE PERFORMANCE YOU COULD EXPECT BY MAKING AN
INVESTMENT IN THE FUND TODAY. THE PAST IS AN IMPERFECT GUIDE TO THE FUTURE;
HISTORY DOES NOT REPEAT ITSELF IN NEAT, PREDICTABLE PATTERNS.

- - To reduce the Fund's transaction costs by buying futures instead of
actual stocks and bonds.

- - To add value to the Fund by buying futures instead of actual stocks and
bonds when futures are cheaper.

INVESTMENT LIMITATIONS

The Fund has adopted limitations on some of its investment policies. Some of
these limitations are that the Fund will not:

- - Invest more than 5% of its assets in the securities of companies that
have been in business for less than three years.

- - Invest more than 25% of its assets in any one industry.

- - Borrow money, except for the purpose of meeting shareholder requests to
redeem shares. Amounts borrowed will not exceed 10% of the Fund's net
assets.

With respect to 75% of its assets, this Fund will not:

- - Invest more than 5% in the securities of any one company.

- - Buy more than 10% of the outstanding voting securities of any company.

A complete list of the Fund's investment limitations can be found in
the Statement of Additional Information. These limitations are fundamental and
may be changed only by approval of a majority of the Fund's shareholders.

INVESTMENT PERFORMANCE

10
<PAGE> 43
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDED NOVEMBER 30, 1997

[BAR CHART]
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years 20 Years
------ ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Wellington Fund 18.6% 24.0% 16.6% 15.1% 14.8%
Wellington Composite Index 21.7% 24.7% 16.4% 16.0% 14.5%
</TABLE>

SHARE PRICE

TOTAL ASSETS - LIABILITIES
NET ASSET VALUE = --------------------------------
NUMBER OF SHARES OUTSTANDING

The Fund's share price can be found daily in the mutual fund listings
of most major newspapers under the heading "Vanguard Funds." Different
newspapers use different abbreviations of the Fund's name, but the most common
is WELLTN.

DIVIDENDS, CAPITAL GAINS, AND TAXES

Each March, June, September, and December, the Fund distributes to shareholders
virtually all of its income from interest and dividends. Any capital gains
realized from the sale of securities are

11
<PAGE> 44
PLAIN TALK ABOUT

DISTRIBUTIONS

PLAIN TALK ABOUT

VANGUARD'S UNIQUE CORPORATE STRUCTURE

distributed in December. In addition, the Fund may occasionally be required to
make supplemental dividend or capital gains distributions at some other time
during the year.

If you own shares of the Fund as an investment option in an
employer-sponsored retirement or savings plan, these dividend and capital gains
distributions will be reinvested in additional Fund shares and accumulate on a
tax-deferred basis. You will not owe taxes on these distributions until you
begin withdrawals. You should consult your plan administrator, your plan's
Summary Plan Document, or your tax adviser about the tax consequences of an
investment in the Fund and of any plan withdrawals.

If your Vanguard/Wellington Fund investment is not part of an
employer-sponsored plan, you can receive distributions of income or capital
gains in cash, or you may have them automatically reinvested in more shares of
the Fund. Both dividend and capital gains distributions -- whether received in
cash or reinvested in additional shares -- are subject to federal (and possibly
state and local) income taxes, no matter how long you have held the shares in
the Fund. You should consult your tax adviser about other tax consequences of an
investment in the Fund.

THE FUND AND VANGUARD

Vanguard also provides marketing services to the funds. Although
shareholders do not pay sales commissions or 12b-1 marketing fees, each fund
pays its allocated share of The Vanguard Group's costs.

A list of the Fund's Directors and officers, and their present
positions and principal occupations during the past five years, can be found in
the Statement of Additional Information.

INVESTMENT ADVISER

12
<PAGE> 45
Each quarter, WMC is paid an advisory fee based on average month-end
net assets of the Fund and a sliding percentage scale:

For the year ended November 30, 1997, the advisory fee represented an
effective annual basic rate of 0.04% of the Fund's average net assets before a
decrease of .0013% based on performance.

GENERAL INFORMATION

PLAIN TALK ABOUT

THE FUND'S ADVISER

13
<PAGE> 46
liabilities of the corporation. If any matters are to be voted on by
shareholders (such as the election of Directors), each Fund share outstanding at
that point would be entitled to one vote. Annual meetings will not be held by
the Fund except as required by the Investment Company Act of 1940. A meeting
will be scheduled to vote on the removal of a Director if the holders of at
least 10% of the Fund's shares request a meeting in writing.

"Standard & Poor's," "Standard & Poor's 500," "S&P 500," "S&P," and "500" are
trademarks of The McGraw-Hill Companies, Inc.

14
<PAGE> 47
INVESTING WITH VANGUARD

FOR PLAN PARTICIPANTS

Vanguard/Wellington Fund is an investment option in your retirement or savings
plan. Your plan administrator or your employee benefits office can provide you
with detailed information on how to participate in your plan and how to elect
the Fund as an investment option.

- - If you have any questions about the Fund or Vanguard, including the
Fund's investment objectives, strategy, or risks, contact Vanguard's
Participant Services Center, toll-free, at 1-800-523-1188.

- - If you have questions about your account, contact your plan
administrator or the organization that provides recordkeeping services
for your plan.

INVESTMENT OPTIONS AND ALLOCATIONS

Your plan's specific provisions may allow you to change your investment
selections, the amount of your contributions, or how your contributions are
allocated among the investment choices available to you. Contact your plan
administrator or employee benefits office for more details.

TRANSACTIONS

Contributions, exchanges, or redemptions of the Fund's shares are processed as
soon as they have been received by Vanguard in good order. Good order means that
your request includes complete information on your contribution, exchange, or
redemption, and that Vanguard has received the appropriate assets.

EXCHANGES

The exchange privilege (your ability to redeem shares from one fund to purchase
shares of another fund) may be available to you through your plan. Although we
make every effort to maintain the exchange privilege, Vanguard reserves the
right to revise or terminate the exchange privilege, limit the amount of an
exchange, or reject any exchange, at any time, without notice. Because excessive
exchanges can potentially disrupt the management of a Fund and increase its
transaction costs, Vanguard limits exchange activity to TWO SUBSTANTIVE EXCHANGE
REDEMPTIONS (at least 30 days apart) from any Fund during any 12-month period.
"Substantive" means either a dollar amount or a series of movements between
Vanguard funds that Vanguard determines, in its sole discretion, could have an
adverse impact on the management of the Fund. In addition, certain investment
options, particularly funds made up of company stock or investment contracts,
may be subject to unique restrictions. Contact your plan administrator for
details on the exchange policies that apply to your plan.

Before making an exchange, you should consider the following:

- - Before you exchange to another Vanguard fund available in your plan,
you should read that fund's prospectus. Contact Vanguard's Participant
Services Center, toll-free, at 1-800-523-1188 for a copy.

- - Vanguard can accept exchanges only as permitted by your plan. Your plan
administrator can explain how frequently exchanges are allowed.

FOR OTHER INSTITUTIONAL INVESTORS

If you have questions about Vanguard/Wellington Fund, including how to establish
an account, call Vanguard, toll-free, at 1-800-523-1036.

If you have questions about an existing account, contact your Vanguard
account administrator.

15
<PAGE> 48
INVESTING WITH VANGUARD (continued)

TRANSACTIONS

Purchases, exchanges, or redemptions of the Fund's shares are processed as soon
as they have been received by Vanguard in good order. Good order means that your
request includes complete information on your purchase, exchange, or redemption,
and that Vanguard has received the appropriate assets. The price of shares
bought, exchanged, or sold will be the Fund's next-determined net asset value
after Vanguard has processed your request, provided your request has been
received before the close of trading on the New York Stock Exchange (generally 4
p.m. Eastern time).

Vanguard must consider the interests of all Fund shareholders and so
reserves the right to:

- - Delay or reject any purchase or exchange request that may disrupt the
Fund's operation or performance.

- - Revise or terminate the exchange privilege or limit the amount of an
exchange, at any time, without notice.

- - Take up to seven days to deliver your redemption proceeds.

- - Pay redemption proceeds -- in whole or in part -- through a
distribution in kind of readily marketable securities.

ACCESSING FUND INFORMATION BY COMPUTER

VANGUARD ONLINE(R)
www.vanguard.com

Use your personal computer to learn more about Vanguard's funds and services;
keep in touch with your Vanguard accounts; map out a long-term investment
strategy; initiate certain transactions; and ask questions, make suggestions,
and send messages to Vanguard.

Our education-oriented website provides timely news and information about
Vanguard's funds and services; an online "university" that offers a variety of
mutual fund classes; and easy-to-use, interactive tools to help you create your
own investment and retirement strategies.

16
<PAGE> 49
GLOSSARY OF INVESTMENT TERMS