VANGUARD CONVERTIBLE SECURITIES FUND
VANGUARD FIXED INCOME SECURITIES FUND
High Yield Corporate Portfolio
VANGUARD VARIABLE INSURANCE FUND
High Yield Bond Portfolio
Prospectus Supplement
September 18, 1998
RESTRICTED SECURITIES
Each of the above funds may invest in restricted, privately placed securities
that, under SEC rules, may only be sold to qualified institutional buyers.
Because these securities can only be resold to qualified institutional buyers,
they may be considered illiquid securities--meaning that they could be difficult
for the funds to convert to cash if needed.
A fund will not invest more than 15%* of its net assets in illiquid
securities.
If a substantial market develops for a restricted security held by a fund,
it will be treated as a liquid security, in accordance with procedures and
guidelines approved by the fund's Board of Directors or Trustees. While the
fund's investment adviser determines the liquidity of restricted securities on a
daily basis, the Board oversees and retains ultimate responsibility for the
adviser's decisions. The factors the Board considers in monitoring these
decisions include the valuation of a security, the availability of qualified
institutional buyers, and the availability of information on the security's
issuer.
*10% for money market funds.
PSRS1
