<PAGE> 1
VANGUARD/WINDSOR FUNDS, INC.
VANGUARD/WINDSOR II
PROSPECTUS SUPPLEMENT
APRIL 9, 1996
The Board of Directors of Vanguard/Windsor II (the "Fund") has approved a
revised investment advisory agreement with Equinox Capital Management, Inc.
("Equinox"), one of the Fund's investment advisers. The new agreement involves
a reduction in the annual rate of advisory fees to be paid to Equinox.
Under the terms of the new agreement, the Fund will pay Equinox a
basic advisory fee at the end of each fiscal quarter, calculated by applying
the following annual percentage rates to the average month-end net assets
managed by Equinox for the quarter:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL BASIC FEE RATE
---------- ---------------------
<S> <C>
First $400 million 0.200%
Next $600 million 0.150
Next $1 billion 0.125
Over $2 billion 0.100
</TABLE>
Both the current and revised agreements provide that the Basic Fee may
be increased or decreased by applying an incentive/penalty fee adjustment based
on the investment performance of the Fund relative to the investment record of
the Standard & Poor's 500 Composite Stock Price Index for the same period.
This revised investment advisory agreement replaces the Fund's
existing agreement with the adviser dated November 1, 1991, and will go into
effect on or about August 1, 1996. Until this date, the adviser has agreed to
waive its advisory fees to the extent necessary to abide by the new fee
schedule.
PWAV
