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VANGUARD U.S. STOCK INDEX FUNDS
SUPPLEMENT TO THE PROSPECTUS DATED APRIL 30, 1999
Each of the Funds described in this prospectus seeks to track the investment
performance of a particular market index. To achieve this objective, each Fund
invests broadly in the stocks of a large number of companies. However, if market
fluctuations cause a Fund's target index to be dominated by a handful of
companies, that Fund would be required to invest a substantial portion of its
assets in those few companies in order to track the index.
Due to the recent, rapid appreciation of certain stocks, as of January
18, 2000, Vanguard Growth Index Fund's top four holdings represented more than
25% of its total assets, consistent with the composition of the Fund's target
index. These holdings were as follows: Microsoft (9.2%), General Electric
(7.5%), Cisco Systems (5.6%), and Intel (5.3%). By tracking the composition of
its target index, the Fund technically has become "nondiversified" under SEC
standards, although it continues to hold more than 100 stock positions.
Keep in mind that a fund's risk grows as its holdings become less
diversified. This is because the poor performance of just a few stocks can cause
a large decline in the price of a less-diversified fund.
(C) 2000 The Vanguard Group, Inc. All rights reserved PS40N-01/20/2000
Vanguard Marketing Corporation, Distributor.
