<PAGE> 1
FUND PROFILE
FOR
VANGUARD
MORGAN
GROWTH FUND
February 28, 1996
A MEMBER OF THE VANGUARD GROUP(r)
<PAGE> 2
1 OBJECTIVE
Vanguard/Morgan Growth Fund seeks to provide long-term capital growth by
investing in common stocks. The Fund may not meet this objective.
2 INVESTMENT STRATEGIES
The Fund invests across many industries--in large companies with strong records
of growth, sales, and earnings, as well as in smaller companies that have plans
to expand or have performed well during specific market cycles. The Fund aims
to match and, if possible, outperform an index of the 50 largest growth mutual
funds in the U.S. In addition to investing in common stocks, the Fund may also
invest, to a limited degree, in short-term fixed-income securities, futures
contracts, and options.
3 RISKS
Investors in the Fund are exposed to . . .
- - A HIGH degree of stock market risk (the possibility that stock prices in
general will decline over short or extended periods).
Historical returns for the U.S. stock market (as measured by the Standard &
Poor's 500 Composite Stock Price Index) show some of this market volatility.
From 1926 to 1995, the S&P 500 Index provided an annualized total return of
+10.5%, but provided a negative return--averaging -12.3%--in 20 of these 70
years. Annual returns for the period ranged from a low of -43.3% to a high of
+53.9%.
Because it emphasizes growth stocks, the Fund is likely to perform differently
than broader market benchmarks like the S&P 500 Index.
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4 APPROPRIATENESS
This Fund may be suitable for investors who . . .
- - Are seeking long-term capital growth.
- - Are willing to assume above-average investment risk.
- - Want a growth fund as part of a balanced investment program.
- - Plan to invest for at least five years.
The Fund is not suitable for investors who . . .
- - Are seeking current income.
- - Cannot tolerate fluctuating share prices.
5 FEES AND EXPENSES
Vanguard/Morgan Growth Fund-like all Vanguard Funds-is offered on a pure
no-load basis (that is, the Fund has no 12b-1 fees or charges to buy or sell
shares).
The Fund's operating expenses are deducted from its total assets before daily
share prices and income distributions are calculated. The Fund's expense ratio
for fiscal year 1995 was 0.49% of assets.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
--------------------------------------------
<S> <C>
Investment Advisory Fees 0.14%
Distribution Costs 0.02
Other Expenses 0.33
----
Total Operating Expenses 0.49%
====
</TABLE>
The following example illustrates the expenses that you would incur on a $1,000
investment over various periods, assuming (1) a 5% annual rate of return and
(2) redemption at the end of each period.
<TABLE>
<C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
----------------------------------------
$5 $16 $27 $62
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be higher or lower than those
shown.
<PAGE> 4
6. PAST PERFORMANCE
<TABLE>
<CAPTION>
PERFORMANCE
ANNUAL RETURNS 1986-1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------------------------
Vanguard/Morgan
Growth Fund 7.8 5.0 22.3 22.7 -1.50 29.3 9.5 7.3 -1.7 36.0
S&P 500 Index* 18.6 5.1 16.6 31.7 -3.1 30.5 7.6 10.1 1.3 37.6
</TABLE>
PERFORMANCE SUMMARY
PERIODS ENDED DECEMBER 31, 1995
AVERAGE ANNUAL TOTAL RETURN
MORGAN GROWTH FUND S&P 500*
--------------------------------------------------
1 Year +35.98% +37.58%
5 Year +15.25% +16.59%
10 Years +13.03% +14.86%
Note: In evaluating past performance, it is important to consider that returns
from stocks were close to their highest levels in history during the past ten
years. Past performance is not indicative of future performance.
Performance figures include the reinvestment of all dividends and any capital
gains distributions. All returns are net of expenses. The performance data
quoted represent past performance. The investment return and principal value of
an investment will fluctuate so that investors' shares, when redeemed, may be
worth more or less than their original cost.
* The Standard & Poor's 500 Composite Stock Price Index is a diversified group
of 500 securities used to measure U.S. stock market performance. An index is
unmanaged; you cannot invest in an index.
"Standard & Poor's(r)" and "S&P 500(tm)" are trademarks of The McGraw-Hill
Companies, Inc.
<PAGE> 5
7 INVESTMENT ADVISER
The Fund employs a "multi-manager" approach. The four investment advisers
select stocks and maintain portfolios independently of one another. As of
December 31, 1995, the Fund's assets were divided as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
ADVISER FUND'S ASSETS
------------------------------------------------
<S> <C>
Wellington Management Company 40.8%
Franklin Portfolio Associates Trust 34.9
Husic Capital Management 13.6
Vanguard Core Management Group 10.7
</TABLE>
8 PURCHASES
You may purchase shares by mail, wire, or exchange from another Vanguard Fund.
The minimum initial investment is $3,000 ($1,000 for IRAs and custodial
accounts).
9 REDEMPTIONS
You may redeem shares by sending a letter to or calling Vanguard. The Fund's
share price is expected to fluctuate and, at redemption, may be higher or lower
than at the time of initial purchase, resulting in a gain or loss.
10 DISTRIBUTIONS
The Fund expects to pay dividend and capital gains distributions annually in
December. These distributions can be automatically reinvested or received in
cash.
11 OTHER SERVICES
- - Vanguard Fund Express(r)--electronic transfers between your bank account
and the Fund.
- - Vanguard Tele-Account(r)--around-the-clock access to Vanguard Fund
information, account balances, and some transactions by calling
1-800-662-6273 (ON-BOARD).
- - Investor Information--toll-free access to Vanguard Associates by calling
1-800-662-7447 (SHIP).
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<LOGO>
This Fund Profile contains key
information about the Fund. More details appear
in the Fund's accompanying prospectus.
0296-4B (c) 1996 Vanguard Marketing Corporation, Distributor FP26
