VANGUARD LIFESTRATEGY FUNDS
PROSPECTUS SUPPLEMENT
SEPTEMBER 20, 1995
The investment policies of the LIFEStrategy Funds have been revised by
adjusting the investment allocation of each LIFEStrategy Portfolio's assets
among the underlying Vanguard Funds. The allocation to the Vanguard Asset
Allocation Fund is being reduced from 30% of the Portfolios' assets to 25%.
Accordingly, the investment in other underlying Funds will be increased.
This minor adjustment will not change the target asset class allocations of
the Portfolios and therefore their investment objectives. The targets will
remain as they currently are: Income Portfolio-20% stocks, 60% bonds, 20%
reserves; Conservative Growth Portfolio-40% stocks, 40% bonds, 20%
reserves; Moderate Growth Portfolio-60% stocks, 40% bonds; and the Growth
Portfolio-80% stocks, 20% bonds.
The new fund investment allocations for each Portfolio are listed in the
following table:
<TABLE>
<CAPTION>
Underlying Conservative Moderate
Investment Vanguard Income Growth Growth Growth
Category Funds Portfolio Portfolio Portfolio Portfolio
---------- ---------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
EQUITY
U.S. VIT-Total Stock Market 5% 20% 35% 50%
Portfolio
Int'l VIEIF-European and Pacific 0% 5% 10% 15%
Portfolios (1)
BONDS VFIS-
Short-Term Corporate,
Intermediate-Term Corporate,
Long-Term Corporate and
GNMA Portfolios (2) 50% 30% 30% 10%
RESERVES VFIS-
Short-Term Corporate 20% 20% 0% 0%
Portfolio
ASSET Vanguard
ALLOCATION Asset
COMPONENT Allocation Fund 25% 25% 25% 25%
---- ---- ---- ----
Total 100% 100% 100% 100%
</TABLE>
(1) The Portfolios will invest in the European and Pacific Portfolios so
that the combined weights parallel the Morgan Stanley Capital
International--EAFE Index.
(2) The Portfolios will divide their investments equally (i.e. 25% each)
between these four VFISF Portfolios.
NOTE: Because of the fluctuating stock/bond ratio within Vanguard Asset
Allocation Fund, the allocation of stocks, bonds, and reserves in each
Vanguard LIFEStrategy Portfolio will fluctuate, but is expected to
remain close to its respective target allocation over time.
PSIP
