<PAGE> 1
FUND PROFILE
FOR
VANGUARD
NEW YORK
INSURED
TAX-FREE FUND
July 31, 1995
[VANGUARD GROUP LOGO]
<PAGE> 2
1 OBJECTIVE
As a municipal bond fund, Vanguard New York Insured Tax-Free Fund seeks to
provide the highest level of income exempt from Federal and New York personal
income taxes. The Fund is available only to investors who reside in New York.
There is no assurance that the Fund will achieve its stated objective.
2 INVESTMENT STRATEGIES
The Fund invests primarily in long-term, high-quality (as rated by independent
agencies) municipal bonds, issued by state and local government agencies in New
York, with an average maturity of 15-25 years. On March 31, 1995, the average
quality of the Fund's holdings was Aaa*. At least 80% of the municipal bonds in
this Fund are insured for scheduled payments of interest and principal by a
private (non-government) insurance company. The insurance feature does not
guarantee the market value of the municipal bonds or the value of the Fund's
shares. In order to effectively implement its policies, the Fund may invest up
to 20% of its assets in futures contracts and options.
3 RISKS
Due to the long-term maturity of its bond holdings, the Fund's total return can
be expected to fluctuate within a substantial range.
Investors in the Fund are exposed to:
- - a HIGH degree of principal risk due to fluctuations in the principal value
of fixed-income securities in relation to changing interest rates. For
example, a 2-percentage-point increase in interest rates would cause a
20-year bond to drop approximately 20% in value, while a
2-percentage-point decrease in rates would cause the same bond to rise
approximately 22% in value.
- - a LOW degree of credit risk (the possibility that an issuer of a bond or
money market instrument will fail to make timely payments of interest or
principal).
- - a LOW degree of income volatility, or fluctuations in the income provided
by the Fund.
*As rated by Moody's Investors Services, Inc.
<PAGE> 3
4 APPROPRIATENESS
This Fund may be appropriate for investors . . .
- - Seeking tax-exempt income and residing in New York.
- - Who want to balance their equity portfolio with a tax-exempt income
investment.
- - Willing to hold their investment over the long term (at least five years).
This Fund is inappropriate for investors . . .
- - Unable to tolerate fluctuating share prices.
- - In a low tax bracket.
5 FEES AND EXPENSES
The following table illustrates all expenses and fees that you would incur as a
shareholder of the Fund. The expenses shown below are for the 1994 fiscal year.
<TABLE>
<S> <C> <C>
Sales Load Imposed on Purchases . . . . . . None
Sales Load Imposed on Reinvested
Dividends . . . . . . . . . . . . . . . None
Redemption Fees** . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . None
ANNUAL FUND OPERATING EXPENSES
----------------------------------------------------------------------------
Management and Administration . . . . . . . 0.18%
Investment Advisory Fees . . . . . . . . . . 0.01
12b-1 Fees . . . . . . . . . . . . . . . . . None
Other Expenses
Distribution Costs . . . . . . . . . . 0.02
Miscellaneous Expenses . . . . . . . . 0.01
----
Total Other Expenses . . . . . . . . . . . . 0.03
----
Total Operating Expenses . . . . . . . . . 0.22%
----
</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>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------
<S> <C> <C> <C>
$2 $7 $12 $28
</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.
**Wire redemptions of less than $5,000 are subject to a $5 charge.
<PAGE> 4
6 PAST PERFORMANCE
PERFORMANCE
ANNUAL RETURNS (%) 1987-1994
<TABLE>
<CAPTION>
'87 '88 '89 '90 '91 '92 '93 '94
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vanguard New York Insured Tax-Free Fund -3.4 11.7 10.4 6.2 12.8 9.8 13.1 -5.6
Lipper NY Insured Municipal Funds Average -2.0 10.6 9.2 5.3 12.6 9.0 12.3 -6.3
</TABLE>
PERFORMANCE SUMMARY
(PERIODS ENDED JUNE 30, 1995)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
NY INSURED LIPPER NY INSURED
TAX-FREE FUND MUNICIPAL DEBT
<S> <C> <C>
1 Year +8.19 % +7.51%
5 Years +8.58 % +7.90%
Since Inception*** +7.30 % NA
</TABLE>
*** Since Fund's inception, April 7, 1986.
Note: In evaluating past performance, it is important to consider that nominal
returns from bonds were close to their highest levels in history during the
past ten years due to generally declining interest rates. 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 an investor's shares, when redeemed, may
be worth more or less than their original cost.
Annualized tax-free current yield for the
30-day period ended June 30, 1995:
5.17%
For the latest yield, call Vanguard at
1-800-662-7447
The annualized current yield is calculated using the
standardized yield formula adopted for mutual funds by the
U.S. Securities and Exchange Commission.
<PAGE> 5
7 INVESTMENT ADVISER
The Fund is managed by Vanguard's Fixed Income Group, which manages total
assets of more than $60 billion.
8 PURCHASES
You may purchase shares by mail, wire, or exchange from another Vanguard Fund.
The minimum initial investment is $3,000. There are no sales commissions or
12b-1 fees.
9 REDEMPTIONS
You may redeem shares by writing a check ($250 minimum), sending a letter, or
calling Vanguard. There is no charge for redemptions except for wire
withdrawals under $5,000, which are subject to a $5 charge. (Please note: 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 declares a dividend each business day based on its ordinary income.
Dividends are paid on the first business day of each month and may be received
in cash or reinvested in additional shares. These dividends are expected to be
exempt from Federal and New York income taxes.
11 OTHER SERVICES
- - Free checkwriting.
- - 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).
<PAGE> 6
[FIGURE 6]
This Fund Profile contains key
information about the Fund. More details appear
in the Fund's accompanying prospectus.
0795-2.7S (C) 1995 Vanguard Marketing Corporation, Distributor FP76
