<PAGE> 1
Vanguard
New York Tax-Free
Fund-Insured
Long-Term Portfolio
Fund Profile
September 2, 1997
The Insured Long-Term Portfolio is part of Vanguard New York Tax-Free Fund,
which also includes the Money Market Portfolio.
<PAGE> 2
1 OBJECTIVE
The New York Insured Long-Term Portfolio (formerly known as Vanguard New York
Insured Tax-Free Fund) seeks to provide current income that is exempt from
federal and New York personal income taxes. The Portfolio, which is available to
New York residents only, may not meet this objective.
2 INVESTMENT STRATEGY
The Portfolio invests primarily in long-term, high-quality* municipal bonds with
an average maturity of 15 to 25 years. These bonds are issued by state and local
government agencies in New York. The Portfolio may also invest up to 20% of its
assets in futures and options contracts.
At least 80% of the Portfolio's municipal bonds are insured for scheduled
payments of interest and principal by a private (that is, nongovernment)
insurance company. This insurance feature does not mean that the value of the
bonds or the value of the Portfolio's shares are guaranteed.
3 RISKS
The Portfolio's total return will fluctuate, so an investor could lose money
over short or even extended periods. More specifically, investors in the
Portfolio are exposed to:
- - A HIGH degree of INTEREST RATE RISK (the possibility that bond prices
will fall as interest rates rise--and vice versa). For instance, a 2%
increase in interest rates would cause a 20-year bond to drop
approximately 20% in value, while a 2% decrease in rates would cause
the same bond to rise about 22% in value.
- - A LOW degree of INCOME RISK (the possibility that income from bonds
will fall when interest rates decline).
- - A LOW degree of CREDIT RISK (the possibility that a bond's issuer will
fail to repay interest and principal) because of the high quality of
the Portfolio's securities.
4 APPROPRIATENESS
This Portfolio may be suitable for New York residents who . . .
- - Are seeking tax-exempt income.
- - Want to balance their stock holdings with a tax-exempt income
investment.
- - Plan to invest for at least five years.
* Average rating of Aaa (as of June 30, 1997) by Moody's Investors Service, Inc.
<PAGE> 3
The Portfolio is not suitable for investors who . . .
- - Cannot tolerate fluctuating share prices.
- - Are in a low tax bracket.
5 FEES AND EXPENSES
The Portfolio--like all Vanguard funds--is offered on a pure no-load basis (that
is, the Portfolio has no 12b-1 fees or charges to buy or sell shares).
The Portfolio's operating expenses are deducted from its total assets before
daily share prices and income distributions are calculated. The Portfolio's
expense ratio for fiscal year 1996 was 0.20% of assets.
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
------------------------------
<S> <C>
Investment Advisory Fees...........0.01%
Distribution Costs.................0.02
Other Expenses.....................0.17
----
Total Operating Expenses ..........0.20%
====
</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 $6 $11 $26
</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.
6 PAST PERFORMANCE
Performance Annual Returns (%) 1987-1996
<TABLE>
<CAPTION>
'87 '88 '89 '90 '91 '92 '93 '94 '95 '96
--- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
New York Insured Long-
Term Portfolio** (3.4) 11.7 10.4 6.2 12.8 9.8 13.1 (5.6) 17.7 4.1
Lipper NY Insured Municipal (2.0) 10.6 9.2 5.3 12.6 9.0 12.3 (6.3) 17.1 2.9
Debt Funds Average
</TABLE>
<PAGE> 4
Performance Summary
(Periods ended June 30, 1997)
<TABLE>
<CAPTION>
Average Annual Total Return
NY Insured Lipper NY Insured
Long-Term Portfolio** Municipal Debt+
<S> <C> <C>
1 Year 8.0% 7.0%
5 Years 7.0% 6.2%
10 Years 8.2% 7.5%
</TABLE>
Note: In evaluating past performance, it is important to consider that returns
from bonds 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.
Annualized tax-free current yield for the
30-day period ended June 30, 1997:
4.99%
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.
** Formerly known as Vanguard New York Insured Tax-Free Fund.
+ Lipper NY Insured Municipal Debt Funds Average is an industry benchmark
of average New York insured municipal debt funds with similar
investment objectives and policies, as measured by Lipper Analytical
Services, Inc.
<PAGE> 5
7 INVESTMENT ADVISER
The Portfolio is managed by Vanguard Fixed Income Group, which manages total
assets of more than $88 billion. Reid Smith, a Principal of Vanguard, serves as
portfolio manager. He has managed the Portfolio since June 1996.
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
for minors).
9 REDEMPTIONS
You may redeem shares by writing a check ($250 minimum), sending a letter to, or
calling Vanguard. The Portfolio'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 taxable gain or loss.
10 DISTRIBUTIONS
Dividends are declared each business day and are paid on the first business day
of each month. Capital gains distributions, if any, are made annually. Dividend
and capital gains distributions can be automatically reinvested or received in
cash. Dividend distributions are exempt from federal and New York income taxes;
capital gains distributions, whether reinvested in additional shares or received
in cash, are taxable for federal income tax purposes.
11 OTHER SERVICES
- - Free checkwriting.
- - Vanguard Fund Express(R)--electronic transfers between your bank
account and the Portfolio.
- - 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
[Vanguard Logo]
Post Office Box 2600
Valley Forge, PA 19482
Toll-Free Investor Information 1-800-662-7447
World Wide Web http://www.vanguard.com
E-mail [email protected]
This Fund Profile contains key information about the Portfolio. If you would
like more information before you invest, please consult the Portfolio's
accompanying prospectus. For details about the Portfolio's holdings or recent
investment strategies, please review the Portfolio's most recent annual or
semiannual report. The prospectus and reports can be obtained at no cost by
calling Vanguard.
