VANGUARD EMERGING MARKETS STOCK INDEX FUND
SUPPLEMENT TO THE PROSPECTUS DATED APRIL 23, 1998
LIQUIDATION OF MALAYSIAN HOLDINGS
Effective January 1, 1999, Malaysia was eliminated from the Fund's target index,
the Morgan Stanley Capital International Select Emerging Markets Free Index.
Accordingly, the Fund has liquidated its Malaysian holdings, which represented
approximately 3.5% of its net assets at the end of 1998.
Malaysian government regulations currently require the Fund to hold the
proceeds of these securities in ringgits--the Malaysian currency--for at least
one year, and the Malaysian government may impose additional restrictions
affecting the Fund at any time. The Fund considers ringgits illiquid, and will
count these holdings towards its 15% limit on investments in illiquid
securities. The adviser expects to maintain the Fund's normal investment
exposure--approximately 95% of assets in stocks and 5% in cash reserves--by
purchasing stock futures contracts equal in value to any ringgit holdings.
