VANGUARD INTERNATIONAL EQUITY INDEX FUND INC, 497, 2000-05-03

VANGUARD INTERNATIONAL EQUITY INDEX FUND INC
497, 2000-05-03

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (NO. 33-32548) UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 19
AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 22

VANGUARD INTERNATIONAL EQUITY INDEX FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)

P.O. BOX 2600, VALLEY FORGE, PA 19482
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER (610) 669-1000

R. GREGORY BARTON, ESQUIRE
P.O. BOX 876
VALLEY FORGE, PA 19482

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

IT IS PROPOSED THAT THIS AMENDMENT BECOME EFFECTIVE ON APRIL 28, 2000, PURSUANT
TO PARAGRAPH (B) OF RULE 485.

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- -------------------------------------------------------------------------------
<PAGE>

VANGUARD(R)
INTERNATIONAL STOCK
INDEX FUNDS

Prospectus
April 28, 2000

This prospectus contains
financial data for the
Funds through the
fiscal year ended
December 31, 1999.

VANGUARD EUROPEAN
STOCK INDEX FUND

VANGUARD PACIFIC STOCK
INDEX FUND

VANGUARD EMERGING
MARKETS STOCK INDEX
FUND

VANGUARD DEVELOPED
MARKETS INDEX FUND

VANGUARD TOTAL
INTERNATIONAL STOCK
INDEX FUND

[MEMBERS OF THE VANGUARD GROUP(R) LOGO]

<PAGE>

VANGUARD INTERNATIONAL STOCK INDEX FUNDS
Prospectus
April 28, 2000

A Group of International Stock Index Mutual Funds

- --------------------------------------------------------------------------------
CONTENTS
- --------------------------------------------------------------------------------
1 AN INTRODUCTION TO INDEX FUNDS

2 FUND PROFILES

2 Vanguard European Stock Index Fund

5 Vanguard Pacific Stock Index Fund

8 Vanguard Emerging Markets Stock Index Fund

12 Vanguard Developed Markets Index Fund

14 Vanguard Total International Stock Index Fund

14 MORE ON THE FUNDS

24 THE FUNDS AND VANGUARD

25 INVESTMENT ADVISER

26 DIVIDENDS, CAPITAL GAINS, AND TAXES

27 SHARE PRICE

28 FINANCIAL HIGHLIGHTS

32 INVESTING WITH VANGUARD

32 Services and Account Features

33 Types of Accounts

34 Buying Shares

36 Redeeming Shares

40 Transferring Registration

40 Fund and Account Updates

GLOSSARY (inside back cover)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
WHY READING THIS PROSPECTUS IS IMPORTANT

This prospectus explains the objective, risks, and strategies of each of the
Vanguard International Stock Index Funds. To highlight terms and concepts
important to mutual fund investors, we have provided "Plain Talk(R)"
explanations along the way. Reading the prospectus will help you to decide which
Fund, if any, is the right investment for you. We suggest that you keep it for
future reference.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IMPORTANT NOTE
The Vanguard European, Pacific, and Emerging Markets Stock Index Funds each
offer two separate classes of shares: Investor and Institutional. This
prospectus offers the Funds' Investor Shares, which have an investment minimum
of $3,000 ($1,000 for IRAs) and are intended for individual investors. Please
call Vanguard's Institutional Investor Group at 1-800-523-1036 to obtain a
separate prospectus that offers the Funds' Institutional Shares as well as the
institutional version of Vanguard Developed Markets Index Fund. These
institutional options have an investment minimum of $10 million and generally
are not available to investors who require special employee benefit plan
services.
The Funds' separate share classes have different expenses; as a result,
their investment performances will vary. UNLESS OTHERWISE NOTED, ALL REFERENCES
IN THIS PROSPECTUS TO FEES, EXPENSES, AND INVESTMENT PERFORMANCE RELATE
SPECIFICALLY TO INVESTOR SHARES.
- --------------------------------------------------------------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

AN INTRODUCTION TO INDEX FUNDS

WHAT IS INDEXING?
An index is an unmanaged group of securities whose overall performance is used
as a standard to measure investment performance. An index (or "passively
managed") fund tries to track, as closely as possible, the performance of an
established target index. The fund does this by holding all, or a representative
sample, of the securities that comprise the index. Keep in mind that an index
fund has operating expenses and transaction costs, while a market index does
not. Therefore, an index fund, while expected to track its target index closely,
typically will be unable to match the performance of the index exactly.
Stock index funds may seek to track indexes that hold a certain type of
stock--such as growth or value, small-cap or large-cap, or those from just one
industry--or they may seek to track indexes that consist of a broader range of
stocks--for example, the entire foreign stock market.
Index funds are not actively managed by investment advisers who buy and
sell securities based on research and analysis in an attempt to outperform a
particular benchmark or the market as a whole. Rather, index funds simply
attempt to mirror what the target index does, for better or worse.

WHAT INDEX FUNDS DOES VANGUARD OFFER?
Vanguard offers a variety of stock (both U.S. and international), bond, and
balanced index funds. This prospectus provides information about Vanguard's
International Stock Index Funds. There are five such Funds offered in this
prospectus, each of which seeks to track a different segment of the
international stock market:

- --------------------------------------------------------------------------------
FUND SEEKS TO TRACK
- --------------------------------------------------------------------------------
Vanguard European Stock Index Fund European stock markets
Vanguard Pacific Stock Index Fund Australian and Far East
stock markets
Vanguard Emerging Markets Stock 13 emerging stock markets in
Index Fund Europe, Asia, Africa, and
Latin America
Vanguard Developed Markets Index Fund European, Australian, and Far
East stock markets
Vanguard Total International Stock European, Australian, Far East,
Index Fund and 13 emerging stock
markets in Europe, Asia,
Africa, and Latin America
- --------------------------------------------------------------------------------

This prospectus contains profiles that summarize key features of each Fund.
Following the profiles, there is important additional information about the
Funds.

<PAGE>

FUND PROFILE--
VANGUARD(R) EUROPEAN STOCK INDEX FUND

The following profile summarizes key features of Vanguard European Stock Index
Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the Morgan Stanley Capital
International (MSCI) Europe Index.

INVESTMENT STRATEGIES
The Fund employs a "passively managed"--or index--investment approach, by
investing all or substantially all of its assets in a representative sample of
the common stocks included in the MSCI Europe Index. The MSCI Europe Index is
made up of approximately 550 common stocks of companies located in 15 European
countries--mostly in the United Kingdom, France, Germany, and the Netherlands,
(which comprised 29%, 15%, 14%, and 8% of the Index's market capitalization,
respectively, as of March 31, 2000), as well as in Austria, Belgium, Denmark,
Finland, Ireland, Italy, Norway, Portugal, Spain, Sweden, and Switzerland. For
more information about passive management, see "Indexing Methods" under MORE ON
THE FUNDS.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters. The Index's,
and therefore the Fund's, heavy exposure to four countries (United Kingdom,
France, Germany, and the Netherlands) involves a higher degree of country
risk than that of more geographically diversified international funds.
- - Regional risk, which is the chance that an entire region--namely
Europe--will be hurt by political troubles, financial problems, or natural
disasters.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
and five calendar years and since inception compare with those of a broad-based
securities market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1991 12.40%
1992 -3.32%
1993 29.13%
1994 1.88%
1995 22.28%
1996 21.26%
1997 24.23%
1998 28.86%
1999 16.62%
----------------------------------------------------
Return figures do not reflect the annual account
maintenance fee imposed on accounts with balances of
less than $10,000, or the transaction fee imposed on
purchases prior to April 1, 2000. If these amounts
were reflected, returns would be less than those
shown.
----------------------------------------------------

During the period shown in the bar chart, the highest return for a calendar
quarter was 20.37% (quarter ended March 31, 1998) and the lowest return for a
quarter was -14.41% (quarter ended September 30, 1998).

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard European Stock
Index Fund** 16.62% 22.58% 14.61%
MSCI Europe Index 15.77 22.27 14.78
-------------------------------------------------------------------------
*June 18, 1990.
**Return figures do not reflect the annual account maintenance fee
imposed on accounts with balances of less than $10,000, or the
transaction fee imposed on purchases prior to April 1, 2000.
-------------------------------------------------------------------------

FEES AND EXPENSES
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The expenses shown under Annual Fund Operating Expenses
are based upon those incurred in the fiscal year ended December 31, 1999.

SHAREHOLDER FEES (fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases: None
Transaction Fee on Purchases: None
Sales Charge (Load) Imposed on Reinvested Dividends: None
Redemption Fee: None
Exchange Fee: None
Account Maintenance Fee (for accounts under $10,000): $10/year*

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.22%
12b-1 Distribution Fee: None
Other Expenses: 0.07%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.29%

<PAGE>

The following example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur over various periods if you invest
$10,000 in the Fund. This example assumes that the Fund provides a return of 5%
a year, and that operating expenses remain the same. The results apply whether
or not you redeem your investment at the end of each period.

- -------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------
$30 $93 $163 $368
- -------------------------------------------------

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS MINIMUM INITIAL INVESTMENT
Distributed annually in December $3,000; $1,000 for IRAs and custodial
accounts for minors
INVESTMENT ADVISER
The Vanguard Group, Valley Forge, NEWSPAPER ABBREVIATION
Pa., since inception Europe

INCEPTION DATE VANGUARD FUND NUMBER
June 18, 1990 079

NET ASSETS AS OF DECEMBER 31, 1999 CUSIP NUMBER
$6.1 billion 922042205

SUITABLE FOR IRAS TICKER SYMBOL
Yes VEURX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) PACIFIC STOCK INDEX FUND

The following profile summarizes key features of Vanguard Pacific Stock Index
Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the MSCI Pacific Free Index.*

*The designation "Free" in the name of the Index refers to the securities that
the Index tracks. Some countries restrict foreign investment in certain
industries, so only stocks that can be bought freely by a fund are tracked.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters. The Index's,
and therefore the Fund's, heavy exposure to Japan involves a higher degree
of country risk than that of more geographically diversified international
funds.
- - Regional risk, which is the chance that an entire region--namely the
Pacific region--will be hurt by political troubles, financial problems, or
natural disasters.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
and five years and since inception compare with those of a broad-based
securities market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1991 10.65%
1992 -18.17%
1993 35.46%
1994 13.04%
1995 2.75%
1996 -7.82%
1997 -25.67%
1998 2.41%
1999 57.05%
----------------------------------------------------
Return figures do not reflect the annual account
maintenance fee imposed on accounts with balances of
less than $10,000, or the transaction fee imposed on
purchases prior to April 1, 2000. If these amounts
were reflected, returns would be less than those
shown.
----------------------------------------------------

During the period shown in the bar chart, the highest return for a calendar
quarter was 26.50% (quarter ended December 31, 1998) and the lowest return for a
quarter was -20.69% (quarter ended December 31, 1997).

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard Pacific Stock
Index Fund** 57.05% 2.52% 3.20%
MSCI Pacific Free Index 56.38 2.39 3.08
-------------------------------------------------------------------------
*June 18, 1990.
**Return figures do not reflect the annual account maintenance fee
imposed on accounts with balances of less than $10,000, or the
transaction fee imposed on purchases prior to April 1, 2000.
-------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.31%
12b-1 Distribution Fee: None
Other Expenses: 0.06%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.37%

<PAGE>

- -------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------
$38 $119 $208 $468
- -------------------------------------------------

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

INCEPTION DATE VANGUARD FUND NUMBER
June 18, 1990 072

NET ASSETS AS OF DECEMBER 31, 1999 CUSIP NUMBER
$2.5 billion 922042106

SUITABLE FOR IRAS TICKER SYMBOL
Yes VPACX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) EMERGING MARKETS STOCK INDEX FUND

The following profile summarizes key features of Vanguard Emerging Markets Stock
Index Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the Select Emerging Markets Free
Index.*

INVESTMENT STRATEGIES
The Fund employs a "passively managed"--or index--investment approach, by
investing all or substantially all of its assets in a representative sample of
the common stocks included in the Select Emerging Markets Free Index. The Select
Emerging Markets Free Index includes approximately 500 common stocks of
companies located in emerging markets around the world. As of March 31, 2000,
the largest markets covered in the Index were Mexico, Brazil, and South Africa
(which comprised 16%, 14%, and 13% of the Index's market capitalization,
respectively). Other countries represented in the Index included Argentina, the
Czech Republic, Greece, Hungary, Indonesia, Israel, the Philippines, Poland,
Thailand, Turkey, Hong Kong, and Singapore. MSCI administers the Select Index
exclusively for Vanguard. For more information about passive management, see
"Indexing Methods" under MORE ON THE FUNDS.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters. Country risk
is especially high for funds that focus on stocks in emerging markets. The
Index's, and therefore the Fund's, heavy exposure to Mexico, Brazil, and
South Africa involves a higher degree of country risk than that of more
geographically diversified international funds.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
and five calendar years and since inception compare with those of both a
broad-based securities market index and the Fund's target index. Keep in mind
that the Fund's past performance does not indicate how it will perform in the
future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1995 0.56%
1996 15.83%
1997 -16.82%
1998 -18.12%
1999 61.57%
----------------------------------------------------
Return figures do not reflect the annual account
maintenance fee imposed on accounts with balances of
less than $10,000, or the transaction fee imposed on
purchases and redemptions. If these amounts were
reflected, returns would be less than those shown.
----------------------------------------------------

During the period shown in the bar chart, the highest return for a calendar
quarter was 28.32% (quarter ended December 31, 1999) and the lowest return for a
quarter was -21.52% (quarter ended June 30, 1998).

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard Emerging Markets
Stock Index Fund** 59.96% 4.88% 6.03%
MSCI Emerging Markets
Free Index 66.40 2.00 3.69
Select Emerging Markets
Free Index+ 60.86 4.81 4.93
-------------------------------------------------------------------------
*May 4, 1994.
**Return figures do not reflect the annual account maintenance fee
imposed on accounts with balances of less than $10,000, but do
reflect the 0.5% transaction fee imposed on purchases and redemptions.
+The Select Emerging Markets Free Index is administered by MSCI
exclusively by Vanguard.
-------------------------------------------------------------------------

<PAGE>

SHAREHOLDER FEES (fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases: None
Transaction Fee on Purchases: 0.5%*
Sales Charge (Load) Imposed on Reinvested Dividends: None
Redemption Fee: 0.5%**
Exchange Fee: None
Account Maintenance Fee (for accounts under $10,000): $10/year+

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.32%
12b-1 Distribution Fee: None
Other Expenses: 0.26%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.58%

*The transaction fee on purchases is deducted from all purchases
(including exchanges from other Vanguard funds) but not from
reinvested dividends and capital gains.
**The redemption fee applies to all redemptions (sales or exchanges);
it is deducted from redemption proceeds, and retained by the Fund.
+The account maintenance fee will be deducted from your annual
distribution of the Fund's dividends. If your distribution is less
than the fee, fractional shares will be automatically redeemed to make
up the difference.

The following example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur over various periods if you invest
$10,000 in the Fund. This example assumes that the Fund provides a return of 5%
a year, that operating expenses remain the same, and that you redeem all your
shares at the end of each period.

- -------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------
$161 $292 $434 $849
- -------------------------------------------------

You would pay the following expenses if you did not redeem your shares (the
difference being that the Fund's 0.5% redemption fee would not apply to any of
the periods below, as it would to those above):

- -------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------
$109 $235 $372 $772
- -------------------------------------------------

THESE EXAMPLES SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

<PAGE>

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

INCEPTION DATE VANGUARD FUND NUMBER
May 4, 1994 533

NET ASSETS AS OF DECEMBER 31, 1999 CUSIP NUMBER
$1.1 billion 922042304

SUITABLE FOR IRAS TICKER SYMBOL
Yes VEIEX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) DEVELOPED MARKETS INDEX FUND

The following profile summarizes key features of Vanguard Developed Markets
Index Fund.

INVESTMENT OBJECTIVE
The Fund seeks to track the performance of the MSCI Europe, Australasia, Far
East (EAFE) Index.

INVESTMENT STRATEGIES
The Fund employs a "passively managed"--or index--investment approach. The Fund
seeks to track the performance of the MSCI EAFE Index by investing in two other
Vanguard funds--the European Stock Index Fund and the Pacific Stock Index Fund.
These other Vanguard funds have the respective objectives of tracking the MSCI
Europe Index and the MSCI Pacific Free Index, which together comprise the MSCI
EAFE Index. The Fund allocates all or substantially all of its assets between
the European Stock Index Fund and the Pacific Stock Index Fund based on the
market capitalization of European and Pacific stocks in the MSCI EAFE Index. The
MSCI EAFE Index includes approximately 1,000 common stocks of companies located
in Europe, Australia, Asia, and the Far East. For more information about passive
management, see "Indexing Methods" under MORE ON THE FUNDS.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters.
- - Regional risk, which is the chance that an entire region--either Europe or
the Far East--will be hurt by political troubles, financial problems, or
natural disasters.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The Fund began operations on May 5, 2000, so performance information (including
annual total returns and average annual total returns) for a full calendar year
is not yet available.

<PAGE>

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Indirect Operating Expenses: **

*The account maintenance fee will be deducted from your annual
distribution of the Fund's dividends. If your distribution is less
than the fee, fractional shares will be automatically redeemed to make
up the difference.
**Although Developed Markets Index Fund is not expected to incur any net
expenses directly, the Fund's shareholders indirectly bear the expenses
of the underlying Vanguard funds in which the Fund invests. See THE
FUNDS AND VANGUARD. It is estimated that the Fund's indirect expense
ratio for its first fiscal year, based on its underlying investments,
will be 0.30%.

- ------------------------
1 YEAR 3 YEARS
- ------------------------
$35 $110
- ------------------------

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

INCEPTION DATE VANGUARD FUND NUMBER
May 5, 2000 227

SUITABLE FOR IRAS CUSIP NUMBER
Yes 921909701
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) TOTAL INTERNATIONAL STOCK INDEX FUND

The following profile summarizes key features of Vanguard Total International
Stock Index Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the Total International Composite
Index. The Total International Composite Index is a combination of the indexes
tracked by the European, Pacific, and Emerging Markets Stock Index Funds.

INVESTMENT STRATEGIES
The Fund seeks to track the performance of the Total International Composite
Index by investing in three other Vanguard funds--the European Stock Index Fund,
the Pacific Stock Index Fund, and the Emerging Markets Stock Index Fund. These
other Vanguard funds have the respective objectives of tracking the MSCI Europe
Index, the MSCI Pacific Free Index, and the Select Emerging Markets Free Index,
which together comprise the Total International Composite Index. The Fund
allocates all or substantially all of its assets between the European Stock
Index Fund, the Pacific Stock Index Fund, and the Emerging Markets Stock Index
Fund based on the market capitalization of European, Pacific, and emerging
markets stocks in the Total International Composite Index. The Index is a market
capitalization weighted index that combines the MSCI Europe Index, the MSCI
Pacific Free Index, and the Select Emerging Markets Free Index. MSCI administers
the Index exclusively for Vanguard. For more information about passive
management, see "Indexing Methods" under MORE ON THE FUNDS.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
calendar year and since inception compare with those of both a broad-based
securities market index and the Fund's target index. Keep in mind that the
Fund's past performance does not indicate how it will perform in the future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1997 -0.77%
1998 15.60%
1999 29.92%
----------------------------------------------------
Return figures do not reflect the annual account
maintenance fee imposed on accounts with balances of
less than $10,000, or the transaction fee imposed on
purchases prior to April 1, 2000. If these amounts
were reflected, returns would be less than those
shown.
----------------------------------------------------

During the period shown in the bar chart, the highest return for a calendar
quarter was 20.49% (quarter ended December 31, 1998) and the lowest return for a
quarter was -14.53% (quarter ended September 30, 1998).

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard Total International
Stock Index Fund** 29.92% 11.64%
MSCI EAFE + Emerging Markets
Free Index 30.33 12.11
Total International Composite
Index+ 28.13 11.30
-------------------------------------------------------------------------
*April 29, 1996.
**Return figures do not reflect the annual account maintenance fee
imposed on accounts with balances of less than $10,000, or the
transaction fee imposed on purchases prior to April 1, 2000.
+Consists of the MSCI EAFE Index and the Select Emerging Markets Free
Index. This index is administered by MSCI exclusively for Vanguard.
-------------------------------------------------------------------------

<PAGE>

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Indirect Operating Expenses: **

*The account maintenance fee will be deducted from your annual
distribution of the Fund's dividends. If your distribution is less
than the fee, fractional shares will be automatically redeemed to make
up the difference.
**Although Total International Stock Index Fund is not expected to incur
any net expenses directly, the Fund's shareholders indirectly bear the
expenses of the underlying Vanguard funds in which the Fund invests.
See THE FUNDS AND VANGUARD. The Fund's indirect expense ratio, based
on its underlying investments, was 0.34% as of December 31, 1999.

- -------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------
$35 $110 $193 $434
- -------------------------------------------------

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

INCEPTION DATE VANGUARD FUND NUMBER
April 29, 1996 113

NET ASSETS AS OF DECEMBER 31, 1999 CUSIP NUMBER
$2.6 billion 921909602

SUITABLE FOR IRAS TICKER SYMBOL
Yes VGTSX
- --------------------------------------------------------------------------------

<PAGE>

MORE ON THE FUNDS
The following sections discuss other important features of Vanguard
International Stock Index Funds, including indexing methods, fund
characteristics, costs and market-timing, fund turnover, and other investment
policies and risks.

WHY INVEST IN INDEX FUNDS?
Index funds appeal to many investors for a number of reasons:
- - Diversification. Index funds generally invest in a diversified mix of
companies and industries.
- - Relative consistency. Index funds typically track the performance of
relevant market benchmarks more closely than comparable actively managed
funds do.
- - Low cost. Index funds do not have many of the expenses of an actively
managed fund--such as research--and keep trading activity, and thus
brokerage commissions, to a minimum.
- - Low realization of capital gains. Because an index fund typically sells
securities only to respond to redemption requests or to adjust the number
of shares it holds to reflect a change in its target index, the fund's
turnover rate--and thus its realization of capital gains--is usually very
low.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
THE COSTS OF INVESTING

Costs are an important consideration in choosing a mutual fund. That's because
you, as a shareholder, pay the costs of operating a fund, plus any transaction
costs associated with the fund's buying and selling of securities. These costs
can erode a substantial portion of the gross income or capital appreciation a
fund achieves. Even seemingly small differences in expenses can, over time, have
a dramatic effect on a fund's performance.
- --------------------------------------------------------------------------------

INDEXING METHODS
Some index funds hold each stock found in their target indexes in about the
same proportions as represented in the indexes themselves.
Other index funds may use a different selection process. Because it would
be very expensive to buy all of the stocks held in certain indexes (the Select
Emerging Markets Free Index, for example, includes approximately 500 stocks),
funds tracking these larger indexes use a "sampling" technique. Using a
sophisticated computer program, these funds invest in stocks that will, in the
aggregate, recreate the key characteristics of their target indexes. For
instance, if 10% of the market capitalization of the MSCI Europe Index were
attributed to companies in Germany, Vanguard European Stock Index Fund would
invest about 10% of its assets in stocks of German issuers. Furthermore, the
Fund would construct a German portfolio whose size and industry weightings, as
well as average financial characteristics, approximated the German component of
the MSCI Europe Index. The European, Pacific, and Emerging Markets Stock Index
Funds each employ this sampling method of indexing.
While each Fund attempts to track the performance of its target index,
there is no guarantee that securities selected for the Fund will provide
investment performance exactly matching that of the index.
Yet another indexing approach is to invest in other index funds that seek
to track subsets of a target index. The Total International Stock Index Fund and
Developed Markets Index Fund both use this "fund of funds" approach, which can
be very cost-effective and efficient

<PAGE>

when starting an index fund from scratch. For example, the Developed Markets
Index Fund seeks to track the performance of the MSCI EAFE Index by investing in
two other Vanguard funds--the European Stock Index Fund and the Pacific Stock
Index Fund. These other Vanguard funds have the respective objectives of
tracking the MSCI Europe Index and the MSCI Pacific Free Index, which together
comprise the MSCI EAFE Index. The Fund allocates its assets between the European
Stock Index Fund and the Pacific Stock Index Fund based on the market
capitalization of European and Pacific stocks in the MSCI EAFE Index.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
"FUND OF FUNDS"

The term "fund of funds" is used to describe a mutual fund that pursues its
objective by investing in other mutual funds rather than in individual stocks or
bonds. A fund of funds may charge for its own direct expenses, in addition to
bearing a proportionate share of the expenses charged by the underlying funds in
which it invests. Funds of funds are best suited for long-term investors.
- --------------------------------------------------------------------------------

To track their target indexes as closely as possible, the European and
Pacific Stock Index Funds attempt to remain fully invested in foreign stocks
included in their particular indexes. Each Fund intends to invest at least 95%
of its total assets in the stocks of its target index. The Emerging Markets
Stock Index Fund normally invests 95% of its total assets in stocks of its
target index, holding the remaining 5% in cash reserves to meet daily redemption
requests. The Total International Stock and Developed Markets Index Funds
normally hold 100% of their assets in shares of their underlying funds
- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
THE RISKS OF INTERNATIONAL INVESTING

Because foreign stock markets operate differently from the U.S. market,
Americans investing abroad will encounter risks not typically associated with
U.S. companies. For instance, foreign companies are not subject to the same
accounting, auditing, and financial reporting standards and practices as U.S.
companies; and their stocks may not be as liquid as those of similar U.S.
companies. In addition, foreign stock exchanges, brokers, and companies
generally have less government supervision and regulation than their
counterparts in the United States. These factors, among others, could negatively
impact the returns Americans receive from foreign investments.
- --------------------------------------------------------------------------------

[FLAG] EACH FUND IS SUBJECT TO STOCK MARKET RISK, WHICH IS THE CHANCE THAT STOCK
PRICES OVERALL WILL DECLINE OVER SHORT OR EVEN LONG PERIODS. STOCK MARKETS
TEND TO MOVE IN CYCLES, WITH PERIODS OF RISING PRICES AND PERIODS OF
FALLING PRICES.
IN ADDITION, INVESTMENTS IN FOREIGN STOCK MARKETS CAN BE RISKIER THAN
U.S. STOCK INVESTMENTS. THE PRICES OF INTERNATIONAL STOCKS AND THE PRICES
OF U.S. STOCKS HAVE OFTEN MOVED IN OPPOSITE DIRECTIONS. THESE PERIODS HAVE,
IN THE PAST, LASTED FOR AS LONG AS SEVERAL YEARS.

<PAGE>

To illustrate the volatility of international stock prices, the following
table shows the best, worst, and average total returns for foreign stock markets
over various periods as measured by the MSCI EAFE Index, a widely used barometer
of international market activity. (Total returns consist of dividend income plus
change in market price.) Note that the returns shown do not include the costs of
buying and selling stocks or other expenses that a real-world investment
portfolio would incur. Note, also, that the gap between best and worst tends to
narrow over the long term.

- ----------------------------------------------------------
INTERNATIONAL STOCK MARKET RETURNS (1969-1999)
- ----------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS 20 YEARS
- ----------------------------------------------------------
Best 69.9% 36.5% 22.8% 16.3%
Worst -23.2 1.5 5.9 12.0
Average 15.2 13.6 14.5 14.7
- ----------------------------------------------------------

The table covers all of the 1-, 5-, 10-, and 20-year periods from 1969
through 1999. Keep in mind that this was a particularly favorable period for all
stock markets. These average returns reflect past performance on international
stocks; you should not regard them as an indication of future returns from
either foreign markets as a whole or any of the Funds in particular.
Note that the preceding chart does not take into account returns measured
by the MSCI Emerging Markets Free Index, a widely used barometer of less
developed stock markets. Emerging markets can be substantially more volatile
than more developed foreign markets. In addition, because the MSCI EAFE Index
tracks the European and Pacific markets collectively, the above returns do not
reflect the variability of returns from year to year for these markets
individually, or the variability across these and other geographic regions or
market sectors. To illustrate this variability, the following table shows
returns for different international markets--as well as the U.S. market for
comparison--from 1990 to 1999, as measured by their respective indexes. Note
that the returns shown do not include the costs of buying and selling stocks or
other expenses that a real-world investment portfolio would incur.

<PAGE>

- --------------------------------------------------------------------------------
STOCK MARKET RETURNS FOR DIFFERENT INTERNATIONAL MARKETS*
- --------------------------------------------------------------------------------
EUROPEAN PACIFIC EMERGING U.S.
MARKET MARKET MARKETS MARKETS
- --------------------------------------------------------------------------------
1990 -2.00% -34.43% -10.55% -3.10%
1991 14.12 11.51 59.91 30.47
1992 -3.92 -18.51 11.40 7.62
1993 29.25 36.15 74.84 10.08
1994 2.82 12.82 -7.31 1.32
1995 22.08 2.89 0.01** 37.58
1996 21.42 -8.23 15.19 22.96
1997 23.75 -25.74 -16.37 33.36
1998 28.68 2.64 -18.39 28.58
1999 15.77 56.38 60.86 21.04
- --------------------------------------------------------------------------------
* European market returns are measured by the MSCI Europe Index; Pacific
market returns are measured by the MSCI Pacific Free Index; emerging
markets returns are measured by the Select Emerging Markets Free Index;
and U.S. market returns are measured by the Standard & Poor's 500 Index.
** The inception date of the Select Emerging Markets Free Index was May 4,
1994; returns shown for 1990 to 1994 are measured by the MSCI Emerging
Markets Free Index.
- --------------------------------------------------------------------------------

Keep in mind, however, that these average returns reflect past performance
of the various indexes; you should not consider them as an indication of future
returns from the indexes, or from any of the Funds in particular.

[FLAG] EACH FUND IS SUBJECT TO COUNTRY RISK, WHICH IS THE CHANCE THAT POLITICAL
EVENTS (A WAR, NATIONAL ELECTIONS), FINANCIAL PROBLEMS (RISING INFLATION,
GOVERNMENT DEFAULT), OR NATURAL DISASTERS (AN EARTHQUAKE, A FLOOD) WILL
WEAKEN A COUNTRY'S ECONOMY AND CAUSE INVESTMENTS IN THAT COUNTRY TO LOSE
MONEY.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
REGIONAL VERSUS BROAD INTERNATIONAL INVESTING

Regional funds are international funds that invest in a particular geographical
region, such as Europe or the Pacific Basin. Because they concentrate their
holdings in a single region, these funds typically have higher share price
volatility than broadly diversified international stock funds (which, by
investing in many different foreign markets, may offset losses from one country
with gains from another at any given time).
- --------------------------------------------------------------------------------

EUROPEAN STOCK INDEX FUND. Stocks from the United Kingdom, France, Germany,
and the Netherlands comprised 29%, 15%, 14%, and 8% of the MSCI Europe Index,
respectively, as of March 31, 2000; stocks from the remaining 11 countries in
the Index have much less significant market capitalization weightings in the
Index and thus much less impact on the Fund's total return. The Fund's heavy
exposure to just four countries involves a higher degree of country risk than
that of more geographically diversified international funds.
PACIFIC STOCK INDEX FUND. Japanese stocks comprised 82% of the MSCI Pacific
Free Index as of March 31, 2000. Therefore, Japanese stocks represent a
correspondingly large component of the Pacific Stock Index Fund's assets. The
Fund's large investment in the

<PAGE>

Japanese stock market involves a higher degree of country risk than that of more
geographically diversified international funds.
EMERGING MARKETS STOCK INDEX FUND. As discussed above, emerging markets can
be substantially more volatile than both U.S. and more developed foreign
markets. Therefore, the Emerging Markets Stock Index Fund may expose investors
to a higher degree of volatility than funds that invest in more developed
markets.
DEVELOPED MARKETS INDEX FUND. As a fund of funds, the Developed Markets
Index Fund intends to invest all of its assets in shares of the European and
Pacific Stock Index Funds; indirectly, its country risk will proportionately
mirror that of the European and Pacific Stock Index Funds.
TOTAL INTERNATIONAL STOCK INDEX FUND. As a fund of funds, the Total
International Stock Index Fund intends to invest all of its assets in shares of
the European, Pacific, and Emerging Markets Stock Index Funds; indirectly, its
country risk will proportionately mirror that of the underlying funds. As of
March 31, 2000, the Fund's assets were invested as follows: 60% in the European
Stock Index Fund; 30% in the Pacific Stock Index Fund; and 10% in the Emerging
Markets Stock Index Fund.

[FLAG]EACH FUND IS SUBJECT TO CURRENCY RISK, WHICH IS THE CHANCE THAT A STRONGER
U.S. DOLLAR WILL REDUCE RETURNS FOR AMERICANS INVESTING OVERSEAS.
GENERALLY, WHEN THE DOLLAR RISES IN VALUE AGAINST ANOTHER COUNTRY'S
CURRENCY, YOUR INVESTMENT IN THAT COUNTRY LOSES VALUE BECAUSE ITS CURRENCY
IS WORTH FEWER U.S. DOLLARS. ON THE OTHER HAND, A WEAKER U.S. DOLLAR
GENERALLY LEADS TO HIGHER RETURNS FOR AMERICANS HOLDING FOREIGN
INVESTMENTS.

SECURITY SELECTION
In seeking to track its target index, the European Stock Index, Pacific Stock
Index, and Emerging Markets Stock Index Funds each invest in a portfolio of
foreign stocks selected in a manner that mirrors the weightings of their target
indexes. The Total International Stock Index Fund simply invests in shares of
the European, Pacific, and Emerging Markets Stock Index Funds. Likewise, the
Developed Markets Index Fund will simply invest in shares of the European and
Pacific Stock Index Funds. Each Fund seeks to provide investment results that
correspond to its target index. The correlation between the performance of a
Fund and its target index is expected to be at least 95%. (A correlation of 100%
would indicate perfect correlation.)
EUROPEAN STOCK INDEX FUND. The Fund invests in a statistically selected
sample of approximately 550 common stocks included in the MSCI Europe Index,
which is made up of the stocks of companies located in 15 European countries.
Four countries--the United Kingdom, France, Germany, and the
Netherlands--dominate the Index, with 29%, 15%, 14%, and 8% of the market
capitalization of the Index, respectively, as of March 31, 2000. The other 11
countries, which include Austria, Belgium, Denmark, Finland, Ireland, Italy,
Norway, Portugal, Spain, Sweden, and Switzerland, are much less significant to
the Index and, consequently, the Fund.
PACIFIC STOCK INDEX FUND. The Fund invests in a statistically selected
sample of the approximately 420 common stocks included in the MSCI Pacific Free
Index, which is comprised of the stocks of Pacific Basin companies. The Index is
dominated by the Japanese stock market, which represented 82% of the market
capitalization of the Index as of March 31, 2000. The other four countries
represented in the Index are Australia, Hong Kong, New Zealand, and Singapore.

<PAGE>

EMERGING MARKETS STOCK INDEX FUND. The Fund invests in a statistically
selected sample of the approximately 500 common stocks included in the Select
Emerging Markets Free Index, which is made up of the stocks of companies located
in 13 emerging markets of Europe, Asia, Africa, and Latin America. Three
countries--Mexico, Brazil, and South Africa--represent a majority of the Index,
with 16%, 14%, and 13% of the market capitalization of the Index, respectively,
as of March 31, 2000. The other 10 countries include Argentina, the Czech
Republic, Greece, Hungary, Indonesia, Israel, Philippines, Poland, Thailand, and
Turkey. The developed countries of Hong Kong and Singapore are included in the
Index to broaden diversification and ensure adequate liquidity. The Index is
called "select" because it is modeled on a larger index--the MSCI Emerging
Markets Free Index--but with certain adjustments designed to reduce risk. For
instance, MSCI considers the Hong Kong and Singapore markets too mature to
include in its index, but they are part of the Select Index. Conversely, as of
March 31, 2000, the Select Index excluded certain countries found in the MSCI
Emerging Markets Free Index--Chile, China, Colombia, India, Jordan, Korea,
Pakistan, Peru, Russia, Sri Lanka, and Taiwan--due to concerns about liquidity
or entry barriers in those markets. MSCI administers the Select Index
exclusively for Vanguard, and periodically adjusts the included countries to
keep pace with evolution in world markets. (Such adjustments are made on a
forward-looking basis, so past performance of the Select Index always reflects
actual country representation during the relevant period.)
Although index funds, by their nature, tend to be tax-efficient investment
vehicles, the Funds are generally managed without regard to tax ramifications.

TRANSACTION FEES AND ACCOUNT MAINTENANCE FEES
Some of Vanguard's index funds charge a transaction fee on purchases of fund
shares to offset the higher costs of trading certain securities, particularly
small-company and international stocks. The transaction fee ensures that these
higher costs are borne by the investors making the transactions--and not by
shareholders already in the fund who do not generate the costs. In addition,
most of Vanguard's index funds charge an account maintenance fee on accounts
under $10,000 to divide the costs of maintaining accounts equitably among
shareholders.
All transaction fees are paid directly to the fund itself (unlike a sales
charge or load that non-Vanguard funds may impose to compensate their sales
representatives). Without transaction fees, some index funds would have trouble
tracking their target indexes.
Vanguard assesses an account maintenance fee on index fund shareholders
whose account balances are below $10,000 (for any reason, including a decline in
the value of a fund's shares) on the date a dividend is distributed. This fee is
intended to allocate the costs of maintaining accounts more equitably among
shareholders. For funds that distribute dividends annually, the account
maintenance fee is $10 per year, deducted from the annual dividend, which
usually is distributed during the last two weeks of the calendar year. If the
fee is deducted from your dividend distribution, you will still be taxed on the
full amount of your dividend (unless you hold your shares through a nontaxable
account). If you are due a dividend that is less than the fee, fractional shares
will be automatically redeemed to make up the difference. This fee cannot be
prepaid.

<PAGE>

securities. These costs are borne by all fund shareholders, including the
long-term investors who do not generate the costs. Therefore, the Vanguard
International Stock Index Funds have adopted the following policies, among
others, designed to discourage short-term trading:
- - Each Fund reserves the right to reject any purchase request--including
exchanges from other Vanguard funds--that it regards as disruptive to the
efficient management of the Fund. A purchase request could be rejected
because of the timing of the investment or because of a history of
excessive trading by the investor.
- - The Emerging Markets Stock Index Fund charges a transaction fee on
purchases and redemptions.
- - Telephone and online exchanges are not accepted for non-IRA accounts.
- - There is a limit on the number of times you can exchange into and out of a
Fund (see "Redeeming Shares" in the INVESTING WITH VANGUARD section).
- - Each Fund reserves the right to stop offering shares at any time.

THE VANGUARD FUNDS DO NOT PERMIT MARKET-TIMING. DO NOT INVEST IN THESE
FUNDS IF YOU ARE A MARKET-TIMER.

TURNOVER RATE
Although each Fund seeks to invest for the long term, the Funds retain the right
to sell securities regardless of how long the securities have been held.
Generally, a passively- managed fund sells securities only to respond to
redemption requests or to adjust the number of shares held to reflect a change
in the fund's target index. Because of this, the turnover rate for each Fund has
been extremely low. The Financial Highlights tables beginning on page 29 show
historic turnover rates for each Fund.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
TURNOVER RATE

Before investing in a mutual fund, you should review its turnover rate. This
gives an indication of how transaction costs could affect the fund's future
returns. In general, the greater the volume of buying and selling by the fund,
the greater the impact that brokerage commissions and other transaction costs
will have on its return. Also, funds with high turnover rates may be more likely
to generate capital gains that must be distributed to shareholders as income
subject to taxes. The average turnover rate for passively managed foreign stock
index funds in 1999 was roughly 17%; for all foreign stock funds, the average
turnover was approximately 76%, according to Morningstar, Inc. (A turnover rate
of 100% would occur, for example, if a fund sold and replaced securities valued
at 100% of its net assets within a one-year period.)

- --------------------------------------------------------------------------------

<PAGE>

owners to purchase a specific number of shares of stock at a predetermined
price), convertible securities (securities that may be exchanged for another
asset), and swap agreements (contracts between two parties in which each agrees
to make payments to the other based on the return of a specified index or
asset).

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
DERIVATIVES

A derivative is a financial contract whose value is based on (or "derived" from)
a traditional security (such as a stock or a bond), an asset (such as a
commodity like gold), or a market index (such as the S&P 500 Index). Futures and
options are derivatives that have been trading on regulated exchanges for more
than two decades. These "traditional" derivatives are standardized contracts
that can easily be bought and sold, and whose market values are determined and
published daily. It is these characteristics that differentiate futures and
options from the relatively new types of derivatives. If used for speculation or
as leveraged investments, derivatives can carry considerable risks.
- --------------------------------------------------------------------------------

For this reason, the Funds will not use futures, options, warrants,
convertible securities, or swap agreements for speculative purposes or as
leveraged investments that magnify the gains or losses of an investment. A
Fund's obligation under futures contracts will not exceed 20% of its total
assets.
The reasons for which a Fund will invest in futures and options are:
- - To keep cash on hand to meet shareholder redemptions or other needs while
simulating full investment in stocks.
- - To reduce the Fund's transaction costs or add value when these instruments
are favorably priced.
Each Fund may also enter into forward foreign currency contracts in order
to maintain the same currency exposure as its respective Index. A forward
foreign currency contract is an agreement to buy or sell a country's currency at
a specific price on a specific date, usually 30, 60, or 90 days in the future.
In other words, the contract guarantees an exchange rate on a given date.
Managers of international stock funds typically use these contracts to guard
against sudden, unfavorable changes in U.S. dollar/foreign currency exchange
rates. However, the Funds will use these contracts for different reasons:
- - To gain currency exposure when investing in futures.
- - To settle trades in a foreign currency.

<PAGE>

Stock Index Fund has incurred no direct expenses since its inception in 1996.
Total International Stock and Developed Markets Index Funds may operate without
incurring direct expenses because Vanguard will reimburse them for (i) their
contributions to the cost of operating the underlying funds in which they
invest, and (ii) savings in administrative and marketing costs that Vanguard
expects to derive from their operations.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
VANGUARD'S UNIQUE CORPORATE STRUCTURE

The Vanguard Group is truly a MUTUAL mutual fund company. It is owned jointly by
the funds it oversees and thus indirectly by the shareholders in those funds.
Most other mutual funds are operated by for-profit management companies that may
be owned by one person, by a group of individuals, or by investors who own the
management company's stock. By contrast, Vanguard provides its services on an
"at-cost" basis, and the funds' expense ratios reflect only these costs. No
separate management company reaps profits or absorbs losses from operating the
funds.
- --------------------------------------------------------------------------------

INVESTMENT ADVISER
The Vanguard Group (Vanguard), P.O. Box 2600, Valley Forge, PA 19482, founded in
1975, serves as the Funds' adviser through its Quantitative Equity Group. (The
Developed Markets and Total International Stock Index Funds receive advisory
services indirectly, by investing in other funds.) Vanguard manages the Funds on
an at-cost basis, subject to the control of the Trustees and officers of the
Funds. For the fiscal year ended December 31, 1999, the advisory fees
represented an effective annual rate of less than 0.01% each for the European,
Pacific, and Emerging Markets Stock Index Funds.
The Funds have authorized Vanguard to choose brokers or dealers to handle
the purchase and sale of securities for the Funds, and to get the best available
price and most favorable execution from these brokers or dealers with respect to
all transactions. The Funds may direct Vanguard to use a particular broker for
certain transactions in exchange for commission rebates or research services
provided to the Funds.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
THE FUNDS' ADVISER

The Vanguard Group provides investment advisory services to many Vanguard funds;
as of December 31, 1999, the Group managed more than $371 billion in total
assets. The individual responsible for overseeing the European, Pacific, and
Emerging Markets Stock Index Funds' investments is:

GEORGE U. SAUTER, Managing Director of Vanguard, and head of Vanguard's
Quantitative Equity Group; has worked in investment management since 1985;
primary responsibility for Vanguard's stock indexing policy and strategy since
joining the company in 1987; A.B., Dartmouth College; M.B.A., University of
Chicago.
- --------------------------------------------------------------------------------

<PAGE>

DIVIDENDS, CAPITAL GAINS, AND TAXES

FUND DISTRIBUTIONS
Each Fund distributes to shareholders virtually all of its net income (interest
and dividends, less expenses), as well as any capital gains realized from the
sale of its holdings. Distributions generally occur in December. In addition, a
Fund may occasionally be required to make supplemental dividend or capital gains
distributions at some other time during the year. You can receive distributions
of income dividends or capital gains in cash, or you can have them automatically
reinvested in more shares of the Fund.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
DISTRIBUTIONS

As a shareholder, you are entitled to your share of the fund's income from
interest and dividends, and gains from the sale of investments. You receive such
earnings as either an income dividend or a capital gains distribution. Income
dividends come from both the dividends that the fund earns from its holdings and
the interest it receives from its money market and bond investments. Capital
gains are realized whenever the fund sells securities for higher prices than it
paid for them. These capital gains are either short-term or long-term, depending
on whether the fund held the securities for one year or less, or more than one
year.
- --------------------------------------------------------------------------------

BASIC TAX POINTS
Vanguard will send you a statement each year showing the tax status of all your
distributions. In addition, taxable investors should be aware of the following
basic tax points:
- - Distributions are taxable to you whether or not you reinvest these amounts
in additional Fund shares.
- - Distributions declared in December--if paid to you by the end of
January--are taxable for federal income tax purposes as if received in
December.
- - Any dividends and short-term capital gains that you receive are taxable to
you as ordinary income for federal income tax purposes.
- - Any distributions of net long-term capital gains are taxable to you as
long-term capital gains for federal income tax purposes, no matter how long
you've owned shares in the Fund.
- - Capital gains distributions may vary considerably from year to year as a
result of the Funds' normal investment activities and cash flows.
- - A sale or exchange of Fund shares is a taxable event. This means that you
may have a capital gain to report as income, or a capital loss to report as
a deduction, when you complete your federal income tax return.
- - Dividend and capital gains distributions that you receive, as well as your
gains or losses from any sale or exchange of Fund shares, may be subject to
state and local income taxes.
- - The European, Pacific, and Emerging Markets Stock Index Funds may be
subject to foreign taxes or foreign tax withholding on dividends, interest,
and some capital gains that they receive on foreign securities. You may
qualify for an offsetting credit or deduction under U.S. tax laws for your
portion of a Fund's foreign tax obligations, provided that you meet certain
requirements. Because the Total International Stock and Developed Markets
Index Funds invest in foreign stocks indirectly through other funds, their
investors are not able to take advantage of foreign tax credits or
deductions. See your tax adviser or IRS publications for more information.

<PAGE>

GENERAL INFORMATION
BACKUP WITHHOLDING. By law, Vanguard must withhold 31% of any taxable
distributions or redemptions from your account if you do not:
- - provide us with your correct taxpayer identification number;
- - certify that the taxpayer identification number is correct; and
- - confirm that you are not subject to backup withholding.
Similarly, Vanguard must withhold from your account if the IRS instructs us to
do so.
FOREIGN INVESTORS. The Vanguard funds generally do not offer their shares for
sale outside of the United States. Foreign investors should be aware that U.S.
withholding and estate taxes may apply to any investments in Vanguard funds.
INVALID ADDRESSES. If a dividend or capital gains distribution check mailed to
your address of record is returned as undeliverable, Vanguard will automatically
reinvest all future distributions until you provide us with a valid mailing
address.
TAX CONSEQUENCES. This prospectus provides general tax information only. If you
are investing through a tax-deferred retirement account, such as an IRA, special
tax rules apply. Please consult your tax adviser for detailed information about
a fund's tax consequences for you.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
"BUYING A DIVIDEND"

Unless you are investing through a tax-deferred retirement account (such as an
IRA), you should avoid buying shares of a fund shortly before it makes a
distribution, because doing so can cost you money in taxes. This is known as
"buying a dividend." For example: On December 15, you invest $5,000, buying 250
shares for $20 each. If the fund pays a distribution of $1 per share on December
16, its share price would drop to $19 (not counting market change). You still
have only $5,000 (250 shares x $19 = $4,750 in share value, plus 250 shares x $1
= $250 in distributions), but you owe tax on the $250 distribution you
received--even if you reinvest it in more shares. To avoid "buying a dividend,"
check a fund's distribution schedule before you invest.
- --------------------------------------------------------------------------------

SHARE PRICE

Each Fund's share price, called its net asset value, or NAV, is calculated each
business day after the close of regular trading on the New York Stock Exchange
(the NAV is not calculated on holidays or other days when the Exchange is
closed). Net asset value per share for the Developed Markets and Total
International Stock Index Funds is computed by adding up the total value of the
Fund's investments (i.e., shares of the underlying funds) and other assets,
subtracting any of its liabilities (debts), and then dividing by the number of
Fund shares outstanding:

TOTAL ASSETS - LIABILITIES
NET ASSET VALUE = --------------------------------
NUMBER OF SHARES OUTSTANDING

<PAGE>

Knowing the daily net asset value is useful to you as a shareholder because
it indicates the current value of your investment. The Fund's NAV, multiplied by
the number of shares you own, gives you the dollar amount you would have
received had you sold all of your shares back to the Fund that day. Because
foreign securities markets may operate on days which are not business days in
the United States, the value of a Fund's holdings may change on days when
shareholders will not be able to purchase or redeem the Fund's shares.
A NOTE ON PRICING: A Fund's investments will be priced at their market
value when market quotations are readily available. When these quotations are
not readily available, investments will be priced at their fair value,
calculated according to procedures adopted by the Funds' Board of Trustees. A
Fund also may use fair value pricing if the value of a security held by the Fund
is materially affected by events occurring after the close of the primary
markets or exchanges on which such security is traded. In these situations,
prices used by the Fund to calculate its net asset value may differ from quoted
or published prices for the underlying securities.
Each Fund's share price can be found daily in the mutual fund listings of
most major newspapers under the heading "Vanguard Index Funds." Different
newspapers use different abbreviations for each Fund, but the most common are
EUROPE, PACIFIC, EMERMKT, DEVMKT, and TOTINTL for the European, Pacific,
Emerging Markets, Developed Markets, and Total International Stock Index Funds,
respectively.

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE

This explanation uses the European Stock Index Fund as an example. The Fund
began fiscal 1999 with a net asset value (price) of $25.28 per share. During the
year, the Fund earned $0.50 per share from investment income (interest and
dividends) and $3.69 per share from investments that had appreciated in value or
that were sold for higher prices than the Fund paid for them.

Shareholders received $0.65 per share in the form of dividend and capital gains
distributions. A portion of each year's distributions may come from the prior
year's income or capital gains.

The earnings ($4.19 per share) minus the distributions ($0.65 per share)
resulted in a share price of $28.82 at the end of the year. This was an increase
of $3.54 per share (from $25.28 at the beginning of the year to $28.82 at the
end of the year). For a shareholder who reinvested the distributions in the
purchase of more shares, the total return from the Fund was 16.62% for the year.

As of December 31, 1999, the Fund had $6.1 billion in net assets. For the year,
its expense ratio was 0.29% ($2.90 per $1,000 of net assets); and its net
investment income amounted to 1.99% of its average net assets. It sold and
replaced securities valued at 7% of its net assets.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
VANGUARD EUROPEAN STOCK INDEX FUND
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $25.28 $20.13 $16.57 $14.02 $11.76
- --------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .50 .41 .38 .34 .32
Net Realized and
Unrealized Gain
(Loss) on Investments 3.69 5.40 3.63 2.63 2.30
--------------------------------------------------------
Total from Investment
Operations 4.19 5.81 4.01 2.97 2.62
--------------------------------------------------------
DISTRIBUTIONS
Dividends from Net
Investment Income (.50) (.52) (.37) (.36) (.32)
Distributions from
Realized Capital Gains (.15) (.14) (.08) (.06) (.04)
--------------------------------------------------------
Total Distributions (.65) (.66) (.45) (.42) (.36)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END
OF YEAR $28.82 $25.28 $20.13 $16.57 $14.02
================================================================================

TOTAL RETURN* 16.62% 28.86% 24.23% 21.26% 22.28%
================================================================================

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Year (Millions) $6,106 $4,479 $2,432 $1,595 $1,017
Ratio of Total
Expenses to Average
Net Assets 0.29% 0.29% 0.31% 0.35% 0.35%
Ratio of Net
Investment Income to
Average Net Assets 1.99% 1.97% 2.19% 2.45% 2.66%
Turnover Rate 7% 7% 3% 4% 2%
================================================================================
*Total return figures do not reflect the transaction fee on purchases imposed
prior to 4/1/2000 or the annual account maintenance fee.

<PAGE>

FINANCIAL HIGHLIGHTS (CONTINUED)

- --------------------------------------------------------------------------------
VANGUARD PACIFIC STOCK INDEX FUND
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 7.84 $7.72 $10.51 $11.50 $11.31
- --------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .08 .085 .09 .10 .10
Net Realized and
Unrealized Gain
(Loss) on Investments 4.39 .100 (2.79) (1.00) .21
--------------------------------------------------------
Total from Investment
Operations 4.47 .185 (2.70) (.90) .31
--------------------------------------------------------
DISTRIBUTIONS
Dividends from Net
Investment Income (.09) (.065) (.09) (.09) (.12)
Distributions from
Realized Capital Gains -- -- -- -- --
--------------------------------------------------------
Total Distributions (.09) (.065) (.09) (.09) (.12)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END
OF YEAR $12.22 $7.84 $ 7.72 $10.51 $11.50
================================================================================

TOTAL RETURN* 57.05% 2.41% -25.67% -7.82% 2.75%
================================================================================

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Year (Millions) $2,526 $1,033 $827 $978 $831
Ratio of Total
Expenses to Average
Net Assets 0.37% 0.40% 0.35% 0.35% 0.35%
Ratio of Net
Investment Income to
Average Net Assets 0.95% 1.17% 1.03% 0.89% 0.97%
Turnover Rate 6% 4% 8% 9% 1%
================================================================================
*Total return figures do not reflect the transaction fee on purchases imposed
prior to 4/1/2000 or the annual account maintenance fee.

- --------------------------------------------------------------------------------
VANGUARD EMERGING MARKETS STOCK INDEX FUND
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 7.91 $9.98 $12.28 $10.75 $10.87
- --------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .24 .27 .24 .18 .15
Net Realized and
Unrealized Gain
(Loss) on Investments 4.62 (2.08) (2.31) 1.52 (.09)
--------------------------------------------------------
Total from Investment
Operations 4.86 (1.81) (2.07) 1.70 .06
--------------------------------------------------------
DISTRIBUTIONS
Dividends from Net
Investment Income (.27) (.26) (.23) (.17) (.18)
Distributions from
Realized Capital Gains -- -- -- -- --
--------------------------------------------------------
Total Distributions (.27) (.26) (.23) (.17) (.18)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END
OF YEAR $21.50 $7.91 $ 9.98 $12.28 $10.75
================================================================================

TOTAL RETURN* 61.57% -18.12% -16.82% 15.83% 0.56%
================================================================================

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Year (Millions) $1,138 $577 $660 $637 $234
Ratio of Total
Expenses to Average
Net Assets 0.58% 0.61% 0.57% 0.60% 0.60%
Ratio of Net
Investment Income to
Average Net Assets 2.55% 2.99% 1.96% 1.69% 2.00%
Turnover Rate 22% 22% 19% 1% 3%
================================================================================
*Total return figures do not reflect the transaction fee on purchases (0.5%
beginning 4/1/2000, 1.0% from 11/3/1997 to 3/31/2000, 1.5% from 1/1/1997 to
11/2/1997, 2.0% in 1995 through 1996), the transaction fee on redemptions
(0.5% beginning 4/1/2000, 1.0% through 3/31/2000), or the annual account
maintenance fee.

<PAGE>

- --------------------------------------------------------------------------------
VANGUARD TOTAL INTERNATIONAL
STOCK INDEX FUND
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1999 1998 1997 1996*
- --------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $11.19 $ 9.87 $10.14 $10.26
- --------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .21 .21 .18 .150
Capital Gain Distributions
Received .04 .02 .02 .015
Net Realized and
Unrealized Gain
(Loss) on Investments 3.09 1.31 (.28) (.110)
--------------------------------------------------------
Total from Investment
Operations 3.34 1.54 (.08) .055
--------------------------------------------------------
DISTRIBUTIONS
Dividends from Net
Investment Income (.21) (.21) (.17) (.160)
Distributions from
Realized Capital Gains (.01) (.01) (.02) (.015)
--------------------------------------------------------
Total Distributions (.22) (.22) (.19) (.175)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.31 $11.19 $ 9.87 $10.14
================================================================================

TOTAL RETURN** 29.92% 15.60% -0.77% 0.55%
================================================================================

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Period (Millions) $2,570 $1,375 $903 $280
Ratio of Total
Expenses to Average
Net Assets 0% 0% 0% 0%
Ratio of Net
Investment Income to
Average Net Assets 2.04% 2.18% 2.19% 1.51%+
Turnover Rate 1% 2% 0% 0%
================================================================================
*April 29 (inception) through December 31, 1996.
**Total return figures do not reflect the transaction fee on purchases imposed
prior to April 1, 2000 or the annual account maintenance fee.
+Annualized.

The Funds are not sponsored, sold, promoted, or endorsed by Morgan Stanley
Capital International. Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard
& Poor's 500," and "500," are trademarks of The McGraw-Hill Companies, Inc., and
have been licensed for use by The Vanguard Group.

<PAGE>

- --------------------------------------------------------------------------------
INVESTING WITH VANGUARD

Are you looking for the most convenient way to open or add money to a Vanguard
account? Obtain instant access to fund information? Establish an account for a
minor child or for your retirement savings?
Vanguard can help. Our goal is to make it easy and pleasant for you to do
business with us.
The following sections of the prospectus briefly explain the many services
we offer. Booklets providing detailed information are available on the services
marked with a [BOOK ICON]. Please call us to request copies.
- --------------------------------------------------------------------------------

SERVICES AND ACCOUNT FEATURES

Vanguard offers many services that make it convenient to buy, sell, or exchange
shares, or to obtain fund or account information.
- --------------------------------------------------------------------------------
TELEPHONE REDEMPTIONS (SALES AND EXCHANGES)
Automatically set up for these Funds unless you notify us otherwise. Note:
Limitations do apply; see page 37.
- --------------------------------------------------------------------------------
VANGUARD(R) DIRECT DEPOSIT SERVICE [BOOK ICON]
Automatic method for depositing your paycheck or U.S. government payment
(including Social Security and government pension checks) into your account.
- --------------------------------------------------------------------------------
VANGUARD(R) AUTOMATIC EXCHANGE SERVICE [BOOK ICON]
Automatic method for moving a fixed amount of money from one Vanguard fund
account to another.
- --------------------------------------------------------------------------------
VANGUARD FUND EXPRESS(R) [BOOK ICON]
Electronic method for buying or selling shares. You can transfer money between
your Vanguard fund account and an account at your bank, savings and loan, or
credit union on a systematic schedule.
- --------------------------------------------------------------------------------
VANGUARD DIVIDEND EXPRESS(R) [BOOK ICON]
Electronic method for transferring dividend and/or capital gains distributions
directly from your Vanguard fund account to your bank, savings and loan, or
credit union account.
- --------------------------------------------------------------------------------
VANGUARD TELE-ACCOUNT(R) 1-800-662-6273 (ON-BOARD) [BOOK ICON]
Toll-free 24-hour access to Vanguard fund and account information--as well as
some transactions--by using any touch-tone phone. Tele-Account provides total
return, share price, price change, and yield quotations for all Vanguard funds;
gives your account balances and history (e.g., last transaction, latest dividend
distribution); and allows you to sell or exchange shares to and from most
Vanguard funds.
- --------------------------------------------------------------------------------
ACCESS VANGUARD(TM) www.vanguard.com [BOOK ICON]
You can use your personal computer to perform certain transactions for most
Vanguard funds by accessing our website. To establish this service, you must
register through our website. We will then mail you an account access password
that allows you to process the following financial and administrative
transactions online:
- - Open a new account.*
- - Buy, sell, or exchange shares of most funds.
- - Change your name/address.

<PAGE>

- - Add/change fund options (including dividend options, Vanguard Fund Express,
bank instructions, checkwriting, and Vanguard Automatic Exchange Service).
(Some restrictions may apply.) Please call our Client Services Department
for assistance.

*Only current Vanguard shareholders can open a new account online, by exchanging
shares from other existing Vanguard accounts.
- --------------------------------------------------------------------------------
INVESTOR INFORMATION DEPARTMENT: 1-800-662-7447 (SHIP) TEXT TELEPHONE:
1-800-952-3335
Call Vanguard for information on our funds, fund services, and retirement
accounts, and to request literature.
- --------------------------------------------------------------------------------
CLIENT SERVICES DEPARTMENT: 1-800-662-2739 (CREW) TEXT TELEPHONE: 1-800-749-7273
Call Vanguard for information on your account, account transactions, and account
statements.
- --------------------------------------------------------------------------------
SERVICES FOR CLIENTS OF VANGUARD'S INSTITUTIONAL DIVISION: 1-888-809-8102
Vanguard's Institutional Division offers a variety of specialized services for
large institutional investors, including the ability to effect account
transactions through private electronic networks and third-party recordkeepers.
- --------------------------------------------------------------------------------

TYPES OF ACCOUNTS

Individuals and institutions can establish a variety of accounts with Vanguard.
- --------------------------------------------------------------------------------
FOR ONE OR MORE PEOPLE
Open an account in the name of one (individual) or more (joint tenants) people.
- --------------------------------------------------------------------------------
FOR HOLDING PERSONAL TRUST ASSETS [BOOK ICON]
Invest assets held in an existing personal trust.
- --------------------------------------------------------------------------------
FOR INDIVIDUAL RETIREMENT ACCOUNTS [BOOK ICON]
Open a traditional IRA account or a Roth IRA account. Eligibility and other
requirements are established by federal law and Vanguard custodial account
agreements. For more information, please call 1-800-662-7447 (SHIP).
- --------------------------------------------------------------------------------
FOR AN ORGANIZATION [BOOK ICON]
Open an account as a corporation, partnership, endowment, foundation, or other
entity.
- --------------------------------------------------------------------------------
FOR THIRD-PARTY TRUSTEE RETIREMENT INVESTMENTS
Open an account as a retirement trust or plan based on an existing corporate or
institutional plan. These accounts are established by the trustee of the
existing plan.
- --------------------------------------------------------------------------------
VANGUARD PROTOTYPE PLANS
Open a variety of retirement accounts using Vanguard prototype plans for
individuals, sole proprietorships, and small businesses. For more information,
please call 1-800-662-2003.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A NOTE ON INVESTING WITH VANGUARD THROUGH OTHER FIRMS
You may purchase or sell Fund shares through a financial intermediary such as a
bank, broker, or investment adviser. If you invest with Vanguard through an
intermediary, please read that firm's program materials carefully to learn of
any special rules that may apply. For example, special terms may apply to
additional service features, fees, or other policies. Consult your intermediary
to determine when your order will be priced.
- --------------------------------------------------------------------------------

<PAGE>

BUYING SHARES

You buy your shares at a Fund's next-determined net asset value after Vanguard
receives your request. As long as your request is received before the close of
regular trading on the New York Stock Exchange, generally 4 p.m. Eastern time,
you will buy your shares at that day's net asset value.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENT TO . . .
open a new account
$3,000 (regular account); $1,000 (traditional IRAs and Roth IRAs).

add to an existing account
$100 by mail or exchange; $1,000 by wire.
- --------------------------------------------------------------------------------
A NOTE ON LOW BALANCES
Each Fund reserves the right to close any nonretirement fund account whose
balance falls below the minimum initial investment. The Fund will deduct a $10
annual fee in June if your nonretirement account balance at that time is below
$2,500. The low balance fee is waived for investors who have aggregate Vanguard
account assets of $50,000 or more.
- --------------------------------------------------------------------------------
A NOTE ON PURCHASE FEES
Emerging Markets Stock Index Fund deducts a 0.5% fee from all purchases
(including exchanges from other Vanguard funds), but not from reinvested
dividends or capital gains.
- --------------------------------------------------------------------------------
BY MAIL TO . . . [ENVELOPE ICON]
open a new account
Complete and sign the account registration form and enclose your check.

add to an existing account
Mail your check with an Invest-By-Mail form detached from your confirmation
statement to the address listed on the form. Please do not alter Invest-By-Mail
forms, since they are fund- and account-specific.

Make your check payable to: The Vanguard Group-(insert appropriate Fund number;
see below)
European Stock Index Fund-79
Pacific Stock Index Fund-72
Emerging Markets Stock Index Fund-533
Developed Markets Index Fund-227
Total International Stock Index Fund-113

All purchases must be made in U.S. dollars, and checks must be drawn on U.S.
banks.

First-class mail to: Express or Registered mail to:
The Vanguard Group The Vanguard Group
P.O. Box 1110 455 Devon Park Drive
Valley Forge, PA 19482-1110 Wayne, PA 19087-1815

For clients of Vanguard's Institutional Division . . .

First-class mail to: Express or Registered mail to:
The Vanguard Group The Vanguard Group
P.O. Box 2900 455 Devon Park Drive
Valley Forge, PA 19482-2900 Wayne, PA 19087-1815

<PAGE>

- --------------------------------------------------------------------------------
IMPORTANT NOTE: To prevent check fraud, Vanguard will not accept checks made
payable to third parties.
- --------------------------------------------------------------------------------
BY TELEPHONE TO . . . [TELEPHONE ICON]
open a new account
Call Vanguard Tele-Account* 24 hours a day--or Client Services during business
hours--to exchange from another Vanguard fund account with the same registration
(name, address, taxpayer identification number, and account type). (Note that
some restrictions apply to index fund accounts.)

add to an existing account
Call Vanguard Tele-Account* 24 hours a day--or Client Services during business
hours--to exchange from another Vanguard fund account with the same registration
(name, address, taxpayer identification number, and account type). (Note that
some restrictions apply to index fund accounts.) Use Vanguard Fund Express (see
"Services and Account Features") to transfer assets from your bank account. Call
Client Services before your first use to verify that this option is available.

Vanguard Tele-Account Client Services
1-800-662-6273 1-800-662-2739

*You must obtain a Personal Identification Number (PIN) through Tele-Account at
least seven days before you request your first exchange.
- --------------------------------------------------------------------------------
IMPORTANT NOTE: Once you have initiated a telephone transaction and a
confirmation number has been assigned, the transaction cannot be revoked. We
reserve the right to refuse any purchase request.
- --------------------------------------------------------------------------------
BY WIRE TO OPEN A NEW ACCOUNT OR ADD TO AN EXISTING ACCOUNT [WIRE ICON]
Call Client Services to arrange your wire transaction. Wire transactions to
retirement accounts are only available for asset transfers and rollovers from
other financial institutions. Individual IRA contributions will not be accepted
by wire.

Wire to:
FRB ABA 021001088
HSBC Bank USA

For credit to:
Account: 000112046
Vanguard Incoming Wire Account

In favor of:
European Stock Index Fund-79
Pacific Stock Index Fund-72
Emerging Markets Stock Index Fund-533
Developed Markets Index Fund-227
Total International Stock Index Fund-113
[Account number, or temporary number for a new account]
[Registered account owner(s)]
[Registered address]
- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------
You can redeem (that is, sell or exchange) shares purchased by check or Vanguard
Fund Express at any time. However, while your redemption request will be
processed at the next-determined net asset value after it is received, your
redemption proceeds will not be available until payment for your purchase is
collected, which may take up to ten calendar days.
- --------------------------------------------------------------------------------
A NOTE ON LARGE PURCHASES
It is important that you call Vanguard before you invest a large dollar amount.
It is our responsibility to consider the interests of all Fund shareholders, and
so we reserve the right to refuse any purchase that may disrupt a Fund's
operation or performance.
- --------------------------------------------------------------------------------

REDEEMING SHARES
This section describes how you can redeem--that is, sell or exchange--a Fund's
shares.

When Selling Shares:
- - Vanguard sends the redemption proceeds to you or a designated third party.*
- - You can sell all or part of your Fund shares at any time.

*May require a signature guarantee; see footnote on page 39.

When Exchanging Shares:
- - The redemption proceeds are used to purchase shares of a different Vanguard
fund.
- - You must meet the receiving fund's minimum investment requirements.
- - Vanguard reserves the right to revise or terminate the exchange privilege,
limit the amount of an exchange, or reject an exchange at any time, without
notice.
- - In order to exchange into an account with a different registration
(including a different name, address, or taxpayer identification number),
you must include the guaranteed signature of all current account owners on
your written instructions.

In both cases, your transaction will be based on the Fund's next-determined
share price, subject to any special rules described in this "Redeeming Shares"
section of the prospectus.
- --------------------------------------------------------------------------------
A NOTE ON REDEMPTION FEES
Emerging Markets Stock Index Fund imposes a 0.5% redemption fee on all share
redemptions. Currently, redemption fees do not apply to Fund shares held through
Vanguard's separate recordkeeping system for employee benefit plan accounts, due
to certain economies associated with these accounts. However, the Fund reserves
the right to impose redemption fees on its shares at any time if warranted by
the Fund's future costs of processing redemptions from these accounts.
- --------------------------------------------------------------------------------
NOTE: Once a redemption is initiated and a confirmation number given, the
transaction CANNOT be canceled.
- --------------------------------------------------------------------------------

<PAGE>

TELEPHONE REQUESTS [TELEPHONE ICON]
All Account Types Except Retirement:
Call Vanguard Tele-Account 24 hours a day--or Client Services during business
hours--to sell shares.

Retirement Accounts:
You can exchange--but not sell--shares by calling Tele-Account or Client
Services.

Vanguard Tele-Account Client Services
1-800-662-6273 1-800-662-2739
- --------------------------------------------------------------------------------
SPECIAL INFORMATION: We will automatically establish the telephone redemption
option for your account, unless you instruct us otherwise in writing. While
telephone redemption is easy and convenient, this account feature involves a
risk of loss from unauthorized or fraudulent transactions. Vanguard will take
reasonable precautions to protect your account from fraud. You should do the
same by keeping your account information private and immediately reviewing any
account statements that we send to you. Make sure to contact Vanguard
immediately about any transaction you believe to be unauthorized.
- --------------------------------------------------------------------------------
We reserve the right to refuse a telephone redemption if the caller is unable to
provide:
- - The ten-digit account number.
- - The name and address exactly as registered on the account.
- - The primary Social Security or employer identification number as registered
on the account.
- - The Personal Identification Number (PIN), if applicable (for instance,
Tele-Account).

<PAGE>

experience difficulty making a telephone redemption during periods of drastic
economic or market change, you can send us your request by regular or express
mail. Follow the instructions on selling or exchanging shares by mail in this
section.
- --------------------------------------------------------------------------------
MAIL REQUESTS [ENVELOPE ICON]
All Account Types Except Retirement:
Send a letter of instruction signed by all registered account holders. Include
the fund name and account number and (if you are selling) a dollar amount or
number of shares OR (if you are exchanging) the name of the fund you want to
exchange into and a dollar amount or number of shares. To exchange into an
account with a different registration (including a different name, address,
taxpayer identification number, or account type), you must provide Vanguard with
written instructions that include the guaranteed signatures of all current
owners of the fund from which you wish to redeem.

Vanguard Retirement Accounts:
For information on how to request distributions from:
- - Traditional IRAs and Roth IRAs--call Client Services.
- - SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial accounts, and Profit-Sharing and
Money Purchase Pension (Keogh) Plans--call Individual Retirement Plans at
1-800-662-2003.

Depending on your account registration type, additional documentation may be
required.

First-class mail to: Express or Registered mail to:
The Vanguard Group The Vanguard Group
P.O. Box 1110 455 Devon Park Drive
Valley Forge, PA 19482-1110 Wayne, PA 19087-1815

For clients of Vanguard's Institutional Division . . .

First-class mail to: Express or Registered mail to:
The Vanguard Group The Vanguard Group
P.O. Box 2900 455 Devon Park Drive
Valley Forge, PA 19482-2900 Wayne, PA 19087-1815
- --------------------------------------------------------------------------------
A NOTE ON LARGE REDEMPTIONS
It is important that you call Vanguard before you redeem a large dollar amount.
It is our responsibility to consider the interests of all fund shareholders, and
so we reserve the right to delay delivery of your redemption proceeds--up to
seven days--if the amount may disrupt a Fund's operation or performance.
If you redeem more than $250,000 worth of Fund shares within any 90-day
period, the Fund reserves the right to pay part or all of the redemption
proceeds above $250,000 in-kind, i.e., in securities, rather than in cash. If
payment is made in-kind, you may incur brokerage commissions if you elect to
sell the securities for cash.
- --------------------------------------------------------------------------------

OPTIONS FOR REDEMPTION PROCEEDS
You may receive your redemption proceeds in one of three ways: check, exchange
to another Vanguard fund, or Fund Express redemption.
- --------------------------------------------------------------------------------
CHECK REDEMPTIONS
Normally, Vanguard will mail your check within two business days of a
redemption.
- --------------------------------------------------------------------------------

<PAGE>

EXCHANGE REDEMPTIONS
As described above, an exchange involves using the proceeds of your redemption
to purchase shares of another Vanguard fund.
- --------------------------------------------------------------------------------
FUND EXPRESS REDEMPTIONS
Vanguard will electronically transfer funds to your pre-linked checking or
savings account.
- --------------------------------------------------------------------------------

FOR OUR MUTUAL PROTECTION
For your best interests and ours, Vanguard applies these additional requirements
to redemptions:

REQUEST IN "GOOD ORDER"
All redemption requests must be received by Vanguard in "good order." This means
that your request must include:
- - The Fund name and account number.
- - The amount of the transaction (in dollars or shares).
- - Signatures of all owners exactly as registered on the account (for mail
requests).
- - Signature guarantees (if required).*
- - Any supporting legal documentation that may be required.
- - Any outstanding certificates representing shares to be redeemed.

*For instance, a signature guarantee must be provided by all registered account
shareholders when redemption proceeds are to be sent to a different person or
address. A signature guarantee can be obtained from most commercial and savings
banks, credit unions, trust companies, or member firms of a U.S. stock
exchange.

TRANSACTIONS ARE PROCESSED AT THE NEXT-DETERMINED SHARE PRICE AFTER VANGUARD HAS
RECEIVED ALL REQUIRED INFORMATION.
- --------------------------------------------------------------------------------
LIMITS ON ACCOUNT ACTIVITY
Because excessive account transactions can disrupt the management of a Fund and
increase the Fund's costs for all shareholders, Vanguard limits account activity
as follows:
- - You may make no more than TWO SUBSTANTIVE "ROUND TRIPS" THROUGH A FUND
during any 12-month period.
- - Your round trips through a Fund must be at least 30 days apart.
- - A Fund may refuse a share purchase at any time, for any reason.
- - Vanguard may revoke an investor's telephone exchange privilege at any time,
for any reason.

A "round trip" is a redemption from a Fund followed by a purchase back into
the Fund. Also a "round trip" covers transactions accomplished by any
combination of methods, including transactions conducted by check, wire, or
exchange to/from another Vanguard fund. "Substantive" means a dollar amount that
Vanguard determines, in its sole discretion, could adversely affect the
management of a Fund.
- --------------------------------------------------------------------------------
RETURN YOUR SHARE CERTIFICATES
Any portion of your account represented by share certificates cannot be redeemed
until you return the certificates to Vanguard. Certificates must be returned
(unsigned), along with a letter requesting the sale or exchange you wish to
process, via certified mail to:

The Vanguard Group
455 Devon Park Drive
Wayne, PA 19087-1815

<PAGE>

- --------------------------------------------------------------------------------
ALL TRADES ARE FINAL
Vanguard will not cancel any transaction request (including any purchase or
redemption) that we believe to be authentic once the request has been initiated
and a confirmation number assigned.
- --------------------------------------------------------------------------------
UNCASHED CHECKS
Please cash your distribution or redemption checks promptly. Vanguard will not
pay interest on uncashed checks.
- --------------------------------------------------------------------------------

TRANSFERRING REGISTRATION

You can transfer the registration of your Fund shares to another owner by
completing a transfer form and sending it to Vanguard.

First-class mail to: Express or Registered mail to:
The Vanguard Group The Vanguard Group
P.O. Box 1110 455 Devon Park Drive
Valley Forge, PA 19482-1110 Wayne, PA 19087-1815

For clients of Vanguard's Institutional Division . . .

FUND AND ACCOUNT UPDATES

STATEMENTS AND REPORTS
We will send you account and tax statements to help you keep track of your Fund
account throughout the year as well as when you are preparing your income tax
returns.
In addition, you will receive financial reports about your Fund twice a
year. These comprehensive reports include an assessment of the Fund's
performance (and a comparison to its industry benchmark), an overview of the
financial markets, a report from the adviser, and the Fund's financial
statements which include a listing of the Fund's holdings.
To keep each Fund's costs as low as possible (so that you and other
shareholders can keep more of the Fund's investment earnings), Vanguard attempts
to eliminate duplicate mailings to the same address. When two or more Fund
shareholders have the same last name and address, we send just one Fund report
to that address--instead of mailing separate reports to each shareholder. If you
want us to send separate reports, notify our Client Services Department at
1-800-662-2739.
- --------------------------------------------------------------------------------
CONFIRMATION STATEMENT
Sent each time you buy, sell, or exchange shares; confirms the trade date and
the amount of your transaction.
- --------------------------------------------------------------------------------
PORTFOLIO SUMMARY [BOOK ICON]
Mailed quarterly for most accounts; shows the market value of your account at
the close of the statement period, as well as distributions, purchases, sales,
and exchanges for the current calendar year.

<PAGE>

- --------------------------------------------------------------------------------
FUND FINANCIAL REPORTS
Mailed in February and August for these Funds.
- --------------------------------------------------------------------------------
TAX STATEMENTS
Generally mailed in January; report previous year's dividend and capital gains
distributions, proceeds from the sale of shares, and distributions from IRAs or
other retirement accounts.
- --------------------------------------------------------------------------------
AVERAGE COST REVIEW STATEMENT [BOOK ICON]
Issued quarterly for most taxable accounts (accompanies your Portfolio Summary);
shows the average cost of shares that you redeemed during the calendar year,
using only the average cost single category method.
- --------------------------------------------------------------------------------

<PAGE>

(THIS PAGE INTENTIONALLY LEFT BLANK.)

<PAGE>

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<PAGE>

(THIS PAGE INTENTIONALLY LEFT BLANK.)

<PAGE>

GLOSSARY OF INVESTMENT TERMS

ACTIVE MANAGEMENT
An investment approach that seeks to exceed the average returns of the financial
markets. Active managers rely on research, market forecasts, and their own
judgment and experience in selecting securities to buy and sell.

CAPITAL GAINS DISTRIBUTION
Payment to mutual fund shareholders of gains realized on securities that a fund
has sold at a profit, minus any realized losses.

CASH RESERVES
Cash deposits, short-term bank deposits, and money market instruments which
include U.S. Treasury bills, bank certificates of deposit (CDs), repurchase
agreements, commercial paper, and banker's acceptances.

COMMON STOCK
A security representing ownership rights in a corporation. A stockholder is
entitled to share in the company's profits, some of which may be paid out as
dividends.

COUNTRY RISK
The chance that domestic events--such as political upheaval, financial troubles,
or a natural disaster--will weaken a country's securities markets.

CURRENCY RISK
The chance that a foreign investment will decrease in value because of
unfavorable changes in currency exchange rates.

DIVIDEND INCOME
Payment to shareholders of income from interest or dividends generated by a
fund's investments.

EXPENSE RATIO
The percentage of a fund's average net assets used to pay its expenses. The
expense ratio includes management fees, administrative fees, and any 12b-1
distribution fees.

INDEX
An unmanaged group of securities whose overall performance is used as a standard
to measure investment performance.

INTERNATIONAL STOCK FUND
A mutual fund that invests in the stocks of companies located outside the United
States.

INVESTMENT ADVISER
An organization that makes the day-to-day decisions regarding a fund's
investments.

MUTUAL FUND
An investment company that pools the money of many people and invests it in a
variety of securities in an effort to achieve a specific objective over time.

NET ASSET VALUE (NAV)
The market value of a mutual fund's total assets, minus liabilities, divided by
the number of shares outstanding. The value of a single share is called its
share value or share price.

PASSIVE MANAGEMENT
A low-cost investment strategy in which a mutual fund attempts to match--rather
than outperform--a particular stock or bond market index. Also known as
indexing.

PRINCIPAL
The amount of money you put into an investment.

TOTAL RETURN
A percentage change, over a specified time period, in a mutual fund's net asset
value, with the ending net asset value adjusted to account for the reinvestment
of all distributions of dividends and capital gains.

VOLATILITY
The fluctuations in value of a mutual fund or other security. The greater a
fund's volatility, the wider the fluctuations between its high and low prices.

YIELD
Income (interest or dividends) earned by an investment, expressed as a
percentage of the investment's price.

<PAGE>

[LOGO]
[THE VANGUARD GROUP(R) LOGO]

Post Office Box 2600
Valley Forge, PA 19482-2600

FOR MORE INFORMATION
If you'd like more information about
Vanguard International Stock Index
Funds, the following documents are
available free upon request:

ANNUAL/SEMIANNUAL REPORT TO
SHAREHOLDERS
Additional information about the
Funds' investments is available in
the Funds' annual and semiannual
reports to shareholders.

STATEMENT OF ADDITIONAL
INFORMATION (SAI)
The SAI provides more detailed
information about the Funds (there
is a separate SAI for Vanguard
Developed Markets and Total
International Stock Index Funds,
which are legally a part of Vanguard
STAR Funds).

The current annual and semiannual
reports and each SAI are
incorporated by reference into
(and are thus legally a part of)
this prospectus.

To receive a free copy of the latest
annual or semiannual report or the
SAI, or to request additional
information about the Funds or other
Vanguard funds, please contact us
as follows:

THE VANGUARD GROUP
INVESTOR INFORMATION
DEPARTMENT
P.O. BOX 2600
VALLEY FORGE, PA
19482-2600

TELEPHONE:
1-800-662-7447 (SHIP)

TEXT TELEPHONE:
1-800-952-3335

WORLD WIDE WEB:
WWW.VANGUARD.COM

If you are a current Fund shareholder
and would like information about
your account, account transactions,
and/or account statements,
please call:

CLIENT SERVICES DEPARTMENT
TELEPHONE:
1-800-662-2739 (CREW)

TEXT TELEPHONE:
1-800-749-7273

INFORMATION PROVIDED BY THE
SECURITIES AND EXCHANGE
COMMISSION (SEC)
You can review and copy
information about the Funds
(including the SAI) at the SEC's
Public Reference Room in
Washington, DC. To find out more
about this public service, call the
SEC at 1-202-942-8090. Reports and
other information about the Funds
are also available on the SEC's
website (www.sec.gov), or you can
receive copies of this information,
for a fee, by electronic request at
the following e-mail address:
[email protected], or by writing
the Public Reference Section,
Securities and Exchange
Commission, Washington, DC
20549-0102.

Funds' Investment Company Act
file number: 811-5972 (811-3919)
for Developed Markets and Total
International Stock Index Funds)

P072N-04/28/2000

<PAGE>

VANGUARD(R)
INTERNATIONAL STOCK
INDEX FUNDS

Participant Prospectus
April 28, 2000

This prospectus contains
financial data for the
Funds through the
fiscal year ended
December 31, 1999.

VANGUARD EUROPEAN
STOCK INDEX FUND

VANGUARD PACIFIC STOCK
INDEX FUND

VANGUARD EMERGING
MARKETS STOCK INDEX
FUND

VANGUARD DEVELOPED
MARKETS INDEX FUND

VANGUARD TOTAL
INTERNATIONAL STOCK
INDEX FUND

[MEMBERS OF THE VANGUARD GROUP(R) LOGO]

<PAGE>

VANGUARD INTERNATIONAL STOCK INDEX FUNDS
Participant Prospectus
April 28, 2000

A Group of International Stock Index Mutual Funds

2 FUND PROFILES

2 Vanguard European Stock Index Fund

5 Vanguard Pacific Stock Index Fund

8 Vanguard Emerging Markets Stock Index Fund

11 Vanguard Developed Markets Index Fund

13 Vanguard Total International Stock Index Fund

16 MORE ON THE FUNDS

23 THE FUNDS AND VANGUARD

24 INVESTMENT ADVISER

25 DIVIDENDS, CAPITAL GAINS, AND TAXES

25 SHARE PRICE

26 FINANCIAL HIGHLIGHTS

29 INVESTING WITH VANGUARD

30 ACCESSING FUND INFORMATION BY COMPUTER

This prospectus explains the objective, risks, and strategies of each of the
Vanguard International Stock Index Funds. To highlight terms and concepts
important to mutual fund investors, we have provided "Plain Talk(R)"
explanations along the way. Reading the prospectus will help you to decide which
Fund, if any, is the right investment for you. We suggest that you keep it for
future reference.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IMPORTANT NOTE
The Vanguard European, Pacific, and Emerging Markets Stock Index Funds each
offer two separate classes of shares: Investor and Institutional. This
prospectus offers the Funds' Investor Shares to participants in
employer-sponsored retirement or savings plans. Please call Vanguard to obtain
separate prospectuses that offer:
- - Investor Shares for private investors ($3,000 minimum)--1-800-662-7447
- - Institutional Shares for very large investors ($10 million
minimum)--1-800-523-1036
The Funds' separate share classes have different expenses; as a result,
their investment performances will vary. UNLESS OTHERWISE NOTED, ALL REFERENCES
IN THIS PROSPECTUS TO FEES, EXPENSES, AND INVESTMENT PERFORMANCE RELATE
SPECIFICALLY TO INVESTOR SHARES.
- --------------------------------------------------------------------------------

<PAGE>

AN INTRODUCTION TO INDEX FUNDS

This prospectus contains profiles that summarize key features of each Fund.
Following the profiles, there is important additional information about the
Funds.

<PAGE>

FUND PROFILE--
VANGUARD(R) EUROPEAN STOCK INDEX FUND

The following profile summarizes key features of Vanguard European Stock Index
Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the Morgan Stanley Capital
International (MSCI) Europe Index.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1991 12.40%
1992 -3.32%
1993 29.13%
1994 1.88%
1995 22.28%
1996 21.26%
1997 24.23%
1998 28.86%
1999 16.62%
----------------------------------------------------
Return figures do not reflect the transaction fee
imposed on purchases prior to April 1, 2000. If the
fee was reflected, returns would be less than those
shown.
----------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.22%
12b-1 Distribution Fee: None
Other Expenses: 0.07%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.29%

<PAGE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Distributed annually in December Europe

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, 079
Pa., since inception
CUSIP NUMBER
INCEPTION DATE 922042205
June 18, 1990

NET ASSETS AS OF DECEMBER 31, 1999 TICKER SYMBOL
$6.1 billion VEURX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) PACIFIC STOCK INDEX FUND

The following profile summarizes key features of Vanguard Pacific Stock Index
Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the MSCI Pacific Free Index.*

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters. The Index's,
and therefore the Fund's, heavy exposure to Japan involves a higher degree
of country risk than that of more geographically diversified international
funds.
- - Regional risk, which is the chance that an entire region--namely the
Pacific region--will be hurt by political troubles, financial problems, or
natural disasters.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
and five years and since inception compare with those of a broad-based
securities market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1991 10.65%
1992 -18.17%
1993 35.46%
1994 13.04%
1995 2.75%
1996 -7.82%
1997 -25.67%
1998 2.41%
1999 57.05%
----------------------------------------------------
Return figures do not reflect the transaction fee
imposed on purchases prior to April 1, 2000. If the
fee was reflected, returns would be less than those
shown.
----------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.31%
12b-1 Distribution Fee: None
Other Expenses: 0.06%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.37%

<PAGE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Distributed annually in December Pacific

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, 072
Pa., since inception

INCEPTION DATE CUSIP NUMBER
June 18, 1990 922042106

NET ASSETS AS OF DECEMBER 31, 1999 TICKER SYMBOL
$2.5 billion VPACX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) EMERGING MARKETS STOCK INDEX FUND

The following profile summarizes key features of Vanguard Emerging Markets Stock
Index Fund.

INVESTMENT OBJECTIVE
The Fund seeks to match the performance of the Select Emerging Markets Free
Index.*

INVESTMENT STRATEGIES
The Fund employs a "passively managed"--or index--investment approach, by
investing all or substantially all of its assets in a representative sample of
the common stocks included in the Select Emerging Markets Free Index. The Select
Emerging Markets Free Index includes approximately 500 common stocks of
companies located in emerging markets around the world. As of March 31, 2000,
the largest markets covered in the Index were Mexico, Brazil, and South Africa
(which comprised 16%, 14%, and 13% of the Index's market capitalization,
respectively). Other countries represented in the Index included Argentina, the
Czech Republic, Greece, Hungary, Indonesia, Israel, the Philippines, Poland,
Thailand, Turkey, Hong Kong, and Singapore. MSCI administers the Select Index
exclusively for Vanguard. For more information about passive management, see
"Indexing Methods" under MORE ON THE FUNDS.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters. Country risk
is especially high for funds that focus on stocks in emerging markets. The
Index's, and therefore the Fund's, heavy exposure to Mexico, Brazil, and
South Africa involves a higher degree of country risk than that of more
geographically diversified international funds.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
and five calendar years and since inception compare with those of both a
broad-based securities market index and the Fund's target index. Keep in mind
that the Fund's past performance does not indicate how it will perform in the
future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1995 0.56%
1996 15.83%
1997 -16.82%
1998 -18.12%
1999 61.57%
----------------------------------------------------
Return figures do not reflect the transaction fee
imposed on purchases and redemptions. If these
amounts were reflected, returns would be less than
those shown.
----------------------------------------------------

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard Emerging Markets
Stock Index Fund** 59.96% 4.88% 6.03%
MSCI Emerging Markets
Free Index 66.40 2.00 3.69
Select Emerging Markets
Free Index+ 60.86 4.81 4.93
-------------------------------------------------------------------------
*May 4, 1994.
**Return figures reflect the 0.5% transaction fee imposed on purchases
and redemptions.
+The Select Emerging Markets Free Index is administered by MSCI
exclusively by Vanguard.
-------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Management Expenses: 0.32%
12b-1 Distribution Fee: None
Other Expenses: 0.26%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.58%

<PAGE>

The following example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. It illustrates the
hypothetical expenses that you would incur over various periods if you invest
$10,000 in the Fund. This example assumes that the Fund provides a return of 5%
a year, that operating expenses remain the same, and that you redeem all your
shares at the end of each period.

THESE EXAMPLES SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Distributed annually in December EmerMkt

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, 533
Pa., since inception

INCEPTION DATE CUSIP NUMBER
May 4, 1994 922042304

NET ASSETS AS OF DECEMBER 31, 1999 TICKER SYMBOL
$1.1 billion VEIEX
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) DEVELOPED MARKETS INDEX FUND

The following profile summarizes key features of Vanguard Developed Markets
Index Fund.

INVESTMENT OBJECTIVE
The Fund seeks to track the performance of the MSCI Europe, Australasia, Far
East (EAFE) Index.

PRIMARY RISKS
THE FUND'S TOTAL RETURN, LIKE STOCK PRICES GENERALLY, WILL FLUCTUATE WITHIN A
WIDE RANGE, SO AN INVESTOR COULD LOSE MONEY OVER SHORT OR EVEN LONG PERIODS. The
Fund is also subject to:
- - Country risk, which is the chance that a country's economy will be hurt by
political troubles, financial problems, or natural disasters.
- - Regional risk, which is the chance that an entire region--either Europe or
the Far East--will be hurt by political troubles, financial problems, or
natural disasters.
- - Currency risk, which is the chance that returns will be hurt by a rise in
the value of the U.S. dollar versus foreign currencies.
- - Investment style risk, which is the chance that returns from foreign stocks
will trail returns from other asset classes or the overall stock market.

<PAGE>

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Indirect Operating Expenses: +

+Although Developed Markets Index Fund is not expected to incur any net
expenses directly, the Fund's shareholders indirectly bear the expenses
of the underlying Vanguard funds in which the Fund invests. See THE
FUNDS AND VANGUARD. It is estimated that the Fund's indirect expense
ratio for its first fiscal year, based on its underlying investments,
will be 0.30%.

- ------------------------
1 YEAR 3 YEARS
- ------------------------
$35 $110
- ------------------------

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Distributed annually in December DevMkt

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, 227
Pa., since inception

INCEPTION DATE CUSIP NUMBER
May 5, 2000 921909701
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--
VANGUARD(R) TOTAL INTERNATIONAL STOCK INDEX FUND

The following profile summarizes key features of Vanguard Total International
Stock Index Fund.

PERFORMANCE/RISK INFORMATION
The bar chart and table below provide an indication of the risk of investing in
the Fund. The bar chart shows the Fund's performance in each calendar year since
inception. The table shows how the Fund's average annual total returns for one
calendar year and since inception compare with those of both a broad-based
securities market index and the Fund's target index. Keep in mind that the
Fund's past performance does not indicate how it will perform in the future.

<PAGE>

----------------------------------------------------
ANNUAL TOTAL RETURNS
----------------------------------------------------
1997 -0.77%
1998 15.60%
1999 29.92%
----------------------------------------------------
Return figures do not reflect the transaction fee
imposed on purchases prior to April 1, 2000. If the
fee was reflected, returns would be less than those
shown.
----------------------------------------------------

-------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
1 YEAR SINCE INCEPTION*
-------------------------------------------------------------------------
Vanguard Total International
Stock Index Fund** 29.92% 11.64%
MSCI EAFE + Emerging Markets
Free Index 30.33 12.11
Total International Composite
Index+ 28.13 11.30
-------------------------------------------------------------------------
*April 29, 1996.
**Return figures do not reflect the transaction fee imposed on purchases
prior to April 1, 2000.
+Consists of the MSCI EAFE Index and the Select Emerging Markets Free
Index. This index is administered by MSCI exclusively for Vanguard.
-------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's assets)
Indirect Operating Expenses: +

+Although Total International Stock Index Fund is not expected to incur
any net expenses directly, the Fund's shareholders indirectly bear the
expenses of the underlying Vanguard funds in which the Fund invests.
See THE FUNDS AND VANGUARD. The Fund's indirect expense ratio, based
on its underlying investments, was 0.34% as of December 31, 1999.

<PAGE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED TO REPRESENT ACTUAL EXPENSES OR
PERFORMANCE FROM THE PAST OR FOR THE FUTURE. ACTUAL FUTURE EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Distributed annually in December TotIntl

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, 113
Pa., since inception

INCEPTION DATE CUSIP NUMBER
April 29, 1996 921909602

NET ASSETS AS OF DECEMBER 31, 1999 TICKER SYMBOL
$2.6 billion VGTSX
- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
THE COSTS OF INVESTING

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
"FUND OF FUNDS"

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
REGIONAL VERSUS BROAD INTERNATIONAL INVESTING

<PAGE>

TRANSACTION FEES
Some of Vanguard's index funds charge a transaction fee on purchases of fund
shares to offset the higher costs of trading certain securities, particularly
small-company and international stocks. The transaction fee ensures that these
higher costs are borne by the investors making the transactions--and not by
shareholders already in the fund who do not generate the costs. All transaction
fees are paid directly to the fund itself (unlike a sales charge or load that
non-Vanguard funds may impose to compensate their sales representatives).
Without transaction fees, some index funds would have trouble tracking their
target indexes.

COSTS AND MARKET-TIMING
Some investors try to profit from a strategy called market-timing--switching
money into investments when they expect prices to rise, and taking money out
when they expect prices to fall. As money is shifted in and out, a fund incurs
expenses for buying and selling securities. These costs are borne by all fund
shareholders, including the long-term investors who do not generate the costs.
Therefore, the Vanguard International Stock Index Funds have adopted the
following policies, among others, designed to discourage short-term trading:
- - Each Fund reserves the right to reject any purchase request--including
exchanges from other Vanguard funds--that it regards as disruptive to the
efficient management of the Fund. A purchase request could be rejected
because of the timing of the investment or because of a history of
excessive trading by the investor.
- - The Emerging Markets Stock Index Fund charges a transaction fee on
purchases and redemptions.

<PAGE>

- - Telephone and online exchanges are not accepted for non-IRA accounts.
- - There is a limit on the number of times you can exchange into and out of a
Fund (see "Exchanges" in the INVESTING WITH VANGUARD section).
- - Each Fund reserves the right to stop offering shares at any time.

THE VANGUARD FUNDS DO NOT PERMIT MARKET-TIMING. DO NOT INVEST IN THESE
FUNDS IF YOU ARE A MARKET-TIMER.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
TURNOVER RATE

OTHER INVESTMENT POLICIES AND RISKS
Besides investing in common stocks of foreign companies, each Fund may make
certain other kinds of investments to achieve its objective. Each Fund may
change its objective without shareholder approval.
The Funds may also invest, to a limited extent, in futures and options
contracts, warrants, convertible securities, and swap agreements, which are
types of derivatives. Losses (or gains) involving futures contracts can
sometimes be substantial--in part because a relatively small price movement in a
futures contract may result in an immediate and substantial loss (or gain) for a
fund. Similar risks exist for warrants (securities that permit their owners to
purchase a specific number of shares of stock at a predetermined price),
convertible securities (securities that may be exchanged for another asset), and
swap agreements (contracts between two parties in which each agrees to make
payments to the other based on the return of a specified index or asset).

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
DERIVATIVES

THE FUNDS AND VANGUARD
Vanguard International Stock Index Funds are offered by The Vanguard Group, a
family of more than 35 investment companies with more than 100 funds holding
assets worth more than $550 billion. All of the Vanguard funds share in the
expenses associated with business operations, such as personnel, office space,
equipment, and advertising.
Vanguard also provides marketing services to the funds. Although
shareholders do not pay sales commissions or 12b-1 distribution fees, each fund
pays its allocated share of The Vanguard Group's marketing costs.
Total International Stock and Developed Markets Index Funds will indirectly
bear a proportionate share of the expenses of the underlying funds in which they
invest. However, their direct expenses are expected to be very low or zero. For
example, Total International Stock Index Fund has incurred no direct expenses
since its inception in 1996. Total International Stock and Developed Markets
Index Funds may operate without incurring direct expenses because Vanguard will
reimburse them for (i) their contributions to the cost of operating the
underlying funds in which they invest, and (ii) savings in administrative and
marketing costs that Vanguard expects to derive from their operations.

<PAGE>

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PLAIN TALK ABOUT
VANGUARD'S UNIQUE CORPORATE STRUCTURE

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PLAIN TALK ABOUT
THE FUNDS' ADVISER

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DIVIDENDS, CAPITAL GAINS, AND TAXES
Each Fund distributes to shareholders virtually all of its net income (interest
and dividends, less expenses), as well as any capital gains realized from the
sale of its holdings. Distributions generally occur in December. In addition,
the Fund may occasionally be required to make supplemental dividend or capital
gains distributions at some other time during the year.
Your dividend and capital gains distributions will be reinvested in
additional Fund shares and accumulate on a tax-deferred basis if you are
investing through an employer-sponsored retirement or savings plan. You will not
owe taxes on these distributions until you begin withdrawals from the plan. You
should consult your plan administrator, your plan's Summary Plan Description, or
your tax adviser about the tax consequences of plan withdrawals.

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PLAIN TALK ABOUT
DISTRIBUTIONS

SHARE PRICE
Each Fund's share price, called its net asset value, or NAV, is calculated each
business day after the close of regular trading on the New York Stock Exchange
(the NAV is not calculated on holidays or other days when the Exchange is
closed). Net asset value per share for the Developed Markets and Total
International Stock Index Funds is computed by adding up the total value of the
Fund's investments (i.e., shares of the underlying funds) and other assets,
subtracting any of its liabilities (debts), and then dividing by the number of
Fund shares outstanding:

TOTAL ASSETS - LIABILITIES
NET ASSET VALUE = --------------------------------
NUMBER OF SHARES OUTSTANDING

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A NOTE ON PRICING: A Fund's investments will be priced at their market
value when market quotations are readily available. When these quotations are
not readily available, investments will be priced at their fair value,
calculated according to procedures adopted by the Funds' Board of Trustees. A
Fund also may use fair value pricing if the value of a security held by the Fund
is materially affected by events occurring after the close of the primary
markets or exchanges on which such security is traded. In these situations,
prices used by the Fund to calculate its net asset value may differ from quoted
or published prices for the underlying securities.
Each Fund's share price can be found daily in the mutual fund listings of
most major newspapers under the heading "Vanguard Index Funds." Different
newspapers use different abbreviations for each Fund, but the most common are
EUROPE, PACIFIC, EMERMKT, DEVMKT, and TOTINTL for the European, Pacific,
Emerging Markets, Developed Markets, and Total International Stock Index Funds,
respectively.

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PLAIN TALK ABOUT
HOW TO READ THE FINANCIAL HIGHLIGHTS TABLE

Shareholders received $0.65 per share in the form of dividend and capital gains
distributions. A portion of each year's distributions may come from the prior
year's income or capital gains.

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TOTAL RETURN* 16.62% 28.86% 24.23% 21.26% 22.28%
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TOTAL RETURN* 57.05% 2.41% -25.67% -7.82% 2.75%
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FINANCIAL HIGHLIGHTS (CONTINUED)

TOTAL RETURN* 61.57% -18.12% -16.82% 15.83% 0.56%
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RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Year (Millions) $1,138 $577 $660 $637 $234
Ratio of Total
Expenses to Average
Net Assets 0.58% 0.61% 0.57% 0.60% 0.60%
Ratio of Net
Investment Income to
Average Net Assets 2.55% 2.99% 1.96% 1.69% 2.00%
Turnover Rate 22% 22% 19% 1% 3%
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*Total return figures do not reflect the transaction fee on purchases (0.5%
beginning 4/1/2000, 1.0% from 11/3/1997 to 3/31/2000, 1.5% from 1/1/1997 to
11/2/1997, 2.0% in 1995 through 1996), or the transaction fee on redemptions
(0.5% beginning 4/1/2000, 1.0% through 3/31/2000).

TOTAL RETURN** 29.92% 15.60% -0.77% 0.55%
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INVESTING WITH VANGUARD

One or more of the Funds is an investment option in your retirement or savings
plan. Your plan administrator or your employee benefits office can provide you
with detailed information on how to participate in your plan and how to elect
any of the Funds as an investment option.
- - If you have any questions about a Fund or Vanguard, including those about
the Fund's investment objective, strategies, or risks, contact Vanguard's
Participant Access Center, toll-free, at 1-800-523-1188.
- - If you have questions about your account, contact your plan administrator
or the organization that provides recordkeeping services for your plan.

INVESTMENT OPTIONS AND ALLOCATIONS
Your plan's specific provisions may allow you to change your investment
selections, the amount of your contributions, or how your contributions are
allocated among the investment choices available to you. Contact your plan
administrator or employee benefits office for more details.

TRANSACTIONS
Contributions, exchanges, or redemptions of a Fund's shares are processed as
soon as they have been received by Vanguard in good order. Good order means that
your request includes complete information on your contribution, exchange, or
redemption, and that Vanguard has received the appropriate assets.
In all cases, your transaction will be based on the Fund's next-determined
net asset value after Vanguard receives your request (or, in the case of new
contributions, the next-determined net asset value after Vanguard receives the
order from your plan administrator). As long as this request is received before
the close of regular trading on the New York Stock Exchange, generally 4 p.m.
Eastern time, you will receive that day's net asset value.

EXCHANGES
The exchange privilege (your ability to redeem shares from one fund to purchase
shares of another fund) may be available to you through your plan. Although we
make every effort to maintain the exchange privilege, Vanguard reserves the
right to revise or terminate this privilege, limit the amount of an exchange or
reject any exchange, at any time, without notice. Because excessive exchanges
can potentially disrupt the management of a Fund and increase its transaction
costs, Vanguard limits participant exchange activity to no more than FOUR
SUBSTANTIVE "ROUND TRIPS" THROUGH THE FUND (at least 90 days apart) during any
12-month period. A "round trip" is a redemption from the Fund followed by a
purchase back into the Fund. "Substantive" means a dollar amount that Vanguard
determines, in its sole discretion, could adversely affect the management of the
Fund.
Before making an exchange to or from another fund available in your plan,
consider the following:
- - Certain investment options, particularly funds made up of company stock or
investment contracts, may be subject to unique restrictions.
- - Make sure to read that fund's prospectus. Contact Vanguard Participant
Access Center, toll-free, at 1-800-523-1188 for a copy.
- - Vanguard can accept exchanges only as permitted by your plan. Contact your
plan administrator for details on the exchange policies that apply to your
plan.

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A NOTE ON REDEMPTION FEES: The Emerging Markets Stock Index Fund imposes a 0.5%
redemption fee on all share redemptions. Currently, redemption fees do not apply
to Fund shares held through Vanguard's separate recordkeeping system for
employee benefit plan accounts, due to certain economies associated with these
accounts. However, the Fund reserves the right to impose redemption fees on its
shares at any time if warranted by the Fund's future costs of processing
redemptions from these accounts.
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ACCESSING FUND INFORMATION BY COMPUTER

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VANGUARD ON THE WORLD WIDE WEB WWW.VANGUARD.COM
Use your personal computer to visit Vanguard's education-oriented website, which
provides timely news and information about Vanguard funds and services; an
online "university" that offers a variety of mutual fund classes; and
easy-to-use, interactive tools to help you create your own investment and
retirement strategies.
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