VANGUARD ADMIRAL FUNDS INC, 485BPOS, 2000-05-04

VANGUARD ADMIRAL FUNDS INC
485BPOS, 2000-05-04

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (NO. 33-49023) UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO. 11

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 12

VANGUARD ADMIRAL 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 FILING BECOME EFFECTIVE:
ON MAY 26, 2000, PURSUANT TO PARAGRAPH (B) OF RULE 485.

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VANGUARD
ADMIRAL FUNDS(R)

Prospectus

May 26, 2000

- -----------------------
VANGUARD ADMIRAL
TREASURY MONEY
MARKET FUND

VANGUARD ADMIRAL
SHORT-TERM
TREASURY FUND

VANGUARD ADMIRAL
INTERMEDIATE-TERM
TREASURY FUND

VANGUARD ADMIRAL
LONG-TERM
TREASURY FUND

This prospectus contains
financial data for the
Funds through the
fiscal year ended
January 31, 2000.

[Members of
The Vanguard Group(R)]
<PAGE>

VANGUARD ADMIRAL FUNDS
Prospectus

May 26, 2000

A Group of Fixed-Income Treasury Mutual Funds

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CONTENTS

1 AN INTRODUCTION TO VANGUARD 19 DIVIDENDS, CAPITAL GAINS, AND TAXES
ADMIRAL FUNDS
21 SHARE PRICE
2 FUND PROFILES
22 FINANCIAL HIGHLIGHTS
2 Vanguard Admiral Treasury Money
Market Fund 25 INVESTING WITH VANGUARD

5 Vanguard Admiral Short-Term 25 Services and Account Features
Treasury Fund
26 Types of Accounts
8 Vanguard Admiral Intermediate-
Term Treasury Fund 27 Buying Shares

11 Vanguard Admiral Long-Term 29 Redeeming Shares
Treasury Fund
33 Transferring Registration
14 MORE ON THE FUNDS
33 Fund and Account Updates
18 THE FUNDS AND VANGUARD
GLOSSARY (inside back cover)
19 INVESTMENT ADVISER
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WHY READING THIS PROSPECTUS IS IMPORTANT
This prospectus explains the objective, risks, and strategies of each of the
Vanguard Admiral 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.
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IMPORTANT NOTE
The minimum initial investment for each of the Funds is $50,000.
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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 VANGUARD ADMIRAL FUNDS

This prospectus provides information about the four Vanguard Admiral Funds. Each
of these Funds seeks to provide current income. The Treasury Money Market Fund
also seeks to maintain a stable share price of $1. To achieve its objective,
each Fund invests primarily in securities backed by the full faith and credit of
the U.S. government. The Funds differ, however, in terms of the dollar-weighted
average maturity of their holdings, as shown in the following table. As a
result, the relative levels of income provided by the Funds will vary to some
extent, with the Long-Term Treasury Fund providing the highest level. The Funds'
levels of risk will also vary, with the Treasury Money Market Fund having the
lowest level and the Long-Term Treasury Fund generally having the highest.

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DOLLAR-WEIGHTED
FUND AVERAGE MATURITY

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Admiral Treasury Money Market 90 days or less
Admiral Short-Term Treasury 1-3 years
Admiral Intermediate-Term Treasury 5-10 years
Admiral Long-Term Treasury 15-30 years
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On the following pages, you'll find profiles that summarize key features of
each Fund. Following the profiles, there is important additional information
common to all of the Funds.
<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) TREASURY MONEY MARKET FUND

The following profile summarizes key features of Vanguard Admiral Treasury Money
Market Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income and preserve investors' principal,
while maintaining liquidity and a stable share price of $1.

INVESTMENT STRATEGIES

The Fund invests solely in high-quality, short-term money market securities
whose interest and principal payments are backed by the full faith and credit of
the U.S. government. At least 65% of the Fund's assets will always be invested
in U.S. Treasury securities. The Fund seeks to provide a stable net asset value
of $1 per share by investing in securities with a maturity of 13 months or less,
and by maintaining a dollar-weighted average maturity of 90 days or less. For
more information see "Security Selection" under MORE ON THE FUNDS.

PRIMARY RISKS

THE FUND IS SUBJECT TO INCOME RISK, WHICH IS THE CHANCE THAT FALLING INTEREST
RATES WILL CAUSE THE FUND'S INCOME--AND THUS ITS TOTAL RETURN--TO DECLINE.
INCOME RISK IS GENERALLY HIGH FOR FUNDS THAT INVEST IN SHORT-TERM SECURITIES.
The Fund is also subject to:

- - Manager risk, which is the chance that poor security selection will cause
the Fund to underperform other funds with similar investment objectives.

AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND
SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1 PER SHARE, IT IS POSSIBLE
TO LOSE MONEY BY INVESTING IN THE 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
and five calendar years and since inception compare with those of a money market
index. Keep in mind that the Fund's past performance does not indicate how it
will perform in the future.

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ANNUAL TOTAL RETURNS
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1993 2.99%
1994 3.99%
1995 5.66%
1996 5.26%
1997 5.29%
1998 5.18%
1999 4.74%
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The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 1.33%.
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<PAGE>

During the period shown in the bar chart, the highest return for a calendar
quarter was 1.42% (quarter ended June 30, 1995) and the lowest return for a
quarter was 0.73% (quarter ended June 30, 1993).

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AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
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SINCE
1 YEAR 5 YEARS INCEPTION*
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Vanguard Admiral Treasury Money
Market Fund 4.74% 5.23% 4.72%
Salomon Smith Barney 3-Month
Treasury Index 4.74 5.20 4.75
Average U.S. Treasury Money
Market Fund** 4.23 4.74 4.26
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*December 14, 1992.
**Derived from data provided by Lipper Inc.
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If you would like to know the current seven-day yield for the Fund, call
Vanguard's Investor Information Department at 1-800-662-7447 (SHIP).

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 January 31, 2000.

SHAREHOLDER FEES (fees paid directly from your investment)
Sales Charge (Load) Imposed on Purchases: None
Sales Charge (Load) Imposed on Reinvested Dividends: None
Redemption Fee: None
Exchange Fee: None

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.

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1 YEAR 3 YEARS 5 YEARS 10 YEARS
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$15 $48 $85 $192
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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.
<PAGE>

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ADDITIONAL INFORMATION

DIVIDENDS MINIMUM INITIAL INVESTMENT
Dividends are declared daily and distributed on $50,000
the first business day of each month
NEWSPAPER ABBREVIATION
INVESTMENT ADVISER VangAdmUST
The Vanguard Group, Valley Forge, Pa.,
since inception VANGUARD FUND NUMBER
011
INCEPTION DATE
December 14, 1992 CUSIP NUMBER
921932109
NET ASSETS AS OF JANUARY 31, 2000
$5.7 billion TICKER SYMBOL
VUSXX
SUITABLE FOR IRAS
Yes
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<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) SHORT-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral Short-Term
Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income and preserve investors' principal.

INVESTMENT STRATEGIES

The Fund invests at least 85% of its assets in high-quality, short-term bonds
whose interest and principal payments are backed by the full faith and credit of
the U.S. government. In addition, at least 65% of the Fund's assets will always
be invested in U.S. Treasury securities. The Fund will generally maintain a
dollar-weighted average maturity of between one and three years. For more
information see "Security Selection" under MORE ON THE FUNDS.

PRIMARY RISKS

The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

- - Income risk, which is the chance that falling interest rates will cause the
Fund's income--and thus its total return--to decline. Income risk is
generally high for short-term bond funds.
- - Interest rate risk, which is the chance that bond prices overall will
decline over short or even long periods due to rising interest rates.
Interest rate risk is low to moderate for short-term bond 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
and five calendar years and since inception compare with those of a broad-based
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

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ANNUAL TOTAL RETURNS
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1993 6.49%
1994 -0.34%
1995 12.27%
1996 4.46%
1997 6.49%
1998 7.51%
1999 1.86%
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The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 1.35%.
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During the period shown in the bar chart, the highest return for a calendar
quarter was 3.79% (quarter ended March 31, 1995) and the lowest return for a
quarter was -1.07% (quarter ended March 31, 1994).
<PAGE>

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AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
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SINCE
1 YEAR 5 YEARS INCEPTION*
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Vanguard Admiral Short-Term
Treasury Fund 1.86% 6.46% 5.54%
Lehman Brothers 1-5 Year U.S. Treasury
Bond Index 1.89 6.74 5.73
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*December 14, 1992.
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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 January 31, 2000.

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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ADDITIONAL INFORMATION

DIVIDENDS AND CAPITAL GAINS MINIMUM INITIAL INVESTMENT
Dividends are declared daily and distributed on $50,000
the first business day of each month; capital
gains, if any, are distributed annually in NEWSPAPER ABBREVIATION
December AdmST

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, Pa., 012
since inception
CUSIP NUMBER
INCEPTION DATE 921932208
December 14, 1992
TICKER SYMBOL
NET ASSETS AS OF JANUARY 31, 2000 VASTX
$1.1 billion

SUITABLE FOR IRAS
Yes
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<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) INTERMEDIATE-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral
Intermediate-Term Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income.

INVESTMENT STRATEGIES

The Fund invests at least 85% of its assets in high-quality, intermediate-term
bonds whose interest and principal payments are backed by the full faith and
credit of the U.S. government. In addition, at least 65% of the Fund's assets
will always be invested in U.S. Treasury securities. The Fund will generally
maintain a dollar-weighted average maturity of between five and 10 years. For
more information see "Security Selection" under MORE ON THE FUNDS.

PRIMARY RISKS
The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

- - Interest rate risk, which is the chance that bond prices overall will
decline over short or even long periods due to rising interest rates.
Interest rate risk is moderate to high for intermediate-term bond funds.
- - Income risk, which is the chance that falling interest rates will cause the
Fund's income--and thus its total return--to decline. Income risk is
generally high for short-term bond 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
and five calendar years and since inception compare with those of a broad-based
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

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ANNUAL TOTAL RETURNS
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1993 11.32%
1994 -4.21%
1995 20.55%
1996 2.05%
1997 9.02%
1998 10.85%
1999 -3.43%
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The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 2.63%.
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During the period shown in the bar chart, the highest return for a calendar
quarter was 7.22% (quarter ended September 30, 1998) and the lowest return for a
quarter was -3.65% (quarter ended March 31, 1994).
<PAGE>

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AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
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SINCE
1 YEAR 5 YEARS INCEPTION*
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Vanguard Admiral Intermediate-Term
Treasury Fund -3.43% 7.50% 6.38%
Lehman Brothers 5-10 Year U.S. Treasury
Bond Index -3.99 7.74 6.53
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*December 14, 1992.
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ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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ADDITIONAL INFORMATION

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, Pa., 019
since inception
CUSIP NUMBER
INCEPTION DATE 921932307
December 14, 1992
TICKER SYMBOL
NET ASSETS AS OF JANUARY 31, 2000 VAITX
$1.3 billion

SUITABLE FOR IRAS
Yes
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<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) LONG-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral Long-Term
Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income.

INVESTMENT STRATEGIES

The Fund invests at least 85% of its assets in high-quality, long-term bonds
whose interest and principal payments are backed by the full faith and credit of
the U.S. government. In addition, at least 65% of the Fund's assets will always
be invested in U.S. Treasury securities. The Fund will generally maintain a
dollar-weighted average maturity of between 15 and 30 years. For more
information see "Security Selection" under MORE ON THE FUNDS.

PRIMARY RISKS
The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

- - Interest rate risk, which is the chance that bond prices overall will
decline over short or even long periods due to rising interest rates.
Interest rate risk is high to very high for long-term bond funds.
- - Income risk, which is the chance that falling interest rates will cause the
Fund's income--and thus its total return--to decline. Income risk is
generally high for short-term bond 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
and five calendar years and since inception compare with those of a broad-based
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

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ANNUAL TOTAL RETURNS
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1993 16.67%
1994 -6.85%
1995 30.05%
1996 -1.07%
1997 13.98%
1998 13.21%
1999 -8.54%
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The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 7.48%.
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During the period shown in the bar chart, the highest return for a calendar
quarter was 10.62% (quarter ended June 30, 1995) and the lowest return for a
quarter was -6.79% (quarter ended March 31, 1996).
<PAGE>

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AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
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SINCE
1 YEAR 5 YEARS INCEPTION*
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Vanguard Admiral Long-Term
Treasury Fund -8.54% 8.71% 7.51%
Lehman Brothers Long U.S. Treasury
Bond Index -8.74 9.08 7.72
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*December 14, 1992.
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ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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ADDITIONAL INFORMATION

INVESTMENT ADVISER VANGUARD FUND NUMBER
The Vanguard Group, Valley Forge, Pa., 020
since inception
CUSIP NUMBER
INCEPTION DATE 921932406
December 14, 1992
TICKER SYMBOL
NET ASSETS AS OF JANUARY 31, 2000 VALGX
$451 million

SUITABLE FOR IRAS
Yes
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<PAGE>

MORE ON THE FUNDS

The following sections discuss other important features of the Vanguard Admiral
Funds, including market exposure, security selection, costs and market-timing,
turnover rate, and other investment policies and risks. You will also find
detailed risk information about the Funds throughout these sections.

MARKET EXPOSURE
Each Fund's primary policy is to invest in securities backed by the full faith
and credit of the U.S. government, in accordance with the Fund's prescribed
maturity and credit quality standards. These securities include U.S. Treasury
obligations such as bills, notes, and bonds, as well as other full faith and
credit obligations of the U.S. government.

[FLAG] EACH FUND IS SUBJECT, IN VARYING DEGREES, TO INCOME RISK, WHICH IS THE
CHANCE THAT A FUND'S DIVIDENDS (INCOME) WILL DECLINE DUE TO FALLING
INTEREST RATES. INCOME RISK IS GENERALLY HIGHER FOR SHORT-TERM BOND FUNDS
AND LOWER FOR LONG-TERM BOND FUNDS.

Changes in interest rates can affect bond prices as well as bond income.

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PLAIN TALK ABOUT
BONDS AND INTEREST RATES
As a rule, when interest rates rise, bond prices fall. The opposite is also
true: Bond prices go up when interest rates fall. Why do bond prices and
interest rates move in opposite directions? Let's assume that you hold a bond
offering a 5% yield. A year later, interest rates are on the rise and bonds are
offered with a 6% yield. With higher-yielding bonds available, you would have
trouble selling your 5% bond for the price you paid--you would have to lower
your asking price. On the other hand, if interest rates were falling and 4%
bonds were being offered, you should be able to sell your 5% bond for more than
you paid.
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[FLAG] EACH FUND IS SUBJECT, IN VARYING DEGREES, TO INTEREST RATE RISK, WHICH IS
THE CHANCE THAT BOND PRICES OVERALL WILL DECLINE OVER SHORT OR EVEN LONG
PERIODS DUE TO RISING INTEREST RATES. INTEREST RATE RISK SHOULD BE LOW FOR
SHORT-TERM BOND FUNDS, MODERATE FOR INTERMEDIATE-TERM BOND FUNDS, AND HIGH
FOR LONG-TERM BOND FUNDS.

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PLAIN TALK ABOUT
BOND MATURITIES
A bond is issued with a specific maturity date--the date when the bond's issuer,
or seller, must pay back the bond's initial value (known as its "face value").
Bond maturities generally range from less than one year (short-term) to 30 years
(long-term). The longer a bond's maturity, the more risk you, as a bond
investor, face as interest rates rise--but also the more interest you could
receive. Long-term bonds are more suitable for investors willing to take greater
risks in hope of higher yields; short-term bond investors should be willing to
accept lower yields in return for less fluctuation in the value of their
investment.
- --------------------------------------------------------------------------------
<PAGE>

In the past, bond investors have seen the value of their investment rise
and fall-- sometimes significantly--with changes in interest rates. Between
December 1976 and September 1981, for instance, rising interest rates caused
long-term bond prices to fall by almost 48%.

Except for the Money Market Fund, each Fund invests mainly in bonds.
Therefore, changes in interest rates will impact, to varying degrees, the value
of each Fund's assets. To illustrate the volatility of bond prices, the
following table shows the effect of both a 1% and a 2% change (both up and down)
in interest rates on three bonds of different maturities, each with a face value
of $1,000.

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HOW INTEREST RATE CHANGES AFFECT THE
VALUE OF A $1,000 BOND*
- --------------------------------------------------------------------------------
AFTER A 1% AFTER A 1% AFTER A 2% AFTER A 2%
TYPE OF BOND (MATURITY) INCREASE DECREASE INCREASE DECREASE
- --------------------------------------------------------------------------------
Short-Term (2.5 years) $978 $1,023 $956 $1,046
Intermediate-Term (10 years) 932 1,074 870 1,156
Long-Term (20 years) 901 1,116 816 1,251
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*Assuming a 7% yield.
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The figures in the table above are for illustration only; you should not
regard them as an indication of future returns from U.S. Treasury securities as
a whole, or any Fund in particular.

SECURITY SELECTION
The Vanguard Group (Vanguard), adviser to the Funds, primarily selects
securities backed by the full faith and credit of the U.S. government. These
include U.S. Treasury obligations as well as other U.S. agency obligations, such
as those issued by the General Services Administration, the Government National
Mortgage Association, the Rural Electrification Administration, the Small
Business Administration, the Federal Financing Bank, and other government
agencies.

The ADMIRAL TREASURY MONEY MARKET FUND invests 100% of its assets in
securities backed by the full faith and credit of the U.S. government. At least
65% of the Fund's assets will always be invested in U.S. Treasury bills, notes,
and bonds. The remaining assets may be invested in U.S. Treasury securities
and/or securities issued by other government agencies. In seeking to provide a
stable net asset value of $1 per share, the Fund is expected to buy securities
with an effective maturity of 13 months or less, and to maintain a
dollar-weighted average maturity of 90 days or less.

The ADMIRAL SHORT-TERM, INTERMEDIATE-TERM, and LONG-TERM TREASURY FUNDS
each invest at least 85% of their assets in securities backed by the full faith
and credit of the U.S. government. At least 65% of each Fund's assets will
always be invested in U.S. Treasury bills, notes, and bonds. The remaining
assets of each Fund may be invested in securities issued by U.S. government
agencies and instrumentalities, as well as in repurchase agreements fully
collateralized by such securities. The three Funds differ primarily in terms of
dollar-weighted average maturity: The Short-Term Treasury Fund is expected to
maintain a dollar-weighted average maturity of between one and three years; the
Intermediate-Term Treasury Fund, a dollar-weighted average maturity of between 5
and 10 years; and the Long-Term Treasury Fund, a dollar-weighted average
maturity of between 15 and 30 years.

The Funds are generally managed without regard to tax ramifications.
<PAGE>

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PLAIN TALK ABOUT
CREDIT QUALITY
A bond's credit quality depends on the issuer's ability to pay interest on the
bond and, ultimately, to repay the debt. The lower the rating by one of the
independent bond-rating agencies (for example, Moody's or Standard & Poor's),
the greater the chance (in the rating agency's opinion) the bond issuer will
default, or fail to meet its payment obligations. All things being equal, the
lower a bond's credit rating, the higher its yield should be to compensate
investors for assuming additional risk. Bonds rated in one of the four highest
rating categories are considered "investment grade." The Funds' Statement of
Additional Information includes a detailed description of the credit-rating
scales used by major independent bond-rating agencies.
- --------------------------------------------------------------------------------

[FLAG] EACH FUND IS SUBJECT TO MANAGER RISK, WHICH IS THE CHANCE THAT THE
ADVISER WILL DO A POOR JOB OF SELECTING SECURITIES.

To help you distinguish between the Funds and their various risks, a
summary table is provided below.

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RISKS OF THE FUNDS
- --------------------------------------------------------------------------------
INCOME INTEREST CREDIT
ADMIRAL FUND RISK RATE RISK RISK
- --------------------------------------------------------------------------------
Treasury Money Market Very High Negligible Negligible
Short-Term Treasury High Low to Moderate Negligible
Intermediate-Term Treasury Moderate Moderate to High Negligible
Long-Term Treasury Low High to Very High Negligible
- --------------------------------------------------------------------------------

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.
Although several of the Admiral Funds are intended to serve investors'
short-term needs, the Funds discourage market-timing, and so 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.
- - 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.
<PAGE>

- --------------------------------------------------------------------------------
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 buying and selling of securities by the fund. 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.
- --------------------------------------------------------------------------------

TURNOVER RATE

Each Fund retains the right to sell securities regardless of how long the
securities have been held. Shorter-term bonds will generally mature or be sold,
and need to be replaced, more frequently than longer-term bonds. As a result,
shorter-term bond funds tend to have higher fund turnover rates than longer-term
bond funds. The turnover rate of each Fund (except the Admiral Treasury Money
Market Fund) for each of the last five years is shown in the FINANCIAL
HIGHLIGHTS section of this prospectus.

- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------

OTHER INVESTMENT POLICIES AND RISKS
Besides investing in U.S. government securities, each Fund may make certain
other kinds of investments to achieve its objective.

[FLAG] THE FUNDS (EXCEPT THE ADMIRAL TREASURY MONEY MARKET FUND) MAY INVEST, TO
A LIMITED EXTENT, IN DERIVATIVES.

The Admiral Short-Term, Intermediate-Term, and Long-Term Treasury Funds may
invest in a variety of derivatives, including bond (interest rate) futures and
options contracts and interest rate swaps. Losses (or gains) involving futures
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. The Funds will not use futures for speculative purposes or as
leveraged investments that magnify the gains or losses of an investment. A
Fund's obligation to purchase securities under futures contracts will not exceed
20% of its total assets.

The reasons for which a Fund may use futures and options are:
- - To keep cash on hand to meet shareholder redemptions or other needs while
simulating full investment in bonds.
- - To reduce the Fund's transaction costs or add value when these instruments
are favorably priced.
The Funds may also invest in a relatively conservative class of
collateralized mortgage obligations (CMOs), which offer a high degree of cash
flow predictability and less vulnera-
<PAGE>

bility to mortgage prepayment risk. To reduce credit risk, a Fund may purchase
these less-risky classes of CMOs only if they are issued by agencies of the U.S.
government.
In addition, the Admiral Short-Term, Intermediate-Term, and Long-Term
Treasury Funds may invest up to 15% of their net assets in illiquid securities,
which are securities that cannot be readily resold or converted into cash.

Except for the Money Market Fund, a Fund may temporarily depart from its
normal investment policies--for instance, by investing substantially in cash
reserves--in response to extraordinary market, economic, political, or other
conditions. In doing so, a Fund may succeed in avoiding losses but otherwise
fail to achieve its investment objective.

- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------

THE FUNDS AND VANGUARD

The Funds are members of 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.

- --------------------------------------------------------------------------------
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 Fixed Income Group. As of January
31, 2000,

<PAGE>

Vanguard served as adviser for about $364 billion in assets. 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 January 31, 2000, the
investment advisory fees represented an effective annual rate of approximately
0.01% of each Fund's average net assets.
The adviser is authorized to choose broker-dealers to handle the purchase
and sale of the Funds' securities, and to seek out the best available price and
most favorable execution for all transactions. Also, the Funds may direct the
adviser to use a particular broker for certain transactions in exchange for
commission rebates or research services provided to the Funds.
In the interest of obtaining better execution of a transaction, the adviser
may at times choose brokers who charge higher commissions. If more than one
broker can obtain the best available price and most favorable execution, then
the adviser is authorized to choose a broker who, in addition to executing the
transaction, will provide research services to the adviser or the Funds.

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
THE FUNDS' ADVISER
The individuals primarily responsible for overseeing the implementation of
Vanguard's strategy for the Admiral Funds' investments are:

IAN A. MACKINNON, Managing Director of Vanguard and head of Vanguard's Fixed
Income Group; has worked in investment management since 1974; primary
responsibility for Vanguard's internal fixed-income policy and strategy since
joining the company in 1981; B.A., Lafayette College; M.B.A., Pennsylvania State
University.

ROBERT F. AUWAERTER, Principal of Vanguard and Fund Manager of the Admiral
Intermediate-Term and Long-Term Treasury Funds since their inception; has worked
in investment management since 1978; has managed portfolio investments since
1979; with Vanguard since 1981; B.S., University of Pennsylvania; M.B.A.,
Northwestern University.

DAVID R. GLOCKE, Principal of Vanguard and Fund Manager of the Admiral Money
Market and Short-Term Treasury Funds; has worked in investment management since
1991; has managed portfolio investments and the Money Market Fund since joining
Vanguard in 1997; has managed the Short-Term Treasury Fund since May 2000; B.S.,
University of Wisconsin.
- --------------------------------------------------------------------------------

DIVIDENDS, CAPITAL GAINS, AND TAXES

FUND DISTRIBUTIONS
Each Fund distributes to shareholders virtually all of its net income (interest
less expenses), as well as any capital gains realized from the sale of its
holdings. The Funds' income dividends accrue daily and are distributed on the
first business day of every month; capital gains distributions generally occur
in December. In addition, the Funds may occasionally be required to make
supplemental 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.

<PAGE>

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 for federal income tax purposes 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. Depending on your state's rules, however, any
dividends attributable to interest earned on direct obligations of the U.S.
Treasury may be exempt from state and local taxes. Vanguard will notify you
each year how much of your distribution may qualify for this exemption.

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.

<PAGE>

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
DISTRIBUTIONS
As a shareholder, you are entitled to your share of the fund's income from
interest, 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 interest the fund earns 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.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
PLAIN TALK ABOUT
"BUYING A CAPITAL GAIN"
Unless you are investing through a tax-deferred retirement account (such as an
IRA), it is not to your advantage to buy 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 capital gain." For example: on December 15, you invest
$5,000, buying 250 shares for $20 each. If the fund pays a capital gains
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 capital gains
distributions), but you owe tax on the $250 capital gain you received, even if
you had reinvested it in more shares. To avoid "buying a capital gain," 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 is computed by adding up the total value of
the Fund's investments 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

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.
A NOTE ON PRICING: A Fund's investments (with the exception of the Admiral
Treasury Money Market Fund, which uses the amortized cost method of valuation)
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.

<PAGE>

most common are: ADMST, ADMIT, and ADMLT. Newspapers typically list money market
fund yields weekly, separately from other mutual funds. The Admiral Treasury
Money Market Fund's abbreviation is VANGADMUST.

FINANCIAL HIGHLIGHTS

The following financial highlights tables are intended to help you understand
each Fund's financial performance for the past five years, and certain
information reflects financial results for a single Fund share in each case. The
total returns in each table represent the rate that an investor would have
earned or lost each year on an investment in the Fund (assuming reinvestment of
all dividends and distributions). This information has been derived from the
financial statements audited by PricewaterhouseCoopers LLP, independent
accountants, whose report--along with each Fund's financial statements-- is
included in the Funds' most recent annual report to shareholders. You may have
the annual report sent to you without charge by contacting Vanguard.

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

This explanation uses the Admiral Treasury Money Market Fund as an example. The
Fund began fiscal 2000 with a net asset value (price) of $1 per share. During
the year, the Fund earned $0.047 per share from investment income (interest and
dividends).

Shareholders received $0.047 per share in the form of dividend distributions.
The earnings ($0.047 per share) minus the distributions ($0.047 per share)
resulted in a share price of $1 at the end of the year. Assuming that the
shareholder had reinvested the distributions in the purchase of more shares, the
total return from the Fund was 4.79% for the year.

As of January 31, 2000, the Fund had $5.6 billion in net assets. For the year,
its expense ratio was 0.15% ($1.50 per $1,000 of net assets); and its net
investment income amounted to 4.69% of its average net assets.
- --------------------------------------------------------------------------------

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
VANGUARD ADMIRAL TREASURY
MONEY MARKET FUND
YEAR ENDED JANUARY 31,
------------------------------------------------------
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .047 .050 .052 .051 .055
Net Realized and Unrealized Gain
(Loss) on Investments -- -- -- -- --
------------------------------------------------------
Total from Investment Operations .047 .050 .052 .051 .055
------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment
Income (.047) (.050) (.052) (.051) (.055)
Distributions from Realized Capital
Gains -- -- -- -- --
------------------------------------------------------
Total Distributions (.047) (.050) (.052) (.051) (.055)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
===========================================================================================
TOTAL RETURN 4.79% 5.12% 5.31% 5.24% 5.66%
===========================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (Millions) $5,648 $5,057 $3,880 $3,247 $1,778
Ratio of Total Expenses to Average
Net Assets 0.15% 0.15% 0.15% 0.15% 0.15%
Ratio of Net Investment Income to
Average Net Assets 4.69% 4.97% 5.20% 5.12% 5.50%
===========================================================================================
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
VANGUARD ADMIRAL SHORT-TERM
TREASURY FUND
YEAR ENDED JANUARY 31,
------------------------------------------------------
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $10.22 $10.15 $10.04 $10.23 $ 9.77
- -------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .532 .548 .592 .587 .626
Net Realized and Unrealized Gain
(Loss) on Investments (.393) .114 .110 (.190) .460
------------------------------------------------------
Total from Investment Operations .139 .662 .702 .397 1.086
------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment
Income (.532) (.548) (.592) (.587) (.626)
Distributions from Realized Capital
Gains (.017) (.044) -- -- --
------------------------------------------------------
Total Distributions (.549) (.592) (.592) (.587) (.626)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 9.81 $10.22 $10.15 $10.04 $10.23
===========================================================================================
TOTAL RETURN 1.41% 6.70% 7.21% 4.05% 11.41%
===========================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (Millions) $1,100 $1,257 $781 $553 $426
Ratio of Total Expenses to Average
Net Assets 0.15% 0.15% 0.15% 0.15% 0.15%
Ratio of Net Investment Income to
Average Net Assets 5.32% 5.35% 5.89% 5.85% 6.22%
Turnover Rate 120% 130% 81% 80% 95%
===========================================================================================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
VANGUARD ADMIRAL INTERMEDIATE-TERM
TREASURY FUND
YEAR ENDED JANUARY 31,
------------------------------------------------------
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $10.94 $10.60 $10.17 $10.70 $ 9.58
- -------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .610 .624 .645 .648 .665
Net Realized and Unrealized Gain
(Loss) on Investments (1.078) .348 .430 (.530) 1.120
------------------------------------------------------
Total from Investment Operations (.468) .972 1.075 .118 1.785
------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment
Income (.610) (.624) (.645) (.648) (.665)
Distributions from Realized Capital
Gains (.042) (.008) -- -- --
------------------------------------------------------
Total Distributions (.652) (.632) (.645) (.648) (.665)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 9.82 $10.94 $10.60 $10.17 $10.70
===========================================================================================
TOTAL RETURN -4.33% 9.45% 10.98% 1.30% 19.16%
===========================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (Millions) $1,285 $1,360 $905 $659 $585
Ratio of Total Expenses to Average
Net Assets 0.15% 0.15% 0.15% 0.15% 0.15%
Ratio of Net Investment Income to
Average Net Assets 5.96% 5.80% 6.28% 6.37% 6.49%
Turnover Rate 72% 63% 34% 52% 64%
===========================================================================================
</TABLE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
VANGUARD ADMIRAL LONG-TERM
TREASURY FUND
YEAR ENDED JANUARY 31,
------------------------------------------------------
2000 1999 1998 1997 1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $11.72 $11.12 $10.13 $11.06 $ 9.40
- -------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS
Net Investment Income .636 .654 .669 .681 .691
Net Realized and Unrealized Gain
(Loss) on Investments (1.597) .653 .990 (.900) 1.749
------------------------------------------------------
Total from Investment Operations (.961) 1.307 1.659 (.219) 2.440
------------------------------------------------------
DISTRIBUTIONS
Dividends from Net Investment
Income (.636) (.654) (.669) (.681) (.691)
Distributions from Realized Capital
Gains (.103) (.053) -- (.030) (.089)
------------------------------------------------------
Total Distributions (.739) (.707) (.669) (.711) (.780)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $10.02 $11.72 $11.12 $10.13 $11.06
===========================================================================================
TOTAL RETURN -8.30% 12.11% 17.05% -1.75% 26.74%
===========================================================================================
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (Millions) $451 $499 $327 $192 $186
Ratio of Total Expenses to Average
Net Assets 0.15% 0.15% 0.15% 0.15% 0.15%
Ratio of Net Investment Income to
Average Net Assets 6.05% 5.72% 6.41% 6.72% 6.66%
Turnover Rate 55% 32% 13% 42% 125%
===========================================================================================
</TABLE>

"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.
<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 [BOOKLET]. 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.
- --------------------------------------------------------------------------------
CHECKWRITING [CHECK]
Method for drawing money from your account by writing a check for $250 or more.
- --------------------------------------------------------------------------------
VANGUARD(R) DIRECT DEPOSIT SERVICE [BOOKLET]
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 [BOOKLET]
Automatic method for moving a fixed amount of money from one Vanguard fund
account to another.
- --------------------------------------------------------------------------------
VANGUARD FUND EXPRESS(R) [BOOKLET]
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 or whenever you wish.
- --------------------------------------------------------------------------------
VANGUARD DIVIDEND EXPRESS(R) [BOOKLET]
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) [BOOKLET]

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.
- --------------------------------------------------------------------------------
ONLINE TRANSACTIONS www.vanguard.com [COMPUTER]
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 [BOOKLET]
Invest assets held in an existing personal trust.
- --------------------------------------------------------------------------------
FOR INDIVIDUAL RETIREMENT ACCOUNTS [BOOKLET]
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 [BOOKLET]
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

If Vanguard receives your check (or electronic transfer) before the close of
trading on the New York Stock Exchange (generally 4 p.m. Eastern time) on a
regular business day, your investment in any Vanguard Admiral Fund (except the
Treasury Money Market Fund) will be converted to federal funds and credited to
your account at that day's closing price, the next-determined net asset value.
You will begin earning dividends on your investment the following business day.
(Federal funds are Federal Reserve deposits that banks and other financial
institutions "borrow" from one another to meet short-term cash needs; fund
advisers must use federal funds to pay for the securities they buy.)
Your investment in the Treasury Money Market Fund will also be converted to
federal funds and credited to your account; however the conversion to federal
funds for the Treasury Money Market Fund investments takes one business day.
Because of this conversion period, your Treasury Money Market Fund account will
be credited on the business day following the day we receive your check. You
will begin earning dividends on your investment on the following business day.
For example, if we receive your check before the close of trading on the New
York Stock Exchange (generally 4 p.m. Eastern time) on a Thursday, your account
will be credited the next business day (Friday) and you will begin earning
dividends on Monday.

Each of the Funds is offered on a no-load basis, meaning that you do not
pay sales commissions or 12b-1 distribution fees.
- --------------------------------------------------------------------------------
MINIMUM INVESTMENT TO . . .
open a new account
$50,000.

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 account whose balance
falls below the minimum initial investment of $50,000.
- --------------------------------------------------------------------------------
BY MAIL TO . . . [ENVELOPE]
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)
Vanguard Admiral Treasury Money Market Fund-11
Vanguard Admiral Short-Term Treasury Fund-12
Vanguard Admiral Intermediate-Term Treasury Fund-19
Vanguard Admiral Long-Term Treasury Fund-20
All purchases must be made in U.S. dollars, and checks must be drawn on U.S.
banks.
<PAGE>

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
- --------------------------------------------------------------------------------
IMPORTANT NOTE: To prevent check fraud, Vanguard will not accept checks made
payable to third parties.
- --------------------------------------------------------------------------------
BY TELEPHONE TO . . . [TELEPHONE]
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]
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
<PAGE>

In favor of:
Vanguard Admiral Treasury Money Market Fund-11
Vanguard Admiral Short-Term Treasury Fund-12
Vanguard Admiral Intermediate-Term Treasury Fund-19
Vanguard Admiral Long-Term Treasury Fund-20
[Account number, or temporary number for a new account]

[Registered account owner(s)]

[Registered address]

FOR THE TREASURY MONEY MARKET FUND ONLY: If you buy Fund shares through a
federal funds wire, your investment begins earning dividends the next business
day. You can begin earning dividends immediately if you notify Vanguard by 10:45
a.m. Eastern time that you intend to make a wire purchase that day.

- --------------------------------------------------------------------------------
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 the 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 32.

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 signatures 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 discussed in the "Redeeming Shares"
section of this prospectus.
- --------------------------------------------------------------------------------
NOTE: Once a redemption is initiated and a confirmation number given, the
transaction CANNOT be canceled.
- --------------------------------------------------------------------------------

<PAGE>

HOW TO REQUEST A REDEMPTION
You can request a redemption from your Fund account in any one of three ways:
online, by telephone, or by mail. You can also sell shares by check.

The Vanguard funds whose shares you cannot exchange online or by telephone
are: VANGUARD U.S. STOCK INDEX FUNDS, VANGUARD BALANCED INDEX FUND, VANGUARD
INTERNATIONAL STOCK INDEX FUNDS, VANGUARD REIT INDEX FUND, and VANGUARD GROWTH
AND INCOME FUND. These funds do, however, permit online and telephone exchanges
within IRAs and other retirement accounts. If you sell shares of these funds
online, a redemption check will be sent to your address of record.
- --------------------------------------------------------------------------------
ONLINE REQUESTS www.vanguard.com [COMPUTER]
You can use your personal computer to sell or exchange shares of 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 will
enable you to sell or exchange shares online (as well as perform other
transactions).

- --------------------------------------------------------------------------------
TELEPHONE REQUESTS [TELEPHONE]
All Account Types Except Retirement:
Call Vanguard Tele-Account 24 hours a day--or Client Services during business
hours--to sell or exchange shares. You can exchange shares from this Fund to
open an account in another Vanguard fund or to add to an existing Vanguard fund
account with an identical registration.

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).

Please note that Vanguard will not be responsible for any account losses
due to telephone fraud, so long as we have taken reasonable steps to verify the
caller's identity. If you wish to remove the telephone redemption feature from
your account, please notify us in writing.
- --------------------------------------------------------------------------------
A NOTE ON UNUSUAL CIRCUMSTANCES

Vanguard reserves the right to revise or terminate the telephone redemption
privilege at any time, without notice. In addition, Vanguard can stop selling
shares or postpone payment at times when the New York Stock Exchange is closed
or under any emergency circumstances as determined by the U.S. Securities and
Exchange Commission. If you experience difficulty making a telephone redemption
during periods of drastic economic or

<PAGE>

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]
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
- --------------------------------------------------------------------------------
CHECK REQUESTS [CHECK]
You can sell shares by writing a check for $250 or more.
- --------------------------------------------------------------------------------
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 the Fund's operation or performance.
If you redeem more than $250,000 worth of Fund shares within any 90-day
period, each 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 four ways: check, wire,
exchange to another Vanguard fund, or Fund Express Redemptions.

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

- --------------------------------------------------------------------------------
CHECK REDEMPTIONS
Normally, Vanguard will mail your check within two business days of a
redemption.
- --------------------------------------------------------------------------------
WIRE REDEMPTIONS [WIRE]
The wire redemption option is not automatic; you must establish it by completing
a special form or the appropriate section of your account application. Wire
redemptions can be initiated by mail or by telephone during Vanguard's business
hours, but not online.

For Money Market Funds:

For telephone requests made by 10:30 a.m. Eastern time, the wire will arrive at
your bank by the close of business that same day. Requests made by 4 p.m.
Eastern time will arrive at your bank by the close of business on the following
business day.

For Other Daily Dividend Funds:
For telephone requests made by 4 p.m. Eastern time, the wire will arrive at your
bank by the close of business on the following business day.
NOTE: Wire redemptions of less than $5,000 are subject to a $5 processing fee.

- --------------------------------------------------------------------------------
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 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 THE FUND
during any 12-month period.
- - Your round trips through the Fund must be at least 30 days apart.
- - The Fund may refuse a share purchase at any time, for any reason.
<PAGE>

- - Vanguard may revoke an investor's telephone exchange privilege at any time,
for any reason.

A "round trip" is a redemption from the 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 the 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
- --------------------------------------------------------------------------------

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.
<PAGE>

In addition, you will receive financial reports about the 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 [BOOKLET]
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.
- --------------------------------------------------------------------------------
FUND FINANCIAL REPORTS
Mailed in March and September 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 [BOOKLET]

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.

- --------------------------------------------------------------------------------
CHECKWRITING STATEMENT
Sent monthly to shareholders using Vanguard's checkwriting option. Our statement
provides images of the front and back of each checkwriting draft paid in the
previous month. This consolidated statement is sent instead of the original
canceled drafts, which will not be returned.
- --------------------------------------------------------------------------------
<PAGE>

(THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE>

GLOSSARY OF INVESTMENT TERMS

BOND
A debt security (IOU) issued by a corporation, government, or government agency
in exchange for the money you lend it. In most instances, the issuer agrees to
pay back the loan by a specific date and make regular interest payments until
that date.

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.

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

DURATION
A measure of the sensitivity of bond--and bond fund--prices to interest rate
movements. For example, if a bond has a duration of two years, its price would
fall by about 2% when interest rates rose one percentage point. On the other
hand, the bond's price would rise by about 2% when interest rates fell by one
percentage point.

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.

FACE VALUE
The amount to be paid at maturity of a bond; also known as the par value or
principal.

FIXED-INCOME SECURITIES
Investments, such as bonds, that have a fixed payment schedule. While the level
of income offered by these securities is predetermined, their prices may
fluctuate.

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

MATURITY
The date when a bond issuer agrees to repay the bond's principal, or face value,
to the bond's buyer.

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.

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>

[SHIP]
[THE VANGUARD GROUP(R)]
Post Office Box 2600
Valley Forge, PA 19482-2600

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

ANNUAL/SEMIANNUAL REPORTS
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.

The current annual and semiannual
reports and the 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: 811-7043

P012N-05/26/2000

<PAGE>

VANGUARD
ADMIRAL FUNDS(R)

Participant Prospectus

May 26, 2000

- -----------------------
VANGUARD ADMIRAL
TREASURY MONEY
MARKET FUND

VANGUARD ADMIRAL
SHORT-TERM
TREASURY FUND

VANGUARD ADMIRAL
INTERMEDIATE-TERM
TREASURY FUND

VANGUARD ADMIRAL
LONG-TERM
TREASURY FUND

This prospectus contains
financial data for the
Funds through the
fiscal year ended
January 31, 2000.

[Members of
The Vanguard Group(R)]
<PAGE>

VANGUARD ADMIRAL FUNDS
Participant Prospectus

May 26, 2000

A Group of Fixed-Income Treasury Mutual Funds

- --------------------------------------------------------------------------------
CONTENTS

1 AN INTRODUCTION TO VANGUARD 18 THE FUNDS AND VANGUARD
ADMIRAL FUNDS
19 INVESTMENT ADVISER
2 FUND PROFILES
19 DIVIDENDS, CAPITAL GAINS, AND TAXES
2 Vanguard Admiral Treasury Money
Market Fund 20 SHARE PRICE

5 Vanguard Admiral Short-Term 21 FINANCIAL HIGHLIGHTS
Treasury Fund
24 INVESTING WITH VANGUARD
8 Vanguard Admiral Intermediate-
Term Treasury Fund 25 ACCESSING FUND INFORMATION BY
COMPUTER
11 Vanguard Admiral Long-Term
Treasury Fund GLOSSARY (inside back cover)

14 MORE ON THE FUNDS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
IMPORTANT NOTE
This prospectus is intended for participants in employer-sponsored retirement or
savings plans. Another version--for investors who would like to open a personal
investment account--can be obtained by calling Vanguard at 1-800-662-7447.
- --------------------------------------------------------------------------------

AN INTRODUCTION TO VANGUARD ADMIRAL FUNDS

- --------------------------------------------------------------------------------
DOLLAR-WEIGHTED
FUND AVERAGE MATURITY

On the following pages, you'll find profiles that summarize key features of
each Fund. Following the profiles, there is important additional information
common to all of the Funds.
<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) TREASURY MONEY MARKET FUND

The following profile summarizes key features of Vanguard Admiral Treasury Money
Market Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income and preserve investors' principal,
while maintaining liquidity and a stable share price of $1.

INVESTMENT STRATEGIES

PRIMARY RISKS

- - Manager risk, which is the chance that poor security selection will cause
the Fund to underperform other funds with similar investment objectives.

PERFORMANCE/RISK INFORMATION

<PAGE>

If you would like to know the current seven-day yield for the Fund, call
Vanguard's Investor Information Department at 1-800-662-7447 (SHIP).

FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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

DIVIDENDS NEWSPAPER ABBREVIATION
Dividends are declared daily and distributed on VangAdmUST
the first business day of each month
VANGUARD FUND NUMBER
INVESTMENT ADVISER 011
The Vanguard Group, Valley Forge, Pa.,
since inception CUSIP NUMBER
921932109
INCEPTION DATE
December 14, 1992 TICKER SYMBOL
VUSXX
NET ASSETS AS OF JANUARY 31, 2000
$5.7 billion
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) SHORT-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral Short-Term
Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income and preserve investors' principal.

INVESTMENT STRATEGIES

PRIMARY RISKS

The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

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
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

- --------------------------------------------------------------------------------
ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
1993 6.49%
1994 -0.34%
1995 12.27%
1996 4.46%
1997 6.49%
1998 7.51%
1999 1.86%
- --------------------------------------------------------------------------------
The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 1.35%.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
SINCE
1 YEAR 5 YEARS INCEPTION*
- --------------------------------------------------------------------------------
Vanguard Admiral Short-Term
Treasury Fund 1.86% 6.46% 5.54%
Lehman Brothers 1-5 Year U.S. Treasury
Bond Index 1.89 6.74 5.73
- --------------------------------------------------------------------------------
*December 14, 1992.
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Dividends are declared daily and distributed on AdmST
the first business day of each month; capital
gains, if any, are distributed annually in VANGUARD FUND NUMBER
December 012

INVESTMENT ADVISER CUSIP NUMBER
The Vanguard Group, Valley Forge, Pa., 921932208
since inception
TICKER SYMBOL
INCEPTION DATE VASTX
December 14, 1992

NET ASSETS AS OF JANUARY 31, 2000
$1.1 billion
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) INTERMEDIATE-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral
Intermediate-Term Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income.

INVESTMENT STRATEGIES

PRIMARY RISKS
The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

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
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

- --------------------------------------------------------------------------------
ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
1993 11.32%
1994 -4.21%
1995 20.55%
1996 2.05%
1997 9.02%
1998 10.85%
1999 -3.43%
- --------------------------------------------------------------------------------
The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 2.63%.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
SINCE
1 YEAR 5 YEARS INCEPTION*
- --------------------------------------------------------------------------------
Vanguard Admiral Intermediate-Term
Treasury Fund -3.43% 7.50% 6.38%
Lehman Brothers 5-10 Year U.S. Treasury
Bond Index -3.99 7.74 6.53
- --------------------------------------------------------------------------------
*December 14, 1992.
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Dividends are declared daily and distributed on AdmIT
the first business day of each month; capital
gains, if any, are distributed annually in VANGUARD FUND NUMBER
December 019

INVESTMENT ADVISER CUSIP NUMBER
The Vanguard Group, Valley Forge, Pa., 921932307
since inception
TICKER SYMBOL
INCEPTION DATE VAITX
December 14, 1992

NET ASSETS AS OF JANUARY 31, 2000
$1.3 billion
- --------------------------------------------------------------------------------

<PAGE>

FUND PROFILE--VANGUARD(R) ADMIRAL(TM) LONG-TERM TREASURY FUND

The following profile summarizes key features of Vanguard Admiral Long-Term
Treasury Fund.

INVESTMENT OBJECTIVE
The Fund seeks to provide current income.

INVESTMENT STRATEGIES

PRIMARY RISKS
The Fund is subject to several risks, any of which could cause investors to lose
money. These include:

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
bond market index. Keep in mind that the Fund's past performance does not
indicate how it will perform in the future.

- --------------------------------------------------------------------------------
ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
1993 16.67%
1994 -6.85%
1995 30.05%
1996 -1.07%
1997 13.98%
1998 13.21%
1999 -8.54%
- --------------------------------------------------------------------------------
The Fund's year-to-date return as of the most recent calendar quarter ended
March 31, 2000, was 7.48%.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR YEARS ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
SINCE
1 YEAR 5 YEARS INCEPTION*
- --------------------------------------------------------------------------------
Vanguard Admiral Long-Term
Treasury Fund -8.54% 8.71% 7.51%
Lehman Brothers Long U.S. Treasury
Bond Index -8.74 9.08 7.72
- --------------------------------------------------------------------------------
*December 14, 1992.
- --------------------------------------------------------------------------------

ANNUAL FUND OPERATING EXPENSES (expenses deducted from the Fund's
assets)
Management Expenses: 0.12%
12b-1 Distribution Fee: None
Other Expenses: 0.03%
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.15%

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.
<PAGE>

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

DIVIDENDS AND CAPITAL GAINS NEWSPAPER ABBREVIATION
Dividends are declared daily and distributed on AdmLT
the first business day of each month; capital
gains, if any, are distributed annually in VANGUARD FUND NUMBER
December 020

INVESTMENT ADVISER CUSIP NUMBER
The Vanguard Group, Valley Forge, Pa., 921932406
since inception
TICKER SYMBOL
INCEPTION DATE VALGX
December 14, 1992

NET ASSETS AS OF JANUARY 31, 2000
$451 million
- --------------------------------------------------------------------------------

<PAGE>

MORE ON THE FUNDS

Changes in interest rates can affect bond prices as well as bond income.

The figures in the table above are for illustration only; you should not
regard them as an indication of future returns from U.S. Treasury securities as
a whole, or any Fund in particular.

The Funds are generally managed without regard to tax ramifications.
<PAGE>

[FLAG] EACH FUND IS SUBJECT TO MANAGER RISK, WHICH IS THE CHANCE THAT THE
ADVISER WILL DO A POOR JOB OF SELECTING SECURITIES.

To help you distinguish between the Funds and their various risks, a
summary table is provided below.

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.
Although several of the Admiral Funds are intended to serve investors'
short-term needs, the Funds discourage market-timing, and so 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.
- - 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.
<PAGE>

TURNOVER RATE

OTHER INVESTMENT POLICIES AND RISKS
Besides investing in U.S. government securities, each Fund may make certain
other kinds of investments to achieve its objective.

[FLAG] THE FUNDS (EXCEPT THE ADMIRAL TREASURY MONEY MARKET FUND) MAY INVEST, TO
A LIMITED EXTENT, IN DERIVATIVES.

THE FUNDS AND VANGUARD

INVESTMENT ADVISER

The Vanguard Group (Vanguard), P.O. Box 2600, Valley Forge, PA 19482, founded in
1975, serves as the Funds' adviser through its Fixed Income Group. As of January
31, 2000,

<PAGE>

DIVIDENDS, CAPITAL GAINS, AND TAXES

Each Fund distributes to shareholders virtually all of its net income (interest
less expenses), as well as any capital gains realized from the sale of its
holdings. The Funds' income dividends accrue daily and are distributed on the
first business day of every month; capital gains distributions generally occur
in December. In addition, the Funds may occasionally be required to make
supplemental 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,

<PAGE>

your plan's Summary Plan Description, or your tax adviser about the tax
consequences of plan withdrawals.

SHARE PRICE

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

The Admiral Short-Term, Intermediate-Term, and Long-Term Treasury Funds'
share prices can be found daily in the mutual fund listings of most major
newspapers under the heading "Vanguard Funds." Different newspapers use
different abbreviations for each Fund, but the most common are: ADMST, ADMIT,
and ADMLT. Newspapers typically list money market fund yields weekly, separately
from other mutual funds. The Admiral Treasury Money Market Fund's abbreviation
is VANGADMUST.

<PAGE>

FINANCIAL HIGHLIGHTS

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

<PAGE>

"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.
<PAGE>

INVESTING WITH VANGUARD

The Fund 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 a Fund 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 a 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 trading on the New York Stock Exchange, generally 4 p.m. Eastern
time, you will receive that day's net asset value. You will begin earning
dividends on your investment the following business day.

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 a 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's 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.
<PAGE>

ACCESSING FUND INFORMATION BY COMPUTER
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE>

(THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE>

GLOSSARY OF INVESTMENT TERMS

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.

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.

FACE VALUE
The amount to be paid at maturity of a bond; also known as the par value or
principal.

FIXED-INCOME SECURITIES
Investments, such as bonds, that have a fixed payment schedule. While the level
of income offered by these securities is predetermined, their prices may
fluctuate.

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

MATURITY
The date when a bond issuer agrees to repay the bond's principal, or face value,
to the bond's buyer.

PRINCIPAL
The amount of money you put into an investment.

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>

[SHIP]
[THE VANGUARD GROUP(R)]
Institutional Division
Post Office Box 2900
Valley Forge, PA 19482-2900

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

ANNUAL/SEMIANNUAL REPORTS
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.

The current annual and semiannual
reports and the 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

PARTICIPANT ACCESS CENTER

P.O. BOX 2900
VALLEY FORGE, PA 19482-2900

TELEPHONE:
1-800-523-1188

TEXT TELEPHONE:
1-800-523-8004

WORLD WIDE WEB:
WWW.VANGUARD.COM

INFORMATION PROVIDED BY THE
SECURITIES AND EXCHANGE
COMMISSION (SEC)

Funds' Investment Company Act
file number: 811-7043

I012N-05/26/2000

<PAGE>

PART B

VANGUARD ADMIRAL FUNDS(R)
(THE TRUST)

STATEMENT OF ADDITIONAL INFORMATION

MAY 26, 2000

This Statement is not a prospectus but should be read in conjunction with the
Trust's current Prospectus (dated May 26, 2000). To obtain, without charge, the
Prospectus or the most recent Annual Report to Shareholders, which contains the
Funds' Financial Statements as hereby incorporated by reference, please call:

INVESTOR INFORMATION DEPARTMENT:
1-800-662-7447

TABLE OF CONTENTS

PAGE

DESCRIPTION OF THE TRUST.....................................................B-1
INVESTMENT POLICIES..........................................................B-3
PURCHASE OF SHARES...........................................................B-8
REDEMPTION OF SHARES.........................................................B-8
SHARE PRICE..................................................................B-8
FUNDAMENTAL INVESTMENT LIMITATIONS...........................................B-9
MANAGEMENT OF THE FUNDS ....................................................B-10
PORTFOLIO TRANSACTIONS......................................................B-14
CALCULATION OF YIELD (ADMIRAL TREASURY MONEY MARKET FUND)...................B-15
YIELD AND TOTAL RETURN......................................................B-16
COMPARATIVE INDEXES ........................................................B-18
TAX ADVANTAGE OF U.S. TREASURY INCOME.......................................B-20
OTHER DEFINITIONS...........................................................B-20
FINANCIAL STATEMENTS........................................................B-20
APPENDIX--DESCRIPTION OF SECURITIES AND RATINGS.............................B-20

DESCRIPTION OF THE TRUST

ORGANIZATION

The Trust was organized as a Maryland Corporation in 1992, and was reorganized
as a Delaware business trust in May, 1998. The Trust is registered with the
United States Securities and Exchange Commission (the Commission) under the
Investment Company Act of 1940 (the 1940 Act) as an open-end diversified
management investment company. It currently offers the following funds:

Vanguard(R) Admiral(TM) Treasury Money Market Fund
Vanguard(R) Admiral(TM) Short-Term Treasury Fund
Vanguard(R) Admiral(TM) Intermediate-Term Treasury Fund
Vanguard(R) Admiral(TM) Long-Term Treasury Fund

(INDIVIDUALLY, A FUND; COLLECTIVELY, THE FUNDS)

The Trust has the ability to offer additional funds or classes of shares.
There is no limit on the number of full and fractional shares that the Trust may
issue.

SERVICE PROVIDERS

CUSTODIAN. The Bank of New York, One Wall Street, New York, New York 10286
and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, serve as the Funds'

B-1
<PAGE>

custodians. The custodians are responsible for maintaining the Funds' assets and
keeping all necessary accounts and records of each Fund's assets.

INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, 30 South 17th Street,
Philadelphia, Pennsylvania 19103, serves as the Funds' independent accountants.
The accountants audit the Funds' financial statements and provide other related
services.

TRANSFER AND DIVIDEND-PAYING AGENT. The Funds' transfer and dividend-paying
agent is The Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, Pennsylvania
19355.

CHARACTERISTICS OF THE FUNDS' SHARES

RESTRICTIONS ON HOLDING OR DISPOSING OF SHARES. There are no restrictions
on the right of shareholders to retain or dispose of the Funds' shares, other
than the possible future termination of the Funds. Each Fund may be terminated
by reorganization into another mutual fund or by liquidation and distribution of
its assets. Unless terminated by reorganization or liquidation, each Fund will
continue indefinitely.

SHAREHOLDER LIABILITY. The Funds are organized under Delaware law, which
provides that shareholders of a business trust are entitled to the same
limitations of personal liability as share-holders of a corporation organized
under Delaware law. Effectively, this means that a shareholder of a Fund will
not be personally liable for payment of the Fund's debts except by reason of his
or her own conduct or acts. In addition, a shareholder could incur a financial
loss on account of a Fund obligation only if the Fund itself had no remaining
assets with which to meet such obligation. We believe that the possibility of
such a situation arising is extremely remote.

DIVIDEND RIGHTS. The shareholders of a Fund are entitled to receive any
dividends or other distributions declared by the Fund. No shares have priority
or preference over any other shares of the same Fund with respect to
distributions. Distributions will be made from the assets of a Fund, and will be
paid ratably to all shareholders of the Fund (or class) according to the number
of shares of such Fund (or class) held by shareholders on the record date. The
amount of income dividends per share may vary between separate share classes of
the same Fund based upon differences in the way that expenses are allocated
between share classes pursuant to a multiple class plan.

VOTING RIGHTS. Shareholders are entitled to vote on a matter if: (i) a
shareholder vote is required under the 1940 Act; (ii) the matter concerns an
amendment to the Declaration of Trust that would adversely affect to a material
degree the rights and preferences of the shares of any Fund; or (iii) the
Trustees determine that it is necessary or desirable to obtain a shareholder
vote. The 1940 Act requires a shareholder vote under various circumstances,
including to elect or remove Trustees upon the written request of shareholders
representing 10% or more of the Fund's net assets, and to change any fundamental
policy of a Fund. Shareholders of each Fund receive one vote for each dollar of
net asset value owned on the record date, and a fractional vote for each
fractional dollar of net asset value owned on the record date. However, only the
shares of the Fund affected by a particular matter are entitled to vote on that
matter. Voting rights are non-cumulative and cannot be modified without a
majority vote.

LIQUIDATION RIGHTS. In the event a Fund is liquidated, shareholders of that
Fund will be entitled to receive a pro rata share of the Fund's net assets.

PREEMPTIVE RIGHTS. There are no preemptive rights associated with each
Fund's shares.

CONVERSION RIGHTS. There are no conversion rights associated with each
Fund's shares.

REDEMPTION PROVISIONS. The Funds' redemption provisions are described in
their current prospectus and elsewhere in this Statement of Additional
Information.

SINKING FUND PROVISIONS. The Funds have no sinking fund provisions.

CALLS OR ASSESSMENT. Each Fund's shares, when issued, are fully paid and
non-assessable.

B-2
<PAGE>

TAX STATUS OF THE FUNDS

Each Fund intends to continue to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code. This special tax status means
that a Fund will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to preserve its tax status, each Fund must
comply with certain requirements. If a Fund fails to meet these requirements in
any taxable year, it will be subject to tax on its taxable income at corporate
rates, and all distributions from earnings and profits, including any
distributions of net tax-exempt income and net long-term capital gains, will be
taxable to shareholders as ordinary income. In addition, the Fund could be
required to recognize unrealized gains, pay substantial taxes and interest, and
make substantial distributions before regaining its tax status as a regulated
investment company.

INVESTMENT POLICIES

The following policies supplement the investment policies set forth in the
Funds' Prospectus.

REPURCHASE AGREEMENTS. The Admiral Short-Term, Intermediate-Term, and
Long-Term Treasury Funds may invest in repurchase agreements with commercial
banks, brokers, or dealers either for defensive purposes due to market
conditions or to generate income from its excess cash balances. A repurchase
agreement is an agreement under which a Fund acquires a fixed-income security
(generally a security issued by the U.S. Government or an agency thereof, a
banker's acceptance, or a certificate of deposit) from a commercial bank,
broker, or dealer, subject to resale to the seller at an agreed upon price and
date (normally, the next business day). A repurchase agreement may be considered
a loan collateralized by securities. The resale price reflects an agreed upon
interest rate effective for the period the instrument is held by the Fund and is
unrelated to the interest rate on the underlying instrument. In these
transactions, the securities acquired by a Fund (including accrued interest
earned thereon) must have a total value in excess of the value of the repurchase
agreement and are held by the Fund's custodian bank until repurchased. In
addition, the Funds' Board of Trustees will monitor each Fund's repurchase
agreement transactions generally and will establish guidelines and standards for
review by the investment adviser of the creditworthiness of any bank, broker, or
dealer party to a repurchase agreement with a Fund.

The use of repurchase agreements involves certain risks. For example, if
the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, a
Fund may incur a loss upon disposition of the security. If the other party to
the agreement becomes insolvent and subject to liquidation or reorganization
under bankruptcy or other laws, a court may determine that the underlying
security is collateral for a loan by the Fund not within the control of the Fund
and therefore the realization by the Fund on such collateral may be
automatically stayed. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement. While the adviser
acknowledges these risks, it is expected that they will be controlled through
careful monitoring procedures.

LENDING OF SECURITIES. Admiral Short-Term, Intermediate-Term, and Long-Term
Treasury Funds may lend their investment securities to qualified institutional
investors (typically brokers, dealers, banks, or other financial institutions)
who need to borrow securities in order to complete certain transactions, such as
covering short sales, avoiding failures to deliver securities, or completing
arbitrage operations. By lending its investment securities, a Fund attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
during the term of the loan would be for the account of the Fund. The terms and
the structure and the aggregate amount of such loans must be consistent with the
1940 Act and the rules or interpretations of the Commission thereunder. These
provisions limit the amount of securities a Fund may lend to 33 1/3% of the
Fund's total assets, and require that (a) the borrower pledge and maintain with
the Fund collateral consisting of cash, an irrevocable letter of credit or
securities issued or guaranteed by the United States Government

B-3
<PAGE>

having at all times not less than 100% of the value of the securities loaned,
(b) the borrower add to such collateral whenever the price of the securities
loaned rises (i.e., the borrower "marks to the market" on a daily basis), (c)
the loan be made subject to termination by the Fund at any time, and (d) the
Fund receive reasonable interest on the loan (which may include the Fund's
investing any cash collateral in interest bearing short-term investments), any
distribution on the loaned securities, and any increase in their market value.
Loan arrangements made by each Fund will comply with all other applicable
regulatory requirements, including the rules of the New York Stock Exchange (the
Exchange), which presently require the borrower, after notice, to redeliver the
securities within the normal settlement time of three business days. All
relevant facts and circumstances, including the creditworthiness of the broker,
dealer, or institution, will be considered in making decisions with respect to
the lending of securities, subject to review by the Funds' Board of Trustees.

VANGUARD INTERFUND LENDING PROGRAM. The Commission has issued an exemptive
order permitting the Funds and other Vanguard funds to participate in Vanguard's
interfund lending program. This program allows the Vanguard funds to borrow
money from and loan money to each other for temporary or emergency purposes. The
program is subject to a number of conditions, including the requirement that no
fund may borrow or lend money through the program unless it receives a more
favorable interest rate than is available from a typical bank for a comparable
transaction. In addition, a Vanguard fund may participate in the program only if
and to the extent that such participation is consistent with the fund's
investment objective and other investment policies. The Boards of Trustees of
the Vanguard funds are responsible for ensuring that the interfund lending
program operates in compliance with all conditions of the Commission's exemptive
order.

ILLIQUID SECURITIES. Admiral Short-Term, Intermediate-Term, and Long-Term
Treasury Funds may invest up to 15% of their net assets in illiquid securities.
Illiquid securities are securities that may not be sold or disposed of in the
ordinary course of business within seven business days at approximately the
value at which they are being carried on the Fund's books.

A Fund may invest in restricted, privately placed securities that, under
securities laws, may be sold only to qualified institutional buyers. Because
these securities can be resold only to qualified institutional buyers or after
they have been held for a number of years, they may be considered illiquid
securities--meaning that they could be difficult for the Fund to convert to cash
if needed.

If a substantial market develops for a restricted security held by a Fund,
it will be treated as a liquid security, in accordance with procedures and
guidelines approved by the Fund's Board of Trustees. This generally includes
securities that are unregistered that can be sold to qualified institutional
buyers in accordance with Rule 144A under the Securities Act of 1933 (the 1933
Act). While the Fund's investment adviser determines the liquidity of restricted
securities on a daily basis, the Board oversees and retains ultimate
responsibility for the adviser's decisions. Several factors that the Board
considers in monitoring these decisions include the valuation of a security, the
availability of qualified institutional buyers, and the availability of
information about the security's issuer.

TEMPORARY INVESTMENTS. The Funds may take temporary investment measures
that are inconsistent with the Funds' normal fundamental or non-fundamental
investment policies and strategies in response to adverse market, economic,
political or other conditions. Such measures could include investments in (a)
highly liquid short-term fixed-income securities issued by or on behalf of
municipal or corporate issuers, obligations of the U.S. Government and its
agencies, commercial paper, and bank certificates of deposit; (b) shares of
other investment companies which have investment objectives consistent with
those of the Fund; (c) repurchase agreements involving any such securities; and
(d) other money market instruments. There is no limit on the extent to which the
Funds may take temporary investment measures. In taking such measures, the Funds
may fail to achieve their investment objective.

FUTURES CONTRACTS AND OPTIONS. Admiral Short-Term, Intermediate-Term, and
Long-Term Treasury Funds may enter into futures contracts, options, and options
on futures contracts for

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<PAGE>

several reasons: to simulate full investment in the underlying securities while
retaining a cash balance for Fund management purposes, to facilitate trading, to
reduce transaction costs, or to seek higher investment returns when a futures
contract is priced more attractively than other futures contracts or the
underlying security or index. Futures contracts provide for the future sale by
one party and purchase by another party of a specified amount of a specific
security at a specified future time and at a specified price. Futures contracts
which are standardized as to maturity date and underlying financial instrument
or index are traded on national futures exchanges. Futures exchanges and trading
are regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission (CFTC), a U.S. Government Agency. Assets committed to futures
contracts will be segregated to the extent required by law.

Although futures contracts by their terms call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out an open futures position is done by taking an opposite position (buying a
contract which has previously been sold, or selling a contract previously
purchased) in an identical contract to terminate the position. Brokerage
commissions are incurred when a futures contract is bought or sold.

Futures traders are required to make a good faith margin deposit in cash or
securities with a broker or custodian to initiate and maintain open positions in
futures contracts. A margin deposit is intended to assure completion of the
contract (delivery or acceptance of the underlying security) if it is not
terminated prior to the specified delivery date. Minimal initial margin
requirements are established by the futures exchange and may be changed. Brokers
may establish deposit requirements which are higher than the exchange minimums.
Futures contracts are customarily purchased and sold on margin deposits which
may range upward from less than 5% of the value of the contract being traded.

After a futures contract position is opened, the value of the contract is
marked to market daily. If the futures contract price changes to the extent that
the margin on deposit does not satisfy margin requirements, payment of
additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The Funds
expect to earn interest income on their margin deposits.

Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators". Hedgers use the futures markets primarily to offset
unfavorable changes in the value of securities otherwise held for investment
purposes or expected to be acquired by them. Speculators are less inclined to
own the securities underlying the futures contracts which they trade, and use
futures contracts with the expectation of realizing profits from fluctuations in
the prices of underlying securities. The Funds intend to use futures contracts
only for bona fide hedging purposes.

Regulations of the CFTC applicable to a Fund require that all of its
futures transactions constitute bona fide hedging transactions except to the
extent that the aggregate initial margins and premiums required to establish any
non-hedging positions do not exceed five percent of the value of the Fund's
portfolio. A Fund will only sell futures contracts to protect securities or
other futures contracts it owns against price declines or purchase contracts to
protect against an increase in the price of securities or other futures
contracts it intends to purchase.

Although techniques other than the sale and purchase of futures contracts
could be used to control a Fund's exposure to market fluctuations, the use of
futures contracts may be a more effective means of hedging this exposure. While
a Fund will incur commission expenses in both opening and closing out futures
positions, these costs are lower than transaction costs incurred in the purchase
and sale of the underlying securities.

Restrictions on the Use of Futures Contracts. Admiral Short-Term,
Intermediate-Term, and Long-Term Treasury Funds will not enter into futures
contract transactions to the extent that, immediately thereafter, the sum of its
initial margin deposits on open contracts exceeds 5% of the market value of the
Fund's total assets. In addition, a Fund will not enter into futures contracts
to the

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<PAGE>

extent that their outstanding obligations to purchase securities under these
contracts would exceed 20% of the Fund's total assets.

Risk Factors in Futures Transactions. Positions in futures contracts may be
closed out only on an exchange which provides a secondary market for such
futures. However, there can be no assurance that a liquid secondary market will
exist for any particular futures contract at any specific time. Thus, it may not
be possible to close a futures position. In the event of adverse price
movements, a Fund would continue to be required to make daily cash payments to
maintain its required margin. In such situations, if the Fund has insufficient
cash, it may have to sell portfolio securities to meet daily margin requirements
at a time when it may be disadvantageous to do so. In addition, the Fund may be
required to make delivery of the instruments underlying futures contracts it
holds. The inability to close options and futures positions also could have an
adverse impact on the ability to effectively hedge.

A Fund will minimize the risk that it will be unable to close out a futures
contract by only entering into futures which are traded on national futures
exchanges and for which there appears to be a liquid secondary market.

The risk of loss in trading futures contracts in some strategies can be
substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. As a result, a relatively
small price movement in a futures contract may result in immediate and
substantial loss (as well as gain) to the investor. For example, if at the time
of purchase, 10% of the value of the futures contract is deposited as margin, a
subsequent 10% decrease in the value of the futures contract would result in a
total loss of the margin deposit, before any deduction for the transaction
costs, if the account were then closed out. A 15% decrease would result in a
loss equal to 150% of the original margin deposit if the contract were closed
out. Thus, a purchase or sale of a futures contract may result in losses in
excess of the amount invested in the contract. However, because the futures
strategies of the Funds are engaged in only for hedging purposes, the adviser
does not believe that the Funds are subject to the risks of loss frequently
associated with futures transactions. The Funds would presumably have sustained
comparable losses if, instead of the futures contract, they had invested in the
underlying financial instrument and sold it after the decline.

Use of futures transactions by a Fund does involve the risk of imperfect or
no correlation where the securities underlying futures contracts have different
maturities than the portfolio securities being hedged. It is also possible that
a Fund could both lose money on futures contracts and also experience a decline
in value of its portfolio securities. There is also the risk of loss by a Fund
of margin deposits in the event of bankruptcy of a broker with whom the Fund has
an open position in a futures contract or related option. Additionally,
investments in futures and options involve the risk that the investment adviser
will incorrectly predict stock market and interest rate trends.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond that limit. The daily limit governs only
price movement during a particular trading day and therefore does not limit
potential losses, because the limit may prevent the liquidation of unfavorable
positions. Futures contract prices have occasionally moved to the daily limit
for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of future positions and subjecting some futures
traders to substantial losses.

Federal Tax Treatment of Futures Contracts. Each Fund is required for
federal income tax purposes to recognize as income for each taxable year its net
unrealized gains and losses on certain futures contracts held as of the end of
the year as well as those actually realized during the year. In these cases, any
gain or loss recognized with respect to a futures contract is considered to be
60% long-term capital gain or loss and 40% short-term capital gain or loss,
without regard to the holding period of the contract. Gains and losses on
certain other futures contracts (primarily non-U.S.

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<PAGE>

futures contracts) are not recognized until the contracts are closed and are
treated as long-term or short-term depending on the holding period of the
contract. Sales of futures contracts which are intended to hedge against a
change in the value of securities held by a Fund may affect the holding period
of such securities and, consequently, the nature of the gain or loss on such
securities upon disposition. A Fund may be required to defer the recognition of
losses on futures contracts to the extent of any unrecognized gains on related
positions held by the Fund.

In order for a Fund to continue to qualify for federal income tax treatment
as a regulated investment company, at least 90% of its gross income for a
taxable year must be derived from qualifying income; i.e., dividends, interest,
income derived from loans of securities, gains from the sale of securities or of
foreign currencies, or other income derived with respect to the Fund's business
of investing in securities or currencies. It is anticipated that any net gain on
futures contracts will be considered qualifying income for purposes of the 90%
requirement.

A Fund will distribute to shareholders annually any net capital gains which
have been recognized for federal income tax purposes on futures transactions.
Such distributions will be combined with distributions of capital gains realized
on the Fund's other investments and shareholders will be advised on the nature
of the transactions.

OTHER TYPES OF DERIVATIVES. In addition to bond (interest rate) futures and
options, the Admiral Short-Term, Intermediate-Term, and Long-Term Treasury Funds
may invest in interest rate swaps. Swap agreements can be structured in a
variety of ways and are known by many different names. In a typical swap
agreement, the Fund negotiates with a counterparty to trade off investment
exposure to a particular market factor, such as interest rate movements or the
credit quality of a bond issuer. Based on the terms of the swap, the Fund may
either receive from or make payments to the counterparty on a regular basis.
Depending on how they are used, swap agreements have the potential to increase
or decrease the Funds' investment risk. The Funds will invest in swap agreements
only to the extent that such investments are consistent with their respective
investment objectives and policies.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS). The Admiral Short-Term,
Intermediate-Term, and Long-Term Treasury Funds may invest in CMOs issued by
agencies or instrumentalities of the U.S. Government. CMOs are bonds
collateralized by whole loan mortgages or mortgage pass-through securities.
Bonds issued under a CMO structure are divided into groups with varying
maturities, and cash flows generated by the mortgages or mortgage pass-through
securities in the collateral pool are used to first pay interest and then pay
principal to the CMO bondholders. Under the CMO structure, the repayment of
principal among the different groups is prioritized in accordance with the terms
of the particular CMO issuance. The "fastest-pay" group of bonds, as specified
in the prospectus for the issuance, would initially receive all principal
payments. When that group of bonds is retired, the next group or groups receive
all of the principal payments, in the sequence specified in the prospectus,
until all of the groups are retired. Aside from market risk, the primary risk
involved in any mortgage security, such as a CMO, is its exposure to prepayment
risk. To the extent a particular group of bonds is exposed to this risk, the
bondholder is generally compensated in the form of higher yields. In order to
provide security, in addition to the underlying collateral, many CMO issues also
include minimum reinvestment rate and minimum sinking-fund guarantees.
Typically, the Funds will invest in those CMOs that most appropriately reflect
their average maturities and market risk profiles.

The maturity of some classes of CMOs may be very difficult to predict
because any such predictions are highly dependent upon assumptions regarding the
prepayments which CMOs may experience. Deviations in the actual prepayments
experienced may significantly affect the ultimate maturity of CMOs, and in such
event, the maturity and risk characteristics of CMOs purchased by the Funds may
be significantly greater or less than intended. The possibility that rising
interest rates may cause prepayments to occur at a slower than expected rate is
known as extension risk. This particular risk may effectively change a CMO which
was considered short-or intermediate-term

B-7
<PAGE>

at the time of purchase into a long-term security. Alternatively, there are
certain classes of CMOs that are by design constructed to have highly
predictable average maturities. Such CMOs will retain their relative
predictability over a broad range or prepayment experience. The Funds expect to
control extension risk by purchasing these specific classes of CMO which, in the
Adviser's opinion, are highly predictable.

PURCHASE OF SHARES

Each Fund reserves the right in its sole discretion: (i) to suspend the offering
of its shares, (ii) to reject purchase orders when in the judgment of management
such rejection is in the best interest of the Fund, and (iii) to reduce or waive
the minimum investment for or any other restrictions on initial and subsequent
investments for certain fiduciary accounts such as employee benefit plans or
under circumstances where certain economies can be achieved in sales of a Fund's
shares.

TRADING SHARES THROUGH CHARLES SCHWAB

Each Fund has authorized Charles Schwab & Co., Inc. (Schwab) to accept on its
behalf purchase and redemption orders under certain terms and conditions. Schwab
is also authorized to designate other intermediaries to accept purchase and
redemption orders on the Fund's behalf subject to those terms and conditions.
Under this arrangement, the Fund will be deemed to have received a purchase or
redemption order when Schwab or, if applicable, Schwab's authorized designee,
accepts the order in accordance with the Fund's instructions. Customer orders
that are properly transmitted to the Fund by Schwab, or if applicable, Schwab's
authorized designee, will be priced as follows:

Orders received by Schwab before 3 p.m. Eastern time on any business day,
will be sent to Vanguard that day and your share price will be based on the
Fund's net asset value calculated at the close of trading that day. Orders
received by Schwab after 3 p.m. Eastern time, will be sent to Vanguard on the
following business day and your share price will be based on the Fund's net
asset value calculated at the close of trading that day.

REDEMPTION OF SHARES

Each Fund may suspend redemption privileges or postpone the date of payment (i)
during any period that the Exchange is closed, or trading on the Exchange is
restricted as determined by the Commission, (ii) during any period when an
emergency exists as defined by the Commission as a result of which it is not
reasonably practicable for a Fund to dispose of securities owned by it, or
fairly to determine the value of its assets, and (iii) for such other periods as
the Commission may permit.

Each Fund has made an election with the Commission to pay in cash all
redemptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Fund at
the beginning of such period.

No charge is made by the Fund for redemptions. Shares redeemed may be worth
more or less than what was paid for them, depending on the market value of the
securities held by the Fund.

SHARE PRICE

Each Fund's share price, or "net asset value" per share, is calculated by
dividing the total assets of the Fund, less all liabilities, by the total number
of shares outstanding. The net asset value is determined as of the close of the
Exchange, generally 4:00 p.m. Eastern time, on each day that the Exchange is
open for trading.

It is the policy of the ADMIRAL TREASURY MONEY MARKET FUND to attempt to
maintain a net asset value of $1.00 per share for sales and redemptions. The
instruments held by the Fund are

B-8
<PAGE>

valued on the basis of amortization cost, which does not take into account
unrealized capital gains or losses. This involves valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortization cost, is
higher or lower than the price which the Fund would receive if it sold the
instrument.

The use of amortization cost and the maintenance of the Fund's net asset
value at $1.00 is based on its election to operate under Rule 2a-7 under the
1940 Act. As a condition of operating under the rule, the Fund must maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 397 days or less, and invest only in
securities that are determined by methods approved by the Trustees to present
minimal credit risks and that are of high quality as determined by the requisite
rating services, or in the case of an instrument not so rated, determined by
methods approved by the Trustees to be of comparable quality.

FOR THE OTHER ADMIRAL FUNDS, short term instruments (those acquired with
remaining maturities of 60 days or less) may be valued at cost, plus or minus
any amortization discount or premium, which approximates market value.

Bonds and other fixed-income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. The prices provided by a pricing
service may be determined without regard to bid or last sale prices of each
security, but take into account institutional-size transactions in similar
groups of securities as well as any developments related to specific securities.

Other assets and securities for which no quotations are readily available
or which are restricted as to sale (or resale) are valued by such methods as the
Board of Trustees deems in good faith to reflect fair value.

The share price for each Fund can be found daily in the mutual fund
listings of most major newspapers under the heading "Vanguard Funds". Newspapers
typically list money market fund yields weekly, separately from other mutual
funds.

FUNDAMENTAL INVESTMENT LIMITATIONS

Each Fund is subject to the following fundamental investment limitations, which
cannot be changed in any material way without the approval of the holders of a
majority of the affected Fund's shares. For these purposes, a "majority" of a
Fund's shares means shares representing the lesser of (i) 67% or more of the
votes cast to approve a change, so long as shares representing more than 50% of
the Fund's net asset value are present or represented by proxy; or (ii) more
than 50% of a Fund's net asset value.

BORROWING. Each Fund may not borrow money, except for temporary or
emergency purposes in an amount not exceeding 15% of the Fund's net assets. Each
Fund may borrow money through banks, reverse repurchase agreements, or
Vanguard's interfund lending program only, and must comply with all applicable
regulatory conditions.

COMMODITIES. Each Fund will not purchase or sell commodities, except that
Admiral Short-Term, Intermediate-Term, and Long-Term Treasury Funds may invest
in bond futures contracts, bond options, and options on bond futures contracts.
No more than 5% of a Fund's total assets may be used as initial margin deposit
for futures contracts, and no more than 20% of a Fund's total assets may be
invested in futures contracts or options at any time.

DIVERSIFICATION. With respect to 75% of its total assets (100% for the
Admiral Treasury Money Market Fund), a Fund may not: (i) purchase more than 10%
of the outstanding voting securities of any one issuer; or (ii) purchase
securities of any issuer if, as a result, more than 5% of the Fund's total
assets would be invested in that issuer's securities. This limitation does not
apply to obligations of the United States Government or its agencies or
instrumentalities.

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<PAGE>

ILLIQUID SECURITIES. Each Fund may not acquire any security if, as a
result, more than 15% of its net assets (any of its net assets in the case of
Admiral Treasury Money Market Fund) would be invested in securities that are
illiquid.

INDUSTRY CONCENTRATION. Each Fund may not invest more than 25% of its total
assets in any one industry, provided that (i) this limitation does not apply to
obligations issued or guaranteed by the U.S. Government, or its agencies or
instrumentalities, and (ii) utility companies will be divided according to their
services; for example, gas, gas transmission, electric and gas, electric, and
telephone will each be considered a separate industry.

INVESTING FOR CONTROL. Each Fund may not invest in a company for the
purpose of controlling its management.

INVESTMENT COMPANIES. Each Fund may not invest in any other investment
company, except through a merger, consolidation or acquisition of assets, or to
the extent permitted by Section 12 of the 1940 Act. Investment companies whose
shares a Fund acquires pursuant to Section 12 must have investment objectives
and policies consistent with those of the Fund.

LOANS. Each Fund may not lend money to any person except by purchasing debt
obligations in which the Fund is authorized to invest in accordance with its
investment policies, by entering into repurchase agreements, by lending its
portfolio securities, or through Vanguard's interfund lending program.

MARGIN. Each Fund may not purchase securities on margin or sell securities
short, except as permitted by the Fund's investment policies relating to
commodities.

OIL, GAS, MINERALS. Each Fund may not invest in interests in oil, gas, or
other mineral exploration or development programs.

PUTS, CALLS, WARRANTS. Each Fund may not purchase or sell warrants, put or
call options, or combinations thereof, except as permitted by the Fund's
investment policies relating to commodities.

PLEDGING ASSETS. Each Fund may not pledge, mortgage, or hypothecate more
than 15% of its net assets.

REAL ESTATE. Each Fund may not invest directly in real estate, although it
may purchase marketable securities of companies which deal in real estate and
bonds secured by real estate.

SENIOR SECURITIES. Each Fund may not issue senior securities, except in
compliance with the 1940 Act.

UNDERWRITING. Each Fund may not engage in the business of underwriting
securities issued by other persons. A Fund will not be considered an underwriter
when disposing of its investment securities.

The investment limitations set forth above are considered at the time that
investment securities are purchased. If a percentage restriction is adhered to
at the time the investment is made, a later increase in percentage resulting
from a change in the market value of assets will not constitute a violation of
such restrictions.

None of these limitations prevents a Fund from participating in The
Vanguard Group, Inc. (Vanguard). As members of The Vanguard Group of Investment
Companies, the Funds may own securities issued by Vanguard, make loans to
Vanguard, and contribute to Vanguard's costs or other financial requirements.
See "Management of the Funds" for more information.

MANAGEMENT OF THE FUNDS

OFFICERS AND TRUSTEES

The officers of the Funds manage their day-to-day operations and are responsible
to the Funds' Board of Trustees. The Trustees set broad policies for each Fund
and choose its officers. The

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<PAGE>

following is a list of the Trustees and officers of each Fund and a statement of
their present positions and principal occupations during the past five years. As
a group, the Funds' Trustees and officers own less than 1% of the outstanding
shares of each Fund. Each Trustee also serves as a Director of The Vanguard
Group, Inc., and as a Trustee of each of the 103 funds administered by Vanguard
(102 in the case of Mr. Malkiel and 93 in the case of Mr. MacLaury). The mailing
address of the Trustees and officers of the Funds is Post Office Box 876, Valley
Forge, PA 19482.

JOHN J. BRENNAN, (DOB: 7/29/1954) Chairman, Chief Executive Officer & Trustee*
Chairman, Chief Executive Officer and Director of The Vanguard Group, Inc., and
Trustee of each of the investment companies in The Vanguard Group.

JOANN HEFFERNAN HEISEN, (DOB: 1/25/1950) Trustee
Vice President, Chief Information Officer, and member of the Executive Committee
of Johnson & Johnson (Pharmaceuticals/Consumer Products), Director of Johnson &
Johnson*MERCK Consumer Pharmaceuticals Co., The Medical Center at Princeton, and
Women's Research and Education Institute.

BRUCE K. MACLAURY, (DOB: 5/7/1931) Trustee
President Emeritus of The Brookings Institution (Independent Non-Partisan
Research Organization); Director of American Express Bank, Ltd., The St. Paul
Companies, Inc. (Insurance and Financial Services), and National Steel Corp.

BURTON G. MALKIEL, (DOB: 8/28/1932) Trustee
Chemical Bank Chairman's Professor of Economics, Princeton University; Director
of Prudential Insurance Co. of America, Banco Bilbao Gestinova, Baker Fentress &
Co. (Investment Management), The Jeffrey Co. (Holding Company), and Select
Sector SPDR Trust (Exchange-Traded Mutual Fund).

ALFRED M. RANKIN, JR., (DOB: 10/8/1941) Trustee
Chairman, President, Chief Executive Officer, and Director of NACCO Industries,
Inc. (Machinery/ Coal/Appliances); and Director of The BFGoodrich Co. (Aircraft
Systems/Manufacturing/ Chemicals).

JOHN C. SAWHILL, (DOB: 6/12/1936) Trustee
President and Chief Executive Officer of The Nature Conservancy (Non-Profit
Conservation Group); Director of Pacific Gas and Electric Co., Procter & Gamble
Co., NACCO Industries, Inc. (Machinery/ Coal/Appliances), and Newfield
Exploration Co. (Energy); formerly, Director and Senior Partner of McKinsey &
Co., and President of New York University.

JAMES O. WELCH, JR., (DOB: 5/13/1931) Trustee
Retired Chairman of Nabisco Brands, Inc. (Food Products); retired Vice Chairman
and Director of RJR Nabisco (Food and Tobacco Products); Director of TECO
Energy, Inc., and Kmart Corp.

J. LAWRENCE WILSON, (DOB: 3/2/1936) Trustee
Retired Chairman of Rohm & Haas Co. (Chemicals); Director of Cummins Engine Co.
(Diesel Engine Company), The Mead Corp. (Paper Products) and AmeriSource Health
Corp.; and Trustee of Vanderbilt University.

RAYMOND J. KLAPINSKY, (DOB: 12/7/1938) Secretary*
Managing Director of The Vanguard Group, Inc.; Secretary of The Vanguard Group,
Inc. and of each of the investment companies in The Vanguard Group.

THOMAS J. HIGGINS, (DOB: 5/21/1957) Treasurer*
Principal of The Vanguard Group, Inc.; Treasurer of each of the investment
companies in The Vanguard Group.

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<PAGE>

ROBERT D. SNOWDEN, (DOB: 9/4/1961) Controller*
Principal of The Vanguard Group, Inc.; Controller of each of the investment
companies in The Vanguard Group.

*Officers of the Funds are "interested persons" as defined in the 1940 Act.

THE VANGUARD GROUP

Each Fund is a member of The Vanguard Group of Investment Companies, which
consists of more than 100 funds. Through their jointly-owned subsidiary, The
Vanguard Group, Inc., the Funds and the other funds in The Vanguard Group obtain
at cost virtually all of their corporate management, administrative, and
distribution services. Vanguard also provides investment advisory services on an
at-cost basis to several of the Vanguard funds.

Vanguard employs a supporting staff of management and administrative
personnel needed to provide the requisite services to the funds and also
furnishes the funds with necessary office space, furnishings, and equipment.
Each fund pays its share of Vanguard's net expenses which are allocated among
the funds under methods approved by the Board of Trustees of each fund. In
addition, each fund bears its own direct expenses, such as legal, auditing, and
custodian fees.

The officers of the funds are also officers and employees of Vanguard. No
officer or employee owns, or is permitted to own, any securities of any external
adviser for the funds.

Vanguard has adopted a Code of Ethics designed to prevent employees who may
have access to nonpublic information about the trading activities of the Funds
(access persons) from profiting from that information. The Code permits access
persons to invest in securities for their own accounts, including securities
that may be held by the Funds, but places substantive and procedural
restrictions on their trading activities. For example, the Code requires that
access persons of the Funds receive advance approval for every securities trade
to ensure that there is no conflict with the trading activities of the Funds.

Vanguard was established and operates under an Amended and Restated Funds'
Service Agreement which was approved by the shareholders of each of the funds.
The amounts which each of the funds has invested are adjusted from time to time
in order to maintain the proportionate relationship between each fund's relative
net assets and its contribution to Vanguard's capital. The Amended and Restated
Funds' Service Agreement provides for the following arrangement: (1) each
Vanguard fund may be called upon to invest a maximum of 0.40% of its current
assets in Vanguard and (2) there is no other limitation on the maximum cash
investment that the Vanguard funds may make in Vanguard.

At January 31, 2000, the Admiral Funds had contributed capital to Vanguard
of:

CAPITAL % OF
CONTRIBUTED % OF FUND VANGUARD'S
FUND TO VANGUARD NET ASSETS CAPITALIZATION
- ---- ----------- ---------- --------------
Admiral Treasury Money Market Fund.. $1,208,000 0.02% 1.2%
Admiral Short-Term Treasury Fund.... $223,000 0.02% 0.2%
Admiral Intermediate-Term Treasury
Fund.............................. $264,000 0.02% 0.3%
Admiral Long-Term Treasury Fund..... $90,000 0.02% 0.1%

MANAGEMENT. Corporate management and administrative services include: (1)
executive staff; (2) accounting and financial; (3) legal and regulatory; (4)
shareholder account maintenance; (5) monitoring and control of custodian
relationships; (6) shareholder reporting; and (7) review and evaluation of
advisory and other services provided to the funds by third parties.

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DISTRIBUTION. Vanguard Marketing Corporation, a wholly-owned subsidiary of
The Vanguard Group, Inc., provides all distribution and marketing activities for
the funds in the Group. The principal distribution expenses are for advertising,
promotional materials, and marketing personnel. Distribution services may also
include organizing and offering to the public, from time to time, one or more
new investment companies which will become members of Vanguard. The Trustees and
officers of Vanguard determine the amount to be spent annually on distribution
activities, the manner and amount to be spent on each fund, and whether to
organize new investment companies.

One half of the distribution expenses of a marketing and promotional nature
is allocated among the Trusts based upon their relative net assets. The
remaining one half of these expenses is allocated among the funds based upon
each fund's sales for the preceding 24 months relative to the total sales of the
funds as a Group, provided, however, that no fund's aggregate quarterly rate of
contribution for distribution expenses of a marketing and promotional nature
shall exceed 125% of the average distribution expense rate for Vanguard, and
that no fund shall incur annual distribution expenses in excess of .20 of 1% of
its average month-end net assets.

During the fiscal years ended January 31, 1998, 1999, and 2000, the Funds
incurred the following approximate amounts of The Vanguard Group's management
(including transfer agency) distribution, and marketing expenses.

FUND 1998 1999 2000
- ---- ---- ---- ----
Admiral Treasury Money Market Fund $4,554,000 $5,978,000 $7,482,000
Admiral Short-Term Treasury Fund $834,000 $1,269,000 $1,644,000
Admiral Intermediate-Term Treasury Fund $909,000 $1,484,000 $1,801,000
Admiral Long-Term Treasury Fund $290,000 $534,000 $613,000

INVESTMENT ADVISORY SERVICES. Vanguard provides investment advisory
services to several Vanguard funds including these Funds. These services are
provided on an at-cost basis from a money management staff employed directly by
Vanguard. The compensation and other expenses of this staff are paid by the
funds utilizing these services.

During the fiscal years ended January 31, 1998, 1999, and 2000, the Funds
incurred the following approximate amounts of Vanguard's expenses relating to
investment advisory services.

FUND 1998 1999 2000
- ---- ---- ---- ----
Admiral Treasury Money Market Fund $531,000 $536,000 $693,000
Admiral Short-Term Treasury Fund $97,000 $113,000 $158,000
Admiral Intermediate-Term Treasury Fund $105,000 $133,000 $172,000
Admiral Long-Term Treasury Fund $33,000 $49,000 $61,000

TRUSTEE COMPENSATION

The same individuals serve as Trustees of all Vanguard funds (with two
exceptions, which are noted in the table appearing on page B-14), and each fund
pays a proportionate share of the Trustees' compensation. The funds employ their
officers on a shared basis, as well. However, officers are compensated by The
Vanguard Group, Inc., not the funds.

INDEPENDENT TRUSTEES. The funds compensate their independent Trustees--that
is, the ones who are not also officers of the fund--in three ways:

B-13
<PAGE>

- - The independent Trustees receive an annual fee for their service to the
funds, which is subject to reduction based on absences from scheduled Board
meetings.

- - The independent Trustees are reimbursed for the travel and other expenses
that they incur in attending Board meetings.
- - Upon retirement, the independent Trustees receive an aggregate annual fee
of $1,000 for each year served on the Board, up to fifteen years of
service. This annual fee is paid for ten years following retirement, or
until each Trustee's death.

"INTERESTED" TRUSTEE. Mr. Brennan serves as a Trustee, but is not paid in
this capacity. He is, however, paid in his role as officer of The Vanguard
Group, Inc.

COMPENSATION TABLE. The following table provides compensation details for
each of the Trustees. We list the amounts paid as compensation and accrued as
retirement benefits by the Funds for each Trustee. In addition, the table shows
the total amount of benefits that we expect each Trustee to receive from all
Vanguard funds upon retirement, and the total amount of compensation paid to
each Trustee by all Vanguard funds.

VANGUARD ADMIRAL FUNDS
TRUSTEES' COMPENSATION TABLE

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PENSION OR
RETIREMENT TOTAL
BENEFITS COMPENSATION
AGGREGATE ACCRUED AS ESTIMATED FROM ALL
COMPENSATION PART OF THESE ANNUAL VANGUARD
FROM THESE FUNDS' BENEFITS UPON FUNDS PAID TO
NAMES OF TRUSTEES FUNDS(1) EXPENSES(1) RETIREMENT TRUSTEES(2)
- ---------------------------------------------------------------------------------------------------------------
John C. Bogle(3) None None None None
John J. Brennan None None None None
JoAnn Heffernan Heisen $1,281 $71 $15,000 $80,000
Bruce K. MacLaury $1,327 $120 $12,000 $75,000
Burton G. Malkiel $1,290 $117 $15,000 $80,000
Alfred M. Rankin, Jr. $1,281 $85 $15,000 $80,000
John C. Sawhill $1,281 $108 $15,000 $80,000
James O. Welch, Jr. $1,281 $125 $15,000 $80,000
J. Lawrence Wilson $1,281 $90 $15,000 $80,000
</TABLE>

(1) The amounts shown in this column are based on the Funds' fiscal year ended
January 31, 2000.
(2) The amounts reported in this column reflect the total compensation paid to
each Trustee for his or her service as Trustee of 103 Vanguard funds (102
in the case of Mr. Malkiel; 93 in the case of Mr. MacLaury) for the
1999 calendar year.
(3) Mr. Bogle has retired from the Funds' Board, effective December 31, 1999.

PORTFOLIO TRANSACTIONS

Brokers or dealers who execute transactions for the four Funds are selected by
Vanguard's investment management staff which is responsible for using its best
efforts to obtain the best available price and most favorable execution for each
transaction. Principal transactions are made directly with issuers,
underwriters, and market makers and usually do not involve brokerage
commissions, although underwriting commissions and dealer markups may be
involved. Brokerage transactions are placed with brokers deemed most capable of
providing favorable terms; where more than one broker can offer such terms,
consideration may be given to brokers who provide the staff with research and
statistical information.

B-14
<PAGE>

Vanguard's investment management staff may occasionally make
recommendations to other Vanguard funds or clients which result in their
purchasing or selling securities simultaneously with the Funds. As a result, the
demand for securities being purchased or the supply of securities being sold may
increase, and this could have an adverse effect on the price of those
securities. It is the staff's policy not to favor one client over another in
making recommendations or placing an order. If two or more clients are
purchasing a given security on the same day from the same broker-dealer, such
transactions may be averaged as to price.

The Fund paid no explicit brokerage commissions during the fiscal years
ended January 31, 1998, 1999, and 2000.

CALCULATION OF YIELD (ADMIRAL TREASURY MONEY MARKET FUND)

The current yield of the Admiral Treasury Money Market Fund is calculated daily
on a base period return of a hypothetical account having a beginning balance of
one share for a particular period of time (generally 7 days). The return is
determined by dividing the net change (exclusive of any capital changes) in such
account by its average net asset value for the period, and then multiplying it
by 365/7 to get the annualized current yield. The calculation of net change
reflects the value of additional shares purchased with the dividends by the
Fund, including dividends on both the original share and on such additional
shares. An effective yield, which reflects the effects of compounding and
represents an annualization of the current yield with all dividends reinvested,
may also be calculated for the Fund by dividing the base period return by 7,
adding 1 to the quotient, raising the sum to the 365th power, and subtracting 1
from the result.

Set forth below is an example, for purposes of illustration only, of the
current and effective yield calculations for Admiral Treasury Money Market Fund
for the 7-day base period ending January 31, 2000.

Value of account at beginning of period. . . . . $1.00000
Value of same account at end of period*. . . . . 1.00099
Net Change in account value. . . . . . . . . . . $0.00099
Annualized Current Net Yield
(Net Change x 365/7)/average net asset value.. 5.38%
Effective Yield
[(Net Change) + 1](365/7) - 1. . . . . . . . . 5.28%
Average Weighted Maturity of Investments . . . . 64 days

* Exclusive of any capital changes

The net asset value of a share of Admiral Treasury Money Market Fund is
$1.00 and it is not expected to fluctuate. However, the yield of the Fund will
fluctuate. The annualization of a week's dividend is not a representation by the
Fund as to what an investment in the Fund will actually yield in the future.
Actual yields will depend on such variables as investment quality, average
maturity, the type of instruments the Fund invests in, changes in interest rates
on instruments, changes in the expenses of the Fund, and other factors. Yield is
one basis investors may use to analyze the Fund, and other investment vehicles;
however, yields of other investment vehicles may not be comparable because of
the factors set forth in the preceding sentence, differences in the time periods
compared, and differences in the methods used in valuing portfolio instruments,
computing net asset value, and calculating yield.

B-15
<PAGE>

YIELD AND TOTAL RETURN

SEC YIELD

Yield is the net annualized yield based on a specified 30-day (or one month)
period assuming semiannual compounding of income. Yield is calculated by
dividing the net investment income per share earned during the period by the
maximum offering price per share on the last day of the period, according to the
following formula:

YIELD = 2[((A-B)/CD+1)(6)- 1]

Where:

a = dividends and interest earned during the period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.

The yield of Admiral Short-Term, Intermediate-Term, and Long-Term Treasury
Funds for the 30-day period ended January 31, 2000 is set forth below. Yields
are calculated daily for each Fund.

Admiral Short-Term Treasury Fund.....................................6.50%
Admiral Intermediate-Term Treasury Fund..............................6.84%
Admiral Long-Term Treasury Fund......................................6.71%

AVERAGE ANNUAL TOTAL RETURN

Average annual total return is the average annual compounded rate of return for
the periods of one year, five years, ten years or the life of the Fund, all
ended on the last day of a recent month. Average annual total return quotations
will reflect changes in the price of the Fund's shares and assume that all
dividends and capital gains distributions during the respective periods were
reinvested in Fund shares.

Average annual total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment over such periods
according to the following formula (average annual total return is then
expressed as a percentage):

T = (ERV/P)(1/N) - 1

Where:

T = average annual total return
P = a hypothetical initial investment of $1,000
n = number of years
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

The average annual total return of each Fund for the one- and five-year
periods ended January 31, 2000 and since inception on December 14, 1992 is set
forth below:

SINCE
FUND 1 YEAR 5 YEARS INCEPTION
- ---- ------ ------- ---------
Admiral Treasury Money Market Fund 4.79% 5.22% 4.72%
Admiral Short-Term Treasury Fund 1.41% 6.10% 5.45%
Admiral Intermediate-Term Treasury Fund -4.33% 7.00% 6.25%
Admiral Long-Term Treasury Fund -8.30% 8.43% 7.60%

B-16
<PAGE>

AVERAGE ANNUAL AFTER-TAX TOTAL RETURN QUOTATION

We calculate the Fund's average annual after-tax total return by finding the
average annual compounded rate of return over the 1-, 5-, and 10-year periods
(or for periods of the Fund's operations) that would equate the initial amount
invested to the after-tax value, according to the following formulas:

After-tax return:

P (1+T)(N) = ATV

Where:

P = a hypothetical initial payment of $1,000
T = average annual after-tax total return
n = number of years
ATV = after-tax value at the end of the 1-,5-, or 10-year
periods of a hypothetical $1,000 payment made at the
beginning of the time period, assuming no liquidation
of the investment at the end of the measurement
periods.

Instructions.

1. Assume all distributions by the Fund are reinvested--less the taxes due on
such distributions--at the price on the reinvestment dates during the
period. Adjustments may be made for subsequent re-characterizations of
distributions.

2. Calculate the taxes due on distributions by the Fund by applying the
highest federal marginal tax rates to each component of the distributions
on the reinvestment date (e.g., ordinary income, short-term capital gain,
long-term capital gain, etc.). For periods after December 31, 1997, the
federal marginal tax rates used for the calculations are 39.6% for ordinary
income and short-term capital gains and 20% for long-term capital gains.
Note that the applicable tax rates may vary over the measurement period.
Assume no taxes are due on the portions of any distributions classified as
exempt interest or non-taxable (i.e., return of capital). Ignore any
potential tax liabilities other than federal tax liabilities (e.g., state
and local taxes).

3. Include all recurring fees that are charged to all shareholder accounts.
For any account fees that vary with the size of the account, assume an
account size equal to the Fund's mean (or median) account size. Assume that
no additional taxes or tax credits result from any redemption of shares
required to pay such fees.

4. State the total return quotation to the nearest hundredth of one percent.

CUMULATIVE TOTAL RETURN

Cumulative total return is the cumulative rate of return on a hypothetical
initial investment of $1,000 for a specified period. Cumulative total return
quotations reflect changes in the price of the Fund's shares and assume that all
dividends and capital gains distributions during the period were reinvested in
Fund shares. Cumulative total return is calculated by finding the cumulative
rates of a return of a hypothetical investment over such periods, according to
the following formula (cumulative total return is then expressed as a
percentage):

C = (ERV/P)- 1

Where:

C = cumulative total return
P = a hypothetical initial investment of $1,000
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000
investment made at the beginning of the applicable
period.

B-17
<PAGE>

COMPARATIVE INDEXES

Each of the investment company members of The Vanguard Group, including Vanguard
Admiral Funds may, from time to time, use one or more of the following unmanaged
indexes for comparative performance purposes.

STANDARD AND POOR'S 500 COMPOSITE STOCK PRICE INDEX--includes stocks selected by
Standard & Poor's Index Committee to include leading companies in leading
industries and to reflect the U.S. stock market.

STANDARD & POOR'S MIDCAP 400 INDEX--is composed of 400 medium sized domestic
stocks.

STANDARD & POOR'S SMALLCAP 600/BARRA VALUE INDEX--contains stocks of the S&P
SmallCap 600 Index which have a lower than average price-to-book ratio.

STANDARD & POOR'S SMALLCAP 600/BARRA GROWTH INDEX--contains stocks of the S&P
SmallCap 600 Index which have a higher than average price-to-book ratio.

RUSSELL 1000 VALUE INDEX--consists of the stocks in the Russell 1000 Index
(comprising the 1,000 largest U.S.-based companies measured by total market
capitalization) with the lowest price-to-book ratios, comprising 50% of the
market capitalization of the Russell 1000.

WILSHIRE 5000 TOTAL MARKET INDEX--consists of more than 7,000 common equity
securities, covering all stocks in the U.S. for which daily pricing is
available.

WILSHIRE 4500 COMPLETION INDEX--consists of all stocks in the Wilshire 5000
except for the 500 stocks in the Standard and Poor's 500 Index.

MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX--is an arithmetic, market
value-weighted average of the performance of over 900 securities listed on the
stock exchanges of countries in Europe, Australia, Asia and the Far East.

GOLDMAN SACHS 100 CONVERTIBLE BOND INDEX--currently includes 71 bonds and 29
preferreds. The original list of names was generated by screening for
convertible issues of $100 million or greater in market capitalization. The
index is priced monthly.

SALOMON BROTHERS GNMA INDEX--includes pools of mortgages originated by private
lenders and guaranteed by the mortgage pools of the Government National Mortgage
Association.

SALOMON BROTHERS HIGH-GRADE CORPORATE BOND INDEX--consists of publicly issued,
non-convertible corporate bonds rated Aa or Aaa. It is a value-weighted, total
return index, including approximately 800 issues with maturities of 12 years or
greater.

LEHMAN BROTHERS LONG-TERM TREASURY BOND INDEX--is a market weighted index that
contains individually priced U.S. Treasury securities with maturities of ten
years or greater.

MERRILL LYNCH CORPORATE & GOVERNMENT BOND INDEX--consists of over 4,500 U.S.
Treasury, Agency and investment grade corporate bonds.

LEHMAN BROTHERS CORPORATE (BAA) BOND INDEX--all publicly offered fixed-rate,
nonconvertible domestic corporate bonds rated Baa by Moody's, with a maturity
longer than 1 year and with more than $100 million outstanding. This index
includes over 1,500 issues.

LEHMAN BROTHERS LONG-TERM CORPORATE BOND INDEX--is a subset of the Lehman
Brothers Corporate Bond Index covering all corporate, publicly issued,
fixed-rate nonconvertible U.S. debt issues rated at least Baa, with at least
$100 million principal outstanding and maturity greater than 10 years.

BOND BUYER MUNICIPAL BOND INDEX--is a yield index on current-coupon high-grade
general-obligation municipal bonds.

STANDARD & POOR'S PREFERRED INDEX--is a yield index based upon the average yield
for four high-grade, non-callable preferred stock issues.

B-18
<PAGE>

NASDAQ INDUSTRIAL INDEX--is composed of more than 3,000 industrial issues. It is
a value-weighted index calculated on price change only and does not include
income.

COMPOSITE INDEX--70% Standard & Poor's 500 Index and 30% NASDAQ Industrial
Index.

COMPOSITE INDEX--65% Standard & Poor's 500 Index and 35% Lehman Brothers
Long-Term Corporate AA or Better Bond Index.

COMPOSITE INDEX--65% Lehman Brothers Long-Term Corporate AA or Better Bond Index
and a 35% weighting in a blended equity composite (75% Standard & Poor's/BARRA
Value Index, 12.5% Standard & Poor's Utilities Index and 12.5% Standard & Poor's
Telephone Index).

LEHMAN BROTHERS LONG-TERM CORPORATE AA OR BETTER BOND INDEX--consists of all
publicly issued, fixed-rate, nonconvertible investment grade,
dollar-denominated, SEC-registered corporate debt rated AA or AAA.

LEHMAN BROTHERS AGGREGATE BOND INDEX--is a market-weighted index that contains
individually priced U.S. Treasury, agency, corporate, and mortgage pass-through
securities corporate rated Baa or better. The Index has a market value of over
$5 trillion.

LEHMAN BROTHERS MUTUAL FUND SHORT (1-5) GOVERNMENT/CORPORATE INDEX--is a
market-weighted index that contains individually priced U.S. Treasury, agency,
and corporate investment grade bonds rated BBB- or better with maturities
between 1 and 5 years. The Index has a market value of over $1.6 trillion.

LEHMAN BROTHERS MUTUAL FUND INTERMEDIATE (5-10) GOVERNMENT/CORPORATE INDEX--is a
market weighted index that contains individually priced U.S. Treasury, agency,
and corporate securities rated BBB- or better with maturities between 5 and 10
years. The Index has a market value of over $800 billion.

LEHMAN BROTHERS LONG (10+) GOVERNMENT/CORPORATE INDEX--is a market-weighted
index that contains individually priced U.S. Treasury, agency, and corporate
securities rated BBB- or better with maturities greater than 10 years. The Index
has a market value of over $1.1 trillion.

LIPPER SMALLCAP FUND AVERAGE--the average performance of small company growth
funds as defined by Lipper, Inc. Lipper defines a small company growth fund as a
fund that by prospectus or portfolio practice, limits its investments to
companies on the basis of the size of the company. From time to time, Vanguard
may advertise using the average performance and/or the average expense ratio of
the small company growth funds. (This fund category was first established in
1982. For years prior to 1982, the results of the Lipper Small Company Growth
category were estimated using the returns of the Funds that constitute the Group
at its inception.)

LIPPER BALANCED FUND AVERAGE--an industry benchmark of average balanced funds
with similar investment objectives and policies, as measured by Lipper Inc.

LIPPER NON-GOVERNMENT MONEY MARKET FUND AVERAGE--an industry benchmark of
average non-government money market funds with similar investment objectives and
policies, as measured by Lipper Inc.

LIPPER GOVERNMENT MONEY MARKET FUND AVERAGE--an industry benchmark of average
government money market funds with similar investment objectives and policies,
as measured by Lipper Inc.

LIPPER GENERAL EQUITY FUND AVERAGE--an industry benchmark of average general
equity funds with similar investment objectives and policies, as measured by
Lipper Inc.

LIPPER FIXED INCOME FUND AVERAGE--an industry benchmark of average fixed income
funds with similar investment objectives and policies, as measured by Lipper
Inc.

B-19
<PAGE>

TAX ADVANTAGE OF U.S. TREASURY INCOME

CURRENT FUND YIELD
------------------
3.00% 4.00% 5.00% 6.00% 7.00%
----- ----- ----- ----- -----
NET EFFECTIVE STATE INCOME TAX RATE* TAXABLE EQUIVALENT YIELD
- ------------------------------------ ------------------------
3.00%....................... 3.09% 4.12% 5.15% 6.19% 7.22%
6.00%....................... 3.19% 4.26% 5.32% 6.38% 7.45%
9.00%....................... 3.30% 4.40% 5.49% 6.59% 7.69%

* Assumes state income tax taken as a deduction on Federal tax return (31%
tax bracket). Yields are not indicative of current or future performance.
This chart is for illustrative purposes only. Prospective investors should
consult their own tax advisers concerning the state tax consequences of an
investment in the Funds.

OTHER DEFINITIONS

Marketing literature for the Vanguard Admiral Funds may from time to time refer
to or discuss a Fund's DURATION. Duration is the weighted average life of a
Fund's debt instruments measured on a present-value basis; it is generally
superior to dollar-weighted average maturity as a measure of a Fund's potential
volatility due to changes in interest rates. Unlike a Fund's dollar weighted
average maturity, which takes into account only the stated maturity date of the
Fund's debt instruments, duration represents a weighted average of both interest
and principal payments, discounted by the current yield-to-maturity of the
securities held. For example, a four-year, zero-coupon bond, which pays interest
only upon maturity (along with principal), has both a maturity and duration of 4
years. However, a four-year bond priced at par with an 8% coupon has a maturity
of 4 years but a duration of 3.6 years (at an 8% yield), reflecting the bond's
earlier payment of interest.

In general, a bond with a longer duration will fluctuate more in price than a
bond with a shorter duration. Also, for small changes in interest rates,
duration serves to approximate the resulting change in a bond's price. For
example, a 1% change in interest rates will cause roughly a 4% move in the price
of a zero-coupon bond with a 4-year duration, while an 8% coupon bond (with a
3.6 year duration) will change by approximately 3.6%.

FINANCIAL STATEMENTS

The Funds' financial statements as of and for the fiscal year ended January 31,
2000, appearing in the Vanguard Admiral Funds' 2000 Annual Report to
Shareholders, and the report thereon of PricewaterhouseCoopers LLP, independent
accountants, also appearing therein, are incorporated by reference in this
Statement of Additional Information. For a more complete discussion of each
Fund's performance, please see the Funds' 2000 Annual Report to Shareholders,
which may be obtained without charge.

APPENDIX--DESCRIPTION OF SECURITIES AND RATINGS

I. DESCRIPTION OF BOND RATINGS

Excerpts from Moody's Investors Service, Inc., (Moody's) description of its bond
ratings: AAA--judged to be the best quality. They carry the smallest degree of
investment risk; AA--judged to be of high quality by all standards. Together
with the AAA group they comprise what are generally known as high grade bonds;
A--possess many favorable investment attributes and are to be considered as
"upper medium grade obligations"; BAA--considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be

B-20
<PAGE>

characteristically unreliable over any great length of time; BA--judged to have
speculative elements; their future cannot be considered as well assured;
B--generally lack characteristics of the desirable investment; CAA--are of poor
standing. Such issues may be in default or there may be present elements of
danger with respect to principal or interest; CA--speculative in a high degree,
often in default; C--lowest rated class of bonds, regarded as having extremely
poor prospects.

Moody's also supplies numerical indicators 1, 2, and 3 to rating
categories. The modifier 1 indicates that the security is in the higher end of
its rating category; the modifier 2 indicates a mid-range ranking; and 3
indicates a ranking toward the lower end of the category.

Excerpts from Standard & Poor's Corporation (S&P) description of its bond
ratings: AAA--highest grade obligations. Capacity to pay interest and repay
principal is extremely strong; AA--also qualify as high grade obligations. A
very strong capacity to pay interest and repay principal and differs from AAA
issues only in small degree; A--regarded as upper medium grade. They have a
strong capacity to pay interest and repay principal although it is somewhat
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories; BBB--regarded as having an
adequate capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories. This
group is the lowest which qualifies for commercial bank investment; BB, B, CCC,
CC--predominately speculative with respect to capacity to pay interest and repay
principal in accordance with terms of the obligation; BB indicates the lowest
degree of speculation and CC the highest.

S&P applies indicators "+" no character, and "-" to its rating categories.
The indicators show relative standing within the major rating categories.

II. U.S. GOVERNMENT SECURITIES

The term "U.S. Government securities" refers to a variety of securities which
are issued or guaranteed by the United States Treasury, by various agencies of
the United States Government, and by various instrumentalities which have been
established or sponsored by the United States Government. The term also refers
to "repurchase agreements" collateralized by such securities.

U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government-sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States. In the case of securities not backed by
the full faith and credit of the United States, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a claim against
the United States itself in the event the agency or instrumentality does not
meet its commitment.

Some of the U.S. Government agencies that issue or guarantee securities
include the Export- Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration, and The Tennessee Valley Authority.

An instrumentality of the U.S. Government is a government agency organized
under Federal charter with government supervision. Instrumentalities issuing or
guaranteeing securities include, among others, Federal Home Loan Banks, Federal
Land Banks, Central Bank for Cooperative, Federal Intermediate Credit Banks, and
the Federal National Mortgage Association.

III. ZERO COUPON TREASURY BONDS

Admiral Short- and Intermediate-Term Treasury Funds may invest in zero coupon
Treasury bonds, a term used to describe U.S. Treasury notes and bonds which have
been stripped of their unmatured interest coupons, or the coupons themselves,
and also receipts or certificates representing interest in such stripped debt
obligations and coupons. The timely payment of coupon interest and principal on
these instruments remains guaranteed by the "full faith and credit" of the
United States government.

B-21
<PAGE>

A zero coupon bond does not pay interest. Instead, it is issued at a
substantial discount to its "face value"--what it will be worth at maturity. The
difference between a security's issue or purchase price and its face value
represents the imputed interest an investor will earn if the security is held
until maturity. For tax purposes, a portion of this imputed interest is deemed
as income received by zero coupon bondholders each year. The Funds which expect
to qualify as regulated investment companies, intend to pass along such interest
as a component of a Fund's distributions of net investment income.

Zero coupon bonds may offer investors the opportunity to earn higher yields
than those available on U.S. Treasury bonds of similar maturity. However, zero
coupon bond prices may also exhibit greater price volatility than ordinary debt
securities because of the manner in which their principal and interest is
returned to the investor.

SAI012-ADMIRAL FUNDS

B-22
<PAGE>

PART C

VANGUARD ADMIRAL FUNDS

OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Declaration of Trust**
(b) By-Laws**

(d) Investment Advisory Contract**
(e) Not applicable

(f) Reference is made to the section entitled "Management of the Funds" in
the Registrant's Statement of Additional Information

(g) Custodian Agreement**
(h) Amended and Restated Funds' Service Agreement**
(i) Legal Opinion**
(j) Consent of Independent Accountants*
(k) Not Applicable
(l) Not Applicable
(m) Not Applicable
(n) Not Applicable
(o) Not Applicable

(p) Code of Ethics*

*Filed herewith
**Filed previously

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Registrant is not controlled by or under common control with any person.

ITEM 25. INDEMNIFICATION

The Registrant's organizational documents contain provisions indemnifying
Trustees and officers against liability incurred in their official capacity.
Article VII, Section 2 of the Declaration of Trust provides that the Registrant
may indemnify and hold harmless each and every Trustee and officer from and
against any and all claims, demands, costs, losses, expenses, and damages
whatsoever arising out of or related to the performance of his or her duties as
a Trustee or officer. However, this provision does not cover any liability to
which a Trustee or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his or her office. Article VI of the By-Laws
generally provides that the Registrant shall indemnify its Trustees and officers
from any liability arising out of their past or present service in that
capacity. Among other things, this provision excludes any liability arising by
reason of willful misfeasance, bad faith, gross negligence, or the reckless
disregard of the duties involved in the conduct of the Trustee's or officer's
office with the Registrant.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Investment advisory services are provided to the Registrant on an at-cost basis
by The Vanguard Group, Inc., a jointly-owned subsidiary of the Registrant and
the other Trusts in the Group. See the information concerning The Vanguard Group
set forth in Parts A and B.

C-1
<PAGE>

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Not Applicable
(b) Not Applicable
(c) Not Applicable

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The books, accounts, and other documents required to be maintained by Section 31
(a) of the Investment Company Act and the rules promulgated thereunder will be
maintained at the offices of Registrant; Registrant's Transfer Agent, The
Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, Pennsylvania 19355; and
the Registrant's Custodian, The Bank of New York, One Wall Street, New York, NY
10286 and State Street Bank & Trust Company, 225 Franklin Street, Boston, MA
02110.

ITEM 29. MANAGEMENT SERVICES

Other than as set forth under the description of The Vanguard Group in Part B of
this Registration Statement, the Registrant is not a party to any
management-related service contract.

ITEM 30. UNDERTAKINGS

Not Applicable

C-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant hereby certifies that it meets all
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Valley Forge and the
Commonwealth of Pennsylvania, on the 4th day of May, 2000.

VANGUARD ADMIRAL FUNDS

BY:_________________________________
(signature)
(HEIDI STAM)
JOHN J. BRENNAN*
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:

SIGNATURE TITLE DATE
- --------------------------------------------------------------------------------

By:/S/ JOHN J. BRENNAN President, Chairman, Chief May 4, 2000
------------------------- Executive Officer, and Trustee
(Heidi Stam)
John J. Brennan*

By:/S/ JOANN HEFFERNAN HEISEN Trustee May 4, 2000
---------------------------
(Heidi Stam)
JoAnn Heffernan Heisen*

By:/S/ BRUCE K. MACLAURY Trustee May 4, 2000
---------------------------
(Heidi Stam)
Bruce K. MacLaury*

By:/S/ BURTON G. MALKIEL Trustee May 4, 2000
---------------------------
(Heidi Stam)
Burton G. Malkiel*

By:/S/ ALFRED M. RANKIN, JR. Trustee May 4, 2000
---------------------------
(Heidi Stam)
Alfred M. Rankin, Jr.*

By:/S/ JOHN C. SAWHILL Trustee May 4, 2000
---------------------------
(Heidi Stam)
John C. Sawhill*

By:/S/ JAMES O. WELCH, JR. Trustee May 4, 2000
---------------------------
(Heidi Stam)
James O. Welch, Jr.*

By:/S/ J. LAWRENCE WILSON Trustee May 4, 2000
---------------------------
(Heidi Stam)
J. Lawrence Wilson*

By:/S/ THOMAS J. HIGGINS Treasurer and Principal May 4, 2000
-------------------------- Financial Officer and
(Heidi Stam) Principal Accounting Officer
Thomas J. Higgins*

*By Power of Attorney. See File Number 33-4424, filed on January 25, 1999.
Incorporated by Reference.
<PAGE>

EXHIBIT INDEX

Consent of Independent Accountants .................................... EX-99.BJ
Code of Ethics ........................................................ EX-99.BP

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 11 to the Registration Statement on Form N-1A (the Registration
Statement) of our report dated March 6, 2000, relating to the financial
statements and financial highlights appearing in the 2000 Annual Report to
Shareholders of Vanguard Admiral Funds, which are also incorporated by reference
into the Registration Statement. We also consent to the references to us under
the heading "Financial Highlights" in the Prospectuses and under the headings
"Financial Statements" and "Service Providers--Independent Accountants" in the
Statement of Additional Information.

PricewaterhouseCoopers LLP
Philadelphia, PA

April 27, 2000

<PAGE>

THE VANGUARD GROUP, INC.
------------------------

CODE OF ETHICS
--------------

SECTION 1: BACKGROUND

This Code of Ethics has been approved and adopted by the Board of Directors of
The Vanguard Group, Inc. ("Vanguard") and the Boards of Trustees of each of the
Vanguard funds in compliance with Rule 17j-1 under the Investment Company Act of
1940. The Code has been amended and restated effective as of May 1, 1999. Except
as otherwise provided, the Code applies to all "Vanguard personnel," which term
includes all employees, officers, Directors and Trustees of Vanguard and the
Vanguard funds. The Code also contains provisions which apply to the investment
advisers to the Vanguard funds (see section 11).

SECTION 2: STATEMENT OF GENERAL FIDUCIARY STANDARDS

This Code of Ethics is based on the overriding principle that Vanguard personnel
act as fiduciaries for shareholders' investments in the Vanguard funds.
Accordingly, Vanguard personnel must conduct their activities at all times in
accordance with the following standards:

a) SHAREHOLDERS' INTERESTS COME FIRST. In the course of fulfilling their
duties and responsibilities to Vanguard fund shareholders, Vanguard personnel
must at all times place the interests of Vanguard fund shareholders first. In
particular, Vanguard personnel must avoid serving their own personal interests
ahead of the interests of Vanguard fund shareholders.

b) CONFLICTS OF INTEREST MUST BE AVOIDED. Vanguard personnel must avoid
any situation involving an actual or potential conflict of interest or possible
impropriety with respect to their duties and responsibilities to Vanguard fund
shareholders.

c) COMPROMISING SITUATIONS MUST BE AVOIDED. Vanguard personnel must not
take advantage of their position of trust and responsibility at Vanguard.
Vanguard personnel must avoid any situation that might compromise or call into
question their exercise of full independent judgment in the best interests of
Vanguard fund shareholders.
<PAGE>

All activities of Vanguard personnel should be guided by and adhere to these
fiduciary standards. The remainder of this Code sets forth specific rules and
procedures which are consistent with these fiduciary standards. However, all
activities by Vanguard personnel are required to conform with these fiduciary
standards regardless of whether the activity is specifically covered in this
Code.

SECTION 3: DUTY OF CONFIDENTIALITY

Vanguard personnel must keep confidential at all times any nonpublic information
they may obtain in the course of their employment at Vanguard. This information
includes but is not limited to:

1) information on the vanguard funds, including recent or impending
securities transactions by the funds, activities of the
funds' advisers, offerings of new funds, and closings of funds;

2) information on Vanguard fund shareholders and prospective
shareholders, including their identities, investments, and account
transactions;

3) information on other vanguard personnel, including their pay,
benefits, position level, and performance ratings; and

4) information on Vanguard business activities, including new services,
products, technologies, and business initiatives.

Vanguard personnel have the highest fiduciary obligation not to reveal
confidential Vanguard information to any party that does not have a clear and
compelling need to know such information.

SECTION 4: GIFT POLICY

Vanguard personnel are prohibited from seeking or accepting gifts of material
value from any person or entity, including any Vanguard fund shareholder or
Vanguard client, when such gift is in relation to doing business with Vanguard.
In certain cases, Vanguard PERSONNEL MAY ACCEPT GIFTS OF DE MINIMIS value (as
determined in accordance with guidelines set forth in Vanguard's Human Resources
Policy Manual) but only if they obtain the approval of a Vanguard officer.
<PAGE>

SECTION 5: OUTSIDE ACTIVITIES

a) PROHIBITIONS ON SECONDARY EMPLOYMENT. Vanguard employees are
prohibited from working for any business or enterprise in the financial services
industry that competes with Vanguard. In addition, Vanguard employees are
prohibited from working for any organization that could possibly benefit from
the employee's knowledge of confidential Vanguard information, such as new
Vanguard services and technologies. Beyond these prohibitions, Vanguard
employees may accept secondary employment, but only with prior approval from the
Vanguard Compliance Department. Vanguard officers are prohibited from accepting
or serving in any form of secondary employment unless they have received
approval from a Vanguard Managing Director or the Vanguard Chairman and Chief
Executive Officer.

b) PROHIBITION ON SERVICE AS DIRECTOR OR PUBLIC OFFICIAL. Vanguard
officers and employees are prohibited from serving on the board of directors of
any publicly traded company or in an official capacity for any federal, state,
or local government (or governmental agency or instrumentality) without prior
approval from the Vanguard Compliance Department.

c) PROHIBITION ON MISUSE OF VANGUARD TIME OR PROPERTY. Vanguard personnel
are prohibited from using Vanguard time, equipment, services, personnel or
property for any purposes other than the performance of their duties and
responsibilities at Vanguard.

SECTION 6: GENERAL PROHIBITIONS ON TRADING

a) TRADING ON KNOWLEDGE OF VANGUARD FUNDS ACTIVITIES. All Vanguard
personnel are prohibited from taking personal advantage of their knowledge of
recent or impending securities activities of the Vanguard funds or the funds'
investment advisers. In particular, Vanguard personnel are prohibited from
purchasing or selling, directly or indirectly, any security when they have
actual knowledge that the security is being purchased or sold, or considered for
purchase or sale, by a Vanguard fund. This prohibition applies to all securities
in which the person has acquired or will acquire "beneficial ownership." For
these purposes, a person is considered to have beneficial ownership in all
securities over which the person enjoys economic benefits substantially
equivalent to ownership (for example, securities held in trust for the person's
benefit), regardless of who is the registered owner. Under this Code of Ethics,
Vanguard personnel are considered to have beneficial ownership of all securities
owned by their spouse or minor children.
<PAGE>

b) VANGUARD INSIDER TRADING POLICY. All Vanguard personnel are subject
to Vanguard's Insider Trading Policy, which is considered an integral part of
this Code of Ethics. Vanguard's Insider Trading Policy prohibits Vanguard
personnel from buying or selling any security while in the possession of
material nonpublic information about the issuer of the security. The policy also
prohibits Vanguard personnel from communicating to third parties any material
nonpublic information about any security or issuer of securities. Any violation
of Vanguard's Insider Trading Policy may result in penalties which could include
termination of employment with Vanguard.

SECTION 7: ADDITIONAL TRADING RESTRICTIONS FOR ACCESS PERSONS

a) APPLICATION. The restrictions of this section 7 apply to all Vanguard
access persons. For purposes of the Code of Ethics, "access persons" include:

1) any Director or Trustee of Vanguard or a Vanguard fund, excluding
disinterested Directors and Trustees (i.e., any Director or Trustee
who is not an "interested person" of a Vanguard fund within the
meaning of Section 2(a)(19) of the Investment Company Act of 1940);

2) any officer of Vanguard or a Vanguard fund; and

3) any employee of Vanguard or a Vanguard fund who in the course of his
or her regular duties participates in the selection of a Vanguard
fund's securities or who works in a Vanguard department or unit that
has access to information regarding a Vanguard fund's impending
purchases or sales of securities.

The Vanguard Compliance Department will notify all Vanguard personnel who
qualify as access persons of their duties and responsibilities under this Code
of Ethics. The restrictions of this section 7 apply to all transactions in which
a Vanguard access person has or will acquire beneficial ownership (see section
6a) of a security, including transactions by a spouse or minor child. However,
the restrictions do not apply to transactions involving: (i) direct obligations
of the Government of the United States; (ii) high quality short-term debt
instruments, including bankers' acceptances, bank certificates of deposit,
commercial paper, and repurchase agreements; and (iii) shares of registered
open-end investment companies (including shares of
<PAGE>

any Vanguard fund). In addition, the restrictions do not apply to transactions
in accounts over which the access person has no direct or indirect control or
influence.

b) GENERAL RESTRICTIONS FOR ACCESS PERSONS. Vanguard access persons are
subject to the following restrictions with respect to their securities
transactions:

1) PRE-CLEARANCE OF SECURITIES TRANSACTIONS. Vanguard access persons must
receive approval from the Vanguard Compliance Department before
purchasing or selling any securities. The Vanguard Compliance
Department will notify Vanguard access persons if their proposed
securities transactions are permitted under this Code of Ethics.

2) TRADING THROUGH VANGUARD BROKERAGE SERVICES. Vanguard access persons
must conduct all their securities transactions through Vanguard
Brokerage Services. Vanguard Brokerage Services will send a
confirmation notice of any purchase or sale of securities by a
Vanguard access person to the Vanguard Compliance Department.

3) PROHIBITION ON INITIAL PUBLIC OFFERINGS. Vanguard access persons are
prohibited from acquiring securities in an initial public offering.

4) PROHIBITION ON PRIVATE PLACEMENTS. Vanguard access persons are
prohibited from acquiring securities in a private placement without
prior approval from the Vanguard Compliance Department. In the event
an access person receives approval to purchase securities in a private
placement, the access person must disclose that investment if he or
she plays any part in a Vanguard fund's later consideration of an
investment in the issuer.

5) PROHIBITION ON OPTIONS. Vanguard access persons are prohibited from
acquiring or selling any option on any security.

6) PROHIBITION ON SHORT-SELLING. Vanguard access persons are prohibited
from selling any security that the access person does not own or
otherwise engaging in "short-selling" activities.

7) PROHIBITION ON SHORT-TERM TRADING PROFITS. Vanguard access persons are
prohibited from profiting in the purchase and sale, or sale and
purchase, of the same (or related) securities within 60 calendar days.
In the event that an access person realizes profits on
<PAGE>

such short-term trades, the access person must relinquish such profits
to The Vanguard Group Foundation.

c) BLACKOUT RESTRICTIONS FOR ACCESS PERSONS. All Vanguard access persons
are subject to the following restrictions when their purchases and sales of
securities coincide with trades by the Vanguard funds:

1) PURCHASES AND SALES WITHIN THREE DAYS FOLLOWING A FUND TRADE. Vanguard
access persons are prohibited from purchasing or selling any security
within three calendar days after a Vanguard fund has traded in the
same (or a related) security. In the event that an access person makes
a prohibited purchase or sale within the three-day period, the access
person must unwind the transaction and relinquish any gain from the
transaction to The Vanguard Group Foundation.

2) PURCHASES WITHIN SEVEN DAYS BEFORE A FUND PURCHASE. A Vanguard access
person who purchases a security within seven calendar days before a
Vanguard fund purchases the same (or a related) security is prohibited
from selling the security for a period of six months following the
fund's trade. In the event that an access person makes a prohibited
sale within the six-month period, the access person must relinquish to
The Vanguard Group Foundation any gain from the transaction.

3) SALES WITHIN SEVEN DAYS BEFORE A FUND SALE. A Vanguard access person
who sells a security within seven days before a Vanguard fund sells
the same (or a related) security must relinquish to The Vanguard Group
Foundation the difference between the access person's sale price and
the Vanguard fund's sale price (assuming the access person's sale
price is higher).

4) RESTRICTIONS NOT APPLICABLE TO TRADES BY VANGUARD INDEX FUNDS. The
restrictions of this section 7c do not apply to purchases and sales of
securities by Vanguard access persons which would otherwise violate
section 7c solely because the transactions coincide with trades by any
Vanguard index funds.

SECTION 8: ADDITIONAL TRADING RESTRICTIONS FOR INSTITUTIONAL CLIENT CONTACTS
<PAGE>

a) APPLICATION. The restrictions of this section 8 apply to all Vanguard
Institutional client contacts. For purposes of the Code of Ethics, an
"Institutional client contact" includes any Vanguard employee who works in a
department or unit at Vanguard that has significant levels of interaction or
dealings with the management of clients of Vanguard's Institutional Investor
Group. The Vanguard Compliance Department will notify Vanguard employees who
qualify as Institutional client contacts of the restrictions of this Section 8.

b) PROHIBITION ON TRADING SECURITIES OF INSTITUTIONAL CLIENTS. Vanguard
Institutional client contacts are prohibited from acquiring securities issued by
clients of the Vanguard Institutional Investor Group (including any options or
futures contracts based on such securities). In the event that any individual
who becomes subject to this prohibition already owns securities issued by
Institutional clients, the individual will be prohibited from disposing of those
securities without prior approval from the Vanguard Compliance Department. The
restrictions of this section 8 apply to all transactions in which Institutional
client contacts have acquired or would acquire beneficial ownership (see section
6a) of a security, including transactions by a spouse or minor child. However,
the restrictions do not apply to transactions in any account over which an
individual does not possess any direct or indirect control or influence. The
Vanguard Compliance Department will maintain a list of the Institutional clients
to which the prohibitions of this section 8 apply. The Vanguard Compliance
Department may waive the prohibition on acquiring securities of Institutional
clients in appropriate cases (including, for example, cases in which an
individual acquires securities as part of an inheritance or through an
employer-sponsored employee benefits or compensation program).

SECTION 9: COMPLIANCE PROCEDURES

a) APPLICATION. The requirements of this section 9 apply to all Vanguard
personnel other than disinterested Directors and Trustees (see section 7a). The
requirements apply to all transactions in which Vanguard personnel have acquired
or would acquire beneficial ownership (see section 6a) of a security, including
transactions by a spouse or minor child. However, the requirements do not apply
to transactions involving: (i) direct obligations of the Government of the
United States; (ii) high quality short-term debt instruments, including bankers'
acceptances, bank certificates of deposit, commercial paper, and repurchase
agreements; and (iii) shares of registered open-end investment companies
(including shares of any Vanguard fund). In addition, the requirements do not
apply to securities acquired for accounts over which the person has no direct or
indirect control or influence.
<PAGE>

b) DISCLOSURE OF PERSONAL HOLDINGS. All Vanguard personnel must disclose
their personal securities holdings to the Vanguard Compliance Department upon
commencement of employment with Vanguard. These disclosures must identify the
title, number of shares, and principal amount with respect to each security
holding.

c) RECORDS OF SECURITIES TRANSACTIONS. All Vanguard personnel must notify
the Vanguard Compliance Department if they have opened or intend to open a
brokerage account. Vanguard personnel must direct their brokers to supply the
Vanguard Compliance Department with duplicate confirmation statements of their
securities transactions and copies of all periodic statements for their
brokerage accounts.

d) CERTIFICATION OF COMPLIANCE. All Vanguard personnel must certify
annually to the Vanguard Compliance Department that: (i) they have read and
understand this Code of Ethics; (ii) they have complied with all requirements of
the Code of Ethics; and (3) they have reported all transactions required to be
reported under the Code of Ethics.

SECTION 10: REQUIRED REPORTS BY DISINTERESTED DIRECTORS AND TRUSTEES

Disinterested Directors and Trustees (see section 7a) are required to report
their securities transactions to the Vanguard Compliance Department only in
cases where the Director or Trustee knew or should have known during the 15-day
period immediately preceding or following the date of the transaction that the
security had been purchased or sold, or was being considered for purchase or
sale, by a Vanguard fund.

SECTION 11: APPLICATION TO INVESTMENT ADVISERS

a) ADOPTION OF CODE OF ETHICS. Each investment adviser to a Vanguard fund
must adopt a code of ethics in compliance with Rule 17j-1 and provide the
Vanguard Compliance Department with a copy of the code of ethics and any
subsequent amendments. Each investment adviser is responsible for enforcing its
code of ethics and reporting to the Vanguard Compliance Department on a timely
basis any violations of the code of ethics and resulting sanctions.
<PAGE>

b) PREPARATION OF ANNUAL REPORTS. Each investment adviser to a Vanguard
fund must prepare an annual report on its code of ethics for review by the Board
of Trustees of the Vanguard fund. This report must contain the following:

1) a description of any issues arising under the adviser's code of ethics
including, but not limited to, information about any violations of the
code, sanctions imposed in response to such violations, changes made
to the code's provisions or procedures, and any recommended changes to
the code; and

2) a certification that the investment adviser has adopted such
procedures as are reasonably necessary to prevent access persons from
violating the code of ethics.

SECTION 12: REVIEW BY BOARDS OF DIRECTORS AND TRUSTEES

a) REVIEW OF INVESTMENT ADVISERS' CODE OF ETHICS. Prior to retaining the
services of any investment adviser for a Vanguard fund, the Board of Trustees of
the Vanguard fund must review the code of ethics adopted by the investment
adviser pursuant to Rule 17j-1 under the Investment Company Act of 1940. The
Board of Trustees must receive a certification from the investment adviser that
the adviser has adopted such procedures as are reasonably necessary to prevent
access persons from violating the adviser's code of ethics. A majority of the
Trustees of the Vanguard fund, including a majority of the disinterested
Trustees of the Fund, must determine whether the adviser's code of ethics
contains such provisions as are reasonably necessary to prevent access persons
from engaging in any act, practice, or course of conduct prohibited by the
anti-fraud provisions of Rule 17j-1.

b) REVIEW OF VANGUARD ANNUAL REPORTS. The Vanguard Compliance Department
must prepare an annual report on this Code of Ethics for review by the Board of
Directors of Vanguard and the Boards of Trustees of the Vanguard funds. The
report must contain the following:

1) a description of issues arising under the Code of Ethics since the
last report including, but not limited to, information about any
violations of the Code, sanctions imposed in response to such
violations, changes made to the Code's provisions or procedures, and
any recommended changes to the Code; and
<PAGE>

2) a certification that Vanguard and the Vanguard Funds have adopted such
procedures as are reasonably necessary to prevent access persons from
violating the Code of Ethics.

SECTION 13: SANCTIONS

In the event of any violation of this Code of Ethics, Vanguard senior management
will impose such sanctions as deemed necessary and appropriate under the
circumstances and in the best interests of Vanguard fund shareholders. In the
case of any violations by Vanguard employees, the range of sanctions could
include a letter of censure, suspension of employment without pay, or permanent
termination of employment.

SECTION 14: RETENTION OF RECORDS

Vanguard must maintain all records required by Rule 17j-1 including: (i) copies
of this Code of Ethics and the codes of ethics of all investment advisers to the
Vanguard funds; (ii) records of any violations of the codes of ethics and
actions taken as a result of the violations; (iii) copies of all certifications
made by Vanguard personnel pursuant to section 9d; (iv) lists of all Vanguard
personnel who are, or within the past five years have been, access persons
subject to the trading restrictions of section 8 and lists of the Vanguard
compliance personnel responsible for monitoring compliance with those trading
restrictions; and (v) copies of the annual reports to the Boards of Directors
and Trustees pursuant to section 12.