VANGUARD TAX-MANAGED FUND, INC.
PROSPECTUS SUPPLEMENT
SEPTEMBER 6, 1994
Vanguard Tax-Managed Fund now offers Telephone Exchange and Fund Express
Special Purchases and Redemptions. Shares of the Fund which are redeemed or
exchanged after being held for less than one year will be assessed a 2%
redemption fee. The fee is 1% for shares held at least one but less than five
years.
Telephone Exchange
Should your investment goals change, the Fund now accepts telephone exchanges
both into and out of the Fund.
Requests for telephone exchanges received prior to the close of trading on the
New York Stock Exchange (generally 4:00 p.m. Eastern time) are processed at
the close of business that same day. Requests received after the close of the
Exchange are processed the next business day. Telephone exchanges are not
accepted into or from Vanguard Balanced Index Fund, Vanguard Index Trust,
Vanguard International Equity Index Fund--European, Pacific and Emerging
Markets Portfolios, and Vanguard Quantitative Portfolios. Important note: An
exchange, whether made in writing or over the telephone, is treated as a
redemption and purchase; therefore, you could realize a taxable gain or loss
or have a redemption fee assessed on the transaction. For further information
about exchanges, please see "Exchanging Your Shares" on page 27 of the
prospectus.
The ability to initiate exchanges by telephone is automatically established on
your account unless you request in writing that telephone transactions on your
account not be permitted. For further information, please see "Important
Information About Telephone Transactions" on page 28 of the prospectus.
Fund Express Special Purchases and Redemptions
The Fund Express Special Purchase and Redemption option lets you move money
between your Vanguard Account and your bank account on your request. For more
information, please see "Purchasing Shares By Fund Express" on page 24 of the
prospectus and "Selling Shares By Fund Express" on page 26 of the prospectus.
