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Vanguard International Equity Index Funds, et al. · 485APOS · On 4/18/08

Filed On 4/18/08 12:40pm ET · SEC Files 33-32548, 811-05972 · Accession Number 932471-8-1084

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 4/18/08  Vanguard Int'l Equity Index Funds 485APOS                1:200                                    Vanguard Horizon Funds
          Vanguard International Equity Index Funds

Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485APOS     Vanguard International Equity Index Funds            200    739K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Advantages of Index Funds Index funds typically have the following characteristics: Authorized Participant Bid-Asked Spread Borrowing Business and Other Connections of Investment Adviser Conversion Privilege Description of the Trust Distribution Exhibits Financial Statements Good Order Indemnification Index Information About the ETF Share Class Investment Advisory Services Investment Limitations Investment Policies Legal Disclaimer Location of Accounts and Records Management of the Funds Management Services Other Investment Companies Passive Management Persons Controlled by or Under Common Control With Registrant Portfolio Holdings Portfolio Transactions Principal Underwriters Proxy Voting Guidelines Purchase and Redemption of Shares Share Price Undertakings Vanguard
1	1st Page - Filing Submission
8	Advantages of Index Funds Index funds typically have the following characteristics:
20	Share Price
32	Good Order
36	Portfolio Holdings
41	Conversion Privilege
44	Index
45	Passive Management
76	Authorized Participant
"	Bid-Asked Spread
130	Description of the Trust
132	Investment Policies
133	Borrowing
141	Other Investment Companies
146	Investment Limitations
148	Purchase and Redemption of Shares
150	Management of the Funds
"	Vanguard
151	Distribution
162	Investment Advisory Services
164	Portfolio Transactions
165	Proxy Voting Guidelines
170	Information About the ETF Share Class
195	Financial Statements
196	Legal Disclaimer
197	Item 23. Exhibits
"	Item 24. Persons Controlled by or Under Common Control With Registrant
"	Item 25. Indemnification
198	Item 26. Business and Other Connections of Investment Adviser
"	Item 27. Principal Underwriters
199	Item 28. Location of Accounts and Records
"	Item 29. Management Services
"	Item 30. Undertakings

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Sponsored Ads...

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

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

PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 58
AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

AMENDMENT NO. 59

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

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

REGISTRANT'S TELEPHONE NUMBER (610) 669-1000

HEIDI STAM, ESQUIRE
P.O. BOX 876
VALLEY FORGE, PA 19482

IT IS PROPOSED THAT THIS AMENDMENT BECOME EFFECTIVE
PURSUANT TO PARAGRAPH (a)(1) OF RULE 485 ON JUNE 17, 2008.

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Vanguard/(R)/ Total World Stock Index Fund

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS
DATED APRIL 18, 2008

> Prospectus

Investor Shares
June 17, 2008

[SHIP LOGO VANGUARD(R)]

This is the Fund's initial prospectus, so it contains no performance data.
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.

485APOS 3rd Page of 200 TOC 1st Previous Next Bottom Just 3rd

Contents

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Fund Profile 1 Investing With Vanguard 18
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Investing in Index Funds 5 Purchasing Shares 18
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More on the Fund 5 Converting Shares 21
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The Fund and Vanguard 13 Redeeming Shares 22
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Investment Advisor 13 Exchanging Shares 26
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Dividends, Capital Gains, and 14 Frequent-Trading Limits 26
Taxes
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Share Price 17 Other Rules You Should Know 28
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Fund and Account Updates 32
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Contacting Vanguard 34
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ETF Shares 36
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Glossary of Investment Terms 41
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Why Reading This Prospectus Is Important
This prospectus explains the investment objective, policies, strategies, and
risks associated with the Fund. 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 decide whether the Fund is the right
investment for you. We suggest that you keep this prospectus for future
reference.

Share Class Overview
This prospectus offers the Fund's Investor Shares. A separate prospectus offers
the Fund's Institutional Shares, which are for investors who generally do not
require special employee benefit plan services and who invest a minimum of $5
million. In addition, the Fund provides an exchange-traded class of shares (ETF
Shares), which are also offered through a separate prospectus. A brief
description of ETF Shares and how to convert into them appears on pages 36 to 40
of this prospectus.

The Fund's separate share classes have different expenses; as a result, their
investment performances will differ.

An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Company or any other
government agency.

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Fund Profile

Investment Objective
The Fund seeks to track the performance of a benchmark index that measures the
investment return of Global stocks.

Primary Investment Strategies
The Fund employs a "passive management" --or indexing--investment approach
designed to track the performance of the FTSE/(R)/ All-World Index, a
free-float- adjusted, market-capitalization-weighted index designed to measure
the market performance of large- and mid-capitalization stocks of companies
located around the world. The Index includes approximately 2,900 stocks of
companies located in 48 countries, including both developed and emerging
markets. As of February 29, 2008, the largest markets covered in the Index were
the United States, the United Kingdom, Japan, France, and Germany (which made up
approximately 41%, 9%, 9%, 5%, and 4%, respectively, of the Index's market
capitalization). The Fund typically holds xxxx-xxxx stocks in its target Index
(covering nearly xx% of the Index's total market capitalization) and a
representative sample of the remaining stocks. The Fund holds a broadly
diversified collection of securities that, in the aggregate, approximates the
full Index in terms of key characteristics. These key characteristics include
industry weightings, country weightings, and market capitalization, as well as
certain financial measures, such as price/earnings ratio and dividend yield. For
additional information on the Fund's investment strategies, please see More on
the Fund.

Primary Risks
An investment in the Fund could lose money over short or even long periods. You
should expect the Fund's share price and total return to fluctuate within a wide
range, like the fluctuations of the overall stock market. The Fund's performance
could be hurt by:

.. Stock market risk, which is the chance that stock prices overall will decline.
Stock markets tend to move in cycles, with periods of rising prices and periods
of falling prices. In addition, investments in foreign stock markets can be
riskier than U.S. stock investments. The prices of foreign stocks and the prices
of U.S. stocks have, at times, moved in opposite directions.

.. Country/regional risk, which is the chance that world events--such as
political upheaval, financial troubles, or natural disasters--will adversely
affect the value of securities issued by companies in foreign countries or
regions. Because the Fund may invest a large portion of its assets in securities
of companies located in any one country or region, its performance may be hurt
disproportionately by the poor performance of its investments in that area.
Country/regional risk is especially high in emerging markets.

.. Emerging markets risk, which is the chance that the emerging markets will be
substantially more volatile, and substantially less liquid, than the more
developed foreign markets.

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.. Currency risk, which is the chance that the value of a foreign investment,
measured in U.S. dollars, will decrease because of unfavorable changes in
currency exchange rates.

.. Index sampling risk, which is the chance that the securities selected for the
Fund, in the aggregate, will not provide investment performance matching that
of its Index.

Performance/Risk Information
The Fund began operations on June 17, 2008, so performance information
(including annual total returns and average annual total returns) is not yet
available.

Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold Investor Shares of the Fund. As is the case with all mutual funds,
transaction costs incurred by the Fund for buying and selling securities are not
reflected in the table. However, these costs are reflected in investment
performance figures. The expenses shown under Annual Fund Operating Expenses are
based on estimated amounts for the current fiscal year. The Fund has no
operating history; actual operating expenses could be different.

[Enlarge/Download Table]

Shareholder Fees
(Fees paid directly from your investment)
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Sales Charge (Load) Imposed on Purchases None
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Purchase Fee 0.15%/1/
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Sales Charge (Load) Imposed on Reinvested Dividends None
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Redemption Fee 2%/2/
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Account Service Fee (for fund account balances below $10,000) $20/year/3/
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Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
------------------------------------------------------------------------------------------------------------------------------
Management Expenses 0.xx%
------------------------------------------------------------------------------------------------------------------------------
12b-1 Distribution Fee None
------------------------------------------------------------------------------------------------------------------------------
Other Expenses 0.xx%
------------------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.45%
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1 The purchase fee is deducted from all purchases (including exchanges from other Vanguard funds) but not from reinvested
dividends and capital gains.
2 The 2% fee applies to shares redeemed within two months of purchase. The fee applies to shares redeemed by selling or by
exchanging to another fund, or if your shares are redeemed because your Fund account balance falls below the minimum
initial investment for any reason, including market fluctuation. The fee is withheld from redemption proceeds and retained
by the Fund. Shares held for two months or more are not subject to the 2% fee.
3 If applicable, the account service fee will be collected by redeeming fund shares in the amount of $20.

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The following example is intended to help you compare the cost of investing in
the Fund's Investor Shares 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's shares. This example assumes that the Shares
provide a return of 5% a year and that operating expenses match our estimates.
The results apply whether or not you redeem your investment at the end of the
given period.

1 Year 3 Years
----------------------------
$xx $xxx
----------------------------

This example should not be considered to represent actual expenses or
performance for the future. Actual future expenses may be higher or lower than
those shown.

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Plain Talk About Fund Expenses

All mutual funds have operating expenses. These expenses, which are deducted
from a fund's gross income, are expressed as a percentage of the net assets of
the fund. We expect the Vanguard Total World Stock Index Fund Investor Shares'
expense ratio for the current fiscal year to be 0.45%, or $4.50 per $1,000 of
average net assets. The average foreign large blend fund had expenses in 2007 of
xx.xx%, or $xx.xx per $1,000 of average net assets (derived from data provided
by Lipper Inc., which reports on the mutual fund industry). Management expenses,
which are one part of operating expenses, include investment advisory fees as
well as other costs of managing a fund--such as account maintenance, reporting,
accounting, legal, and other administrative expenses.
--------------------------------------------------------------------------------

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Plain Talk About 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 incurred when the fund buys or sells securities. These
costs can erode a substantial portion of the gross income or the capital
appreciation a fund achieves. Even seemingly small differences in expenses
can, over time, have a dramatic effect on a fund's performance.
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[Enlarge/Download Table]

Additional Information
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Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
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Dividends and Capital Gains Distributed annually in December
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Suitable for IRAs Yes
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Inception Date June 17, 2008
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Minimum Initial Investment $3,000
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Newspaper Abbreviation xxxx
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Vanguard Fund Number xxx
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CUSIP Number xxxx
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Ticker Symbol xxxxx
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Investing in Index Funds

What Is Indexing?
Indexing is an investment strategy for tracking the performance of a specified
market benchmark, or "index." An index is an unmanaged group of securities whose
overall performance is used as a standard to measure the investment performance
of a particular market. There are many types of indexes. Some represent entire
markets--such as the U.S. stock market or the U.S. bond market. Other indexes
cover market segments--such as small-capitalization stocks or short-term bonds.

An index fund holds all, or a representative sample, of the securities that make
up its target index. Index funds attempt to mirror what the target index does,
for better or worse. However, an index fund does not always perform exactly like
its target index. For example, like all mutual funds, index funds have operating
expenses and transaction costs. Market indexes do not, and therefore will
usually have a slight performance advantage over funds that track them.

More on the Fund

This prospectus describes the primary risks you would face as a Fund
shareholder. It is important to keep in mind one of the main axioms of
investing: The higher the risk of losing money, the higher the potential reward.
The reverse, also, is generally true: The lower the risk, the lower the
potential reward. As you consider an investment in any mutual fund, you should
take into account your personal tolerance for fluctuations in the securities
markets. Look for this FLAG LOGO symbol throughout the prospectus. It is used
to mark detailed information about the more significant risks that you would
confront as a Fund shareholder.

The following sections explain the primary investment strategies and policies
that the Fund uses in pursuit of its objective. The Fund's board of trustees,
which oversees the Fund's management, may change investment strategies or
policies in the interest of shareholders without a shareholder vote, unless
those strategies or policies are designated as fundamental. Note that the Fund's
investment objective is not fundamental and may be changed without a shareholder
vote. Under normal circumstances, the Fund will invest at least 80% of its
assets in the stocks that make up its target index. The Fund may change its 80%
policy only upon 60 days' notice to shareholders.

Advantages of Index Funds
Index funds typically have the following characteristics:

.. Variety of investments. Most Vanguard index funds generally invest in the
securities of a wide variety of companies and industries.

.. Relative performance consistency. Because they seek to track market
benchmarks, index funds usually do not perform dramatically better or worse than
their benchmarks.

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.. Low cost. Index funds are inexpensive to run, compared with actively managed
funds. They have low or no research costs and typically keep trading
activity--and thus brokerage commissions and other transaction costs--to a
minimum.

Compared with actively managed funds, most index funds have lower turnover rates
and lower capital gains distributions. However, from time to time, some index
funds may pay out higher-than-expected taxable distributions. That's because
index funds must adjust their holdings to reflect changes in their target
indexes. In some cases, such changes may force an index fund to sell securities
that have appreciated in value, thereby realizing a capital gain that must be
distributed to shareholders. A security may move out of an index for a number of
reasons, including a merger or acquisition, or a substantial change in the
market capitalization of the issuer. Generally, these changes tend to occur more
frequently with small and medium-size companies than they do with large,
well-established companies.

Market Exposure
The Fund invests mainly in large- and mid-capitalization stocks of companies
located around the world, including developed and emerging markets.

--------------------------------------------------------------------------------
Plain Talk About International Investing

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

FLAG LOGO
The Fund is subject to stock market risk, which is the chance that stock prices
overall will decline. Stock markets tend to move in cycles, with periods of
rising prices and periods of falling prices. In addition, investments in
foreign stock markets can be riskier than U.S. stock investments. The prices of
foreign stocks and the prices of U.S. stocks have, at times, moved in opposite
directions.

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that the returns shown do not include the costs of buying and selling stocks or
other expenses that a real-world investment portfolio would incur.

U.S. Stock Market Returns
(1926-2007)
1 Year 5 Years 10 Years 20 Years
----------------------------------------------------------
Best 54.2% 28.6% 19.9% 17.8%
----------------------------------------------------------
Worst -43.1 -12.4 -0.8 3.1
----------------------------------------------------------
Average 12.2 10.4 11.1 11.4
----------------------------------------------------------

The table covers all of the 1-, 5-, 10-, and 20-year periods from 1926 through
2007. You can see, for example, that although the average return on common
stocks for all of the 5-year periods was 10.4%, average returns for individual
5-year periods ranged from -12.4% (from 1928 through 1932) to 28.6% (from 1995
through 1999). These average returns reflect past performance of common stocks;
you should not regard them as an indication of future performance of either the
stock market as a whole or the Fund in particular.

To illustrate the volatility of international stock prices, the following table
shows the best, worst, and average annual total returns for foreign stock
markets over various periods as measured by the Morgan Stanley Capital
International Europe, Australasia, Far East (MSCI EAFE) Index, a widely used
barometer of international market activity. (Total returns consist of dividend
income plus change in market price.) Note that the returns shown do not include
the costs of buying and selling stocks or other expenses that a real-world
investment portfolio would incur.

International Stock Market Returns
(1970-2007)
1 Year 5 Years 10 Years 20 Years
----------------------------------------------------------
Best 69.4% 36.1% 22.0% 15.5%
----------------------------------------------------------
Worst -23.4 -2.9 4.0 7.4
----------------------------------------------------------
Average 12.9 11.1 11.6 12.3
----------------------------------------------------------

The table covers all of the 1-, 5-, 10-, and 20-year periods from 1970 through
2007. These average returns reflect past performance of international stocks;
you should not regard them as an indication of future performance of either
foreign markets as a whole or the Fund in particular.

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EAFE Index tracks the European and Pacific developed markets collectively, the
returns in the preceding table do not reflect the variability of returns for
these markets individually. To illustrate this variability, the following table
shows returns for different international markets--as well as for the U.S.
market for comparison--from 1998 through 2007, as measured by their respective
indexes.

[Enlarge/Download Table]

Returns for Various Stock Markets/1/
European Pacific Emerging U.S.
Market/2/ Market/2/ Markets/2/ Market
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1998 28.53% 2.72% -25.34% 28.58%
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1999 15.89 56.65 66.41 21.04
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2000 -8.39 -25.78 -30.61 -9.10
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2001 -19.90 -25.40 -2.62 -11.89
-----------------------------------------------------------------------------------------------------------------------------
2002 -18.38 -9.29 -6.17 -22.10
-----------------------------------------------------------------------------------------------------------------------------
2003 38.54 38.48 55.82 28.68
-----------------------------------------------------------------------------------------------------------------------------
2004 20.88 18.98 25.55 10.88
-----------------------------------------------------------------------------------------------------------------------------
2005 9.42 22.64 34.00 4.91
-----------------------------------------------------------------------------------------------------------------------------
2006 33.72 12.20 32.17 15.79
-----------------------------------------------------------------------------------------------------------------------------
2007 13.86 5.30 39.39 5.49
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1 European market returns are measured by the MSCI Europe Index; Pacific market returns are measured by the MSCI Pacific
Index; emerging markets returns are measured by the MSCI Emerging Markets Index; and U.S. market returns are measured by
the Standard & Poor's 500 Index.
2 Index returns are adjusted for withholding taxes applicable to Luxembourg holding companies.

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

FLAG LOGO
The Fund is subject to country/regional risk and currency risk.
Country/regional risk is the chance that world events--such as political
upheaval, financial troubles, or natural disasters--will adversely affect the
value of securities issued by companies in foreign countries or regions.
Because the Fund may invest a large portion of its assets in securities of
companies located in any one country or region, its performance may be hurt
disproportionately by the poor performance of its investments in that area.
Country/regional risk is especially high in emerging markets. Currency risk is
the chance that the value of a foreign investment, measured in U.S. dollars,
will decrease because of unfavorable changes in currency exchange rates.

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Security Selection
The Fund attempts to track the investment performance of a benchmark index
consisting of common stocks of large- and mid-capitalization companies located
around the world, including developed and emerging markets. The Fund's
investment in the Index will be within the capitalization range of the companies
included in the FTSE All-World Index ($xx million to $xxx billion as of February
29, 2008). The Index includes approximately 2,900 stocks of companies located in
48 countries, including both developed and emerging markets. As of February 29,
2008, the largest markets covered in the Index were the United States, the
United Kingdom, Japan, France, and Germany (which made up approximately 41%, 9%,
9%, 5%, and 4%, respectively, of the Index's market capitalization). The Fund
typically holds xxxx-xxxx stocks in its target Index (covering nearly xx% of the
Index's total market capitalization) and a representative sample of the
remaining stocks.

FLAG LOGO
The Fund is subject to emerging markets risk, which is the change that the
emerging markets will be substantially more volatile, and substantially less
liquid, than the more developed foreign markets.

Indexing Strategy. The Fund uses a sampling method of indexing, meaning that
the Fund's advisor, using sophisticated computer programs, selects from the
target index a representative sample of securities that will resemble the target
index in terms of key risk factors and other characteristics. These factors
include industry weightings, country weightings, market capitalization, and
other financial characteristics of stocks.

FLAG LOGO
The Fund is subject to index sampling risk, which is the chance that the
securities selected for the Fund, in the aggregate, will not provide investment
performance matching that of its Index.

Depositary Receipts. The Fund, in most cases, will obtain economic exposure to
stocks of its target index (component securities) by investing directly in
common stocks. However, the Fund reserves the right to obtain economic exposure
to component securities indirectly by purchasing depositary receipts of the
component securities. Depositary receipts are securities that are listed on
exchanges or quoted in OTC markets in one country, but represent shares of
issuers domiciled in another country. Generally, the Fund would hold depositary
receipts only when the advisor believes that holding the depositary receipt,
rather than the underlying component security, would benefit the Fund. The Fund
might opt to hold depositary receipts if the foreign market in which a stock
trades does not provide adequate protection to the rights of foreign investors
or government regulators place restrictions on the free flow of capital or
currency. The Fund treats depositary receipts that represent interests in
component securities as component securities for purposes of any requirements
related to the percentage of component securities held in the Fund's portfolio.

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The FTSE All-World Index. The FTSE All-World Index is maintained by FTSE Group
(FTSE), a widely known global index provider that currently manages and
calculates more than 60,000 indexes daily.

Other Investment Policies and Risks
The Fund reserves the right to substitute a different index for the index it
currently tracks if the current index is discontinued, if the Fund's agreement
with the sponsor of its target index is terminated, or for any other reason
determined in good faith by the Fund's board of trustees. In the future, the
advisor may recommend that the Fund's board change the Fund's target index to an
index that provides broader market coverage of global stocks.

If the Fund's board were to approve such a change, the change may require
adjustments to the Fund's portfolio holdings, which could temporarily increase
the Fund's transaction costs and may cause the Fund to realize capital gains or
losses. The exact timing of any index change would be held in strict confidence
by Vanguard until it actually occurs, to prevent "front-running"--which is
seeking to profit by driving up the prices of stocks to be bought by the Fund,
or driving down the prices of stocks to be sold by the Fund. If the Fund were to
track a broader index, such index could have different return characteristics
from those of its existing index over any period of time.

The Fund may invest, to a limited extent, in stock futures and options
contracts, warrants, convertible securities, and swap agreements, all of which
are types of derivatives. Generally speaking, a derivative is a financial
contract whose value is based on the value of a financial asset (such as a
stock, bond, or currency), a physical asset (such as gold), or a market index
(such as the S&P 500 Index). Investments in derivatives may subject the Funds to
risks different from, and possibly greater than, those of underlying securities,
assets, or market indexes. The Fund will not use derivatives for speculation or
for the purpose of leveraging (magnifying) investment returns.

The Fund may enter into forward foreign currency exchange contracts, which are
types of derivative contracts, in order to maintain the same currency exposure
as its respective index. A forward foreign currency exchange contract is an
agreement to buy or sell a country's currency at a specific price on a specific
date, usually 30, 60, or 90 days in the future. In other words, the contract
guarantees an exchange rate on a given date. These contracts, however, will not
prevent the Fund's securities from falling in value during foreign market
downswings. The Fund may use these contracts to gain currency exposure when
investing in stock index futures and to settle trades in a foreign currency.

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Cash Management
The Fund's daily cash balance may be invested in one or more Vanguard CMT Funds,
which are very low-cost money market funds. When investing in a Vanguard CMT
Fund, the Fund bears its proportionate share of the at-cost expenses of the CMT
Fund in which it invests.

Temporary Investment Measures
The Fund may temporarily depart from its normal investment policies and
strategies when doing so is believed to be in the Fund's best interest, so long
as the alternative is consistent with the Fund's investment objective. For
instance, the Fund may invest beyond the normal limits in derivatives or ETFs
that are consistent with the Fund's objective when those instruments are more
favorably priced or provide needed liquidity, as might be the case when the Fund
receives large cash flows that it cannot prudently invest immediately.

Purchase, Redemption, and Account Service Fees
The Fund charges a 0.15% fee on purchases of its shares, including shares
purchased by exchange from another Vanguard fund. Purchases that result from
reinvested dividend or capital gains distributions are not subject to the
purchase fee. In addition, the Fund charges a 2% redemption fee on shares that
are redeemed before they have been held for two months. The fee applies when
shares are redeemed by selling or by exchanging to another Vanguard fund, or if
your shares are redeemed because your Fund account balance falls below the
minimum initial investment for any reason, including market fluctuation. Shares
you have held the longest will be redeemed first.

Unlike a sales charge or a load paid to a broker or a fund management company,
purchase and redemption fees are paid directly to the Fund to offset the costs
of buying and selling securities. The 2% redemption fees are designed to ensure
that short-term investors pay their share of the Fund's transaction costs and
that long-term investors do not subsidize the activities of short-term traders.

An account service fee of $20 per year applies to certain fund accounts whose
balances are less than $10,000.

See the Fund Profile and Investing With Vanguard for more information about
fees.

Frequent Trading or Market-Timing

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shifted into and out of a fund by a shareholder engaging in frequent trading, a
fund incurs costs for buying and selling securities, resulting in increased
brokerage and administrative costs. These costs are borne by all fund
shareholders, including the long-term investors who do not generate the costs.
In addition, frequent trading may interfere with an advisor's ability to
efficiently manage the fund.

Policies to Address Frequent Trading. The Vanguard funds (other than money
market funds, short-term bond funds, and Vanguard ETF(TM) Shares) do not
knowingly accommodate frequent trading. The board of trustees of each Vanguard
fund has adopted policies and procedures reasonably designed to detect and
discourage frequent trading and, in some cases, to compensate the fund for the
costs associated with it. Although there is no assurance that Vanguard will be
able to detect or prevent frequent trading or market-timing in all
circumstances, the following policies have been adopted to address these issues:

.. Each Vanguard fund reserves the right to reject any purchase
request--including exchanges from other Vanguard funds--without notice and
regardless of size. For example, a purchase request could be rejected if
Vanguard determines that such purchase may negatively affect a fund's operation
or performance or because of a history of frequent trading by the investor.

.. Each Vanguard fund (other than money market funds, short-term bond funds, and
ETF Shares) generally prohibits, except as otherwise noted in the Investing With
Vanguard section, an investor's purchases or exchanges into a fund account for
60 calendar days after the investor has redeemed or exchanged out of that fund
account.

.. Certain Vanguard funds charge shareholders purchase and/or redemption fees
on transactions.

See the Investing With Vanguard section of this prospectus for further details
on Vanguard's transaction policies.

Each fund (other than money market funds), in determining its net asset value,
will, when appropriate, use fair-value pricing, as described in the Share Price
section. Fair-value pricing may reduce or eliminate the profitability of certain
frequent-trading strategies.

Do not invest with Vanguard if you are a market-timer.

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Turnover Rate
Although the Fund normally seeks to invest for the long term, it may sell
securities regardless of how long they have been held.

--------------------------------------------------------------------------------
Plain Talk About Turnover Rate

Turnover rates give an indication of how transaction costs, which are not
included in the fund's expense ratio, 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
taxable income.
--------------------------------------------------------------------------------

The Fund and Vanguard

The Fund is a member of The Vanguard Group, a family of 37 investment companies
with more than 150 funds holding assets in excess of $1.2 trillion. All of the
funds that are members of The Vanguard Group share in the expenses associated
with administrative services and 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 (or in the case
of a fund with multiple share classes, each share class of the 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 management companies that may
be owned by one person, by a group of individuals, or by investors who own
the management company's stock. The management fees charged by these
companies include a profit component over and above the companies' cost of
providing services. By contrast, Vanguard provides services to its member
funds on an at-cost basis, with no profit component, which helps to keep the
funds' expenses low.
--------------------------------------------------------------------------------

Investment Advisor

The Vanguard Group, Inc. (Vanguard), P.O. Box 2600, Valley Forge, PA 19482,
which began operations in 1975, serves as advisor to the Fund through its
Quantitative

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Equity Group. As of December 31, 2007, Vanguard served as advisor for
approximately $1 trillion in assets. Vanguard manages the Fund on an at-cost
basis, subject to the supervision and oversight of the trustees and officers of
the Fund.

For a discussion of why the board of trustees approved the Fund's investment
advisory arrangement, see the annual report to shareholders covering the fiscal
period ended October 31, 2008, which will be available 60 days after that date.

George U. Sauter is Chief Investment Officer and Managing Director of Vanguard.
As Chief Investment Officer, he is responsible for the oversight of Vanguard's
Quantitative Equity and Fixed Income Groups. The investments managed by these
two groups include active quantitative equity funds, equity index funds, active
bond funds, index bond funds, stable value portfolios, and money market funds.
Since joining Vanguard in 1987, Mr. Sauter has been a key contributor to the
development of Vanguard's stock indexing and active quantitative equity
investment strategies. He received his A.B. in Economics from Dartmouth College
and an M.B.A. in Finance from the University of Chicago.

--------------------------------------------------------------------------------
Plain Talk About the Fund's Portfolio Manager

The manager primarily responsible for the day-to-day management of the Fund
is:

Duane F. Kelly, Principal of Vanguard. He has been with Vanguard since 1989;
has managed investment portfolios since 1992; and has managed the Fund since
its inception. Education: B.S., LaSalle University.
--------------------------------------------------------------------------------

The Statement of Additional Information provides information about the portfolio
manager's compensation, other accounts under management, and ownership of
securities in the Fund.

Dividends, Capital Gains, and Taxes

Fund Distributions
The Fund distributes to shareholders virtually all of its net income (interest
and dividends, less expenses) as well as any net capital gains realized from the
sale of its holdings. Distributions generally occur annually in December. You
can receive distributions of income or capital gains in cash, or you can have
them automatically reinvested in more shares of the Fund.

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--------------------------------------------------------------------------------
Plain Talk About Distributions

As a shareholder, you are entitled to your portion of a fund's income from
interest and dividends as well as gains from the sale of investments. Income
consists of both the dividends that the fund earns from any stock holdings
and the interest it receives from any 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 for more than one year. You receive the fund's earnings as either a
dividend or capital gains distribution.
--------------------------------------------------------------------------------

Basic Tax Points
Vanguard will send you a statement each year showing the tax status of all your
distributions. In addition, investors in taxable accounts 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 dividend and short-term capital gains distributions that you receive are
taxable to you as ordinary income for federal income tax purposes. If you are an
individual and meet certain holding-period requirements with respect to your
Fund shares, you may be eligible for reduced federal tax rates on "qualified
dividend income," if any, distributed by the Fund.

.. 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 Fund's 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.

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designated as your portion of the Fund's foreign tax obligations, provided that
you meet certain requirements. See your tax advisor or IRS publications for more
information.

.. Any conversion between classes of shares of the same fund is a nontaxable
event. By contrast, an exchange between classes of shares of different funds is
a taxable event.

--------------------------------------------------------------------------------
Plain Talk About 'Buying a Dividend'

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

General Information

Backup withholding. By law, Vanguard must withhold 28% 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 taxes from your account if the IRS instructs
us to do so.

Foreign investors. Vanguard funds generally are not sold outside the United
States, except to certain qualified investors. If you reside outside the United
States, please consult our website at www.vanguard.com and review "Non-U.S.
investors." 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 advisor for detailed information about
a fund's tax consequences for you.

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Share Price

The Fund's share price, called its net asset value, or NAV, is calculated each
business day as of the close of regular trading on the New York Stock Exchange,
generally 4 p.m., Eastern time. Each share class has its own NAV, which is
computed by dividing the net assets allocated to each share class by the number
of Fund shares outstanding for that class. On holidays or other days when the
Exchange is closed, the NAV is not calculated, and the Fund does not transact
purchase or redemption requests. However, on those days the value of the Fund's
assets may be affected because the Fund holds foreign securities that trade on
foreign markets that are open.

Stocks held by a Vanguard fund are valued at their market value when reliable
market quotations are readily available. Certain short-term debt instruments
used to manage a fund's cash are valued on the basis of amortized cost. The
values of any foreign securities held by a fund are converted into U.S. dollars
using an exchange rate obtained from an independent third party. The values of
any mutual fund shares held by a fund are based on the NAVs of the shares. The
values of any ETF or closed-end fund shares held by a fund are based on the
market value of the shares.

When reliable market quotations are not readily available, securities are priced
at their fair value (the amount that the owner might reasonably expect to
receive upon the current sale of a security). A fund also will use fair-value
pricing if the value of a security it holds has been materially affected by
events occurring before the fund's pricing time but after the close of the
primary markets or exchanges on which the security is traded. This most commonly
occurs with foreign securities, which may trade on foreign exchanges that close
many hours before the fund's pricing time. Intervening events might be
company-specific (e.g., earnings report, merger announcement); country-specific
(e.g., natural disaster, economic or political news, act of terrorism, interest
rate change); or global. Intervening events include price movements in U.S.
markets that are deemed to affect the value of foreign securities. Fair value
pricing may be used for domestic securities--for example, if (1) trading in a
security is halted and does not resume before the fund's pricing time of if a
security does not trade in the course of a day, and (2) the fund holds enough of
the security that its price could affect the fund's NAV.

Fair-value prices are determined by Vanguard according to procedures adopted by
the board of trustees. When fair-value pricing is employed, the prices of
securities used by a fund to calculate its NAV may differ from quoted or
published prices for the same securities.

Vanguard fund share prices can be found daily in the mutual fund listings of
most major newspapers under various "Vanguard" headings.

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Investing With Vanguard

This section of the prospectus explains the basics of doing business with
Vanguard. Be sure to carefully read each topic that pertains to your
relationship with Vanguard. Vanguard reserves the right to change the following
policies, without prior notice to shareholders. Please call or check online for
current information.

Each fund you hold in an account is a separate "fund account." For example, if
you hold three funds in a nonretirement account titled in your own name, two
funds in a nonretirement account titled jointly with your spouse, and one fund
in an individual retirement account, you have six fund accounts--and this is
true even if you hold the same fund in multiple accounts.

Purchasing Shares

Vanguard reserves the right, without prior notice, to increase or decrease the
minimum amount required to open, convert shares to, or maintain a fund account,
or to add to an existing fund account.

Investment minimums may differ for certain categories of investors.

Account Minimums

To open and maintain an account. $3,000.

To add to an existing account. $50 by Automatic Investment Plan; $100 by check,
exchange, wire, or electronic bank transfer (other than Automatic Investment
Plan).

How to Initiate a Purchase Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You
Should Know before placing your purchase request.

Online. You may open certain types of accounts, request an electronic bank
transfer, and make an exchange (using the proceeds from the redemption of shares
from one Vanguard fund to simultaneously purchase shares of a different Vanguard
fund) through our website at www.vanguard.com if you are a registered user.

By telephone. You may call Vanguard to begin the account registration process
or request that the account-opening forms be sent to you. You may also request a
purchase of shares by wire, by electronic bank transfer, or by an exchange. See
Contacting Vanguard.

By mail. You may send your account registration form and check to open a new
fund account at Vanguard. To add to an existing fund account, you may send your
check with an Invest-by-Mail form (from your account statement) or with a
deposit slip (available online). You may also send a written request to Vanguard
to add to a fund account or to make an exchange. For a list of Vanguard
addresses, see Contacting Vanguard.

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How to Pay For a Purchase

By electronic bank transfer. You may purchase shares of a Vanguard fund through
an electronic transfer of money held in a designated bank account. To establish
the electronic bank transfer option on an account, you must designate a bank
account online, complete a special form, or fill out the appropriate section of
your account registration form. After the option is set up on your account, you
can purchase shares by electronic bank transfer on a regular schedule (Automatic
Investment Plan) or whenever you wish. Your purchase request can be initiated
online, by telephone, or by mail.

By wire. Wiring instructions vary for different types of purchases. Please call
Vanguard for instructions and policies on purchasing shares by wire. See
Contacting Vanguard.

By check. You may send a check to make initial or additional purchases to your
fund account. Also see How to Initiate a Purchase Request: By mail. Make your
check payable to Vanguard and include the appropriate fund number (e.g.,
Vanguard--xxx). See Contacting Vanguard.

By exchange. You may purchase shares of a Vanguard fund using the proceeds from
the simultaneous redemption of shares from another Vanguard fund. You may
initiate an exchange online (if you are a registered user of Vanguard.com), by
telephone, or by mail. See Exchanging Shares.

Trade Date
The trade date for any purchase request received in good order will depend on
the day and time Vanguard receives your request, the manner in which you are
paying, and the type of fund you are purchasing. Your purchase will be executed
using the fund's NAV as calculated on the trade date. NAVs are calculated only
on days the New York Stock Exchange (NYSE) is open for trading (a business day).

For purchases by check into all funds other than money market funds, and for
purchases by exchange or wire into all funds: If the purchase request is
received by Vanguard on a business day before the close of regular trading on
the NYSE (generally 4 p.m., Eastern time), the trade date will be the same day.
If the purchase request is received on a business day after the close of regular
trading on the NYSE, or on a nonbusiness day, the trade date will be the next
business day.

For purchases by check into money market funds: If the purchase request is
received by Vanguard on a business day before the close of regular trading on
the NYSE (generally 4 p.m., Eastern time), the trade date will be the next
business day. If the purchase request is received on a business day after the
close of regular trading on the NYSE, or on a nonbusiness day, the trade date
will be the second business day following the day Vanguard receives the purchase
request. Because money market instruments must be purchased with federal funds
and it takes a money market

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mutual fund one business day to convert check proceeds into federal funds, the
trade date will be one business day later than for other funds.

For purchases by electronic bank transfer using an Automatic Investment Plan:
Your trade date generally will be one business day before the date you
designated for withdrawal from your bank account.

For purchases by electronic bank transfer not using an Automatic Investment
Plan: If the purchase request is received by Vanguard on a business day before
10 p.m., Eastern time, the trade date will be the next business day. If the
purchase request is received on a business day after 10 p.m., Eastern time, or
on a nonbusiness day, the trade date will be the second business day following
the day Vanguard receives the request.

If your purchase request is not accurate and complete, it may be rejected. See
Other Rules You Should Know--Good Order.

For further information about purchase transactions, consult our website at
www.vanguard.com or see Contacting Vanguard.

Purchase Fees
The Fund charges a purchase fee of 0.15% on all share purchases, including
shares purchased by exchange from other Vanguard funds. Purchase fees do not
apply to shares purchased through reinvested dividends and capital gains.

Other Purchase Rules You Should Know

Check purchases. All purchase checks must be written in U.S. dollars and must
be drawn on a U.S. bank. Vanguard does not accept cash, traveler's checks, or
money orders. In addition, Vanguard may refuse "starter checks" and checks that
are not made payable to Vanguard.

New accounts. We are required by law to obtain from you certain personal
information that we will use to verify your identity. If you do not provide the
information, we may not be able to open your account. If we are unable to verify
your identity, Vanguard reserves the right, without prior notice, to close your
account or take such other steps as we deem reasonable.

Refused or rejected purchase requests. Vanguard reserves the right to stop
selling fund shares or to reject any purchase request at any time and without
prior notice, including, but not limited to, purchases requested by exchange
from another Vanguard fund. This also includes the right to reject any purchase
request because of a history of frequent trading by the investor or because the
purchase may negatively affect a fund's operation or performance.

Large purchases. Please call Vanguard before attempting to invest a large
dollar amount.

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No cancellations. Vanguard will not accept your request to cancel any purchase
request once processing has begun. Please be careful when placing a purchase
request.

Converting Shares

When a conversion occurs, you receive shares of one class in place of shares of
another class of the same fund. At the time of conversion, the dollar value of
the "new" shares you receive equals the dollar value of the "old" shares that
were converted. In other words, the conversion has no effect on the value of
your investment in the fund. However, the number of shares you own after the
conversion may be greater than or less than the number of shares you owned
before the conversion, depending on the net asset values of the two share
classes.

A conversion between share classes of the same fund is a nontaxable event.

Trade Date
The trade date for any conversion request received in good order will depend on
the day and time Vanguard receives your request. Your conversion will be
executed using the NAVs of the different share classes on the trade date. NAVs
are calculated only on days that the NYSE is open for trading (a business day).

For a conversion request (other than a request to convert to ETF Shares)
received by Vanguard before the close of regular trading on the NYSE (generally
4 p.m., Eastern time), the trade date will be the same day. For a conversion
request received on a business day after the close of regular trading on the
NYSE, or on a nonbusiness day the trade date will be the next business day. See
Other Rules You Should Know. (Please contact Vanguard for information on
conversions to ETF Shares.)

Conversions to Institutional Shares
You are eligible for a self-directed conversion from Investor Shares to
Institutional Shares of the Fund, provided that your account meets all
Institutional Shares' eligibility requirements. Registered users of our website,
www.vanguard.com, may request a conversion online, or you may contact Vanguard
by telephone or by mail to request this transaction. Accounts that qualify for
Institutional Shares will not be automatically converted.

Mandatory Conversions to Investor Shares
If an account no longer meets the balance requirements for Institutional Shares,
Vanguard may automatically convert the shares in the account to Investor Shares.
A decline in the account balance because of market movement may result in such a
conversion. Vanguard will notify the investor in writing before any mandatory
conversion occurs.

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Redeeming Shares

How to Initiate a Redemption Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You
Should Know before placing your redemption request.

Online. You may redeem shares, request an electronic bank transfer, and make an
exchange (the purchase of shares of one Vanguard fund using the proceeds of a
simultaneous redemption from another Vanguard fund) through our website at
www.vanguard.com if you are a registered user.

By telephone. You may call Vanguard to request a redemption of shares by wire,
by electronic bank transfer, by check, or by an exchange. See Contacting
Vanguard.

By mail. You may send a written request to Vanguard to redeem from a fund
account or to make an exchange. See Contacting Vanguard.

How to Receive Redemption Proceeds

By electronic bank transfer. You may have the proceeds of a fund redemption
sent directly to a designated bank account. To establish the electronic bank
transfer option, you must designate a bank account online, complete a special
form, or fill out the appropriate section of your account registration form.
After the option is set up on your account, you can redeem shares by electronic
bank transfer on a regular schedule (Automatic Withdrawal Plan--$50 minimum) or
whenever you wish ($100 minimum). Your transaction can be initiated online, by
telephone, or by mail.

By wire. When redeeming from a money market fund or a bond fund, you may
instruct Vanguard to wire your redemption proceeds ($1,000 minimum) to a
previously designated bank account. Wire redemptions generally are not available
for Vanguard's balanced or stock funds. The wire redemption option is not
automatic; you must designate a bank account online, complete a special form, or
fill out the appropriate section of your account registration form. Vanguard
charges a $5 fee for wire redemptions under $5,000.

By exchange. You may have the proceeds of a Vanguard fund redemption invested
directly in shares of another Vanguard fund. You may initiate an exchange online
(if you are a registered user of Vanguard.com), by telephone, or by mail.

By check. If you have not chosen another redemption method, Vanguard will mail
you a redemption check, normally within two business days of your trade date.

Trade Date
The trade date for any redemption request received in good order will depend on
the day and time Vanguard receives your request and the manner in which you are

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redeeming. Your redemption will be executed using the fund's NAV as calculated
on the trade date. NAVs are calculated only on days that the NYSE is open for
trading (a business day).

For redemptions by check, exchange, or wire: If the redemption request is
received by Vanguard on a business day before the close of regular trading on
the NYSE (generally 4 p.m., Eastern time), the trade date will be the same day.
If the redemption request is received on a business day after the close of
regular trading on the NYSE, or on a nonbusiness day, the trade date will be the
next business day.

. Note on timing of wire redemptions from money market funds: For telephone
requests received by Vanguard on a business day before 10:45 a.m., Eastern
time (2 p.m., Eastern time, for Vanguard Prime Money Market Fund), the
redemption proceeds will leave Vanguard by the close of business the same day.
For telephone requests received by Vanguard on a business day after those
cut-off times, or on a nonbusiness day, and for all requests other than by
telephone, the redemption proceeds will leave Vanguard by the close of
business on the next business day.

. Note on timing of wire redemptions from bond funds: For requests received by
Vanguard on a business day before the close of regular trading on the NYSE
(generally 4 p.m., Eastern time), the redemption proceeds will leave Vanguard
by the close of business on the next business day. For requests received by
Vanguard on a business day after the close of regular trading on the NYSE, or
on a nonbusiness day, the redemption proceeds will leave Vanguard by the close
of business on the second business day after Vanguard receives the request.

For redemptions by electronic bank transfer using an Automatic Withdrawal Plan:
Your trade date generally will be the date you designated for withdrawal of
funds (redemption of shares) from your Vanguard account. Proceeds of redeemed
shares generally will be credited to your designated bank account two business
days after your trade date. If the date you designated for withdrawal falls on a
weekend, holiday, or other nonbusiness day, your trade date will be the previous
business day.

For redemptions by electronic bank transfer not using an Automatic Withdrawal
Plan: If the redemption request is received by Vanguard on a business day before
the close of regular trading on the NYSE (generally 4 p.m., Eastern time), the
trade date generally will be the same day. If the redemption request is received
on a business day after the close of regular trading on the NYSE, or on a
nonbusiness day, the trade date will be the next business day.

If your redemption request is not accurate and complete, it may be rejected. See
Other Rules You Should Know--Good Order.

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For further information about redemption transactions, consult our website at
www.vanguard.com or see Contacting Vanguard.

Redemption Fees
The Fund charges a 2% fee on shares redeemed within two months of purchase by
selling or by exchanging to another fund, or if your shares are redeemed because
your Fund account balance falls below the minimum initial investment for any
reason, including market fluctuation. The fee is withheld from redemption
proceeds and is paid directly to the Fund. Shares held for two months or more
are not subject to the 2% fee.

In an effort to reduce or eliminate the redemption fees you pay, if you redeem
less than your full investment in the Fund, we will first redeem those shares
not subject to the fee, followed by those shares you have held the longest.

For Vanguard fund accounts (including participants in employer-sponsored defined
contribution plans that are served by Vanguard Small Business Services),
redemption fees will not apply to the following:

.. Redemptions of shares purchased with reinvested dividend and capital
gains distributions.

.. Share transfers, rollovers, or re-registrations within the same fund.

.. Conversions of shares from one share class to another in the same fund.

.. Redemptions of shares to pay fund or account fees.

.. Redemptions of shares to remove excess shareholder contributions to an IRA.

.. Section 529 college savings plans.

.. For a one-year period, shares rolled over to an IRA held at Vanguard from a
retirement plan for which Vanguard serves as recordkeeper (except for Vanguard
Small Business Services retirement plans).

.. Distributions by shareholders age 701/2 or older from the following:

. Traditional IRAs.

. Inherited IRAs (traditional and Roth).

. Rollover IRAs.

. SEP-IRAs.

. SIMPLE IRAs.

. Section 403(b)(7) plans served by the Vanguard Small Business Services
Department.

. Vanguard Retirement Plans for which Vanguard Fiduciary Trust Company serves
as trustee.

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For participants in employer-sponsored defined contribution plans (other than
those served by the Vanguard Small Business Services Department), in addition to
the exclusions previously listed, redemption fees will not apply to the
following:

.. Exchanges of shares purchased with participant payroll or employer
contributions.

.. Distributions, loans, and in-service withdrawals from a plan.

.. Redemptions or transfers of shares as part of a plan termination or at the
direction of the plan.

.. Direct rollovers into IRAs.

Redemption fees will apply to shares exchanged out of a fund within the fund's
redemption-fee period into which fund the shares had previously been exchanged,
rolled over, or transferred by a participant.

If Vanguard does not serve as recordkeeper for your plan, redemption fees may be
applied differently. Please read your recordkeeper's plan materials carefully to
learn of any other rules or fees that may apply. Also see Frequent-Trading
Limits--Accounts Held by Intermediaries for information about the assessment of
redemption fees by intermediaries.

Other Redemption Rules You Should Know

Documentation for certain accounts. Special documentation may be required to
redeem from certain types of accounts, such as trust, corporate, nonprofit, or
retirement accounts. Please call us before attempting to redeem from these types
of accounts.

Potentially disruptive redemptions. Vanguard reserves the right to pay all or
part of a redemption in kind--that is, in the form of securities--if we
reasonably believe that a cash redemption would negatively affect the fund's
operation or performance or that the shareholder may be engaged in market-timing
or frequent trading. Under these circumstances, Vanguard also reserves the right
to delay payment of the redemption proceeds for up to seven calendar days. By
calling us before you attempt to redeem a large dollar amount, you may avoid
in-kind or delayed payment of your redemption. Please see Frequent-Trading
Limits for information about Vanguard's policies to limit frequent trading.

Recently purchased shares. Although you can redeem shares at any time, proceeds
may not be made available to you until the fund collects payment for your
purchase. This may take up to ten calendar days for shares purchased by check or
by electronic bank transfer. If you have written a check on a fund with
checkwriting privileges, that check may be rejected if your fund account does
not have a sufficient available balance.

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Address change. If you change your address online or by telephone, there may be
a 15-day restriction on your ability to make online and telephone redemptions.
You can request a redemption in writing at any time. Confirmations of address
changes are sent to both the old and new addresses.

Payment to a different person or address. At your request, we can make your
redemption check payable to a different person or send it to a different
address. However, this requires the written consent of all registered account
owners and may require a signature guarantee. You can obtain a signature
guarantee from most commercial and savings banks, credit unions, trust
companies, or member firms of a U.S. stock exchange. A notary public cannot
provide a signature guarantee.

No cancellations. Vanguard will not accept your request to cancel any
redemption request once processing has begun. Please be careful when placing a
redemption request.

Emergency circumstances. Vanguard funds can postpone payment of redemption
proceeds for up to seven calendar days. In addition, Vanguard funds can suspend
redemptions and/or postpone payments of redemption proceeds beyond seven
calendar days at times when the NYSE is closed or during emergency
circumstances, as determined by the SEC.

Exchanging Shares

An exchange occurs when you use the proceeds from the redemption of shares of
one Vanguard fund to simultaneously purchase shares of a different Vanguard
fund. You can make exchange requests online (if you are a registered user of
Vanguard.com), by telephone, or by mail. See Purchasing Shares and Redeeming
Shares.

If the NYSE is open for regular trading (a business day) at the time an exchange
request is received in good order, the trade date will generally be the same
day. See Other Rules You Should Know--Good Order for additional information on
all transaction requests.

Please note that Vanguard reserves the right, without prior notice, to revise or
terminate the exchange privilege, limit the amount of any exchange, or reject an
exchange, at any time, for any reason.

Frequent-Trading Limits

Because excessive transactions can disrupt management of a fund and increase the
fund's costs for all shareholders, Vanguard places certain limits on frequent
trading in the Vanguard funds. Each Vanguard fund (other than money market
funds, short-term bond funds, and ETF Shares) limits an investor's purchases or
exchanges into a fund

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account for 60 calendar days after the investor has redeemed or exchanged out of
that fund account.

For Vanguard Retirement Investment Program pooled plans, the policy applies to
exchanges made by participants online or by phone.

The policy does not apply to the following:

.. Purchases of shares with reinvested dividend or capital gains distributions.

.. Transactions through Vanguard's Automatic Investment Plan, Automatic Exchange
Service, Direct Deposit Service, Automatic Withdrawal Plan, Required Minimum
Distribution Service, and Vanguard Small Business Online/(R)/.

.. Redemptions of shares to pay fund or account fees.

.. Transaction requests submitted by mail to Vanguard from shareholders who hold
their accounts directly with Vanguard. (Wire transactions and transaction
requests submitted by fax are not mail transactions and are subject to the
policy.)

.. Transfers and re-registrations of shares within the same fund.

.. Purchases of shares by asset transfer or direct rollover.

.. Conversions of shares from one share class to another in the same fund.

.. Checkwriting redemptions.

.. Section 529 college savings plans.

.. Certain approved institutional portfolios and asset allocation programs, as
well as trades made by Vanguard funds that invest in other Vanguard funds.
(Please note that shareholders of Vanguard's funds of funds are subject to the
policy.)

For participants in employer-sponsored defined contribution plans that are not
served by Vanguard Small Business Services, the frequent-trading policy does not
apply to:

.. Purchases of shares with participant payroll or employer contributions or
loan repayments.

.. Purchases of shares with reinvested dividend or capital gains distributions.

.. Distributions, loans, and in-service withdrawals from a plan.

.. Redemptions of shares as part of a plan termination or at the direction of the
plan.

.. Automated transactions executed during the first six months of a participant's
enrollment in the Vanguard Managed Account Program.

.. Redemptions of shares to pay fund or account fees.

.. Share or asset transfers or rollovers.

.. Re-registrations of shares.

.. Conversions of shares from one share class to another in the same fund.

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.. Exchange requests submitted by mail to Vanguard. (Exchange requests submitted
by fax or wire are not mail requests and remain subject to the policy.)

Accounts Held by Institutions (Other Than Defined Contribution Plans)
Vanguard will systematically monitor for frequent trading in institutional
clients' accounts. If we detect suspicious trading activity, we will investigate
and take appropriate action, which may include applying to a client's accounts
the 60-day policy previously described, prohibiting a client's purchases of fund
shares, and/or eliminating the client's exchange privilege.

Accounts Held by Intermediaries
When intermediaries establish accounts in Vanguard funds for their clients, we
cannot always monitor the trading activity of the individual clients. However,
we review trading activity at the omnibus level, and if we detect suspicious
activity, we will investigate and take appropriate action. If necessary,
Vanguard may prohibit additional purchases of fund shares by an intermediary or
by certain of the intermediary's clients. Intermediaries may also monitor their
clients' trading activities in the Vanguard funds.

For those Vanguard funds that charge purchase or redemption fees, intermediaries
will be asked to assess purchase and redemption fees on shareholder and
participant accounts and remit these fees to the funds. The application of
purchase and redemption fees and frequent-trading policies may vary among
intermediaries. There are no assurances that Vanguard will successfully identify
all intermediaries or that intermediaries will properly assess purchase and
redemption fees or administer frequent-trading policies. If you invest with
Vanguard through an intermediary, please read that firm's materials carefully to
learn of any other rules or fees that may apply.

Other Rules You Should Know

Prospectus and Shareholder Report Mailings
Vanguard attempts to eliminate the unnecessary expense of duplicate mailings by
sending just one prospectus and/or report when two or more shareholders have the
same last name and address. You may request individual prospectuses and reports
by contacting our Client Services Department in writing, by telephone, or by
e-mail.

Vanguard.com

Registration. If you are a registered user of Vanguard.com, you can use your
personal computer to review your account holdings; to buy, sell, or exchange
shares of most Vanguard funds; and to perform most other transactions. You must
register for this service online.

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Electronic delivery. Vanguard can deliver your account statements, transaction
confirmations, and fund financial reports electronically. If you are a
registered user of Vanguard.com, you can consent to the electronic delivery of
these documents by logging on and changing your mailing preference under
"Account Profile." You can revoke your electronic consent at any time, and we
will begin to send paper copies of these documents within 30 days of receiving
your notice.

Telephone Transactions

Automatic. When we set up your account, we'll automatically enable you to do
business with us by telephone, unless you instruct us otherwise in writing.

Tele-Account/(R)/. To conduct account transactions through Vanguard's automated
telephone service, you must first obtain a Personal Identification Number (PIN).
Call Tele-Account at 800-662-6273 to obtain a PIN, and allow seven days after
requesting the PIN before using this service.

Proof of a caller's authority. We reserve the right to refuse a telephone
request if the caller is unable to provide the requested information or if we
reasonably believe that the caller is not an individual authorized to act on the
account. Before we allow a caller to act on an account, we may request the
following information:

.. Authorization to act on the account (as the account owner or by legal
documentation or other means).

.. Account registration and address.

.. Fund name and account number, if applicable.

.. Other information relating to the caller, the account holder, or the account.

Subject to revision. For any or all shareholders, we reserve the right, at any
time and without prior notice, to revise, suspend, or terminate the privilege to
transact or communicate with Vanguard by telephone.

Good Order
We reserve the right to reject any transaction instructions that are not in
"good order." Good order generally means that your instructions include:

.. The fund name and account number.

.. The amount of the transaction (stated in dollars, shares, or percentage).

Written instructions also must include:

.. Signatures of all registered owners.

.. Signature guarantees, if required for the type of transaction. (Call Vanguard
for specific signature-guarantee requirements.)

.. Any supporting documentation that may be required.

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The requirements vary among types of accounts and transactions.

Vanguard reserves the right, without prior notice, to revise the requirements
for good order.

Future Trade-Date Requests
Vanguard does not accept requests to hold a purchase, conversion, redemption, or
exchange transaction for a future date. All such requests will receive trade
dates as previously described in Purchasing Shares, Converting Shares, and
Redeeming Shares. Vanguard reserves the right to return future-dated purchase
checks.

Accounts With More Than One Owner
If an account has more than one owner or authorized person, Vanguard will accept
telephone or online instructions from any one owner or authorized person.

Responsibility for Fraud
Vanguard will not be responsible for any account losses because of fraud if we
reasonably believe that the person transacting business on an account is
authorized to do so. Please take precautions to protect yourself from fraud.
Keep your account information private, and immediately review any account
statements that we provide to you. It is important that you contact Vanguard
immediately about any transactions you believe to be unauthorized.

Uncashed Checks
Please cash your distribution or redemption checks promptly. Vanguard will not
pay interest on uncashed checks.

Unusual Circumstances
If you experience difficulty contacting Vanguard online, by telephone, or by
Tele-Account, you can send us your transaction request by regular or express
mail. See Contacting Vanguard for addresses.

Investing With Vanguard Through Other Firms
You may purchase or sell shares of most Vanguard funds through a financial
intermediary, such as a bank, broker, or investment advisor. Please consult your
financial intermediary to determine which, if any, shares are available through
that firm and to learn about other rules that may apply.

Please see Frequent-Trading Limits--Accounts Held by Intermediaries for
information about the assessment of redemption fees and monitoring of frequent
trading for accounts held by intermediaries.

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Account Service Fee
For most shareholders, Vanguard deducts a $20 account service fee from all fund
accounts that have a balance below $10,000 for any reason, including market
fluctuation. The account service fee applies to both retirement and
nonretirement fund accounts. The fee will be assessed on fund accounts in all
Vanguard funds, regardless of a fund's minimum investment amount. The account
service fee, which will be collected by redeeming fund shares in the amount of
$20, will be deducted from a fund account only once per calendar year.

If you register on Vanguard.com and elect to receive electronic delivery of
statements, reports, and other materials for all of your fund accounts, the
account service fee for balances below $10,000 will not be charged, so long as
that election remains in effect.

The account service fee also does not apply to the following:

.. Money market sweep accounts held through Vanguard Brokerage Services/(R)/.

.. Accounts held through intermediaries.

.. Accounts held by Voyager, Voyager Select, and Flagship clients. Membership is
based on total household assets held at Vanguard, with a minimum of $100,000 to
qualify for Vanguard Voyager Services/TM/, $500,000 for Vanguard Voyager Select
Services/TM/, and $1 million for Vanguard Flagship Services/TM/. Vanguard
determines membership by aggregating assets of all eligible accounts held by the
investor and immediate family members who reside at the same address. Aggregate
assets include investments in Vanguard mutual funds, Vanguard ETFs/TM/,
annuities through Vanguard, the Vanguard 529 Plan, certain small-business
accounts, and employer-sponsored retirement plans for which Vanguard provides
recordkeeping services.

.. Participant accounts in employer-sponsored defined contribution plans (other
than those served by the Vanguard Small Business Services Department, which are
subject to various fee structures). Please consult your enrollment materials for
the rules that apply to your account.

.. Section 529 college savings plans.

Low-Balance Accounts
The Fund reserves the right, without prior notice, to liquidate any
investment-only retirement-plan fund account or any nonretirement fund account
whose balance falls below the minimum initial investment for any reason,
including market fluctuation. Shares redeemed in accordance with this policy
will be subject to applicable redemption fees.

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Right to Change Policies
In addition to the rights expressly stated elsewhere in this prospectus,
Vanguard reserves the right to (1) alter, add, or discontinue any conditions of
purchase (including eligibility requirements), redemption, exchange, conversion,
service, or privilege at any time without prior notice; (2) accept initial
purchases by telephone; (3) freeze any account and/or suspend account services
when Vanguard has received reasonable notice of a dispute regarding the assets
in an account, including notice of a dispute between the registered or
beneficial account owners or when we reasonably believe a fraudulent transaction
may occur or has occurred; (4) temporarily freeze any account and/or suspend
account services upon initial notification to Vanguard of the death of the
shareholder until Vanguard receives required documentation in good order; (5)
alter, impose, discontinue, or waive any redemption fee, account service fee, or
other fees charged to a group of shareholders; and (6) redeem an account,
without the owner's permission to do so, in cases of threatening conduct or
suspicious, fraudulent, or illegal activity. Changes may affect any or all
investors. These actions will be taken when, at the sole discretion of Vanguard
management, we reasonably believe they are deemed to be in the best interest of
a fund.

Share Classes
Vanguard reserves the right, without prior notice, to change the eligibility
requirements of its share classes, including the types of clients who are
eligible to purchase each share class.

Fund and Account Updates

Confirmation Statements
We will send (or provide online, whichever you prefer) a confirmation of your
trade date and the amount of your transaction when you buy, sell, exchange, or
convert shares. However, we will not send confirmations reflecting only
checkwriting redemptions or the reinvestment of dividends or capital gains
distributions. For any month in which you had a checkwriting redemption, a
Checkwriting Activity Statement will be sent to you itemizing the checkwriting
redemptions for that month. Promptly review each confirmation statement that we
provide to you by mail or online. It is important that you contact Vanguard
immediately with any questions you may have about any transaction reflected on a
confirmation statement, or Vanguard will consider the transaction properly
processed.

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distributions, purchases, redemptions, exchanges, transfers, and conversions for
the current calendar year. Promptly review each summary that we provide to you
by mail or online. It is important that you contact Vanguard immediately with
any questions you may have about any transaction reflected on the summary, or
Vanguard will consider the transaction properly processed.

Tax Statements
For most taxable accounts, we will send annual tax statements to assist you in
preparing your income tax returns. These statements, which are generally mailed
in January, will report the previous year's dividend and capital gains
distributions, proceeds from the sale of shares, and distributions from IRAs and
other retirement plans. These statements can be viewed online.

Average-Cost Review Statements
For most taxable accounts, average-cost review statements will accompany annual
1099B tax forms. These tax forms show the average cost of shares that you
redeemed during the previous calendar year, using the average-cost
single-category method, which is one of the methods established by the IRS.

Annual and Semiannual Reports
We will send (or provide online, whichever you prefer) financial reports about
Vanguard Total World Stock Index Fund twice a year, in June and December. These
comprehensive reports include overviews of the financial markets and provide the
following specific Fund information:

.. Performance assessments and comparisons with industry benchmarks.

.. Financial statements with listings of Fund holdings.

Portfolio Holdings
We generally post on our website at www.vanguard.com, in the Holdings section of
the Fund's Profile page, a detailed list of the securities held by the Fund
(under Portfolio Holdings), as of the most recent calendar-quarter-end. This
list is generally updated within 30 days after the end of each calendar quarter.
Vanguard may exclude any portion of these portfolio holdings from publication
when deemed in the best interest of the Fund. We also generally post the ten
largest stock portfolio holdings of the Fund and the percentage of the Fund's
total assets that each of these holdings represents, as of the most recent
calendar-quarter-end. This list is generally updated within 15 calendar days
after the end of each calendar quarter. Please consult the Fund's Statement of
Additional Information or our website for a description of the policies and
procedures that govern disclosure of the Fund's portfolio holdings.

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Contacting Vanguard

[Enlarge/Download Table]

Web
---------------------------------------------------------------------------------------
Vanguard.com For the most complete source of Vanguard news
24 hours a day, 7 days For fund, account, and service information
a week For most account transactions
For literature requests
----------------------------------------------------------------------------------------
Phone

----------------------------------------------------------------------------------------
Vanguard For automated fund and account information
Tele-Account/(R)/ For exchange transactions (subject to limitations)
800-662-6273 Toll-free, 24 hours a day, 7 days a week
(ON-BOARD)
----------------------------------------------------------------------------------------
Investor Information For fund and service information
800-662-7447 (SHIP) For literature requests
(Text telephone for Business hours only: Monday-Friday, 8 a.m. to 10 p.m.,
people with hearing Eastern time; Saturday, 9 a.m. to 4 p.m., Eastern time
impairment at
800-952-3335)
----------------------------------------------------------------------------------------
Client Services For account information
800-662-2739 (CREW) For most account transactions
(Text telephone for Business hours only: Monday-Friday, 8 a.m. to 10 p.m.,
people with hearing Eastern time; Saturday, 9 a.m. to 4 p.m., Eastern time
impairment at
800-749-7273)
----------------------------------------------------------------------------------------
Institutional Division For information and services for large institutional investors
888-809-8102 Business hours only: Monday-Friday, 8:30 a.m. to 9 p.m.,
Eastern time
----------------------------------------------------------------------------------------
Intermediary Sales For information and services for financial intermediaries
Support including broker-dealers, trust institutions, insurance
800-997-2798 companies, and financial advisors
Business hours only: Monday-Friday, 8:30 a.m. to 7 p.m.,
Eastern time
----------------------------------------------------------------------------------------

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Vanguard Addresses

Please be sure to use the correct address, depending on your method of delivery.
Use of an incorrect address could delay the processing of your transaction.

Regular Mail (Individuals) The Vanguard Group
P.O. Box 1110
Valley Forge, PA 19482-1110
----------------------------------------------------------------------
Regular Mail (Institutions) The Vanguard Group
P.O. Box 2900
Valley Forge, PA 19482-2900
----------------------------------------------------------------------
Registered, Express, or Overnight The Vanguard Group
455 Devon Park Drive
Wayne, PA 19087-1815
----------------------------------------------------------------------

Fund Number
Please use the specific fund number when contacting us:

Investor Shares
Vanguard Total World Stock Index Fund xxx
-------------------------------------------------------------

Vanguard, Vanguard.com, Connect with Vanguard, Plain Talk, Vanguard
Tele-Account, Tele-Account, Vanguard ETF, Vanguard ETFs, Vanguard Small Business
Online, Vanguard Brokerage Services, Vanguard Voyager Services, Voyager,
Vanguard Voyager Select Services, Voyager Select, Vanguard Flagship Services,
Flagship, and the ship logo are trademarks of The Vanguard Group, Inc. Vanguard
Total World Stock Index Fund is not in any way sponsored, endorsed, sold or
promoted by FTSE International Limited (FTSE) or by the London Stock Exchange
Plc (the Exchange) or by The Financial Times Limited (FT), and neither FTSE nor
the Exchange nor FT makes any warranty or representation whatsoever, expressly
or impliedly, either as to the results to be obtained from the use of the FTSE
All-World Index (the Index) and/or the figure at which the said Index stands at
any particular time on any particular day or otherwise. The Index is compiled
and calculated by FTSE. However, neither FTSE nor the Exchange nor FT shall be
liable (whether in negligence or otherwise) to any person for any error in the
Index and neither FTSE nor the Exchange nor FT shall be under any obligation to
advise any person of any error therein.

"FTSE/(R)/" is a trademark of the London Stock Exchange Plc and The Financial
Times Limited and is used by FTSE International Limited under license.
"All-World" is a trademark of FTSE International Limited. All other marks are
the exclusive property of their respective owners.

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ETF Shares

In addition to Investor Shares, certain Vanguard funds offer a class of shares,
known as Vanguard ETF* Shares, that are listed for trading on a national
securities exchange. If you own Investor Shares issued by one of these funds,
you may convert those shares into ETF Shares of the same fund.

Note: Vanguard reserves the right to modify or terminate the conversion
privilege in the future.

Although ETF Shares represent an investment in the same portfolio of securities
as Investor Shares, they have different characteristics and may appeal to a
different group of investors. It is important that you understand the
differences before deciding whether to convert your shares to ETF Shares.

The following material summarizes key information about ETF Shares. A separate
prospectus with more complete information about ETF Shares is also available.
Investors should review that prospectus before deciding whether to convert.

Differences Between ETF Shares and Conventional Mutual Fund Shares
Investor Shares are "conventional" mutual fund shares; that is, they can be
purchased from and redeemed with the issuing fund for cash at a net asset value
(NAV) calculated once a day. ETF Shares, by contrast, cannot be purchased from
or redeemed with the issuing fund, except as noted.

An organized trading market is expected to exist for ETF Shares, unlike
conventional mutual fund shares, because ETF Shares are listed for trading on a
national securities exchange. Investors can purchase and sell ETF Shares on the
secondary market through a broker. Secondary-market transactions occur not at
NAV, but at market prices that change throughout the day based on the supply of,
and demand for, ETF Shares and on changes in the prices of the fund's portfolio
holdings.

The market price of a fund's ETF Shares will differ somewhat from the NAV of
those shares. The difference between market price and NAV is expected to be
small most of the time, but in times of extreme market volatility the difference
may become significant.

Buying and Selling ETF Shares
Vanguard ETF Shares must be held in a brokerage account. Therefore, before
acquiring ETF Shares, whether through a conversion or an open-market purchase,
you must have an account with a broker.

*U.S. Pat. No. 6,879,964 B2; 7,337,138.

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You buy and sell ETF Shares in the same way you buy and sell any other
exchange-traded security--on the open market, through a broker. In most cases,
the broker will charge you a commission to execute the transaction. Unless
imposed by your broker, there is no minimum dollar amount you must invest and no
minimum number of ETF Shares you must purchase. Because open-market transactions
occur at market prices, you may pay more than NAV when you buy ETF Shares and
receive less than NAV when you sell those shares.

If you own conventional shares of a Vanguard fund that issues ETF Shares, you
can convert those shares into ETF Shares of equivalent value--but you cannot
convert back. See "Conversion Privilege" for a discussion of the conversion
process.

There is one other way to buy and sell ETF Shares. Investors can purchase and
redeem ETF Shares directly from the issuing fund at NAV if they do so (1)
through certain authorized broker-dealers, (2) in large blocks of 300,000 ETF
Shares, known as Creation Units, and (3) in exchange for baskets of securities
rather than cash. However, because Creation Units will be worth millions of
dollars, and because most investors prefer to transact in cash rather than with
securities, it is expected that only a limited number of institutional investors
will purchase and redeem ETF Shares this way.

Risks
ETF Shares issued by a fund are subject to the same risks as conventional shares
of the same fund. ETF Shares also are subject to the following risks:

.. The market price of a fund's ETF Shares will vary somewhat from the NAV of
those shares. Therefore, you may pay more than NAV when buying ETF Shares and
you may receive less than NAV when selling them.

.. ETF Shares cannot be redeemed with the Fund, except in Creation Unit
aggregations. Therefore, if you no longer wish to own ETF Shares, you must sell
them on the open market. Although ETF Shares will be listed for trading on a
national securities exchange, it is possible that an active trading market may
not be maintained.

.. Trading of a fund's ETF Shares on an exchange may be halted if exchange
officials deem such action appropriate, if the shares are delisted from the
listing exchange, or if the activation of marketwide "circuit breakers" (which
are tied to large decreases in stock prices) halts stock trading generally.

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Fees and Expenses
When you buy and sell ETF Shares through a brokerage firm, you will pay whatever
commissions the firm charges. You also will incur the cost of the "bid-asked
spread," which is the difference between the price a dealer will pay for a
security and the somewhat higher price at which the dealer will sell the same
security. If you convert from conventional shares to ETF Shares, you will not
pay a brokerage commission or a bid-asked spread. However, Vanguard charges $50
for each conversion transaction, and your broker may impose its own conversion
fees as well.

The estimated total annual operating expenses (the expense ratio) for the Fund's
ETF Shares are 0.25%.

Account Services
Because you hold ETF Shares through a brokerage account, Vanguard will have no
record of your ownership unless you hold the shares through Vanguard Brokerage
Services/(R)/ (Vanguard Brokerage). Your broker will service your account. For
example, the broker will provide account statements, confirmations of your
purchases and sales of ETF Shares, and year-end tax information. The broker also
will be responsible for ensuring that you receive shareholder reports and other
communications from the fund whose ETF Shares you own. You will receive certain
services (e.g., dividend reinvestment and average-cost information) only if your
broker offers those services.

Conversion Privilege
Owners of conventional shares issued by the Fund may convert those shares into
ETF Shares of equivalent value. Please note that investors who own conventional
shares through a 401(k) plan or other employer-sponsored retirement or benefit
plan may not convert those shares into ETF Shares. Vanguard imposes a $50 charge
on conversion transactions and reserves the right, in the future, to raise or
lower the fee and to limit or terminate the conversion privilege. Your broker
may charge an additional fee to process a conversion. ETF Shares, whether
acquired through a conversion or purchased on the open market, cannot be
converted into conventional shares of the same Fund. Similarly, ETF Shares of
one fund cannot be exchanged for ETF Shares of another fund.

Unless you are an Authorized Participant, you must hold ETF Shares in a
brokerage account. Thus, before converting conventional shares into ETF Shares,
you must have an existing, or open a new, brokerage account. To initiate a
conversion of conventional shares into ETF Shares, please contact your broker.

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Please note that upon converting your conventional mutual fund shares to ETF
Shares, you will need to select a cost-basis method of accounting for your ETF
Shares. Options for your cost-basis method will depend on your historical
transaction activity in the conventional shares. Prior to conversion, please
consult your tax advisor to identify your options and select a method. You
should also contact your broker to ensure that the method you choose is offered
by your particular brokerage firm.

Converting conventional shares into ETF Shares generally is accomplished as
follows. First, after your broker notifies Vanguard of your request to convert,
Vanguard will transfer your conventional shares from your account to the
broker's omnibus account with Vanguard (an account maintained by the broker on
behalf of all its customers who hold conventional Vanguard fund shares through
the broker). After the transfer, Vanguard's records will reflect your broker,
not you, as the owner of the shares. Next, your broker will instruct Vanguard to
convert the appropriate number or dollar amount of conventional shares in its
omnibus account into ETF Shares of equivalent value, based on the respective net
asset values of the two share classes.

Your Fund's transfer agent will reflect ownership of all ETF Shares in the name
of the Depository Trust Company (DTC). The DTC will keep track of which ETF
Shares belong to your broker, and your broker, in turn, will keep track of which
ETF Shares belong to you.

Because the DTC is unable to handle fractional shares, only whole shares will be
converted. For example, if you owned 300.250 conventional shares, and this was
equivalent in value to 90.750 ETF Shares, the DTC account would receive 90 ETF
Shares. Conventional shares worth 0.750 ETF Shares (in this example, that would
be 2.481 conventional shares) would remain in the broker's omnibus account with
Vanguard. Your broker then could either (1) credit your account with 0.750 ETF
Shares rather than 2.481 conventional shares, or (2) redeem the 2.481
conventional shares at net asset value, in which case you would receive cash in
place of those shares. If your broker chooses to redeem your conventional
shares, you will realize a gain or loss on the redemption that must be reported
on your tax return (unless you hold the shares in an IRA or other tax-deferred
account). Please consult your broker for information on how it will handle the
conversion process, including whether it will impose a fee to process a
conversion.

If you convert your conventional shares to ETF Shares through Vanguard
Brokerage, all conventional shares for which you request conversion will be
converted into ETF Shares of equivalent value. Because no fractional shares will
have to be sold, the transaction will be 100% tax-free. Vanguard Brokerage does
not impose a conversion fee over and above the fee imposed by Vanguard.

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Here are some important points to keep in mind when converting conventional
shares of a Vanguard fund into ETF Shares:

.. The conversion transaction is nontaxable except, as applicable, to the limited
extent as previously described.

.. The conversion process can take anywhere from several days to several weeks,
depending on your broker. Vanguard generally will process conversion requests
either on the day they are received or on the next business day. Vanguard
imposes conversion blackout windows around the dates when a fund with ETF Shares
declares dividends. This is necessary to prevent a shareholder from collecting a
dividend from both the conventional share class currently held and also from the
ETF share class into which the shares will be converted.

.. Until the conversion process is complete, you will remain fully invested in a
fund's conventional shares, and your investment will increase or decrease in
value in tandem with the net asset value of those shares.

.. During the conversion process, you will be able to liquidate all or part of
your investment by instructing Vanguard or your broker (depending on who
maintains records of your share ownership) to redeem your conventional shares.
After the conversion process is complete, you will be able to liquidate all or
part of your investment by instructing your broker to sell your ETF Shares.

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Glossary of Investment Terms

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

Capital Gains Distribution. Payment to mutual fund shareholders of gains
realized on securities that a fund has sold at a profit, minus any realized
losses.

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

Circuit Breaker. A rule that requires a halt in trading in the U.S. stock
markets for a specific period of time when the Dow Jones Industrial Average
declines by a specified percentage during the course of a trading day.

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

Country/Regional Risk. The chance that world events--such as political
upheaval, financial troubles, or natural disasters--will adversely affect the
value of securities issued by companies in foreign countries or regions. Because
a fund may invest a large portion of its assets in securities of companies
located in any one country or region, its performance may be hurt
disproportionately by the poor performance of its investments in that area.
Country/regional risk is especially high in emerging markets.

Currency Risk. The chance that the value of a foreign investment, measured in
U.S. dollars, will decrease because of unfavorable changes in currency exchange
rates.

Dividend Distribution. Payment to mutual fund 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 during a fiscal year. The expense ratio includes management
expenses--such as advisory fees, account maintenance, reporting, accounting,
legal, and other administrative expenses--and any 12b-1 distribution fees. It
does not include the transaction costs of buying and selling portfolio
securities.

Inception Date. The date on which the assets of a fund (or one of its share
classes) are first invested in accordance with the fund's investment objective.
For funds with a subscription period, the inception date is the day after that
period ends. Investment performance is measured from the inception date.

Index. An unmanaged group of securities whose overall performance is used as a
standard to measure the investment performance of a particular market.

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International Stock Fund. A mutual fund that invests in the stocks of companies
located outside the United States.

Investment Advisor. An organization that is responsible for making the
day-to-day decisions regarding a fund's investments.

Median Market Cap. An indicator of the size of companies in which a fund
invests; the midpoint of market capitalization (market price x shares
outstanding) of a fund's stocks, weighted by the proportion of the fund's assets
invested in each stock. Stocks representing half of the fund's assets have
market capitalizations above the median, and the rest are below it.

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 also called its share value or share price.

Passive Management. A low-cost investment strategy in which a mutual fund
attempts to track--rather than outperform--a specified market benchmark or
"index"; also known as indexing.

Principal. The face value of a debt instrument or the amount of money put into
an investment.

Securities. Stocks, bonds, money market instruments, and other investment
vehicles.

Total Return. A percentage change, over a specified time period, in a mutual
fund's net asset value, assuming 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 in its returns.

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

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[SHIP LOGO VANGUARD(R)]
P.O. Box 2600
Valley Forge, PA 19482-2600

CONNECT WITH VANGUARD/(R)/ > www.vanguard.com

For More Information
If you would like more information about Vanguard Total World Stock Index Fund,
the following documents are available free upon request:

Annual/Semiannual Reports to Shareholders
Additional information about the Fund's investments will be available in the
Fund's annual and semiannual reports to shareholders. In the annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.

Statement of Additional Information (SAI)
The SAI provides more detailed information about the Fund.

The current SAI is incorporated by reference into (and is thus legally a part
of) this prospectus.

To receive a free copy of the latest annual or semiannual report (once
available) or the SAI, or to request additional information about the Fund or
other Vanguard funds, please visit www.vanguard.com or contact us as follows:

The Vanguard Group
Investor Information Department
P.O. Box 2600
Valley Forge, PA 19482-2600
Telephone: 800-662-7447 (SHIP)
Text telephone for people with hearing impairment: 800-952-3335
If you are a current Vanguard shareholder and would like information about your
account, account transactions, and/or account statements, please call:

Client Services Department
Telephone: 800-662-2739 (CREW)
Text telephone for people with hearing impairment: 800-749-7273

Information Provided by the Securities and Exchange Commission (SEC)
You can review and copy information about the Fund (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 202-551-8090. Reports and other information
about the Fund are also available in the EDGAR database on the SEC's Internet
site at www.sec.gov, or you can receive copies of this information, for a fee,
by electronic request at the following e-mail address: publicinfo@sec.gov, or by
writing the Public Reference Section, Securities and Exchange Commission,
Washington, DC 20549-0102.

Fund's Investment Company Act file number: 811-5972
(C) 2008 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.

Pxxx 062008

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Vanguard/(R)/ Total World Stock ETF

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS
DATED APRIL 18, 2008

> Prospectus

Exchange-traded fund shares that are not individually redeemable
June 17, 2008

[SHIP LOGO VANGUARD(R)]

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Contents

--------------------------------------------------------------------------------
ETF Profile 1
--------------------------------------------------------------------------------
Investing in Vanguard ETF Shares 5
--------------------------------------------------------------------------------
More on the Fund and ETF Shares 6
--------------------------------------------------------------------------------
The Fund and Vanguard 19
--------------------------------------------------------------------------------
Investment Advisor 20
--------------------------------------------------------------------------------
Dividends, Capital Gains, and Taxes 21
--------------------------------------------------------------------------------
Daily Pricing 23
--------------------------------------------------------------------------------
Glossary of Investment Terms 25
--------------------------------------------------------------------------------

A Note to Retail Investors
Vanguard ETF Shares can be purchased directly from the issuing Fund only in
exchange for a basket of securities that is expected to be worth several million
dollars. Most individual investors, therefore, will not be able to purchase ETF
Shares directly from the Fund. Instead, these investors will purchase ETF Shares
on the secondary market with the assistance of a broker. Thus, some of the
information contained in this prospectus--such as information about purchasing
and redeeming ETF Shares from the Fund and references to transaction fees
imposed on purchases and redemptions--is not relevant to most individual
investors.

An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Company or any other
government agency.

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ETF Profile--Vanguard Total World Stock ETF

The following profile summarizes key features of Vanguard Total World Stock ETF,
an exchange-traded class of shares issued by Vanguard Total World Stock Index
Fund.

Investment Objective
The Fund seeks to track the performance of a benchmark index that measures the
investment return of global stocks.

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.. Emerging markets risk, which is the chance that the emerging markets will be
substantially more volatile, and substantially less liquid, than the more
developed foreign markets.

.. Currency risk, which is the chance that the value of a foreign investment,
measured in U.S. dollars, will decrease because of unfavorable changes in
currency exchange rates.

.. Index sampling risk, which is the chance that the securities selected for the
Fund, in the aggregate, will not provide investment performance matching that of
its Index.

Because ETF Shares are traded on an exchange, they are subject to additional
risks:

.. Total World Stock ETF Shares are listed for trading on NYSE Arca, Inc. (NYSE
Arca) and can be bought and sold on the secondary market at market prices.
Although it is expected that the market price of a Total World Stock ETF Share
typically will approximate its net asset value, there may be times when the
market price and the NAV vary significantly. Thus, you may pay more than NAV
when you buy World Stock ETF Shares on the secondary market, and you may receive
less than NAV when you sell those shares.

.. Although Total World Stock ETF Shares are listed for trading on NYSE Arca, it
is possible that an active trading market may not be maintained.

.. Trading of Total World Stock ETF Shares on NYSE Arca may be halted if NYSE
Arca officials deem such action appropriate, if Total World Stock ETF Shares are
delisted from NYSE Arca, or if the activation of marketwide "circuit breakers"
halts stock trading generally.

Performance/Risk Information
The Fund began operations on June 17, 2008, so performance information
(including annual total returns and average annual total returns) is not yet
available.

Fees and Expenses

The following table describes the fees and expenses you may pay if you buy and
hold ETF Shares of Vanguard Total World Stock Index Fund. As is the case with
all mutual funds, transaction costs incurred by the Fund for buying and selling
securities are not reflected in the table. However, these costs are reflected in
investment performance figures. The expenses shown under Annual Fund Operating
Expenses are based on estimated amounts for the current fiscal year. The Fund
has no operating history; actual operating expenses could be different.

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[Enlarge/Download Table]

Shareholder Fees
(Fees paid directly from your investment)
--------------------------------------------------------------------------------------------------------------------------------

Sales Charge (Load) Imposed on Purchases None
--------------------------------------------------------------------------------------------------------------------------------
Sales Charge (Load) Imposed on Reinvested Dividends None
--------------------------------------------------------------------------------------------------------------------------------
Transaction Fee on Purchases and Redemptions Varies/1/
--------------------------------------------------------------------------------------------------------------------------------
Transaction Fee Imposed on Reinvested Dividends None
--------------------------------------------------------------------------------------------------------------------------------

Annual Fund Operating Expenses
(Expenses deducted from the Fund's assets)
--------------------------------------------------------------------------------------------------------------------------------
Management Expenses 0.xx%
--------------------------------------------------------------------------------------------------------------------------------
12b-1 Distribution Fee None
--------------------------------------------------------------------------------------------------------------------------------
Other Expenses 0.xx%
--------------------------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.25%
--------------------------------------------------------------------------------------------------------------------------------
1 An investor purchasing or redeeming Creation Units of Total World Stock ETF will pay to the issuing Fund a
standard transaction fee of $xx,000. An additional fee may be charged on the cash portion of any creation (purchase) or
redemption transaction. Please see "Purchasing Vanguard ETF Shares From an Issuing Fund." The Fund reserves the right to exempt
investors providing seed capital from the purchase transaction fee.

An investor buying or selling Total World Stock ETF Shares on the secondary market will pay a commission to his or her broker in
an amount established by the broker. An investor converting conventional shares into Total World Stock ETF Shares will pay a $50
conversion fee to Vanguard; in addition, the broker may impose a conversion fee of its own.

The following example is intended to help retail investors compare the cost of
investing in Total World Stock ETF with the cost of investing in other funds. It
illustrates the hypothetical expenses that such investors would incur over
various periods if they invest $10,000 in Total World Stock ETF. This example
assumes that Total World Stock ETF Shares provide a return of 5% a year and that
operating expenses match our estimates. This example does not include the
brokerage commissions that retail investors will pay to buy and sell World Stock
ETF Shares. It also does not include the transaction fees on purchases and
redemptions of Creation Units, because these fees will not be imposed on retail
investors.

1 Year 3 Years
----------------------------
$xx $xx
----------------------------

The value of a Total World Stock ETF Creation Unit as of the date of this
prospectus was approximately $xxx million. Assuming an investment of $xxx
million, payment of the standard $xx,000 transaction fee applicable to both the
purchase and redemption of the Creation Unit, a 5% return each year, and no
change in operating expenses, the total

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costs of holding a Total World Stock ETF Creation Unit would be $xxxx if the
Creation Unit were redeemed after one year and $xxxx if redeemed after three
years.

These examples should not be considered to represent actual expenses or
performance for the future. Actual future expenses may be higher or lower than
those shown.

--------------------------------------------------------------------------------
Plain Talk About Fund Expenses

All mutual funds have operating expenses. These expenses, which are deducted
from a fund's gross income, are expressed as a percentage of the net assets
of the fund. We expect the Vanguard Total World Stock ETF Shares' expense ratio
for the current fiscal year to be 0.25%, or $2.50 per $1,000 of average net
assets. The average foreign large blend fund had expenses in 2007 of xx.xx%,
or $xx.xx per $1,000 of average net assets (derived from data provided by
Lipper Inc., which reports on the mutual fund industry). Management expenses,
which are one part of operating expenses, include investment advisory fees as
well as other costs of managing a fund--such as account maintenance,
reporting, accounting, legal, and other administrative expenses.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Plain Talk About 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 incurred when the fund buys or sells securities. These
costs can erode a substantial portion of the gross income or the capital
appreciation a fund achieves. Even seemingly small differences in expenses
can, over time, have a dramatic effect on a fund's performance.
--------------------------------------------------------------------------------

[Enlarge/Download Table]

Additional Information
--------------------------------------------------------------------------------------------------------

Investment Advisor The Vanguard Group, Inc., Valley Forge, Pa., since inception
--------------------------------------------------------------------------------------------------------
Dividends and Capital Gains Distributed annually in December
--------------------------------------------------------------------------------------------------------
Inception Date ETF Shares--June 17, 2008
--------------------------------------------------------------------------------------------------------
Number of Global Stock ETF Shares in a xxxx
Creation Unit
--------------------------------------------------------------------------------------------------------
Vanguard Fund Number xxx
--------------------------------------------------------------------------------------------------------
CUSIP Number xxxx
--------------------------------------------------------------------------------------------------------
NYSE Arca Ticker Symbol XXX
--------------------------------------------------------------------------------------------------------

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Investing in Vanguard ETF(TM) Shares

What Are Vanguard ETF Shares?
Vanguard ETF Shares are an exchange-traded class of shares issued by certain
Vanguard mutual funds. ETF Shares represent an interest in the portfolio of
stocks or bonds held by the issuing fund. This prospectus describes Total World
Stock ETF, a class of shares issued by Vanguard Total World Stock Index Fund. In
addition to ETF Shares, the Fund offers two conventional (not exchange-traded)
classes of shares. This prospectus, however, relates only to ETF Shares.

How Are Vanguard ETF Shares Different From Conventional Mutual Fund Shares?

Conventional mutual fund shares are bought from and redeemed with the issuing
fund for cash at a net asset value (NAV) typically calculated once a day. ETF
Shares, by contrast, cannot be purchased from or redeemed with the issuing fund
except by or through Authorized Participants (defined below), and then only for
an in-kind basket of securities.

An organized trading market is expected to exist for ETF Shares, unlike
conventional mutual fund shares, because ETF Shares are listed for trading on a
national securities exchange. Investors can purchase and sell ETF Shares on the
secondary market through a broker. Secondary-market transactions occur not at
NAV, but at market prices that change throughout the day, based on the supply
of, and demand for, ETF Shares and on changes in the prices of the fund's
portfolio holdings.

How Do I Buy and Sell Vanguard ETF Shares?
The Fund issues and redeems ETF Shares only in bundles of xxx,000 shares. These
bundles are known as "Creation Units." To purchase or redeem a Creation Unit,
you must be an Authorized Participant or you must trade through a broker that is
an Authorized Participant. An Authorized Participant is a participant in the
Depository Trust Company that has executed a Participant Agreement with the
fund's Distributor. Vanguard will provide a list of Authorized Participants upon
request. Because Creation Units can be purchased only in exchange for a basket
of securities likely to cost millions of dollars, it is expected that only a
limited number of institutional investors will purchase and redeem ETF Shares
directly with an issuing fund.

Investors who cannot afford to purchase a Creation Unit can acquire ETF Shares
in one of two ways. If you own conventional shares of a stock fund that issues
ETF Shares, you can, for a fee, convert those shares into ETF Shares of
equivalent value. For more information about the conversion privilege, see
"Conversion Privilege"

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under More on the Fund and ETF Shares. In addition, any investor can purchase
ETF Shares on the secondary market through a broker. ETF Shares are publicly
traded on a national securities exchange. To acquire ETF Shares through either
means, you must have a brokerage account. For information about acquiring ETF
Shares through conversion of conventional shares or through a secondary-market
purchase, please contact your broker. If you want to sell ETF Shares, you must
do so through your broker; ETF Shares cannot be converted back into conventional
shares.

When you buy or sell ETF Shares on the secondary market, your broker will charge
a commission. You will also incur the cost of the "bid-asked spread," which is
the difference between the price a dealer will pay for a security and the
somewhat higher price at which the dealer will sell the same security. In
addition, because secondary-market transactions occur at market prices, you may
pay more than NAV when you buy ETF Shares, and receive less than NAV when you
sell those shares.

More on the Fund

Advantages of Index Funds
Index funds typically have the following characteristics:

.. Variety of investments. Most Vanguard index funds generally invest in the
securities of a wide variety of companies and industries.

.. Relative performance consistency. Because they seek to track market
benchmarks, index funds usually do not perform dramatically better or worse than
their benchmarks.

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Market Exposure
The Fund invests mainly in large- and mid-capitalization stocks of companies
located around the world, including developed and emerging markets.

--------------------------------------------------------------------------------
Plain Talk About International Investing

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that the returns shown do not include the costs of buying and selling stocks or
other expenses that a real-world investment portfolio would incur.

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[Enlarge/Download Table]

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

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Security Selection
The Fund attempts to track the investment performance of a benchmark index
consisting of common stocks of large- and mid-capitalization companies located
around the world, including developed and emerging markets. The Fund's
investment in the Index will be within the capitalization range of the companies
included in the FTSE All-World Index ($xx million to $xxx billion as of February
29, 2008). The Index includes approximately 2,900 stocks of companies located in
48 countries, including both developed and emerging markets. As of February xx,
2008, the largest markets covered in the Index were the United States, the
United Kingdom, Japan, France, and Germany (which made up approximately 41%, 9%,
9%, 5%, and 4%, respectively, of the Index's market capitalization). The Fund
typically holds xxxx-xxxx stocks in its target Index (covering nearly xx% of the
Index's total market capitalization) and a representative sample of the
remaining stocks.

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The FTSE All-World Index. The FTSE All-World Index is maintained by FTSE Group
(FTSE), a widely known global index provider that currently manages and
calculates more than 60,000 indexes daily.

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Purchase and Redemption Fees
The Fund charges a 0.15% fee on purchases of its shares, including shares
purchased by exchange from another Vanguard fund. Purchases that result from
reinvested dividend or capital gains distributions are not subject to the
purchase fee. In addition, the Fund charges a 2% redemption fee on shares that
are redeemed before they have been held two months. The fee applies when shares
are redeemed by selling or by exchanging to another Vanguard fund. Shares you
have held the longest will be redeemed first.

See the Fund Profile and Investing With Vanguard for more information about
fees.

Frequent Trading or Market-Timing

Background. Some investors try to profit from strategies involving frequent
trading of mutual fund shares, such as market-timing. For funds holding foreign
securities, investors may try to take advantage of an anticipated difference
between the price of the fund's shares and price movements in overseas markets,
a practice also known as time-zone arbitrage. Investors also may try to engage
in frequent trading of funds holding investments such as small-cap stocks and
high-yield bonds. As money is shifted into and out of a fund by a shareholder
engaging in frequent trading, a fund incurs costs for buying and selling
securities, resulting in increased brokerage and administrative costs. These
costs are borne by all fund shareholders, including the

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long-term investors who do not generate the costs. In addition, frequent trading
may interfere with an advisor's ability to efficiently manage the fund.

.. Certain Vanguard funds charge shareholders purchase and/or redemption fees
on transactions.

See the Investing With Vanguard section of this prospectus for further details
on Vanguard's transaction policies.

Do not invest with Vanguard if you are a market-timer.

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Turnover Rate
Although the Fund normally seeks to invest for the long term, it may sell
securities regardless of how long they have been held.

--------------------------------------------------------------------------------
Plain Talk About Turnover Rate

The Fund and Vanguard

--------------------------------------------------------------------------------
Plain Talk About Vanguard's Unique Corporate Structure

Investment Advisor

The Vanguard Group, Inc. (Vanguard), P.O. Box 2600, Valley Forge, PA 19482,
which began operations in 1975, serves as advisor to the Fund through its
Quantitative

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--------------------------------------------------------------------------------
Plain Talk About the Fund's Portfolio Manager

The manager primarily responsible for the day-to-day management of the Fund
is:

The Statement of Additional Information provides information about the portfolio
manager's compensation, other accounts under management, and ownership of
securities in the Fund.

Dividends, Capital Gains, and Taxes

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--------------------------------------------------------------------------------
Plain Talk About Distributions

.. 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 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 Fund's normal investment activities and cash flows.

.. 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.

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.. Any conversion between classes of shares of the same fund is a nontaxable
event. By contrast, an exchange between classes of shares of different funds is
a taxable event.

--------------------------------------------------------------------------------
Plain Talk About 'Buying a Dividend'

General Information

Backup withholding. By law, Vanguard must withhold 28% 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 taxes from your account if the IRS instructs
us to do so.

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Share Price

Fair-value prices are determined by Vanguard according to procedures adopted by
the board of trustees. When fair-value pricing is employed, the prices of
securities used

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by a fund to calculate its NAV may differ from quoted or published prices for
the same securities.

Vanguard fund share prices can be found daily in the mutual fund listings of
most major newspapers under various "Vanguard" headings.

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Investing With Vanguard

Purchasing Shares

Vanguard reserves the right, without prior notice, to increase or decrease the
minimum amount required to open, convert shares to, or maintain a fund account,
or to add to an existing fund account.

Investment minimums may differ for certain categories of investors.

Account Minimums for Institutional Shares

To open and maintain an account. $5 million. Vanguard institutional clients may
meet the minimum investment amount by aggregating up to three separate accounts
within the same Fund. This policy does not apply to clients receiving special
administrative services from Vanguard, nor does this policy apply to omnibus
accounts maintained by financial intermediaries.

To add to an existing account. $50 by Automatic Investment Plan; $100 by check,
exchange, wire, or electronic bank transfer (other than Automatic Investment
Plan).

How to Initiate a Purchase Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You
Should Know before placing your purchase request.

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How to Pay For a Purchase

By wire. Wiring instructions vary for different types of purchases. Please call
Vanguard for instructions and policies on purchasing shares by wire. See
Contacting Vanguard.

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For purchases by electronic bank transfer using an Automatic Investment Plan:
Your trade date generally will be one business day before the date you
designated for withdrawal from your bank account.

If your purchase request is not accurate and complete, it may be rejected. See
Other Rules You Should Know--Good Order.

For further information about purchase transactions, consult our website at
www.vanguard.com or see Contacting Vanguard.

Other Purchase Rules You Should Know

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Large purchases. Please call Vanguard before attempting to invest a large
dollar amount.

No cancellations. Vanguard will not accept your request to cancel any purchase
request once processing has begun. Please be careful when placing a purchase
request.

Converting Shares

A conversion between share classes of the same fund is a nontaxable event.

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request this transaction. Accounts that qualify for Institutional Shares will
not be automatically converted.

Redeeming Shares

How to Initiate a Redemption Request
Be sure to check Exchanging Shares, Frequent-Trading Limits, and Other Rules You
Should Know before placing your redemption request.

By telephone. You may call Vanguard to request a redemption of shares by wire,
by electronic bank transfer, by check, or by an exchange. See Contacting
Vanguard.

By mail. You may send a written request to Vanguard to redeem from a fund
account or to make an exchange. See Contacting Vanguard.

How to Receive Redemption Proceeds

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By check. If you have not chosen another redemption method, Vanguard will mail
you a redemption check, normally within two business days of your trade date.

Trade Date
The trade date for any redemption request received in good order will depend on
the day and time Vanguard receives your request and the manner in which you are
redeeming. Your redemption will be executed using the fund's NAV as calculated
on the trade date. NAVs are calculated only on days that the NYSE is open for
trading (a business day).

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If your redemption request is not accurate and complete, it may be rejected. See
Other Rules You Should Know--Good Order.

.. Redemptions of shares purchased with reinvested dividend and capital
gains distributions.

.. Share transfers, rollovers, or re-registrations within the same fund.

.. Conversions of shares from one share class to another in the same fund.

.. Redemptions of shares to pay fund or account fees.

.. Redemptions of shares to remove excess shareholder contributions to an IRA.

.. Section 529 college savings plans.

.. Distributions by shareholders age 701/2 or older from the following:

. Traditional IRAs.

. Inherited IRAs (traditional and Roth).

. Rollover IRAs.

. SEP-IRAs.

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. SIMPLE IRAs.

. Section 403(b)(7) plans served by the Vanguard Small Business Services
Department.

. Vanguard Retirement Plans for which Vanguard Fiduciary Trust Company serves
as trustee.

.. Exchanges of shares purchased with participant payroll or employer
contributions.

.. Distributions, loans, and in-service withdrawals from a plan.

.. Redemptions or transfers of shares as part of a plan termination or at the
direction of the plan.

.. Direct rollovers into IRAs.

Other Redemption Rules You Should Know

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No cancellations. Vanguard will not accept your request to cancel any
redemption request once processing has begun. Please be careful when placing a
redemption request.

Exchanging Shares

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Frequent-Trading Limits

For Vanguard Retirement Investment Program pooled plans, the policy applies to
exchanges made by participants online or by phone.

The policy does not apply to the following:

.. Purchases of shares with reinvested dividend or capital gains distributions.

.. Redemptions of shares to pay fund or account fees.

.. Transfers and re-registrations of shares within the same fund.

.. Purchases of shares by asset transfer or direct rollover.

.. Conversions of shares from one share class to another in the same fund.

.. Checkwriting redemptions.

.. Section 529 college savings plans.

For participants in employer-sponsored defined contribution plans that are not
served by Vanguard Small Business Services, the frequent-trading policy does not
apply to:

.. Purchases of shares with participant payroll or employer contributions or
loan repayments.

.. Purchases of shares with reinvested dividend or capital gains distributions.

.. Distributions, loans, and in-service withdrawals from a plan.

.. Redemptions of shares as part of a plan termination or at the direction of the
plan.

.. Automated transactions executed during the first six months of a participant's
enrollment in the Vanguard Managed Account Program.

.. Redemptions of shares to pay fund or account fees.

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.. Share or asset transfers or rollovers.

.. Re-registrations of shares.

.. Conversions of shares from one share class to another in the same fund.

.. Exchange requests submitted by mail to Vanguard. (Exchange requests submitted
by fax or wire are not mail requests and remain subject to the policy.)

Other Rules You Should Know

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Vanguard.com

Telephone Transactions

Automatic. When we set up your account, we'll automatically enable you to do
business with us by telephone, unless you instruct us otherwise in writing.

.. Authorization to act on the account (as the account owner or by legal
documentation or other means).

.. Account registration and address.

.. Fund name and account number, if applicable.

.. Other information relating to the caller, the account holder, or the account.

Good Order
We reserve the right to reject any transaction instructions that are not in
"good order." Good order generally means that your instructions include:

.. The fund name and account number.

.. The amount of the transaction (stated in dollars, shares, or percentage).

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Written instructions also must include:

.. Signatures of all registered owners.

.. Signature guarantees, if required for the type of transaction. (Call Vanguard
for specific signature-guarantee requirements.)

.. Any supporting documentation that may be required.

The requirements vary among types of accounts and transactions.

Vanguard reserves the right, without prior notice, to revise the requirements
for good order.

Accounts With More Than One Owner
If an account has more than one owner or authorized person, Vanguard will accept
telephone or online instructions from any one owner or authorized person.

Uncashed Checks
Please cash your distribution or redemption checks promptly. Vanguard will not
pay interest on uncashed checks.

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Please see Frequent-Trading Limits--Accounts Held by Intermediaries for
information about the assessment of redemption fees and monitoring of frequent
trading for accounts held by intermediaries.

Low-Balance Accounts
The Fund reserves the right to convert an investor's Institutional Shares to
Investor Shares if the fund account balance falls below the minimum initial
investment for any reason, including market fluctuation. Any such conversion
will be preceded by written notice to the investor. No purchase or redemption
fee will be imposed on share-class conversions.

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Fund and Account Updates

Portfolio Summaries
We will send (or provide online, whichever you prefer) quarterly portfolio
summaries to help you keep track of your accounts throughout the year. Each
summary shows the market value of your account at the close of the statement
period, as well as all distributions, purchases, redemptions, exchanges,
transfers, and conversions for the current calendar year. Promptly review each
summary that we provide to you by mail or online. It is important that you
contact Vanguard immediately with any questions you may have about any
transaction reflected on the summary, or Vanguard will consider the transaction
properly processed.

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.. Performance assessments and comparisons with industry benchmarks.

.. Financial statements with listings of Fund holdings.

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Contacting Vanguard

[Enlarge/Download Table]

Web
----------------------------------------------------------------------------------------
Vanguard.com For the most complete source of Vanguard news
24 hours a day, 7 days For fund, account, and service information
a week For most account transactions
For literature requests
----------------------------------------------------------------------------------------
Phone

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Vanguard Addresses

Please be sure to use the correct address, depending on your method of delivery.
Use of an incorrect address could delay the processing of your transaction.

Fund Number
Please use the specific fund number when contacting us:

Institutional Shares
Vanguard Total World Stock Index Fund xxx
------------------------------------------------------------------

Vanguard, Vanguard.com, Connect with Vanguard, Plain Talk, Vanguard
Tele-Account, Tele-Account, Vanguard ETF, Vanguard Small Business Online, and
the ship logo are trademarks of The Vanguard Group, Inc. Vanguard Total World
Stock Index Fund is not in any way sponsored, endorsed, sold or promoted by FTSE
International Limited (FTSE) or by the London Stock Exchange Plc (the Exchange)
or by The Financial Times Limited (FT), and neither FTSE nor the Exchange nor FT
makes any warranty or representation whatsoever, expressly or impliedly, either
as to the results to be obtained from the use of the FTSE All-World Index (the
Index) and/or the figure at which the said Index stands at any particular time
on any particular day or otherwise. The Index is compiled and calculated by
FTSE. However, neither FTSE nor the Exchange nor FT shall be liable (whether in
negligence or otherwise) to any person for any error in the Index and neither
FTSE nor the Exchange nor FT shall be under any obligation to advise any person
of any error therein.

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ETF Shares

In addition to Institutional Shares, certain Vanguard funds offer a class of
shares, known as Vanguard ETF* Shares, that are listed for trading on a national
securities exchange. If you own Institutional Shares issued by one of these
funds, you may convert those shares into ETF Shares of the same fund.

Note: Vanguard reserves the right to modify or terminate the conversion
privilege in the future.

Although ETF Shares represent an investment in the same portfolio of securities
as Institutional Shares, they have different characteristics and may appeal to a
different group of investors. It is important that you understand the
differences before deciding whether to convert your shares to ETF Shares.

Differences Between ETF Shares and Conventional Mutual Fund Shares
Institutional Shares are "conventional" mutual fund shares; that is, they can be
purchased from and redeemed with the issuing fund for cash at a net asset value
(NAV) calculated once a day. ETF Shares, by contrast, cannot be purchased from
or redeemed with the issuing fund, except as noted.

*U.S. Pat. No. 6,879,964 B2; 7,337,138.

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Risks
ETF Shares issued by a fund are subject to the same risks as conventional shares
of the same fund. ETF Shares also are subject to the following risks:

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The estimated total annual operating expenses (the expense ratio) for the Fund's
ETF Shares is 0.25%.

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Here are some important points to keep in mind when converting conventional
shares of a Vanguard fund into ETF Shares:

.. The conversion transaction is nontaxable except, as applicable, to the limited
extent as previously described.

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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.

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

Currency Risk. The chance that world events--such as political upheaval,
financial troubles, or natural disasters--will adversely affect the value of
companies in a particular country.

Dividend Distribution. Payment to mutual fund shareholders of income from
interest or dividends generated by a fund's investments.

Index. An unmanaged group of securities whose overall performance is used as a
standard to measure the investment performance of a particular market.

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