N-Q 1 convsecuritiesfinal.htm VANGUARD CONVERTIBLE SECURITIES FUND

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT COMPANY


Investment Company Act file number: 811-4627

Name of Registrant: Vanguard Convertible Securities Fund

Address of Registrant: P.O. Box 2600
Valley Forge, PA 19482

Name and address of agent for service: Heidi Stam, Esquire
P.O. Box 876
Valley Forge, PA 19482

Registrant’s telephone number, including area code: (610) 669-1000


Date of fiscal year end: November 30

Date of reporting period: February 28, 2007

Item 1: Schedule of Investments



Vanguard Convertible Securities Fund
Schedule of Investments
February 28, 2007

Face
Amount
($000)		 Market
Value
($000)
   Convertible Bonds (90.1%)    
   Consumer Discretionary (6.8%)
   Eastman Kodak Corp.
   3.375%, 10/15/2033 9,610  9,766 
   Ford Motor Co.
   4.250%, 12/15/2036 9,010  10,057 
   General Motors Corp.
   6.250%, 7/15/2033 600† 13,941 
   Scientific Games Corp.
1  0.750%, 12/1/2024 2,870  3,505 
   Sirius Satellite Radio Inc.
   3.250%, 10/15/2011 4,700  4,688 
   The Interpublic Group of Companies, Inc.
   4.500%, 3/15/2023 6,360  7,648 
   United Auto Group, Inc.
   3.500%, 4/1/2026 550  606 
    50,211
   Consumer Staples (1.1%)
   Archer-Daniels-Midland Co.
1  0.875%, 2/15/2014 8,025  8,055 
   Energy (4.8%)
   Cameron International Corp.
^ 2.500%, 6/15/2026 16,845  18,572 
   Goodrich Petroleum Corp.
1  3.250%, 12/1/2026 1,365  1,292 
   McMoRan Exploration Co.
1  5.250%, 10/6/2011 4,920  5,080 
   5.250%, 10/6/2011 405  418 
   Oil States International, Inc.
   2.375%, 7/1/2025 1,775  2,088 
   Peabody Energy Corp.
   4.750%, 12/15/2066 7,365  7,264 
   Superior Energy Services, Inc.
1  1.500%, 12/15/2026 1,220  1,170 
    35,884
   Financials (0.6%)
   CapitalSource Inc.
   3.500%, 7/15/2034 2,950  3,359 
   Fairfax Financial Holdings Ltd.
   5.000%, 7/15/2023 860  875 
    4,234
   Health Care (28.7%)
   Allergan, Inc.
   1.500%, 4/1/2026 3,925  4,111 
1  1.500%, 4/1/2026 10,665  11,172 
   American Medical Systems Holdings, Inc.
   3.250%, 7/1/2036 7,875  9,775 
   Amgen Inc.
1  0.125%, 2/1/2011 7,115  6,885 
^   0.125%, 2/1/2011 2,550  2,467 
   China Medical Technologies, Inc.
1  3.500%, 11/15/2011 3,230  3,436 
   Conceptus Inc.
   2.250%, 2/15/2027 3,880  3,783 
   Cytyc Corp.
   2.250%, 3/15/2024 8,360  9,374 
   First Horizon Pharmaceutical Corp.
   1.750%, 3/8/2024 7,360  8,188 
   Fisher Scientific International Inc.
   3.250%, 3/1/2011 10,070  13,167 
   Five Star Quality Care Inc.
1  3.750%, 10/15/2026 5,500  6,023 
   Genzyme Corp.
   1.250%, 12/1/2008 14,380  14,901 
   Gilead Sciences Inc.
   0.500%, 5/1/2011 675  736 
1  0.500%, 5/1/2011 19,495  21,274 
   Invitrogen Corp.
^   2.000%, 8/1/2023 5,675  6,072 
   Kyphon Inc.
1  1.000%, 2/1/2012 3,665  3,656 
   Manor Care, Inc.
1  2.125%, 8/1/2035 11,920  14,960 
   2.125%, 8/1/2035 515  646 
   2.000%, 6/1/2036 240  280 
   MedImmune Inc.
1  1.375%, 7/15/2011 1,130  1,280 
   1.375%, 7/15/2011 1,730  1,959 
   Medarex Inc.
1  2.250%, 5/15/2011 3,645  4,451 
   2.250%, 5/15/2011 1,465  1,789 
   Medicis Pharmaceutical Corp.
   1.500%, 6/4/2033 9,570  10,192 
   Medtronic Inc.
1 1.500%, 4/15/2011 960  996 
   Regeneron Pharmaceutical, Inc.
   5.500%, 10/17/2008 4,105  4,279 
   Teva Pharmaceutical Finance LLC
   0.500%, 2/1/2024 8,435  8,909 
   Teva Pharmaceutical Financial
   0.250%, 2/1/2026 5,350  5,203 
   Thoratec Corp.
   1.379%, 5/16/2034 12,105  8,443 
   Tizetto Group
   2.750%, 10/1/2025 5,805  7,503 
   Wyeth
   5.109%, 1/15/2024 16,375  17,387 
    213,297
   Industrials (14.6%)
   AAR Corp.
   1.750%, 2/1/2026 2,745  3,208 
   Alliant Techsystems Inc.
1  2.750%, 9/15/2011 6,830  7,351 
   2.750%, 2/15/2024 3,000  3,525 
   Covanta Holding Corp.
   1.000%, 2/1/2027 11,065  11,024 
   DRS Technologies Inc.
1  2.000%, 2/1/2026 9,460  10,099 
   General Cable Corp.
   0.875%, 11/15/2013 6,490  7,520 
   Jetblue Airways
   3.750%, 3/15/2035 4,700  4,841 
   L-3 Communications Corp.
   3.000%, 8/1/2035 16,872  18,011 
   Suntech Power Holdings
1  0.250%, 2/15/2012 1,335  1,363 
   Trinity Industries Inc.
   3.875%, 6/1/2036 5,070  5,653 
   Triumph Group
1  2.625%, 10/1/2026 6,620  7,745 
   UAL Corp.
   5.000%, 2/1/2021 10,950  12,335 
   WESCO International, Inc.
1  1.750%, 11/15/2026 5,790  5,862 
   Waste Connections Inc.
^   3.750%, 4/1/2026 2,280  2,468 
1  3.750%, 4/1/2026 7,280  7,881 
    108,886
   Information Technology (31.3%)
   Andrew Corp.
   3.250%, 8/15/2013 14,540  14,667 
   Anixter International Inc.
1  1.000%, 2/15/2013 7,605  8,499 
   Arris Group, Inc.
   2.000%, 11/15/2026 9,260  9,998 
   Cadence Design
1  1.375%, 12/15/2011 13,395  14,634 
   Ciena Corp.
   0.250%, 5/1/2013 18,525  18,108 
   Coherent, Inc.
   2.750%, 3/1/2011 85  89 
1  2.750%, 3/1/2011 8,355  8,731 
   EMC Corp.
^   1.750%, 12/1/2011 3,220  3,486 
1  1.750%, 12/1/2011 17,000  18,403 
   Electronic Data Systems
   3.875%, 7/15/2023 6,855  7,266 
   Euronet Worldwide, Inc.
   1.625%, 12/15/2024 10,945  11,410 
   FEI Co.
^1 2.875%, 6/1/2013 3,150  4,221 
   2.875%, 6/1/2013 2,165  2,901 
   Flextronics International Ltd.
   1.000%, 8/1/2010 11,155  10,653 
   Hutchinson Technology Inc.
   3.250%, 1/15/2026 770  709 
   Itron Inc.
   2.500%, 8/1/2026 12,350  14,774 
   Kemet Corp.
1 2.250%, 11/15/2026 2,420  2,514 
   LSI Logic
   4.000%, 5/15/2010 20,170  21,456 
   Macrovision Corp.
1 2.625%, 8/15/2011 7,750  8,612 
   Magma Design Automation Inc.
   0.000%, 5/15/2008 4,030  3,823 
   Maxtor Corp.
   6.800%, 4/30/2010 3,330  3,746 
   Newport Corp.
1 2.500%, 2/15/2012 4,565  4,599 
   Powerwave Technologies Inc.
   1.875%, 11/15/2024 5,450  4,694 
   RF Micro. Devices Inc.
   1.500%, 7/1/2010 12,730  14,655 
   Sunpower Corp.
   1.250%, 2/15/2027 3,550  3,586 
   Sybase Inc.
   1.750%, 2/22/2025 4,715  5,298 
   Symantec Corp.
1 0.750%, 6/15/2011 1,420  1,512 
   Symmetricom Inc.
   3.250%, 6/15/2025 3,375  3,383 
   Xilinx Inc.
1 3.125%, 3/15/2037 6,010  6,010 
    232,437
   Telecommunication Services (2.2%)
   FiberTower Corp.
1 9.000%, 11/15/2012 5,545  6,356 
   Level 3 Communications, Inc.
   2.875%, 7/15/2010 8,490  9,806 
    16,162
   Total Convertible Bonds
   (Cost $641,500)   669,166 
  Shares  
   Convertible Preferred Stocks (7.9%)
   Consumer Staples (1.0%)
   Bunge Ltd.
* 4.875% Cvt. Pfd. 63,800  7,170 
   Energy (3.2%)
   Bristow Group
   5.500% Cvt. Pfd. 90,500  4,559 
   Chesapeake Energy Corp.
   5.000% Cvt. Pfd. 31,000  3,309 
1 5.000% Cvt. Pfd. 147,400  15,735 
    23,603
   Financials (1.6%)
   Aspen Insurance Holdings, Ltd.
   5.625% Cvt. Pfd. 154,900  8,655 
   Travelers Property Casualty Corp.
   4.500% Cvt. Pfd. 109,225  2,803 
    11,458
   Health Care (0.2%)
   Quadramed Corp.
* 5.500% Div. Cvt. Pfd. 65,600  1,804 
   Materials (0.9%)
   Celanese Corp. Series
   4.250% Cvt. Pfd. 177,700  6,819 
   Utilities (1.0%)
   NRG Energy, Inc.
   5.750% Cvt. Pfd. 25,200  7,658 
   Total Convertible Preferred Stocks
   (Cost $52,032)   58,512 
   Temporary Cash Investment (2.5%)
2 Vanguard Market Liquidity Fund, 5.282%
   (Cost $19,058) 19,058,216  19,058 
   Total Investments (100.5%)
   (Cost $712,590)   746,736 
   Other Assets and Liabilities—Net (-0.5%)   (4,019)
   Net Assets (100%)   742,717 
* Non-income-producing security.
^ Part of security position is on loan to broker-dealers.
† Represents shares in thousands.
1 Security exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration, normally to qualified institutional buyers. At February 28,2007, the aggregate value of these securities was $233,362,000, representing 31.4% of net assets.
2 Affiliated money market fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown is the 7-day yield.

Investment Securities: Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time) on the valuation date. Equity securities are valued at the latest quoted sales prices or official closing prices taken from the primary market in which each security trades; such securities not traded on the valuation date are valued at the mean of the latest quoted bid and asked prices. Bonds, and temporary cash investments acquired over 60 days to maturity, are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Investments in Vanguard Market Liquidity Fund are valued at that fund's net asset value. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the fund's pricing time but after the close of the securities' primary markets, are valued by methods deemed by the board of trustees to represent fair value.

At February 28, 2007, the cost of investment securities for tax purposes was $712,590,000. Net unrealized appreciation of investment securities for tax purposes was $34,146,000, consisting of unrealized gains of $41,242,000 on securities that had risen in value since their purchase and $7,096,000 in unrealized losses on securities that had fallen in value since their purchase.

Item 2: Controls and Procedures.

(a) Disclosure Controls and Procedures. The Principal Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

(b) Internal Control Over Financial Reporting. During the last fiscal quarter, there was no significant change in the Registrant’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3:

 Exhibits.
(a) Certifications.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VANGUARD CONVERTIBLE SECURITIES FUND

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

Date: April 20, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

VANGUARD CONVERTIBLE SECURITIES FUND

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

Date: April 20, 2007

VANGUARD CONVERTIBLE SECURITIES FUND

BY: (signature)
(HEIDI STAM)
THOMAS J. HIGGINS*
TREASURER

Date: April 20, 2007

* By Power of Attorney. See File Number 002-65955-99, filed on July 27, 2006. Incorporated by Reference.