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                     VANGUARD(R) FUNDS PROSPECTUS SUPPLEMENT

           IMPORTANT INFORMATION ABOUT VANGUARD'S EXCHANGE PRIVILEGES

                              EFFECTIVE IMMEDIATELY

The exchange  privilege that applies to the U.S. Stock Index Funds,  U.S. Sector
Index Funds,  International  Stock Index Funds, REIT Index Fund,  Balanced Index
Fund, Calvert Social Index Fund,  International Growth Fund, International Value
Fund,  International  Explorer(TM)  Fund,  and Growth and Income  Fund no longer
prohibits online or telephone  exchanges between 2:30 and 4 p.m.,  Eastern time,
on business  days. All other limits on the exchange  privilege  described in the
prospectus remain in effect.






































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Vanguard Marketing Corporation, Distributor.                      PSVEP   032004