May 17, 2004

Vanguard Closes Convertible Securities Fund

May 17, 2004 -- The Vanguard Convertible Securities (VCVSX) was closed to all investors last Friday to keep its assets from reaching the point where they could hurt the fund's performance.

Vanguard Group said the fund's assets have increased from $481 million to $1.1 billion in the past 12 months because of new investments and "market appreciation."

Vanguard said that continued "strong cash" inflows and capital appreciation "could make it increasingly difficult" for the fund's investment advisor, Oaktree Capital Management LLC, to "implement its disciplined, bottom-up approach in selecting convertible securities."

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