June 27, 2005

Vanguard Reopens Convertible Securities Fund

The Vanguard Convertible Securities fund (VCVSX) will reopen to new investors Friday, but it will cost people more to get into and out of the fund than before.

To encourage long-term investments, Vanguard is raising the fund's minimum initial investment to $10,000 from $3,000 on all accounts.

Also, the company is imposing a 1% redemption fee on shares bought on or after September 15 that are sold within a year. The fee will be paid directly to the fund to compensate for transaction costs stemming from short-term investments.

The fund was closed in new investors in May 2004. At that time, its managers were concerned that strong cash inflows could hinder their ability to effectively run the fund. But the amount of money investors have directed into the fund has since eased, Vanguard said. The fund currently has assets of $565 million.

Vanguard Convertible Securities fund is ranked 4 Stars by Standard & Poor's.

Contact Bob Keane with questions or comments at: .

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