SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>corrletterforbfiling121.txt
<DESCRIPTION>CORRESP LETTER FOR B FILING
<TEXT>
<PAGE>

                                   [SHIP LOGO}
                         [THE VANGUARD GROUP/ (R)/ LOGO]

                                                              November 30, 2004

Christian Sandoe, Esq.
Division of Investment Management
U.S. Securities and Exchange Commission                  via electronic filing
450 Fifth Street,
N.W., Fifth Floor
Washington, D.C. 20549

                       RE:  VANGUARD CHESTER FUNDS; COMMENTS ON PEA 29

Dear Mr. Sandoe:

         The following responds to your comments of November 23, 2004 on the
post-effective amendment of the registration statement of Vanguard Chester
Funds. You commented on PEA number 29 that was filed on October 12, 2004
pursuant to Rule 485(a). Please note that each prospectus page reference is to
the Vanguard PRIMECAP Fund prospectus.

COMMENT 1:       VANGUARD PRIMECAP FUND (PROSPECTUS PGS. 1 AND 4)
-----------------------------------------------------------------
Comment:          The More on the Fund section provides that the Fund's board
                  may change investment strategies or policies in the interest
                  of shareholders without a shareholder vote, unless those
                  strategies or policies are designated as fundamental. Is the
                  Fund's investment objective a fundamental policy? Item 4(a)
                  requires a fund to designate whether the investment objectives
                  may be changed without shareholder approval, and Item 11(c)
                  requires a fund to disclose a policy that a fund deems
                  fundamental, including the objective.

Response:         The PRIMECAP Fund has a fundamental investment objective. As
                  such, we will add the following sentence to the "Investment
                  Limitations" section of the SAI: "INVESTMENT OBJECTIVE". The
                  investment objective of each Fund may not be materially
                  changed without a shareholder vote."

COMMENT 2:       VANGUARD PRIMECAP FUND (PROSPECTUS P. 8)
---------------------------------------------------------
Comment:          In the Cash Management section, Vanguard CMT Funds are
                  described as funds "established under an SEC exemption." The
                  funds were not established by the exemption, rather the use of
                  the funds by other affiliated funds was permitted by an SEC
                  exemption. Clarify this language.

          Post Office Box 2600, Valley Forge, Pennsylvania 19482-2600
                       (610) 669-1000 . www.vanguard.com

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Christian Sandoe
November 30, 2004
Page 2

Response:         We propose to revise the first sentence of the Cash Management
                  section as follows: "Vanguard may invest the Fund's daily cash
                  balance in one or more Vanguard CMT Funds, which are very
                  low-cost money market funds. The Fund is permitted to invest
                  in the CMT Funds under the terms of an exemptive order granted
                  by the Securities and Exchange Commission."

COMMENT 3:       VANGUARD PRIMECAP FUND (PROSPECTUS P. 9)
---------------------------------------------------------
Comment:          In the prospectus discussion of the Fund's investment advisor,
                  there is the following statement, "Under the terms of an SEC
                  exemption, the Fund's board of trustees may, without prior
                  approval from shareholders, change the terms of an advisory
                  agreement or hire a new investment advisor--either as a
                  replacement for an existing advisor or as an additional
                  advisor." Is this statement consistent with the Fund's
                  multi-manager exemptive order?

Response:         Yes. The disclosure is consistent with the Fund's exemptive
                  order. See Vanguard  Convertible  Securities  Fund,  et al.,
                  SEC File No.  812-12380, Investment Company Act Release
                  Nos. 26062 (Notice) (May 29, 2003) and 26089 (Order)
                  (June 25, 2003).

COMMENT 4:       VANGUARD PRIMECAP FUND (PROSPECTUS P. 19)
----------------------------------------------------------
Comment:          On page 19 of the prospectus, there is a disclosure of share
                  class conversions from the Investor Share Class to the Admiral
                  Share Class based on an investor's tenure in the Fund. One of
                  the conditions of a tenure conversion is the investor's
                  registration on Vanguard.com. Why is there a requirement to
                  register with Vanguard.com in order to convert from Investor
                  to Admiral Share Class based on tenure in the Fund?

Response:         Limiting Admiral Share eligibility in certain circumstances to
                  those shareholders who register with Vanguard.com is designed
                  to encourage more shareholders to register. It costs far less
                  to effect transactions (buys, sells, exchanges), communicate
                  information, and conduct other business over the web than it
                  does through other channels such as phone or mail. Although
                  web-registered shareholders are not required to transact or
                  communicate with Vanguard using the web, we believe that many,
                  if not most, investors who register will soon interact with
                  Vanguard primarily through the web, generating savings that
                  are passed through directly to all Vanguard fund shareholders.

                  The eligibility criteria for Admiral Shares is part of the
                  PRIMECAP Fund's Rule 18f-3 Multiple-Class Plan. The current
                  version of the Plan was filed as an exhibit to the Fund's
                  filing on October 12, 2004.

COMMENT 5:       VANGUARD PRIMECAP FUND (PROSPECTUS P.26)
---------------------------------------------------------
Comment:          On page 26 of the prospectus, there is a statement that
                  Vanguard "reserves the right to ... redeem an account, without
                  the owner's permission to do so, in cases of threatening
                  conduct or suspicious or illegal activity." Confirm that this
                  policy

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Christian Sandoe
November 30, 2004
Page 3
                  is consistent with instances where the SEC has
                  expressly permitted forced redemptions. Also, confirm that the
                  "illegal activity" referred to in the disclosure is related
                  fund activity and not to other illegal activity of the
                  investor. For example, confirm that an investor's drunk
                  driving conviction will not constitute "illegal activity" that
                  could result in a forced redemption.

Response:         We propose no change to the current disclosure. We recognize
                  that the disclosure provides Vanguard with a great deal of
                  flexibility. However, we need that flexibility because we
                  cannot conceive of, and therefore cannot disclose, every
                  illegal activity [or abusive practice] that might cause us to
                  reject a transaction or force a redemption. Thus, having that
                  flexibility is in the best interests of the fund, its
                  shareholders, and Vanguard employees. Of course, Vanguard will
                  apply that flexibility in a manner consistent with any
                  relevant SEC guidance.

COMMENT 6:       SAI (P. B-34)
------------------------------
Comment:          Add disclosure to the SAI concerning the factors considered by
                  the Fund's board of trustees in reviewing and approving
                  revised terms of the Fund's investment advisory agreement with
                  PRIMECAP Management Company, pursuant to Item 12(b)(10) of
                  Form N-1A.

Response:         We will include the following disclosure in the SAI concerning
                  the Board's review and approval of the Fund's Amended and
                  Restated Investment Advisory Agreement with PRIMECAP
                  Management Company:

     VANGUARD PRIMECAP FUND. The board of trustees of Vanguard(R) PRIMECAP Fund
     adopted a new advisory fee schedule for the Fund, effective October 15,
     2004. The Fund's trustees regularly evaluate its investment advisory
     agreement, focusing on many factors, including but not limited to, the
     advisor's investment process, style consistency, performance, and the
     composition and depth of the firm's management and research teams. In
     deciding to adopt the new fee schedule, the trustees considered the Fund's
     performance and a wide range of information relating to PRIMECAP Management
     Company ("PRIMECAP"), which has managed the Fund since its inception in
     1984.
     The Fund's trustees retained PRIMECAP under the terms of an Amended and
     Restated Investment Advisory Agreement. The board's decision to revise the
     current advisory fee schedule was based upon its most recent evaluation of
     the advisor's investment staff, portfolio management process, and
     performance results. In considering whether to approve the new agreement,
     the board engaged in arms-length discussions with PRIMECAP and considered
     the following factors, among others:

     * The board considered the benefits to shareholders of retaining PRIMECAP
     as the advisor to the Fund, particularly in light of the nature, extent,
     and quality of services provided by the firm. The board considered the
     quality of investment management provided to the Fund over both the short-
     and long-term and the firm's organizational depth and stability. The
     trustees found that the Fund has grown considerably since inception and
     that the portfolio

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Christian Sandoe
November 30, 2004
Page 4

     management team has expanded to handle the increase in Fund assets.
     The new fee arrangement will help PRIMECAP continue to attract
     and retain top investment talent, and thereby enhance the organizational
     depth and stability of the firm. The Board noted that although the Fund has
     entered into an Amended and Restated Investment Advisory Agreement with
     PRIMECAP to reflect the new fee schedule, other terms of the existing
     agreement have not changed.

     * The board considered the investment performance of the Fund in comparison
     with the Fund's peer group and benchmarks. The trustees found that the Fund
     has a superior performance record under PRIMECAP's management relative to
     both the S&P 500 Index and the Fund's peer group. The Fund's investment
     performance is reflected in the following table:

                         (Insert Performance Table Here)

     * The board considered the fair market value of services to be provided,
     including consideration of competitive fee rates and the fact that, after
     the adjustment, the Fund's advisory fee remains considerably below that of
     most of its peers. The board observed that after the adjustment, the
     estimated advisory fee rate for the Fund would be 0.22%. The estimated rate
     is considerably less than the average fee rate of the Fund's peer group,
     which is 0.58%. The board noted that the new fee schedule is expected to
     raise the Fund's expense ratio to 0.50% from 0.46% for Investor Shares and
     to 0.35% from 0.31% for Admiral Shares for the current fiscal year. These
     increases represent an additional $4 in fees on a $10,000 investment.
     Additional data about the Fund's expense ratio, advisory fee rate, and
     those of the Fund's competitors are expressed in the following table:

                        (Insert Advisory Fee Table Here)

     * The board considered the extent to which economies of scale would be
     realized as the Fund grows, including a consideration of appropriate
     asset-level breakpoints in the fee schedule. By adjusting the fee through
     increases in asset breakpoints, rather than increases in fee rates, the
     Fund's trustees revised the fee schedule in a way that will allow investors
     to realize economies of scale by holding shares of a large fund.

     * The board considered whether the Fund should obtain alternative portfolio
     management services and concluded that, under all the circumstances and
     based on its informed business judgment, the most appropriate course of
     action in the best interest of the Fund's shareholders was to enter into
     the Amended and Restated Investment Advisory Agreement with PRIMECAP.

COMMENT 7:       SAI (P. B-38)
------------------------
Comment:          Explain how the Fund's "Proxy Voting Guidelines" address
                  conflicts of interest.

Response:         The following disclosure concerning conflicts of interests
                  appears in Section IX of the policy where it states:

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Christian Sandoe
November 30, 2004
Page 5

     The Board, including a majority of the independent trustees, appoints the
     members of the [Proxy Voting] Committee who are principals of Vanguard, and
     who have the requisite expertise to oversee proxy voting for the Vanguard
     funds.

      The Committee does not include anyone whose primary duties include
     external client relationship management or sales. This clear separation
     between the proxy voting and client relationship functions is intended to
     eliminate any potential conflict of interest in the proxy voting process.
     In the unlikely event that a member of the Committee believes he or she
     might have a conflict of interest regarding a proxy vote, that member must
     recuse him or herself from the committee meeting at which the matter is
     addressed, and not participate in the voting decision.

COMMENT 8:        TANDY REQUIREMENTS
------------------------------------
Comment:          The SEC is now requiring all registrants to provide at the
                  end of response letters to registration statement comments,
                  the following statements:

                  -   The Fund is responsible for the adequacy and accuracy
                      of the disclosure in the filing
                  -   Staff comments or changes in response to staff comments in
                      the filings reviewed by the staff do not foreclose the
                      Commission from taking any action with respect to the
                      filing.
                  -   The Fund may not assert staff comments as a defense in any
                      proceeding initiated by the Commission or any person under
                      the federal securities laws of the United States.

Response:         As required by the SEC, we will provide the foregoing
                  acknowledgements.

                                   * * * * *

         As required by the SEC, the Fund acknowledges that:

         - The Fund is responsible for the adequacy and accuracy of the
           disclosure in the filing.
         - Staff comments or changes in response to staff comments in the
           filings reviewed by the staff do not foreclose the Commission from
           taking any action with respect to the filing.
         - The Fund may not assert staff comments as a defense in any
           proceeding initiated by the Commission or any person under the
           federal securities laws of the United States.

         Please call me at (610) 503-2320 if you have any questions or further
         comments.