3 of the Best Vanguard Mutual Funds to Buy Ahead of September

The Federal Reserve’s interest-rate outlook is likely to remain a key driver that will influence both the stock market and the bond market as we approach September. The Federal Reserve kept the federal funds target rate within the range of 3.50% to 3.75% at its most recent meeting in July. The next meeting for consideration of interest-rate decisions will take place from Sept. 15 to Sept.16, as the Federal Reserve will assess inflation and determine the interest-rate decisions. 

The economic indicators released on Tuesday show signs of moderation.  The Conference Board reported on Tuesday that consumer confidence fell to 89.4 in August from 90.2 in July. The reading came below the consensus estimate of 90.2. 

The housing market also weakened. The Commerce Department's Census Bureau reported that new-home sales fell 10.5% to a seasonally adjusted annualized rate of 607,000 units in July from June's revised pace of 678,000 units. The reading came below the consensus estimate of 619,000 units.  

Against this backdrop, Vanguard mutual funds provide a range of investment options for the current market environment. Vanguard offers funds across major U.S. equity categories, growth-oriented strategies and balanced portfolios, allowing exposure to different areas of the market as economic growth and interest-rate expectations evolve. 

Vanguard’s mutual funds have relatively low expenses. This means that the portion of returns consumed by fund expenses is lower for these funds. The September Fed meeting is approaching, and the economy is experiencing mixed growth. Against this backdrop, the following three Vanguard mutual funds offer distinct portfolio exposure and investment approaches. 

We have selected three Vanguard mutual funds — Vanguard Tax-Managed Balanced Adm VTMFX, Vanguard Equity-Income Inv VEIPX and Vanguard PRIMECAP Inv VPMCX — which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.

Vanguard Tax-Managed Balanced Adm fund seeks capital gains and income tax efficiency while approximating the index's characteristics and performance. VTNFX invests its assets in municipal securities and the balance in common stocks. 

James M. D'Arcy has been the lead manager of VTMFX since June 28, 2013. Most of the fund’s holdings were in companies, such as NVIDIA Corp (2.9%), Apple Inc. (2.6%) and Microsoft Corp (1.9%) as of March. 31, 2026.

VTMFX’s 3-year and 5-year annualized returns are 10.8% and 6.5%, respectively. Its net expense ratio is 0.09%. VTMFX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other 1 (Strong Buy) and 2 Ranked Mutual Funds, please click here.

Vanguard Equity-Income Inv fund invests mainly in common stocks of mid-size and large companies that typically pay above-average dividend income and that the purchasing advisor believes are undervalued relative to similar stocks. 

Sharon Hill has been the lead manager of VEIPX since Feb. 26, 2021. Most of the fund’s holdings were in companies, such as Broadcom Inc. (5.6%), Merck & Co., Inc. (2.5%) and Johnson & Johnson (2.3%) as of March 31, 2026.

VEIPX’s 3-year and 5-year annualized returns are 15.5% and 11.7%, respectively. Its net expense ratio is 0.26%. VEIPX has a Zacks Mutual Fund Rank #1.

Vanguard PRIMECAP Inv fund invests in stocks it considers to have above-average earnings growth potential that is not reflected in their current market prices. 

Theo A. Kolokotrones has been the lead manager of VPMCX since June 1, 1985. Most of the fund’s holdings were in companies, such as Eli Lilly and Co (6.9%), Micron Technology, Inc. (6%) and Alphabet Inc. (3.8%) as of March 31, 2026.

VPMCX’s 3-year and 5-year annualized returns are 23.5% and 15%, respectively. Its net expense ratio is 0.35%. VPMCX has a Zacks Mutual Fund Rank #1.

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