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3 Best Vanguard Mutual Funds to Buy in September

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Vanguard is one of the world’s largest asset management corporations that manages around $3 trillion in assets. As of Jan 31, 2020, it offered nearly 190 domestic funds and 220 funds for foreign markets. It offers asset management and financial planning services to clients across the world.

Unlike other mutual fund companies, Vanguard is owned by the funds themselves, which helps its management focus better on shareholder interests. Among the other advantages, it claims to offer low-cost, no-load funds. Vanguard was founded by John C. Bogle in 1975.

Vanguard’s Performance So Far This Year

By the end of July, Vanguard had around $6.2 trillion of assets under management. The initial investment of the majority of mutual funds from the family ranges from $0 to $3,000. As of Jan 31, 2020, none of the Vanguard mutual funds carried any load.

Further, Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX - Free Report) turned up as one of the best-performing mutual fund from the Vanguard family. VWESX, which invests a bulk of its intermediate- and long-term investment-grade securities, has returned 22.5% in the past year and added 17.2% so far this year.

Vanguard invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in the technology sector. Among the cyclical sectors, the fund family has invested the maximum in the financial services sector, while among the defensive sectors it has invested heavily in healthcare.

Technology Select Sector SPDR (XLK) has climbed 38.6% in the year-to-date period and 59.7% over the past year. The sector turned out the best-performer among the 11 S&P 500 sectors.

3 Best Funds to Buy Now

Given such bullish circumstances, we have highlighted three Vanguard mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and one-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Vanguard New Jersey Long-Term Tax-Exempt Fund Investor Shares (VNJTX - Free Report) aims to provide current income exempted from federal as well as New Jersey personal income taxes. The fund mostly invests in high-quality municipal bonds issued by New Jersey state and local governments and regional governmental and public financing authorities. VNJTX is a non-diversified fund and maintains a dollar-weighted average maturity between 10 and 25 years.

This Muni-Bonds product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 5.5% and 4.6%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

VNJTX has an annual expense ratio of 0.17%, which is below the category average of 0.85%.

Vanguard Short-Term Treasury Fund Investor Shares (VFISX - Free Report) seeks current income with minimum price volatility. VFISX invests a large share of its assets in U.S. Treasury securities such as bills, bonds and notes. VFISX seeks to maintain a dollar-weighted average maturity between 1 and 4 years.

This Govt Bond-Short product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 2.7% and 4.7%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

VFISX has an annual expense ratio of 0.20%, which is below the category average of 0.72%.

Vanguard LifeStrategy Growth Fund Investor Shares (VASGX - Free Report) invests in other Vanguard mutual funds with asset allocation of nearly 80% in equity securities and about 20% in debt securities and bonds. VASGX seeks appreciation of income and capital for the long run.

This Allocation Balanced product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 7.1% and 7.9%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

VASGX has an annual expense ratio of 0.14%, which is below the category average of 0.73%.

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