TheStreet.com Ratings: Two Index Funds to Own Now

There's an old saying that's never been more applicable than now: "If you can't beat the benchmark, be the benchmark."

With the abundance of index funds now available, investors have a wealth of ways to generate market-equivalent returns while holding down expenses. So, hypothetically speaking, your index fund investments can keep up with the market while you're having a candle-light dinner with the financial equivalent of Tropical Storm Ernesto swirling around your home.

Both of the mutual funds I will discuss today are from the Vanguard Group, one of the families we've designated as an "Ultra" fund family for a keen eye on keeping expenses low for fund holders.

The two funds -- one a small-cap, one a mid-cap -- share several things in common: They track major indices, neither charge front- or back-end loads, and both have diversified holdings, which should help them weather any economic storms. And, of course, either (or both) would make a good core holding around which to build your diversified mutual fund portfolio.

Of course, being Vanguard funds, they keep expenses low. The Vanguard (VISVX Quote) Small-Cap Value Index Fund has an expense ratio of 0.23%. This is significantly lower than the average expense ratio of 1.55% for the 1,222 small-cap funds we rate. The ( VIMSX Quote) Vanguard Mid-Cap Index Fund has a similarly low expense ratio of just 0.22%, also well below the average expense ratio of 1.45% for the 777 mid-cap funds rated by TheStreet.com Ratings.