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Back Door Funds

There are ways to get in to good funds with high minimum investments.

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Every average Joe or Josephine loves a good loophole--the co-worker with playoff game tickets, the relative with front-row concert seats, the friend of a friend of a friend with the tee time at the exclusive golf course you've been dreaming of playing. Similarly, what small investor doesn't appreciate finding a way into a good fund whose required initial investment puts it out of reach of all but the biggest investors, such as pension plans and affluent individuals?

You can hurdle high barriers to entry. It requires a bit of gumshoe work, and, in some cases, you may end up paying additional fees and higher annual expenses than you would if you chose a comparable no-load fund with an affordable minimum. If you decide you can't do without a high-minimum fund, though, there are ways to get in.

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Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.