The 5 best funds you can't buy

Related topics: mutual funds, investments, savings, ETF, retirement

It's an unfortunate fact of life that unless you have millions of dollars, it's extremely unlikely you'll get access to top investments.

When Goldman Sachs Group (GS, news) structured an investment in Facebook, for example, it initially approached its best private-wealth clients with an offer to take part in a special fund that would invest in the social networking site. (Goldman later switched focus to overseas clients as concerns grew that media coverage surrounding the Facebook offering could run afoul of U.S. securities laws.)

A "closed" fund is a fund that is exactly what the name implies -- a mutual fund that is closed to new investors. Why would a fund close to new money? Often it's because the fund's manager believes it is hard to put that money to work. This is often the case with small-cap funds, because an investment may be so large it moves the stock price. Or it could be that the manager is just not willing to expand his investments and compromise the quality of the fund, even if it means more assets and more fees in his pocket.

Funds that are out of reach due to high minimums are not "closed," but they are often impractical. A $1 million minimum buy-in is out of reach for all but elite investors.

So what are some prime examples of funds you can't buy? Here are five:

Sentinel Small Company

A small-cap fund can be a good choice for investors seeking solid long-term returns. Over time, the volatility of investments in smaller companies should be muted. And, hopefully, some of the companies will ultimately become big caps.

One of the top offerings in the small-cap category is Sentinel Small Company (SAGWX). Over the past decade, the fund's average annual return was 8.6%.

A big plus is that the managers -- Chuck Schwartz and Betsy Pecor -- have broad skills in diverse industries, and their portfolio has holdings in a range of sectors, including software, hardware, health care, industrial materials and energy.

Calamos Convertible I

Successful investing is about finding an edge, something that's not easy to do even for the best minds in mutual-fund research. But John Calamos Sr., manager of Calamos Convertible I (CICVX), has carved out a niche in convertible securities, sophisticated investments that are a hybrid of stocks and bonds.

When done right, investing in this niche can bring substantial results. The reason is that convertible investments often do better in tough times, yet they retain the chance for a decent performance in rallies.

The Calamos fund has an annualized return of 6.3% over the past decade. Though the Calamos Convertible fund is theoretically open to new investors, you better have a cool $1 million if you're trying to buy in outside of an IRA. If not, this fund is not available to you.

Gabelli Small Cap Growth B

Mario Gabelli has a reputation for doing extensive research on stocks, with a focus on finding deep values. A good number of the companies in his Gabelli Small Cap Growth B (GCBSX) fund often wind up getting bought out at nice premiums.

Consider that the fund's 10-year annual average return is a stunning 9.1%. This was achieved during a period when the Standard & Poor's 500 Index ($INX) struggled to break even through the dot-com implosion, the Sept. 11, 2001, terrorist attacks, the Enron debacle and the Great Recession.

Needless to say, Gabelli understands how to navigate markets. Then again, he has been managing money since the 1970s.

True, the 2.17% expense ratio is on the high side, but it's an acceptable price to pay for a top-notch manager.

Royce Premier Investment

When it comes to picking stocks, Charles Royce is a pro. He is also quite busy, as he manages 12 mutual funds and two closed-end funds. Despite this, he is able to post strong returns.

One of his top performers is the Royce Premier Investment (RYPRX) fund, which seeks value in smaller companies, which Royce defines as those with market values of $500 million to $2.5 billion.

Royce is a big believer in holding on to good companies for the long term. As a result, the fund's turnover is only 14%. Moreover, its 10-year performance validates the approach: The fund's annualized return over the decade is 12.2%. The Royce Premier Investment fund is closed to new investors.

American Century Equity Income

There's no shortage of investment articles about the advantages of mutual funds that provide investors with a stable ride, which often means a portfolio of fixed-income securities and dividend-paying stocks.

Among the core holdings of the American Century Equity Income (AEKBX) fund are large-cap stocks, many of which, like Johnson & Johnson (JNJ, news) and AT&T (T, news), attract investors with their dividend yields.

American Century has also effectively purchased convertible bonds, which have helped the fund achieve a 10-year annualized gain of 5.7%.

The fund is pricey, with an expense ratio of 1.97%. The American Century Equity Income fund is closed to new investors.

This article was reported by Tom Taulli for InvestorPlace.