The Vanguard 500 fund is legendary not only because it was the first index offering ever launched, but also because of its rock-bottom prices. The fund levies a mere 0.18% annual expense ratio, one of the lowest in the industry. What investors may not realize, though, is that they can cut those expense fees in half -- as long as they are willing to pony up some serious cash.

Vanguard 500, like every mutual fund, requires shareholders to invest a certain amount of money when they first buy shares. The amount funds charge can be as little as $500 or as high as a six-figure sum. Vanguard 500's regular minimum investment is $3,000. But the fund also has an Admiral share that rewards investors with a 50% fee discount if new investors put at least $100,000 down.

Typically, when SmartMoney.com runs a fund screen we set our minimum investment cutoff at $5,000 or less -- a level we think most people saving for retirement can realistically afford. However, that means we disqualify funds for reasons that have nothing to do with their performance. But this time we decided to take a look at funds with much higher minimum investment thresholds. We started by looking at the 5,296 funds and share classes in our Lipper database that charge a minimum investment of greater than $5,000. We then searched for funds with above-average track records during the trailing three- and five-year time periods. We also favored cheap fees. Ultimately, we were left with the 13 funds listed on the table below. All of the funds are up 14% or more for 2009.

Some fund families say they offer high minimums in order to protect existing shareholders. The goal is to deter investors who chase performance from moving in and out of the fund, which could potentially impact the fund's performance if the manager is forced to sell some stocks in order to cash out an existing shareholder. The belief is that a higher minimum may keep some of those investors from jumping in at all since putting up $50,000 is a much bigger commitment than investing $500. Fund families can also use large minimums to slow down the flow of money to a certain fund if the total amount is getting too cumbersome for a manager.

While Mark Matson, founder of Matson Money Advisors, a Cincinnati investment company with over $2 billion under management, believes higher minimums do help to protect shareholders, he also sees some of the so-called benefits as marketing ploys. In his experience, Matson has seen investors chase performance regardless of whether they can afford to invest $500 or $5 million.

"It does afford a little protection, but it sounds like a little bit of marketing from the fund company," he says. "[Investors] will market time if they have hundreds of millions of dollars or if they don't have that much. Just are both as likely to panic in a down market and sell."

Of course, picking a mutual fund simply because of its minimum investment is not something we recommend. While high minimums help keep costs down -- if a fund can raise $100 million from just 20 shareholders they don't have to print as many prospectuses or account statements as if there were 20,000 shareholders -- investors need to be careful when investing such sizable sums of money. If your account balance is just $300,000, moving a third of that into a high minimum fund simply to take advantage of lower fees could skew your entire portfolio and leave it too heavily weighted in a particular asset class. It may pay to go with a financial advisor instead. Those pros can usually get around the minimum if they have a relationship with the company.

For those who still want to invest in a high-minimum fund, keep in mind that it can be complicated. At Vanguard, new investors can put $100,000 or more down for what the company calls an Admiral share. In return, Vanguard cuts the annual expenses to 0.09%. In addition, investors who have owned shares of a given Vanguard fund longer than 10 years can get the same deal if they have half that amount in the fund. Fidelity has a similar $100,000 hurdle associated with its Advantage share class. (The deals apply mostly to index funds, as evidenced by our table.)

The Criteria: The funds on the table below require a minimum investment greater than $5,000, according to Lipper. In addition, they are in the top 20% of their respective fund categories over the trailing three- and five-year time periods. They are open to new money, charge an annual expense ratio less than 1.5% and do not levy a sales load charge.

Recipe

• Fund Type = *
• Annualized 3-Year Return (%) = Display Only
• Rank in Classification (%) (3 year performance) <= 30
• Annualized 5-Year Return (%) = Display Only
• Rank in Classification (%) (5 year performance) <= 30
• Expense Ratio <= 1.5%
• Load Fund (type) = No Load
• Minimum Initial Investment >= $5,001
• Open to New Investors = Yes
• Total Net Assets ($ millions) >= 50
• Year-to-Date Return (%) >= 14%

* Screen does not include fixed income funds.