Some mutual funds are only available for large institutional investors, e.g., pension funds, or to high-net worth individuals through their investment advisors. Because they do not deal with the public (and the higher turnover rate associated with public or “retail” funds due to “emotional” trading), they typically have lower internal costs. They can, therefore, pass those savings on to the investors in what basically amounts to wholesale pricing.
These funds generally have a high minimum initial deposit requirement (usually $1M–5M per investor). They do not charge front-end or back-end fees, and their expense ratios are typically under 0.75%.
It is possible for those with under $1M to invest to buy an institutional fund through a brokerage firm or registered investment advisor. These firms buy into funds as part of a managed mutual fund account for which they charge a management fee.
Some institutional share funds are available through “discount” brokers, though the brokers require the fund to increase its expenses by around 0.25% so the brokerage firm gets paid without charging the investor a transaction fee.