With an impressive 105% year-to-date return, the $77 million

(SMCFX) - Get Report

Schroder Micro Cap fund is one that many investors would love to get their hands on.

Alas, that is impossible -- the fund closed in December 1998 -- a little more than a year after its inception.

But that doesn't stop some investors from trying, as this desperate plea posted on


message boards last summer illustrates:

"I'd like to add this fund to my IRA but it is closed to new investors. Does anyone have a share (or more) that they wouldn't mind selling to me?"

The posting got no replies.

These missives are occasionally seen on message boards dedicated to hot mutual funds that have been closed to new investors because they've gotten too large to manage properly. Undaunted, some investors still try to sneak their way into closed funds by finding a shareholder who is willing to "give" them one share -- usually for a hefty sum or in exchange for a share of another coveted closed fund.

One message posted in June read: "Does anyone know how to get into a closed


fund by transferring ownership of one share? I am looking to get into

(VHCOX) - Get Report

Cap Opp. I have

(VPMCX) - Get Report

Primecap or

(WEHIX) - Get Report

Weitz Hickory to swap. Thanks."

Such transactions are possible because existing shareholders are often allowed to continue to invest in closed funds. They're also typically permitted to transfer shares as a gift to someone else, allowing the recipient to then put more into the fund.

The trick is finding an investor willing to part with a share, something that has led to a gray market in closed funds on Internet message boards. Some recent postings on Morningstar.com's boards show offers for shares of the $3.2 billion

TheStreet Recommends

(SEQUX) - Get Report

Sequoia fund, which closed in 1982, and the $5.5 billion Vanguard Capital Opportunity fund, which closed in March for a cooling-off period.

Though the exclusivity and juicy returns of some closed funds are alluring, analysts and financial planners say investors might want to think twice before delving into the forbidden territory of such funds.

"We've found that closed funds actually don't perform all that well," says Morningstar's director of fund analysis, Russ Kinnel. "The biggest reason is simply because the point at which it closes is that point at which it's had really strong returns, and you're kind of just buying at the top."

A case in point is the Sequoia fund, which had 31.4% of its assets invested in Warren Buffet's

Berkshire Hathaway

as of March 31. This once-stellar performer has posted a year-to-date return of 2.5%, and has underperformed the

S&P 500

index over the last one-, three-, five- and 10-year periods.

Kinnel adds that funds often close after the portfolio manager has found that the fund's size has become a hindrance to performance, and by then it's too late.

"You have to

ask, 'Do I really want to get into a fund if it's too large?' " says Catherine Morris, a certified financial planner with

American Express Financial Advisors

in Pittsburgh. "The new investor could look elsewhere, where another fund closely matches or exceeds the performance of that fund."

Further, finding someone willing to give you shares as a gift could prove difficult. If a prospective investor didn't already know somebody in the closed fund, he or she would have to turn to the gray market, which many industry watchers say is not very well developed. In fact, it is so small that many mutual fund companies don't see it as much of a problem.

"We know that it happens, but it's at such a ground level, it's of no consequence," says Vanguard spokesman Brian Mattes.

Vanguard does allow its fund holders to transfer shares as a gift, but it also imposes minimum investment levels on certain funds to discourage fickle investors. Its Capital Opportunity fund, for example, has a minimum of $25,000.


, which has closed half its 16 stock funds and last week closed its flagship $50 billion


Janus fund, does not allow shareholders of its closed funds to make gifts of shares. Only investors who were in the fund at the time of its closing are allowed to invest more.

"We haven't had any issues with that in the past, and it wouldn't work operationally speaking," says Janus spokeswoman Shelly Peterson. "Hopefully, there's not anybody out there trying to."