A turbocharger includes a turbine, a compressor, and a bearing housing forming a bearing bore. A bearing arrangement is disposed between a shaft interconnecting the turbine and compressor wheels, and the bearing housing. The bearing arrangement includes first and second bearings formed between an outer bearing race element disposed within the bearing bore an inner bearing race element disposed within the outer bearing race element and between the outer bearing race element and the shaft. The inner bearing race element rotates with the shaft and forms an extension segment having an open channel that, together with an annular surface on an inner side of a back of the compressor wheel, forms a U-shaped channel into which a ring seal is disposed. The ring seal sealably engages the inner bearing race element and also slidably and sealably engages the inner bore of the bearing retainer.