It had previously had four funds that were soft closed, and was not accepting investment from people who did not already have money in the funds.

But it had received feedback that that was confusing, group head of investments Paul Gregory said.

Instead, it had opted to close its emerging fund completely but open its growth, dividend and growth 2 funds. That decision was made based on Pie Funds’ view of the capacity of the funds, he said. 

But Chris Douglas, a principal at My Fiduciary, said it was a "puzzling" decision.

Growth has 60% cash, growth 2 32.25% and dividend 38.52% cash. Each has a target of 100% Australasian equities.

Usually fund managers would reopen a fund because they had withdrawals or the market increased to the point where they thought there were increased opportunities for investment.

"It's hard to know why they're reopening their funds now. I doubt it's because of the view that there's a greater amount of opportunities to invest in because they have such a significant amount of cash they must be relatively pessimistic abut the market at the moment."

Gregory said the composition of the fund at a point in time was not that important to capacity, "Especially if – as now – there is high cash. Cash is much more liquid than equities. We could maybe argue the capacity of the fund is higher with high cash, because it grows more slowly. But our intention with our cash is always to invest it, as much of it as possible, if we find good companies at good prices. Cash is a tool, so it’s not really appropriate for us to regard it as ‘additional’ capacity."

Performance in the funds has dropped off recently, though they have been strong performers in the past.

In 2018, Growth 2 delivered 14.87% against a market index of 14.99%. Growth returned 7.12% in 2018 compared to a market index of 14.99%. 

Gregory said Pie Funds determined the capacity of each of the funds and how much space might be left to accept more investment and determined the three had more room to move.

“What’s important to us is how efficiently can we move into or out of the positions we have.

"Given the weight we have in that company how big are we on the company’s register? If it’s a smaller company that can be quite large.”

That created filing requirements that could slow the process of moving out of a position, he said.

“We want that to be as efficient as possible because the longer it takes to get out the more the price can move against you.”

He said it was likely the now open funds would close in future.

“At some point there will be too much money in them to generate the return we want.”

Gregory said he hoped the emerging fund would remain closed. “The only reason it would open again is if it gets below capacity which would happen because of bad returns or because of withdrawals and those tend to go hand in hand.”