Aegon switches property fund pricing as inflows swell

Aegon has switched the pricing of the £1bn Aegon Scottish Equitable Property fund from a cancellation to a creation basis to reflect recent positive inflows.

It says the move has resulted in an instant fund price increase of about 7%.

The fund moved from a creation to a cancellation price basis in August 2007 because net redemptions exceeded new money invested.

"This could be an indication of a wider trend of positive cash flows into the commercial property sector and suggests that investors' optimism has returned," Aegon head of investment marketing Mark Pearson says.

A rush to withdraw money from its commercial property funds forced Scottish Equitable to introduce delays of up to 12 months for its customers in January 2008.

The delays, lifted in early September of that year, affected investors in the property fund as well as those in the Select Reserve and Select Distribution funds.

A creation price broadly represents the value of the properties in the fund and any cash plus dealing costs and stamp duty, reflecting the buying position of the fund.

A cancellation basis is where the fund may need to sell properties and therefore pricing reflects the value of properties in the fund, and cash, less any selling costs.