Property fund doomsayers 'have got it wrong'

The firm has said that recent changes in fund prices, such a Standard Life’s 6.7% reduction in its property fund, are simply the result of more of the fund being redeemed than is being purchased. There has been no change in the underlying asset values. Dennehy Weller’s managing director, Brian Dennehy, says when fund cashflows are negative, they are valued on a bid basis, so unit prices are based on the underlying asset price less the cost of selling. Dennehy says: “This sort of adjustment is fairly common, but it hardly gets noticed on equity funds as the costs of buying and selling the...