Managers not adding value picking asset classes

Analysis conducted by actuarial firm MJW shows no evidence that fund managers are adding value for their clients with tactical asset allocation, and in some cases, it's costing returns.

"When it comes to setting investment strategy, most investors accept that the largest impact on the risk/return profile will come from the asset allocation," MJW said in its report.

"While variance within asset sectors (i.e. active management) will play a part, this is usually overwhelmed by the differences in returns between, say, equities and bonds. Thus a key consideration is the policy in place to manage asset allocation."

Strategic asset allocation was set to guide the long-term profile of the investment portfolio.