Differences between multi- managers may be small but the strategic allocation between managers varies considerably, according to a report by research house and consultant Chant West.

"Strategic allocation is widely accepted as the most important determinant of long-term returns and volatility. Even within the fairly tight categories used, there are some significant differences in the benchmark allocations," said the report.

For example, between the different multi-products reviewed, the report found that the allocation to Australian shares varied from 22 per cent to 40 per cent. For international shares, the strategic allocation between the multi manager products varied from 18 per cent to 27 per cent.

The report also identified the value of market timing as another differentiating factor between the products.

The report revealed that multi-managers like Russell, Intech and MLC tend to remain with their long-term investment objectives, however, managers like ING, Jana Investment Advisers and van Eyk made tactical decisions in their portfolios that reflected their view of the way markets are valued.

"Arguments over the value added potential of Tactical Asset Allocation have been going on for years and nobody has produced conclusive proof either way. What's important is that you know if your fund is going to use it or not, because it can involve added risk which may or may not be rewarded," Chant West principal Warren Chant said.

The report on the sector rated multi-managers in stages with the first nine reports released yesterday. Of the nine managers five were given the highest rating of five apples which included industry fund Hostplus and investment managers MLC, Russell, Mercer and Jana Investment Advisers. Managers, BT Financial Group, ING, Intech and van Eyk received four apples.