Value-hungry investors 'should consider investment trusts over model portfolios'

Focus should be on reliability of income, report argues

London-based financial planner Master Adviser has warned the investment industry's focus on modern portfolio theory (MPT) is failing long-term income investors.

The firm has produced a white paper, Converting cash sums into monthly pay cheques: rational income investing in a post-QE environment, in which it demonstrates that even portfolios with 80%+ equity exposure can be appropriate income portfolios for retirees, supported by Morningstar research, as they are less risky than is initially perceived. Rather than looking at total return, as is common across the sector, Master Adviser said given today's post-quantitative easing (QE), low-yielding world, investors should be concentrating on the reliability of income, which is often "hidden" by the...