“If you look at the end of the tech boom, markets ran up into around March 2000, but valuations were incredibly extended through that period and there was a big spike up,” Mr Doyle said.

“If nothing goes too far wrong in the economy and liquidity keeps being injected in, it’s quite possible the market could run up, but we think that run-up is not based on solid fundamentals; it’s based on a belief that central banks will bail out investors, therefore you can take more risk.

“So, you can continue to take that risk, but bear in mind that ended pretty painfully in the early 2000s, so equity markets don’t always go up.”

Mr Doyle said the fund manager currently had around a 27 per cent allocation to equities, out of a possible asset range between 0 and 70 per cent, because of stretched valuations in key markets and the possibility of a market correction.

“We are not as low [weighted] as we could be, but we’re on the conservative side given what’s happened to valuations. Given what’s happened to valuations, we’ve added equities through last year and we’re starting to trim that a little bit,” he said.

“If you’re running a typical balanced fund, which is 60 to 70 per cent equities, and you’re looking at equity markets at close to highs, that implies a lower return [going forward]. So, I think we should expect lower returns from those models than we’ve seen.”

Mr Doyle said with central banks running out of ammunition to pump up asset values, the risk of a hard landing in equity markets if economic growth stalled was significant.

“We’re now in an environment where you’ve got incredibly low yields and elevated asset prices supported by those low interest rates, and that is across the curve — infrastructure, private debt, real estate. If you take a really simple view of it, there’s a giant Ponzi scheme being created and no one is sure how to get out of it,” he said.

“We’ve gotten away with it because growth has been enough to paper over the cracks, but if you get an earnings collapse the basis for [those prices] in markets is going to disappear, or if you get an inflation shock and central banks can’t keep rates as they are, that is also a real problem.”