‘Prudent’ to expect a sell-off: Bonham Carter

Market is 'artificial': Bonham Carter

A stock market sell-off could be on the way, the vice chairman of Jupiter Fund Management warned on Monday, describing the current low-interest-rate environment as "artificial and somewhat Alice in Wonderland."

Speaking at the FundForum International event in Monacco on Monday, Edward Bonham Carter urged caution, given the recent rise in equity markets.

"After such a strong run, one should be a bit more cautious and valuations are getting a bit more stretched," he told CNBC.

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But predicting the timing of a market downturn was "notoriously difficult," Bonham Carter, who is the brother of actress Helena Bonham Carter, added.

"All I know is our fund managers are finding it a bit harder to find value out there, so it would be prudent to expect some sort of sell-off," he said.

"But the basic economic conditions around the world are still pretty solid."

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A number of stock indexes have hit new highs recently, with the U.S. benchmark and Germany's Dax still trading near record levels.

The benefits of multi-asset investing

Despite the risk of a correction, Tom Caddick, head of global multi-asset solutions at Santander Asset Management, told CNBC he remained long on equities.

He stressed that although markets were near record highs in absolute terms, "on a long-term PE (price-to-earnings ratio) basis, there is still some value to be had."

Caddick added: "Is the case as compelling as it was 18 months ago? Absolutely not. But there's still value, even over a six-month to a one-year view in equities."

'Alice in Wonderland'

The rise in stock markets over the course of this year has been accompanied by low volatility, with the much-watched Volatility Index (VIX) falling to a pre-financial-crisis seven-year low earlier this month.

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Bonham Carter said that quantitative easing by central banks like the U.S. Federal Reserve had led to record-low interest rates and dampened volatility.

"We're in a place we've never been before and the so-called experts can't give you an agreed answer about what's going to happen," he said. "So it is artificial and somewhat Alice in Wonderland."