5 stocks the fund managers own for a falling Aussie dollar

Have you missed the boat to invest offshore?

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian dollar has dropped 17%, since hitting highs of around US$1.10 in July 2011, and is currently trading around 89.5 US cents.

Since the beginning of this month, the Aussie has dropped from above US93 cents, and could be headed even lower. Chris Stott, CIO of Wilson Asset Management has told Livewire that he expects to see the Aussie dollar with a '7' in front of it within the next 12-18 months.

That could be good news for Australia's economy, driving up the value of our exports – much of which is US denominated commodities like iron ore and coal.

But it could also have a detrimental effect on our market. International investors who have bought into ASX-listed stocks could decide to cap their losses, selling down their holdings and take their capital out of Australia.

As they are mostly invested in our very large market capital stocks, who make up a majority of the market and the S&P / ASX 200 Index (index: ^AXJO) (ASX: XJO), a sell-out of big banks, miners and consumer discretionary stocks could see our market fall.

That would be fabulous news for value investors – it's getting harder and harder to find cheap quality stocks. Another way to play the falling dollar and benefit is to invest in companies with large offshore earnings, particularly in the US.

Mr Stott's pick is poker machine maker Aristocrat Leisure Limited (ASX: ALL). Aristocrat earns more than half its revenues and profit from the Americas. Steve Johnson from Forager Funds Management says nearly half his portfolio is positioned to capitalise on a fall in the Aussie dollar, with stocks such as RNY Property Trust (ASX: RNY), Mirvac Industrial Trust (ASX: MIX), Hansen Technologies Limited (ASX: HSN) and GBST Holdings Limited (ASX: GBT).

RNY and Mirvac hold US property as their primary business, while Hansen provides billing solutions to customers in the telecommunications and utilities sectors around the world. GBST provides software platforms for wealth administration, share trading and derivatives processing amongst others.

If you think you've missed the boat to invest offshore, imagine how you might feel if the Aussie falls into the 70's.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »