It's finally happened.
After five years of punching well above its weight the mighty Aussie dollar has slipped under the $0.90 mark – only this time it's here to stay.
And the best part is that with the wider ASX falling, investors can't see the wood from the trees, watching their portfolio turn into a sea of red ink.
Shares that earn 100% of their earnings in foreign currency are watching their prices fall rapidly, at exactly the same time that their earnings are expanding thanks to the magic of foreign exchange rates.
It's not just USD denominated companies that are benefiting, with the AUD falling 7% against the British pound and 4% against the Euro in just the past two weeks.
And with some analysts predicting the Aussie dollar to fall up to 10% further, investors have a real window of opportunity to pick up some foreign currency earners on the cheap.
Here are three of the best:
Westfield Corp Ltd (ASX: WFD)
With 74% of its portfolio currently denominated in US dollars and the remaining 26% in GBP, Westfield is a solid bet to play a falling AUD – and has the fringe benefit of being a great investment even if our dollar wasn't falling.
Westfield now denominates its reports in US dollars which should see shareholders granted larger dividends in future periods thanks to current exchange rates.
Paying a dividend of 4% at today's prices and with the prospect of increasing Euro/ GBP exposure in coming years, Westfield Corp is in no danger of leaving my portfolio any time soon.
Macquarie Atlas Roads Group (ASX: MQA)
Macquarie is returning to something like normal prices after investors finally realised dividend growth was lagging way behind price growth.
It's ironic, because last time the Aussie dollar looked like falling, Macquarie Atlas shot up from $1.50 to over $3 a share.
I guess investors have forgotten about that and are now casting about for shares with higher yields.
That's all to our advantage though, because with earnings divided fairly equally into USD, Euro and GBP, this toll road operator is another solid way to gain foreign currency exposure with the added defensiveness of its infrastructure assets. It also has a 3.3% dividend yield.
Galileo Japan Trust (ASX: GJT)
An ASX-listed property trust that owns 100% of its tenements in Japan, Galileo Japan Trust benefits from significant exposure to the Japanese Yen as well as ridiculously low interest rates of around 0.5% in Japan.
While the property trust is highly geared, Japanese interest rates are not rising any time soon and the Aussie dollar has dropped just over 3% against the Yen in the past three weeks.
Investors should also find the high quality property portfolio and 6.4% dividend yield pretty hard to argue with.
While the Aussie dollar continues to fall rapidly, there is another equally effective way to play our current economic climate – without the stress of worrying about foreign exchange rates.
One small-cap company in particular boasts of over seven consecutive years of profit, revenue and dividend growth – from the GFC aftermath until now – and a number of impressive tailwinds see that growth expected to continue long into the future.
With earnings growth easily convertible into price growth – falling market or not – this under-the-radar company could join Westfield, Macquarie Atlas and Galileo as the fourth pillar of your portfolio, giving you peace of mind through the tough times and glorious capital growth in the better ones.
With such huge appeal, it will be no surprise to find this share has been chosen as The Motley Fool's Top Stock Pick for 2014 – and as part of its mission to help the world invest better, TMF is giving its special report away to readers for free.
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