"When the Australian dollar drops, then Aussie stocks start to look more attractive. Some people may feel queasy when both drop together, but I feel excited," Randal Jenneke said.

As head of Australian equities, Sydney-based Mr Jenneke is responsible for managing a $120 million portfolio on behalf of local clients, as well as advising on the $US3 billion ($3.5 billion) that T Rowe Price has invested in Australian equities on behalf of offshore investors. Globally, the firm has $851 billion under management.

Over the past five weeks the Australian dollar has plunged 7 per cent against a strengthening US dollar. Over that same period the benchmark S&P/ASX 200 Index is down 5.5 per cent, after wiping off 6 per cent in September, and is now trading below where it began 2014.

"The September selloff in Australian assets is something we had been waiting for," Mr Jenneke said.

"Globally markets are starting to price for an eventual rise in US interest rates, and that is a good thing. The longer rates stay low the greater the risks of asset bubbles forming."

He thinks the local market will avoid entering a technical correction, as defined by a drop of 10 per cent or more, over the coming weeks as more foreign capital steps in to snap up bargains. But the market's leadership is set to switch.

Banks, miners to lose out

The losers are set to be those stocks that have risen most strongly over the past three years – such as Telstra, the big four banks, and property trusts – fuelled by investors ­searching for yield in a record-low interest rate environment.

Slower growth in China and the ensuing weakness in commodity prices is also making the miners less attractive. A plunge in the spot price of iron ore, Australia's biggest export, to five-year lows was a key factor behind the share market's tumble in September.

One of the biggest shifts in the T Rowe Price Australian equity strategy this year was to sell out of iron ore behemoth Rio Tinto in the lead-up to August reporting season. The fund is still modestly overweight on BHP Billiton, as Mr Jenneke is comforted by its more diverse mix of commodity exposures. Smaller resource players are of no interest to the fund.

As the trends of the past three years reverse and the exchange rate continues to depreciate, Mr Jenneke tips the biggest winners will be those Australian companies that derive a large portion of their earnings offshore. Favourites include packaging supplier Amcorand glove and condom maker Ansell.

He also remains optimistic about companies, such as Harvey Norman, which get a boost from strong housing construction. While the Reserve Bank of Australia is exploring the use of macro­prudential tools to take heat out of pockets of the housing market, it will continue to be broadly supportive through an extended period of low rates, Mr Jenneke said.

The sector he is most bullish on is Australia's flourishing listed fertility clinic sector. T Rowe Price participated in the June 2013 initial public offering from Virtus Health and the IPO of its main rival Monash IVF a year later. The fund remains invested in both companies with Mr Jenneke tipping that in vitro technology providers are set to see share price booms comparable with those enjoyed by online market-place companies such as Seek, REA Group, and Carsales over the past few years.

The Australian Financial Review