At the 2013 Morningstar Investment Conference, the audience of over 300 people, mainly planners and researchers, was polled on which asset class they intended to invest more on over the coming 12 moths.
At the start of the session, 54% voted for global equities and only 16% Australian equities. After the speakers gave a negative outlook for the Australian dollar and portrayed the Australian market as yiled-driven rather than earnings-driven, the audience was polled again. This time, the global equity allocation had increased to a staggering 68%.
When you consider the modest allocation to global equities in most Australian retail discretionary portfolios, a big potential shift is possible. And the majority wanted an unhedged exposure, suggesting it's as much a currency play as company valuation preference.
The other dominant theme was that it is difficult to pick an asset class that is not overvalued at the moment, especially bonds.