Emerging Stocks to Earn 20% on Decoupling, Schroder Says

Emerging-market equities are set to return as much as 20 percent to investors next year as consumers drive growth in developing nations, leaving them less reliant on the U.S. and Europe, Schroder Investment Management says.

The MSCI Emerging Markets Index, the benchmark stock gauge for 21 emerging markets, and the MSCI World Index of developed-nation stocks are diverging by the most in almost six months, with the developing-country measure’s 120-day correlation coefficient with the MSCI World falling to 0.73 today, the least since June 28, data compiled by Bloomberg show. A reading of 1 indicates securities are moving in tandem.