In the staid world of sovereign wealth and pension funds, an evolution is underway that could rewrite how trillions of dollars get invested.
For decades, these institutional allocators took roughly the same approach to managing the vast piles of cash under their control: They diversified by divvying up the money across asset classes — for example 40% in stocks, 40% bonds and 20% alternatives — then stuck with it by rebalancing now and again when things got out of whack.
But a growing list of funds is challenging that convention by turning to a method that ditches the asset-class silos. ...