EVEN before bond yields ripped through the roof this month, some asset managers had begun quietly shifting strategies in a fundamental way: less index, more brain. Instead of delving deeper into matching benchmarks that are now loaded with negative-yielding debt, they're returning to more traditional methods of picking according to fundamentals. That means looking for governments narrowing deficits or company turnarounds.
While the sell-off shook markets and drove up yields from New York to Zurich,...