First investment banks developed tools to act like hedge funds. Now their risk strategies are spreading to traditional money management.

With the help of its first big client, Goldman Sachs, Russell Investments and Axioma Inc. teamed up to create the Russell-Axioma Momentum Index last year. As of this week, the Momentum Index now has four companion “factor” indices, one to manage leverage, another for liquidity, a third for beta, and a fourth for volatility.

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