UPDATE 1-AQR launches momentum funds for retail clients

* Launches three new mutual funds

* Investors must commit at least $5,000

BOSTON, July 10 (Reuters) - Money management firm AQR Capital Management, which relies heavily on computer models to select investments, has launched three new funds to let retail clients make money on momentum plays, AQR said on Friday.

Momentum investing, where managers bet on securities that have outperformed their peers on a relative basis in the recent past, has been widely researched but there have been few ways for retail investors to bet on this strategy.

AQR, which manages $20 billion and is best known for its hedge funds, said the AQR Momentum Index, the AQR Small Cap Momentum Index, and the AQR International Momentum Index began trading this week.

Reuters first reported the expected launch last month.

"AQR is introducing the Momentum mutual funds as a cost-effective way to access this proven approach," David Kabiller, who co-founded AQR with Clifford Asness, said in a statement. "The launch of these new funds furthers our efforts to provide clients with innovative ways to gain diversification for their portfolios."

Each fund currently has $2 million in assets. Investors must commit at least $5,000 to invest. The funds are rebalanced four times a year and include stocks that rank in the top third of their sectors based on their momentum over the last 12 months. (Reporting by Svea Herbst-Bayliss; editing by John Wallace)