Competition, if nothing else, keeps companies constantly looking for the next innovative product or strategy that will bring more assets to their firm. That is why many asset management firms are choosing to offer the increasingly popular 130/30 strategies as the benefits of shorting stocks can outweigh the benefits of going long, according to the report "130/30: From Rationale to Implementation" by New York-based Merrill Lynch.

"One reason for the growth of 130/30 strategies is the sophisticated framework allows for flexibility, and investors realize that it is difficult for a manager to extract all value from their fundamental views without having a flexible framework," said Benjamin Bowler, equity linked analyst and co-author of the report.

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