Money managers and prime brokers love 130/30 strategies. If you want to know why, just follow the money. While a pension fund typically pays 50 to 75 basis points for an active U.S. large-cap strategy, it pays about 5 basis points more for a 130/30 strategy. Many firms are converting existing active U.S. large-cap equity accounts into these strategies, which permit the manager to make bigger bets on stocks they expect to go up by leveraging their portfolios by 30% and shorting potential losers by an equal amount. The net effect is that the portfolios have a 100% exposure to the stock market.