Hedge funds employ various investment strategies to generate returns, often categorizing them into different methods based on their characteristics. Among these strategies, relative value is particularly focused on identifying pricing inefficiencies between related securities.
Consider a hedge fund manager who specializes in relative value strategies. The manager observes that the yield spread between 10-year government bonds from two similar countries has widened significantly due to temporary market dislocations. The manager believes that this spread will revert to historical norms over the next few months. Based on this information, which of the following actions is most aligned with a typical relative value hedge fund strategy?