Credit Strategies for Undervalued Bonds

During a recent review of their fixed income portfolio, a portfolio manager at Wise Investments is evaluating the credit risk associated with a potential investment in corporate bonds. The manager considers the merits and risks of investing in bonds from companies with varying credit ratings. Wise Investments employs a credit strategy that seeks to optimize returns by identifying opportunities in both investment-grade and speculative-grade (high-yield) bonds.

In this context, the portfolio manager is particularly interested in understanding how the spread between corporate bond yields and Treasury yields can indicate credit risk and the potential for credit spread widening or tightening. Which of the following credit strategies is most appropriate for managing a fixed income portfolio focused primarily on identifying undervalued speculative-grade bonds?