A Corporate Bond is a loan from an investor to an issuer (such as the government, a bank or corporation). When you purchase a bond, the bond issuer is legally obliged to pay you regular interest and at the bond’s maturity, the face value of the bond (which is the price the bond was issued at) must be returned to you.
Bonds can be traded by investors after they have been issued and before they mature.
There are many types of bonds including fixed, floating and inflation linked bonds. A balanced portfolio will include different weightings of these three types of bonds, depending on your expectations for interest rates and inflation