What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community.

Corporate bond fund

A corporate bond fund is a mutual fund that invests in corporate bonds. If a bond fund is not otherwise designated, it is presumed to be a corporate bond fund.

Expanded Definition

Bond rating and maturity are key factors in types of bond funds. Corporate bond funds are usually assumed to invest in investment-grade bonds unless they are labeled as a high-yield bond fund or a junk bond fund. Investment-grade bonds are rated "AAA" to "BBB-" among credit-rating agencies. Junk bonds are rated "BB+" or lower.

The average maturity of a bond fund may be long or short. Short bond funds pay a lower yield and are less volatile. The market value of long bond funds will vary more with changes in interest rates and related news.

Related Fool Articles

Related Terms

Recent Mentions on Fool.com