 There are four main reasons why you would hold bonds in a balanced portfolio. The first is that bonds will usually outperform cash over any given period of time. In fact, over the last ten years to May 2017, bonds outperformed cash and even shares over that period. The second benefit of holding corporate bonds in a balanced portfolio is that they do offer predictable income. They offer that more so than dividends which can be stopped and cut off by the company at their discretion. The third benefit is that the bond is a legal commitment from the company to the investor. That is to pay coupons and the face value at the maturity of the bond. This means that bonds in the same company are less risky than shares. The last benefit from owning corporate bonds in a balanced portfolio is that they do offer investors the opportunity to diversify away from some of the other asset classes and smooth some of the earnings. In addition, it does allow investors to get access to some investments that aren't listed on the ASX from unlisted sectors such as infrastructure and also from offshore issuers such as Apple.