Which of the following is NOT a benefit of owning bonds?

Owning bonds typically provides several benefits, and it is essential to recognize that one key characteristic of bonds is their relative stability compared to equities. Regular cash flows from bond interest payments are a significant advantage for investors seeking predictable income. Furthermore, bonds generally exhibit less volatility than equities, making them a safer choice in times of market fluctuations.

The potential for inflation hedging is not traditionally associated with bonds, especially if the inflation rate exceeds the coupon rate, but certain types of bonds, such as Treasury Inflation-Protected Securities (TIPS), are designed to offer protection against inflation by adjusting the principal value with changes in the Consumer Price Index.

When considering volatility, bonds are not known for having volatility similar to equities. In fact, bonds are usually characterized by lower volatility, which contributes to their appeal for risk-averse investors. Therefore, the statement regarding volatility being similar to equities stands out as not a typical benefit of owning bonds, highlighting the fundamental difference in the nature of these asset classes.