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What are equity, mortgage and mixed REITs?
Real estate trust and investment funds (REITs) are an important means of real estate securitization. Real estate securitization is a financial transaction process that directly transforms illiquid non-securities real estate investment into securities assets in the capital market.

According to the different forms of investment, REITs can usually be divided into three categories: equity type, mortgage type and mixed type.

1. Equity REITs invest in real estate and have ownership. Equity REITs are increasingly engaged in real estate business activities, such as leasing and customer service. However, the main difference between REITs and traditional real estate companies is that the main purpose of REITs is to operate real estate as part of the portfolio, rather than resell it after development.

2. Mortgage REITs invest in real estate mortgage loans or real estate mortgage-backed securities, and their main source of income is real estate loan interest.

3. Hybrid REITs, as the name implies, are between equity REITs and mortgage REITs. They own some property rights and also engage in mortgage services. Most of the REITs circulating in the market are equity, and the other two types of REITs account for less than 10%. Equity REITs can provide better long-term investment returns and greater liquidity, and the market price is more stable.

Reply time: 2020- 12-24. Please refer to the latest business changes announced by Ping An Bank in official website.

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