The main difference between reits and abs is the difference in definition and operation. Reits is a real estate trust and investment fund, which invests in real estate after obtaining funds through public offering. Abs is an asset-backed bond, which is based on our real estate and then mortgaged to issue bonds. In this regard, we can find that although their liquidity is the same, their asset composition is different.

To put it bluntly, reits means that many people put money together and then let a professional invest, which is essentially no different from stock funds. Abs refers to the process of issuing asset-backed securities as repayment support and credit enhancement through structured design based on the future cash flow of basic assets. It is equivalent to a big factory using its own cash flow as equity and then issuing bonds.

Generally speaking, the difference between the two is obvious. In the former, we often encounter the devaluation of input assets, while in the latter, we may encounter the over-packaging of assets.

Therefore, when we invest in these two products, we need to do a good job of investigation. Just like investing in a stock, you must know its fundamentals (such as location, rent rate and previous rate of return) before you start. You must know something about policy, interest rate, politics and economy.