The definitions of reits and abs are different. First, reits are real estate trust and investment funds and abs are asset-backed bonds. Moreover, the scope of application of the two is different. Reits directly convert illiquid non-securities real estate investment into securities assets in the capital market. Abs is a form of financing, which issues tradable securities backed by a specific portfolio of assets or a specific cash flow.

The simple understanding of reits is to concentrate on investing in real estate projects, such as shopping centers, office buildings and hotels. Finally, it provides investors with regular income from rental income or real estate appreciation. Under REITs mode, investors become shareholders of the company by subscribing for shares and indirectly hold shares in real estate assets.

The investors of abs asset-backed bonds are mainly banks, insurance companies, money market funds, mutual funds, pension funds and hedge funds. Because most asset-backed securities have different durations, repayment structures and credit enhancement methods, most of their transactions are conducted in the OTC market, mainly through telephone bilateral quotations and agreements. Therefore, except for the highly standardized MBS, other types of ABS generally lack liquidity and have low price transparency.