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web3glossaryasset backed security
Asset-backed Security

Summary

An asset-backed security (ABS) is a financial investment product that is backed by a pool of assets, typically loans, leases, or receivables, that generates cash flows.

Detailed Description

Asset-backed securities are created by pooling together various types of assets (such as loans or leases) and then issuing securities that represent an interest in that pool. Investors receive payments that are derived from the cash flows of the underlying assets. ABS can include various asset types like auto loans, credit card receivables, and mortgage loans.

Category
Financial Instruments
Synonyms
Collateralized Loan Obligation
ABS
Asset-backed Bond

Impact Details

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Real Estate Investment

Investors can buy ABS linked to mortgage loans to gain exposure to the real estate market without owning property directly.

Industries:

Finance
Real Estate

Platforms:

Traditional Financial Markets
Blockchain Platforms
Automobile Financing

ABS can be created from auto loans, providing investors returns from a diversified pool of car loans.

Industries:

Finance
Automotive

Platforms:

Traditional Financial Markets
Blockchain Platforms
Consumer Credit Investment

Investors can access cash flows from a pool of consumer loans or credit card debt through ABS.

Industries:

Finance
Consumer Services

Platforms:

Traditional Financial Markets
Digital Investment Platforms

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