Are high yield bonds or REITS better for a beginner with low capital? Just started studying and want to invest what I earn part time. Income per month is around 1k.

Strictly comparing these 2 asset classes, I'd go for the HYB. REITs are as sensitive to interest rates but property is an illiquid holding. A REIT manager can't just decide to sell of some buildings or lower their gearing as and when.

HYB funds do better at active management to respond to interest rates, also bonds are much more liquid and the entire bond market even eclipses the entire equity market.

Plus HYB funds are usually cheaper than REITs as well. To start investing in a high yield bond fund, you'll need a minimum of 1k however.

High yield bonds are better because they have lower volatility for around the same yield.

The answer given below by Zann also applies more to individual bonds, not bond funds and especially not bond funds. Bond values are not fixed - especially with active management, the duration can be managed effectively so that you always get a higher compounded return.

To be fair, what can happen is that some High Yield Bond Funds 'cheat' by holding some REITs anyway. So you may want to just invest in high yield bond funds.

You can see an example listed above, which gives between 7 - 8% dividends.