Hi, my name is Sohail Ackmann. I'm the author of CL5.com. In this presentation, I'll be explaining to you the difference between mutual funds and exchange traded funds. So what are mutual funds and ETFs? Let's have a look at what mutual funds are first. They're basically an investment vehicle that is essentially a pool of capital from a group of individuals. Mutual funds are controlled by an individual known as the fund manager who invests the funds that the individuals have given to him within the financial markets. So how does it actually work? An individual investor invests in a mutual fund together with a large group of other investors. The investment from the group will be controlled by the fund manager. But the manager invests the funds in his only at the manager's own discretion. So the actual individual investor will never really know how the mutual fund is managing their money except at the end of the quarter when they will receive a statement or a summary of the holdings at the end of the quarter at that particular time. Now let's compare that with ETFs or exchange traded funds. Exchange traded funds are like mutual funds except that they usually track an index of either commodity or basket of assets like an index fund. But more importantly ETFs trade on a stock exchange whereas mutual funds do not. And ETFs can be bought and sold like normal shares during the market today. Unlike a mutual fund which can only be bought or sold at the end of a day. How does it actually work? So an individual investor invests a large amount into an ETF. The ETF invested follows a specific index for example the dollar or a group of indices. And the profit generated by the ETF is directly related to the underlying asset. And the underlying asset is usually fixed and therefore as an individual investor you know exactly where the ETF is investing at any given time. Furthermore ETFs have usually a very low management fee, often a fraction of the fee you would pay a mutual fund manager. So this is a basic difference between a mutual fund and an exchange traded fund.