The purpose with this study is to investigate funds that are environmentally friendly. Environment issues has become a large subject that affects all aspects in today’s society.  It is a global issue which has affected the awareness of environmentally friendly products and its benefits for the environment.

How has this awareness affected the financial market?  In this study the authors have looked at six environmentally sound funds and six energy funds to answer the question if it´s better to have your money in traditional energy or in renewable energy.

This study is made in an quantitative way, the data has been gathered from the internet database Morningstar. 

The energy funds have had its biggest assets in companies dealing with oil, and the environmentally sound funds have had its biggest assets in renewable energy. Bye looking at the different funds rate of return and relating that to risk managing theories of Sharpe and Treynor, the authors compared the two types of funds.

During the period that was looked at during this study ( third quarter of 2007 until third quarter 2010) the energy funds outperformed the environmentally sound funds in every aspect.