Sovereign Irish bonds gave 36pc investment return in 2012
IRISH government bonds handed investors a 36pc return if they held them from the start of the year.
The successful re-entry by the National Treasury Management Agency (NTMA) into the bond market in the second half of the year helped bed in a dramatic change in investor attitudes towards Ireland.
Only risky junk-rated Greek bonds and Portuguese debt generated better returns over the past 12 months, according to research from Thomson Reuters.
The outsized returns for investors in the three bailout countries is a sign international money managers think the debt crisis is abating, and therefore no longer deem government bonds high risk.
In the year just gone, Greece took the honours, with a surprise 100pc return on investment.
It is the first time since 2009 that holders of Greek debt have made a profit on the bonds and comes despite losses being inflicted on bondholders earlier in the year.
The yield, or interest, on Greek 10-year bond yields dropped to 11pc at the end of the year from a peak of 44pc on March 9, the eve of the debt restructuring.
As bond yields drop, the price paid for the paper rises, handing a capital gain to investors.
The recovery in Irish bonds was less dramatic, but only because Irish bonds had been the top performers worldwide in 2011.
Anyone owning German Government bonds made a 6.4pc return last year, according to the same research.
Danish and UK Government bonds generated the worst returns for investors. Along with Sweden, they are regarded as safe haven investments because they are in Europe but outside the eurozone.
In Greece the Athens Stock Exchange Index made its first annual gain since 2009 in the 12 months just gone.
The market value of shares on the Irish Stock Exchange is up 20pc over the past 12 months.