With the silly season fast approaching now is a good time for investors to review 1998 and to start thinking about what is in store for 1999. After a roller-coaster ride in global stock markets, particularly in the second half of the year, it still looks like healthy returns will be recorded for 1998.

In Ireland, even though there has been a growth in individuals investing directly in the stock market in recent years, the bulk of assets exposed to markets still resides in unit-linked funds. The table, right, summarises the year-to-date returns of a selection of leading unit-linked funds. As well as providing a snapshot of the relative performance of different market sectors, the returns provide private investors with a good benchmark against which to judge the performance of their own portfolios. The prices of unit-linked funds are struck after allowing for tax and therefore show actual after-tax returns.

The initial striking feature of the data in this table is that with the exception of the Far East, cash funds were still the worst place to invest. Just as notable is the strikingly good performance turned in by property during 1998.

The buoyancy of the property sector clearly reflects the impact of the Celtic Tiger economy and the effect of declining interest rates on property valuations. These unit-linked property funds are primarily invested in the Irish market although they do have some exposure to overseas property markets.

Among the various major equity sub-sectors, Irish equities have produced reasonable returns so far in 1998. While smaller stocks have under-performed, both in Ireland and abroad, the strength of the Irish economy has boosted the profits of companies such as Bank of Ireland, CRH and DCC. As with property, the economic boom is having a positive impact on the returns from Irish equities.

The only sector to produce a negative return during 1998 was the Far East. Under-performance from the Far East has been a feature for the past two or three years and indeed the crisis afflicting the region deteriorated even further during 1998. One of the big investment questions for 1999 is what are the chances of a turnaround in Japan and the rest of the Far East. Also, for Irish investors there are major issues surrounding the likely longevity of the current economic boom and the impact that monetary union will have on our economic and financial prospects.

For the Far East, 1998 really will go down as a truly awful year. The majority of these once all-powerful tiger economies are in either mild or deep recession. Even the mighty Japan is now suffering from a contraction in economic output. Despite the widespread gloom and doom there are signs emerging that the worst of the crisis might be over. Straws in the wind include:

The Japanese authorities seem to be finally tackling the financial crisis in their banking system. A number of the other Asian economies are getting their financial house in order, most notably Korea.

The recent strengthening of the Yen has taken the pressure off other Asian currencies.

After so many years in the doldrums a somewhat better performance from the Far East could well be in store for 1999. As for our own economy, there is as yet little sign of a slowdown, let alone a crash. Given the many bottlenecks now in evidence throughout the economy a slowdown in growth is inevitable. However, the current momentum would seem to be sufficiently strong to ensure a good return from Irish investment assets during 1999.