The Irish stock market was the fifth best performing in the world last year, delivering returns of 15.5 per cent compared with a 0.4 of a percentage point increase in Europe generally, according to Mercers.

Consultant, Mr Thomas Geraghty, said international bonds, cash and property outperformed equities while worries about inflation, high oil prices and rising interest rates impacted on international stock markets. Ryanair and Elan were the two top-performing Irish stocks, with Ryanair up 117 per cent last year and Elan up 74 per cent. Eircom and Smurfit were the worst performers with drops of 36.5 per cent and 30 per cent respectively.

Against this background, the fortunes of pension and investment funds were dependent on the stance adopted by fund managers, with those invested heavily in technology and media stocks suffering most.

Mercers reveals that the average managed fund fell by 3.2 per cent in the fourth quarter of 2000 bringing the average return for 2000 to a disappointing 2.6 per cent.

The compares with double digit growth achieved in recent years. Canada Life/Setanta were the top-performing fund bringing in returns of 10.8 per cent. BIAM regained some ground emerging as the second best performer with returns of 8.4 per cent.

Those underperforming were Baillie Gifford and Eagle Star where the value of their funds dropped by an average 2.8 per cent.