Irish investments are the best in the world say analysts in a new report from Bank of America Merrill Lynch.

According to the research, Irish government bonds have been the best-performing asset over the past 12 months while Irish shares have also handed outsized returns to investors, surpassing bonds over the past six months, reports the Independent.

The value of Irish government IOUs has seen an increase of 19 percent over the past 12 months.

Investing €100 in a mix of Irish shares would have netted a €15.30 return over the last six months -- while a similar investment on Greek shares would have seen a €49.40 loss.

Irish assets are booming because of the political response to the economic crisis according to Bank of America.

"The Irish restructured debt, recapitalised banks and voted for regime change (austerity)," the bank said. "Indebted countries that fail to implement fiscal contraction will see markets do the job for them."

However, the bank said investors should steer clear of all euro area shares until there is a clear plan in place to manage the Greek crisis.

"Without common-sense fiscal policy that allows the periphery to refinance debt at reasonable rates, European equities should not be owned."