Happy St. Patrick’s Day! Irish market beating U.S.

Begorrah! The Irish are marking Saint Patrick’s day by beating the Standard & Poor’s 500 stock index.

iShares MSCI Ireland Capped ETF (EIRL) has gained 7.7% this year, according to Morningstar, vs. 6.7% for the S&P 500 with dividends reinvested. And The New Ireland Fund (IRL), a closed-end offering, has gained 7.6%.

Sure, and a bit of luck seems to have played a part in the funds’ performance. The Irish stock market has gained 4.2% this year in U.S. dollar terms, according to MSCI. Those returns got a wee bit of help from currency conversion: In euro terms, the Irish market has gained just 2.4%.

In the case of the iShares offering, Kerry Group PLC (ISE:KRZ), an Irish food and nuitrtion company, has gained 11.3% this year, according to Morningstar. It’s the ETF’s second-largest holding. Glanbia PLC (ISE:GL9), another nutrition company, has jumped 13.2%. It’s the ETF’s fourth-largest holding.

The New Ireland Fund’s two largest holdings, CRH PLC, (IRE: CRG) a maker of building materials, and Ryanair Holdings PLC (ISE:RY4C), have performed about as well as flat beer in the old shebeen. Neither has gained more than 2.13% this year, and the two stocks account for about 36% of the fund’s assets.

Fortunately, the fund also owns Kerry Group and Kingspan Group (ISE:KRX), another building materials supplier, which is up 15.3%. More importantly, investors’ opinion of the fund’s prospects have improved: It now sells for a 9.17% discount to its net asset value, versus an average 12.72% discount the past three years.

But it hasn’t been just the luck of the Irish that’s pushing its market higher, nor its reputation as a business-friendly, low-tax haven for U.S. businesses. GDP grew last year at a 5.2% pace and 9% when stripped of cross-border flows by multinationals. It’s the fastest-growing European Union economy, and has been for the third year in a row. Nearly a third of Ireland’s imported goods are from Great Britain, and that country’s currency plummet has translated into flat inflation.