Investors have just over a month to consider the latest First National Building Society `First Preference Equity Bond'. The closing date is December 2nd for anyone interested in investing a minimum of £3,000 in a tracker bond which is linked to the performance of the Nikkei 300 and the Swiss SMI indexes. You can choose to leave your money in the bond for five years and 10 months after which you are guaranteed your capital back plus a 20 per cent return and a maximum overall return of 75 per cent of any growth of the indices. Or you can opt for three and a half years after which your capital is guaranteed and there is an opportunity to earn the full growth return of the indices (but no guaranteed performance return).

Before making any decision about this bond, investors may want to check with an independent adviser about the merits of the Japanese and Swiss indices.

Japan's long awaited recovery . . . is just that long awaited, and market reports about Japan remain gloomy. AIB and Hibernian Investment Managers, for example, both describe the Japanese equity markets in the past two months as "further weakened" with "the decline in economic sentiment very worrying". Hibernian's latest report warns that "the economic woes continue with investor and consumer sentiment at a low ebb".

If the Nikkei has bottomed out, then it can only go up again, which would be good news for Japanese index trackers buying in right now, but recovery still remains a big "if" and one which has been incorrectly predicted for at least three years. With economic growth picking up in Switzerland, and Europe generally, analysts are more optimistic about the short-term future performance of the SMI index, but this may not be a strong enough endorsement on which to buy a dual-index tracker bond. Finally, the averaging-out period for this bond is 18 months

too long says an increasing number of independent advisers. They warn that taking the average daily closing value of these two indices over the last 18 months of the contract may prevent serious losses in value should the markets collapse during that period, but you could also lose the full benefit of any major gains as well. Six-month averaging periods are their preferred choice. As with all trackers, 26 per cent DIRT is deducted at source from any profits that may accrue and you are not advised to encash the bond early because of the potential risk to capital or growth.