TO keep the tracker bond momentum going, both Ark Life, AIB's life and pensions company and the First National Building Society have brought out new bonds. The Ark bond has three-quarters of the fund linked to the performance of the Eurotrack 200 index (representing the top 200 European companies) and the balance to the Nikkei 225, and the First National tracker, called the First Preference Equity Bond, Series One, is based on the Nikkei 225 and the Swiss SMI index.

The First National bond offers two investment terms - three years and nine months or five-and-a-half years - and, while the capital is guaranteed if you hold the bond for the full term, you can earn 100 per cent of any rise in the indices if you opt for the longer saving option and 90 per cent of any rise for the shorter option.

At £2,000 Ark is keeping the minimum investment amount very low, and is averaging out the return over the last six months of the investment period to avoid any last-minute surprises in the event of a sudden drop in the markets.

First National also guarantees the initial capital sum and also offers two choices - to invest for a five years and 10 months term and receive a minimum return of 25 per cent and a maximum of 75 per cent of any growth in the indices, or to leave your funds in for a three years and six months period and receive a minimum return of just 7 per cent with no ceiling on the total growth.

In either case you will need a minimum £5,000 cash sum. The averaging period with First National is a much longer 18 months.

First National's promotional material for this bond includes a table that shows how its previous trackers have performed over the past four years: the first one, a FTSE-100 bond launched in November 1993 and maturing next year has so far achieved a 58.6 per cent gross cumulative return or a gross annual return of over 14.6 per cent.

A Nikkei/FTSE bond launched this time last year has returned 13.4 per cent gross, but has not done as well as stand-alone FTSE bonds which, though launched in October and December of last year, are now reporting returns of over 22 per cent gross. Not all advisers are as keen on the tracker bonds as the institutions which launch them and they warn that the conditions which resulted in the very high final returns on bonds that were launched five or six years ago - such as exceptionally high stock exchange growth, a different tax regime and the fact that many of the early ones did not have long averaging periods (like the First National bond) - are unlikely to be repeated.

Trackers, they say, should play no more than a small part in a balanced portfolio. The price of the capital and growth guarantees mean that they need to be chosen very carefully.

Ark Life's tracker closes on October 3rd, and the First National bond on September 16th.