Family Money may have spoken too soon last week in predicting that the tracker bond market was slowly winding down. The ink was barely dry when the First National Building Society brought out the First Active Tracker Bond Series 2.

Like Bank of Ireland's recently introduced World Series 11 tracker, this one is concentrating on a mixture of indices, in this case, the French CAC 40, the Nikkei 225, the Swiss SMI and for the first time, the Australian All Ordinary Index. You will need a minimum of £3,000 to buy into this bond.

The tracker has three options: a four-year investment period in which you are offered a maximum 63 per cent participation rate in any rise in the index; a five-year option in which that rate is 72 per cent, or a six-year option in which the rate of participation is capped at 80 per cent of any rise in the indices. The last option certainly offers the best reward potential, but you need to be sure you can commit your funds for a full six years.

Unlike some of the more recent trackers, this one does secure 100 per cent of capital, which will be a plus for cautious investors, but does carry the downside of lower returns in a low-interest rate environment where it has become increasingly expensive for fund managers to buy into the options that underlie these bonds.

As with most of the tracker providers, First National's early bonds have done extremely well: one that is due to mature in November has achieved a cumulative five-year performance of more than 90 per cent growth gross.

Bonds introduced a year ago are reflecting returns of 15 to 18 per cent gross, but more modest returns are being predicted. Always consult an independent adviser before making any final investment choice.