Summer is a quiet time for the release of new investment products, and never more so for the tracker bond market. This perhaps proves a point that many financial observers have been making for months that the tracker bond may have finally seen its day. Stubbornly low interest rates and signs that stock markets may be due for a fall are the main cause for concern about this product.

Just two trackers have come to market of late, and one of them, Ulster Bank's ISEQ tracker is more correctly, a low-tax (10 per cent) Special Investment Policy underwritten by Scottish Legal Life that reflects the performance of the Irish exchange.

Introduced a couple of months ago, it collected £12.5 million and was closed after just three weeks, making it one of Ulster Bank's most successful stock market products. (They thought it would remain open for six months.) Its popularity reflected the desire of many to share the ISEQ's riches, rather than having to always invest in the performance of overseas indices.

Investment conditions have changed even in the space of a few months, however, and this latest version of the ISEQ Tracker offers two choices, one a Growth Option in which there is no initial fee and your capital is fully invested from day one. Your share of the growth is unlimited, but your capital is not guaranteed. This is the main difference between this "tracker" and the more conventional ones which usually offer total, or very high, capital guarantees.

Option two is the Protected Option, in which there is now only a 90 per cent capital guarantee (version one guaranteed 95 per cent of capital) and an upfront charge of 6 per cent resulting in 94 per cent of your fund invested from the outset. This charge is also up 1 per cent from the original ISEQ tracker.

This is a five-year bond, with a minimum £5,000 investment, and there is some provision for early encashment after 12 months at a cost of 3 per cent of the units' value. You put your capital at risk, however, as the guarantees only apply if you leave your funds in place until the five-year maturity date.

Financial advisers have mixed feelings about this product. Even though it is more expensive to buy (guarantees are linked to interest rate returns and interest rates have fallen), the ISEQ is still one of the strongest markets in the world, says Douglas Farrell of National Deposit Brokers (with an annualised return of 18.3 per cent for the last 10 years). The downside, he says, "is that you are sacrificing the dividend stream and that could have a significant impact on long term returns, especially if you choose the Growth Option, which has no in-built capital guarantee".

Ulster Bank projects that if this tracker achieves an 8 per cent growth rate, a £20,000 investment will grow to £29,386 at the end of five years. But the big question on every fund manager's mind these days is whether the markets are going to remain bullish and keep rising as they have, remarkably, for the last three years, or begin to fall, as history shows they always do.

There is certainly an ill wind blowing from the Far East that may suggest that the ISEQ and other stock markets have finally peaked and it is time for investors to prepare for the descent. Buying into trackers now means buying in at a peak price and while a sharp fall may not mean that you lose your money if you keep it in place for five years, you may not earn any either since it may take more than five years for markets (even ours) to make a full recovery and achieve the kind of performance we've been witnessing.

Meanwhile, Bank of Ireland is the only other institution in recent weeks to bring out a tracker the twelfth in its World Tracker series.

This one, which lasts for five years and nine months, requires a minimum investment of £3,000 and tracks four world indices in the US, Britain, Japan and Europe in equal, 25 per cent allocations.

Once again, terms are not as attractive as in the past and investors will only benefit from half (i.e. 50 per cent) of any rise in the performance of the indices, a far cry from the days when 75-100 per cent participation was the norm. Even the eleventh World Tracker set the participation rate at 60 per cent.

"To give Bank of Ireland their due, they do explain to prospective customers why this offer isn't quite so good," says Mr Farrell.

"It comes down to the fact that interest rates have fallen, and if they are going to keep providing a capital guarantee something is going to have to give."

National Deposit Brokers provide a free Tracker Bond Information Service on freephone 1-800322422. Always consult your independent financial adviser before making any investment decision.