I am asking for what the site states, not what you state.
The link you provided specifically stated "short-term, high quality bond fund yielding 5% - and is considered a "conservative" estimate.
http://desertrosecapital.com/iop-101
OK, you'll have to ask them directly then, that's not my company.

If this company is selling their investment idea based on short term high quality bond funds yielding 5% - and claiming such is conservative...then they might want to prepare for a letter from FINRA in the future.
They might want to, or perhaps they're already sorted on that aspect.

I'd assume they fund their safe leg from the same trading firms, like PIMCO, that provide that service for the insurance companies that provide reset indexing. (Granted, its my *assumption* that DRC does it this way... unlike the insurance companies they don't back their safety with reserve-funded guarantees, so the bottom line risk is on the account holder. Of course, they also seem to have no lock in periods nor surrender fees.)

Dave Donhoff
Leverage Planner