As I understand it, for at least some of these products, the accretion on the zero coupon bond is currently taxable to U. S. citizens and residents regardless of whether distributions are made. These investments, therefore, may be more appropriate for tax exempt entities such as qualified retirement plans or IRA's.
If you do pursue this, you may want to ask the companies who are touting these structured products some questions: - do the gains count as capital gains or as interest? - do you have to pay tax only at maturity, or every year based on the current asset value?
You can buy your own zero coupon bond and your own SPY ETF and save yourself the management fee which is probably close to 1%/year. Or simply invest a small portion of your money in the ETF and a large portion in Emigrant @ 4%. To do your own structured product with Emigrant, invest 96% of your funds in Emigrant @ 4% and 4% of your funds in SPY or QQQQ. Same result. Not very exciting is it! If you use an "expert", they take 1% for their expertise. If the zero yields 5% for 10 years, put 60% in the zero and 40% in the ETF. If the zero yields 5% for 30 years, put closer to 22% in the zero and closer to 78% in the ETF. (Verify these figures yourself.) Its not really "no risk" since you could get 0% return when inflation is 3%-4% or whatever it is in the future, so you lose in real return terms. You could get 0% rather than 4% in the bank, your broker/adviser could go bankrupt, etc. Good luck.
Yes, that's exactly what was described at http://www.lowriskstrategies.com/Build_Your_Own.html EXCEPT they used call index options instead of SPY ETF. Using a call option would provide more 1/1 exposure to the index's returns than using an ETF.