J.P. Morgan Mozaic II Index in Nationwide Annuities (2026)

What is the J.P. Morgan Mozaic II Index?

The J.P. Morgan Mozaic II Index is a rules-based index that spreads its exposure across a wide mix of assets rather than tracking a single market. J.P. Morgan built it with one stated goal: deliver steadier, more consistent growth than a traditional stock index, by leaning on 15 different asset classes and rotating between them based on recent performance.

You do not buy shares of this index or hold it in a brokerage account. It exists purely as a reference point inside certain Nationwide fixed index annuities, most notably the New Heights Select series. When you choose it as a crediting strategy, Nationwide tracks how the index performs over your contract year and uses a share of any gain to set your interest credit. If the index falls instead, you are credited 0% and your principal stays where it was.

The index has been trading live since December 28, 2016. J.P. Morgan has also published a much longer stretch of backtested history, reaching back to November 1, 1996, which Nationwide references in some of its own product materials. That earlier period is simulated using the index's methodology applied after the fact, not an actual trading record, so treat it as an illustration of how the rules would have behaved rather than a guarantee of anything going forward.

J.P. Morgan is one of the larger sponsors of proprietary indexes used across the annuity industry, and the Mozaic II name specifically points to the idea of a mosaic, many small, independent pieces combining into a single picture. That is a fair description of how the index is built: instead of relying on one dominant market to carry its performance, it treats each of its 15 asset classes as one tile that can be swapped in or out depending on what is doing well at any given time. The insurance carrier's job is simply to translate whatever that mosaic produces, over your specific one-year term, into a credited interest rate under your contract's participation rate.

How does the J.P. Morgan Mozaic II Index work?

The index leans on three ideas that have been used by institutional money managers for a long time, packaged into one rules-based system.

Fifteen asset classes across four market segments

Rather than blending just two ingredients, the way many volatility-managed indexes do, the Mozaic II draws from 15 separate asset classes spread across four broad market segments: equities, fixed income, commodities and currencies. That range is one of the index's biggest structural differences from a simpler stock-and-bond index. When one segment, say U.S. equities, hits a rough patch, the index has more places to look for a source of return, whether that is a bond market, a commodity or a currency pair behaving differently that month.

A monthly, momentum-based selection

At the start of every month, the index reviews the recent return of all 15 asset classes and keeps only the 9 that performed best. The other 6 are dropped entirely until the next review. This is a momentum approach, grounded in the well-documented tendency for assets that have recently outperformed to keep doing so over the following weeks, a pattern institutional allocators such as pension funds have leaned on for decades. Capital goes where it has recently been working rather than sitting in a fixed allocation regardless of conditions.

Monthly rebalancing to smooth volatility

Once the top 9 asset classes are selected, the index does not simply let the strongest performer run unchecked. It rebalances the weights across those 9 every month, so a single hot asset class cannot dominate the portfolio and expose the whole index to an outsized reversal. The goal across all three pieces working together is steady, positive performance across a wide range of market environments, not a swing for the fences in any single year.

Put the three pieces together and you get a process that repeats on a fixed monthly clock: look back at recent returns across all 15 candidates, keep the strongest 9, size each position so no single winner dominates, then wait a month and start over. Nothing about the process depends on macro forecasts, headlines or an economist's view on where rates are headed next. It is entirely backward-looking and entirely mechanical, which is precisely the point. A system like this does not get talked into holding onto a losing position out of stubbornness, and it does not chase a hot asset class past the point its own risk rules would allow.

The stop-loss mechanism: how the Mozaic II limits drawdowns

On top of the monthly process, the Mozaic II carries a built-in circuit breaker. If the overall index posts a weekly return below negative 3%, every allocation is paused for the following week. During that pause, the index holds none of its 15 asset classes, effectively stepping to the sideline until the next review period.

That rule exists to stop a fast, steep selloff from compounding on itself during the worst days of a crash. The trade-off is real: if markets fall sharply and then bounce back just as fast, the stop-loss can leave the index sitting out part of that recovery, since it has already stepped away for the week. For an annuity owner, this matters less for your account value, which already has a 0% floor regardless of what the index does, and more for what it means over the long run. Fewer severe drawdowns in the reference index tend to mean cheaper hedging costs for Nationwide, which supports more generous crediting terms over time.

How it works inside a Nationwide annuity

Choosing the Mozaic II inside a Nationwide fixed index annuity does not put your money into the index itself. Your account value does not move with the index day to day. Instead, at the end of each one-year crediting period, Nationwide compares the index's starting and ending value and credits your account a share of any gain, based on your contract's participation rate.

A hypothetical example: Say you place $100,000 into a Nationwide annuity with the full amount allocated to the Mozaic II at a hypothetical 65% participation rate. If the index rises 9% over the next 12 months, your account is credited 5.85%, since 9% multiplied by 65% works out to 5.85%. If the index instead falls 4% that year, you receive 0%, and your $100,000 is untouched by the decline.

Participation rates on multi-asset, volatility-managed indexes like the Mozaic II often run higher than what you would see on a plain S&P 500 cap strategy, because the calmer, more diversified index costs less to hedge. Current rates move with interest rates and market conditions, so ask your strategist for today's number rather than relying on anything printed here.

Because the crediting period resets every 12 months, your outcome in any given contract year depends heavily on the exact 12-month window measured from your specific policy anniversary. Two people who bought the same annuity a few months apart, both fully allocated to the Mozaic II, could see noticeably different credits in their first year simply because their measurement windows do not line up. That is not unique to this index, it is true of any annual point-to-point strategy, but it is worth understanding before you compare your own results against someone else's.

Historical performance: what the backtested data generally shows

J.P. Morgan's published backtest, stretching back to November 1, 1996, covers roughly three decades that include two major equity bear markets, several corrections and multiple bond downturns. The broad conclusion drawn from that backtest is consistent with the index's design goal: deliver positive, low-volatility performance across a wide range of environments rather than trying to match a pure stock index during its best years.

That is an important disclosure to sit with. Backtested performance is hypothetical, built after the fact with full knowledge of how markets actually moved, and it excludes the fees and costs that would apply to an actual investment referencing the index. The index has only been live since December 28, 2016. Anything before that date is a simulation, not a record of real trading. Past performance, whether live or simulated, never guarantees what happens next.

How the design tends to behave during major market stress

The momentum selection, monthly rebalancing and stop-loss were all built with an eye toward periods when a pure stock index falls sharply. A few widely documented stretches illustrate the kind of environment this design targets:

• The dot-com bust of 2000 to 2002, when the S&P 500 lost roughly half its value. A momentum-based, multi-asset approach would have had little reason to stay heavily allocated to equities once their recent performance turned negative.
• The 2007 to 2009 financial crisis, when the S&P 500 fell more than half from its peak. Asset classes like commodities and fixed income that held up better during parts of that period would have given a diversified, momentum-driven index somewhere else to lean.
• The 2020 COVID crash, when the S&P 500 dropped more than 30% in about a month. A stop-loss like the Mozaic II's is specifically designed to engage during the steepest days of a move like that one.
• The 2022 rate shock, an unusual year when stocks and bonds fell together. An index with access to currencies and commodities has a structural advantage in exactly that kind of environment, since it is not limited to just the two asset classes that were struggling at the same time.

The flip side is straightforward: during strong, sustained equity bull markets, a design built around consistency across 15 asset classes will typically lag a pure S&P 500 strategy, because it is not trying to maximize upside in any one type of year. It is trying to avoid the worst outcomes across many types of years.

J.P. Morgan Mozaic II versus other volatility-controlled indexes

The Mozaic II stands out here for sheer breadth. Fifteen asset classes give it far more room to maneuver than a two-asset blend, let alone a single-index strategy. That breadth comes with a cost, though: because its underlying moves tend to be smoother, Nationwide typically offers a participation rate on this strategy rather than an uncapped option, unlike some of the higher-volatility, single-asset alternatives available elsewhere. For more background on how these strategies fit inside an annuity contract, see our guide to proprietary index strategies in fixed index annuities.

It helps to think of these indexes on a spectrum. On one end sits a single-asset, leveraged design like the S&P 500 Daily Risk Control strategy, which amplifies or trims one market's exposure but has nothing else to fall back on. On the other end sits the Mozaic II, with four entire market segments to draw from. The MLSB and the Bloomberg Dynamic Balance II sit in the middle, adding a second asset class to a core equity position but stopping short of the Mozaic II's full range. None of these designs is objectively better. They simply trade off complexity, breadth and typical crediting terms in different ways, and the right one for you depends on which trade-off matches your goals.

Three features that define the Mozaic II

Genuine multi-asset diversification. Many of the volatility-managed indexes offered inside annuities today are, at their core, a stock allocation and a bond allocation with a formula controlling the mix. When stocks and bonds move together, as they did in 2022, those two-asset designs have limited room to adapt. The Mozaic II's access to commodities and currencies, both of which have historically moved somewhat independently of stocks and bonds, is its clearest structural advantage over simpler competitors.

Momentum applied by rule, not by opinion. No analyst at J.P. Morgan is deciding whether energy or international equities look more promising for the coming month. The same criteria apply every time: measure recent performance across all 15 asset classes, keep the top 9, rebalance monthly. That consistency removes emotion and guesswork from the process and makes the index's behavior predictable, even if the outcome in any single month is not.

A stop-loss that actually does something. The negative 3% weekly trigger is not a marketing flourish. It is written into the index rules and would have engaged during genuinely severe weeks, such as the depths of the March 2020 selloff. For your annuity, this matters less for the account value you already have protected by the 0% floor, and more for the pricing behind the participation rate Nationwide can offer over time. Fewer severe drawdowns in the reference index generally support more competitive crediting terms.

Which Nationwide annuities offer the Mozaic II?

The Mozaic II is available exclusively through Nationwide Life and Annuity Insurance Company, primarily inside the Nationwide New Heights Select 9, a 9-year single-premium fixed index annuity that can be paired with optional income riders and enhanced death benefit choices.

For the full picture of Nationwide as a carrier, including its financial strength ratings and its broader product lineup, see our Nationwide annuity review. To compare the New Heights Select against Nationwide's income-focused sibling contract, see our Nationwide Peak 10 review.

Who fits the Mozaic II

This index tends to be a good match if you:

• Want a single crediting choice that already diversifies across stocks, bonds, commodities and currencies, rather than assembling that mix yourself across several strategies.
• Are more interested in steady, positive crediting than in matching the S&P 500's best years.
• Are using the annuity mainly to fund a lifetime income rider, where the crediting strategy protects contract value from erosion rather than driving your guaranteed payout.
• Are concerned about a large loss early in the contract compounding against you, since the monthly rebalancing and stop-loss are both aimed at reducing that specific risk.

It is probably not the right fit if you are using an accumulation-focused FIA and want to maximize growth potential above all else. In that case, a higher-volatility, uncapped index, or a straightforward S&P 500 point-to-point with a competitive cap, may serve you better during a strong equity stretch.

There is also nothing stopping you from splitting an allocation between the Mozaic II and a more growth-oriented strategy inside the same Nationwide contract, if your product allows it. That way you keep some exposure to a strong equity run while still holding a diversified, lower-volatility option as ballast. Not sure which approach fits your goals and timeline? Request a free quote and we will run illustrations across a few different crediting strategies so you can compare the numbers side by side.

Related index reviews

• Merrill Lynch Strategic Balanced Index (MLSB): a simpler two-asset alternative used by Corebridge
• Bloomberg US Dynamic Balance Index II: another two-asset, daily-rebalanced index, used by Allianz
• Proprietary index strategies in FIAs: how to evaluate any carrier's in-house crediting index
• Fixed index annuity guide: how the whole product category works