Merrill Lynch Strategic Balanced Index (MLSB) Review: How It Works in Corebridge Annuities (2026)

What is the Merrill Lynch Strategic Balanced Index?

The Merrill Lynch Strategic Balanced Index, known by the ticker MLSB, is a rules-based index built by Bank of America that splits its exposure between U.S. stocks and U.S. government bonds, adjusting the mix based on how volatile each side has been. It launched on August 12, 2014 and targets 6% annualized volatility, a bit higher than several competing volatility-managed indexes.

You will only find the MLSB inside one carrier's contracts: it is used exclusively as a crediting strategy in Corebridge Financial's Power Protector series of fixed index annuities, including the Corebridge Power 10 Protector. You do not invest in it directly. Choosing it inside your annuity simply ties your interest credit to how the index performs over your contract term.

The index leans on three underlying pieces rather than trading stocks and bonds outright:

• The S&P 500, tracked on a price-only basis without dividends, representing the equity side.
• A 10-year Treasury futures total return index, representing the fixed income side.
• A short-term cash reference rate, used only when the index needs somewhere defensive to sit during a volatility spike.

What makes the MLSB different from a simpler two-asset design is that it works in two layers. First, it sets the equity-to-bond split using a longer look-back at historical volatility. Second, on top of that, it watches short-term volatility every single day and can shift part or all of the portfolio into cash when conditions turn sharply turbulent.

How does the MLSB allocation process work?

The index manages its mix through a repeatable, three-part process with no discretionary decisions involved:

• Measure. The formula looks at how choppy trading has recently been in both the S&P 500 and the Treasury futures piece.
• Allocate. Based on that volatility reading, it sets how much weight goes to stocks versus bonds. The asset class that has been more volatile recently gets a smaller share.
• Review. This strategic allocation is reset every six months, not continuously.

Layered on top of that semiannual process is a daily check. If short-term volatility climbs above a 6% threshold on any given day, the combined stock-and-bond position can be shifted toward cash, and in an especially sharp spike, the whole allocation can move there. As conditions calm back down, exposure shifts back out of cash and into the stock-Treasury blend.

This dual-layer setup, a longer-term strategic allocation paired with a daily tactical overlay, is what distinguishes the MLSB from indexes that only rebalance once a day and call it done.

How the MLSB credits a Corebridge annuity

Selecting the MLSB inside a Corebridge fixed index annuity means picking one crediting option among the contract's menu. The available method is an annual point-to-point structure using a participation rate.

A hypothetical example: Say you place $100,000 into a Corebridge Power 10 Protector, fully allocated to the MLSB, at a hypothetical 80% participation rate. If the index gains 11% over your contract year, you are credited 8.80%, since 11% times 80% works out to 8.80%. If the index instead falls 5%, you are credited 0%, and your $100,000 stays intact.

Participation rates on the MLSB commonly scale with how much you deposit, with larger premiums typically qualifying for a higher rate. Because these figures move at each renewal and depend on your specific contract, we do not print a fixed number here. Ask your strategist for today's rate, or see our guide to FIA participation rates for how the math generally works.

What the historical record suggests about the MLSB

Bank of America has published backtested performance for the MLSB reaching back to 1985, well before the index's actual 2014 launch, alongside its live record since then. As with any backtest, that earlier data is a simulation built with the benefit of hindsight and does not include the fees or costs of an actual product referencing the index, so it should be read as an illustration of the methodology rather than a promise about future results.

The consistent theme across the years the index has published is exactly what its two-layer design is meant to produce: a narrower gap between strong and weak stretches than you would typically see from an equity-only strategy, since the Treasury allocation and the cash overlay are both designed to cushion periods when stocks alone would have struggled. Because any specific return figures depend on the exact time period, participation rate and premium selected, we do not reprint historical dollar or percentage outcomes here. If you want to see how the numbers might look for your premium and timeline, ask your strategist for a current illustration.

MLSB versus other volatility-controlled indexes

The MLSB sits toward the middle of this group. It targets more volatility than the Bloomberg Dynamic Balance II or the S&P 500 Daily Risk Control strategy, but far less than the equity-only Nasdaq FC, which can apply significant leverage on top of a single benchmark. Its semiannual-plus-daily structure is also distinct: the six-month review sets the strategic backbone, while the daily volatility check acts purely as a short-term safety valve rather than the index's main driver.

Three features that define the MLSB

A fully rules-based allocation. There is no portfolio manager deciding how much to hold in stocks versus bonds on any given day. The same volatility-driven formula runs every time, which keeps the process transparent and removes emotional decision-making from the equation entirely.

A semiannual strategic reset. Every six months, the index re-examines how volatile the S&P 500 and the Treasury futures component have each been and adjusts the split accordingly, shifting toward bonds when stocks look choppier and back toward stocks when things calm down.

A daily volatility backstop. Beyond the semiannual review, the index checks volatility every day and can move meaningfully toward cash if short-term conditions spike above its threshold, adding a layer of protection the twice-a-year review alone would not catch in time.

Which annuities offer the MLSB?

The MLSB is available only through Corebridge Financial, inside its Power Protector series of fixed index annuities, including the Corebridge Power 10 Protector, a 10-year contract that can be paired with an optional income rider.

For a full look at Corebridge as a company, its financial strength ratings and its broader lineup, see our Corebridge annuity review.

Who fits the MLSB

This index tends to suit you if:

• You want built-in diversification between stocks and Treasuries rather than pure equity exposure.
• You are more interested in a narrower range of outcomes over time than in chasing the single best year available.
• You value a longer track record, since the MLSB has backtested data reaching back to 1985 and has been live since 2014.
• You are already looking at a Corebridge Power Protector contract, since the MLSB is not available anywhere else.

If you want more growth potential and are comfortable with more turbulence, an index with a higher volatility target, such as the Nasdaq FC available through other carriers, may fit you better. For a similar equity-and-bond approach available through a different carrier, the Bloomberg US Dynamic Balance II plays a comparable role inside Allianz contracts. Not sure which fits your situation? Request a free quote and we will help you compare.