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THE MAINSTAY FUNDS
Supplement dated October 24, 1997 to the
Prospectus dated May 1, 1997
The Prospectus is amended as follows:
1. In light of the limited market for convertible securities and the size of
Convertible Fund, the Fund's Investment Adviser and Board of Trustees
believe that it is in the best interest of the Fund and its shareholders to
limit the Fund's cash inflow in order to better enable the Fund to continue
to find appropriate investment opportunities. Accordingly, effective June
2, 1997, Convertible Fund will not offer or accept purchase orders from new
investors. Existing shareholders of other MainStay Funds will not be
permitted to make exchanges into Convertible Fund after June 2, 1997.
Shareholders of record, as of May 30, 1997, will continue to be allowed to
make additional purchases of shares or redeem shares. The Board of Trustees
and management may elect to open the Fund in the future if they determine
it appropriate to do so.
2. In the section titled, "Tell Me The Details - The Trust" on page 52, the
second sentence of the second paragraph beginning "As of April 1, 1997..."
is hereby deleted and replaced with the following:
As of April 1, 1997, NYLIFE Distributors Inc. owned a controlling interest
(as that term is defined under the 1940 Act) of the New York Tax Free Fund
Class A shares, International Equity Fund Class A shares, International
Bond Fund Class A shares and Strategic Income Fund Class B shares and New
York Life Insurance Company General Account owned a controlling interest of
the Strategic Income Fund Class A shares.
3. On July 28, 1997, the Board of Trustees approved a number of proposals to
be presented to shareholders at a special meeting of shareholders of The
MainStay Funds that was held on October 24, 1997. The following proposals
were adopted: electing Trustees of the Trust; approving a management
agreement between the Trust on behalf of each of the Funds and MainStay
Management, Inc. (the "Manager"); approving sub-advisory agreements between
the Manager and MacKay-Shields Financial Corporation (for each Fund other
than Equity Index Fund) and between the Manager and Monitor Capital
Advisers, Inc., (for MainStay Equity Index Fund) advisers to the Funds;
approving an amendment to the Plans of Distribution pursuant to Rule 12b-1
for Class B shares of each of the Funds, other than Equity Index Fund which
does not offer Class B shares, Money Market Fund which does not have a Rule
12b-1 Plan and Strategic Income Fund; to eliminate or revise certain
fundamental investment restrictions of the Funds; to ratify the selection
of Price Waterhouse LLP as independent certified accountants of the Trust;
and, to transact such other business as may properly come before the
Meeting or any adjournment thereof. The amendment to the Plans of
Distribution changes the method of calculating fees under the Plans and has
the effect of increasing the distribution fee actually payable to the
Distributor up to the existing maximum fee. A revised prospectus, including
the adopted changes will be mailed to shareholders of the Trust.
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4. In the section titled, "Financial Highlights" beginning on page 12, the
following information regarding Strategic Income Fund is hereby included as a
part thereof:
The following is unaudited information for a share of beneficial interest
outstanding throughout the period from February 28, 1997 (commencement of
operations) to June 30, 1997. Additional information concerning the
performance of the Fund is included in the Fund's semi-annual report to
shareholders. For a free copy of the Fund's semi-annual report, write to
NYLIFE Distributors Inc., 300 Interpace Parkway, Paraippany, New Jersey
07054 or call 1-800-522-4202.
<TABLE>
<CAPTION>
Class A Class B
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February 28, 1997*
through
June 30, 1997**
------------------------------------
<S> <C> <C>
Net asset value at beginning of period............................... $10.00 $10.00
------ ------
Net investment income................................................ 0.18 0.16
Net realized and unrealized gain on investments...................... 0.08 0.08
Net realized and unrealized gain on foreign currency transactions.... 0.03 0.03
------ ------
Total from investment operations..................................... 0.29 0.27
------ ------
Less dividends:
From net investment income......................................... (0.17) (0.16)
------ ------
Net asset value at end of period..................................... $10.12 $10.11
====== ======
Total investment return (a).......................................... 2.97% 2.68%
Ratios (to average net assets)/Supplemental Data:
Net investment income.............................................. 6.54%+ 5.79%+
Net expenses....................................................... 1.15%+ 1.90%+
Expenses (before reimbursement).................................... 1.41%+ 2.16%+
Portfolio turnover rate.............................................. 129% 129%
Net assets at end of period (in 000's)............................... $28,740 $24,539
</TABLE>
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* Commencement of operations.
** Unaudited.
+ Annualized.
(a) Total return is calculated exclusive of sales charges and is not annualized.
