The MainStay Funds
Supplement dated April 7, 1997 to the
Prospectus dated May 1, 1996
The Prospectus is amended as follows:
1. In the description of the Value Fund under the heading "Who's Managing
your Money?" on page 28 Mr. Kolefas' biography is hereby deleted and
replaced with the following:
Mr. Simon joined MacKay-Shields in 1993. Mr. Simon is a Director of
MacKay-Shields and specializes in equity securities. Previously, Mr.
Simon was a senior equity research analyst and portfolio manager at
National Securities and Research Corporation (from 1991-1992) and
Neuberger & Berman (from 1987-1991).
2. Effective January 1, 1996, the Administrator voluntarily agreed to
reduce its fees payable by the Equity Index Fund to the extent that
Fund's total expenses (including Rule 12b-1 fees) for any fiscal year
exceed .80% of the value of the Fund's average annual net assets. See
Note + to the chart on the Administrator's fees on page 63.
3. In the section titled "Deferred Sales Charge Class B Shares -
Contingent Deferred Sales Charge, Class B" on page 68, the following
subsection is added at the end of the listing of redemptions for which
the contingent deferred sales charge will be waived:
and (xviii) redemptions by shareholders of shares purchased with the
proceeds of a settlement payment made in connection with the
liquidation and dissolution of a limited partnership sponsored by New
York Life or one of its affiliates.
4. In the description of the High Yield Corporate Bond Fund under the
heading "The Fund invests in..." on page 30, the first item under
"Under normal market conditions..." is hereby deleted and replaced with
the following:
...at least 65% of total assets in corporate debt securities: all types
of foreign and domestic debt securities ordinarily in the lower rating
categories of Moody's (Baa to B) and S&P (BBB to B). Securities rated
Baa or BBB or lower are considered speculative and tend to offer yields
above those that are rated higher.
5. In the description of the International Equity Fund and International
Bond Fund under the heading "Who's Managing your Money?" on pages 25
and 31, respectively, Mr. Perelstein's biography is hereby deleted and
replaced with the following on page 31:
Mr. Portera is a Director of MacKay-Shields specializing in
international bonds. He returned to MacKay-Shields in December 1996
after working at Fiduciary Trust Company International as a portfolio
manager in international bonds. Mr. Portera joined MacKay-Shields in
1991 and was portfolio manager of the International Bond Fund from its
inception in September 1994 to August 1995. Previously, Mr. Portera
was a portfolio manager specializing in international debt securities
at ABN-AMRO Bank, N.V. (from 1988-1991).
Shigemi Takagi remains a portfolio manager of the International Equity
Fund. His biography appears on page 25.
6. In the description of the Government Fund under the heading "The Fund
invests in..." on page 29, the following should be inserted after the
third bullet point:
...up to 35% of total assets in mortgage-backed and asset-backed
securities that are not U.S. government securities.
7. In the description of the Convertible Fund under the heading, "Who's
Managing your Money?" on page 26, the biographical information is
hereby deleted and replaced with the following:
Denis LaPlaige, Neil Feinberg and Thomas Wynn of MacKay-Shields
Financial Corporation.
Mr. LaPlaige is President, Managing Director and Chief Investment
Officer of MacKay-Shields. He joined the firm in 1982, became a
Director in 1988, Managing Director in 1991, a member of the Board of
Directors in 1993 and Chief Investment Officer in 1996. He has managed
this Fund since 1991 and is also a manager of the Value Fund and the
High Yield Corporate Bond Fund. Mr. Feinberg is a Director of
MacKay-Shields and has been a portfolio manager for the Convertible
Fund since he joined the firm in 1992. For the previous three years,
he was an analyst for National Securities and Research Corporation; and
for the prior four years he worked as a CPA/auditor for Peat Marwick
Main & Company. Mr. Wynn has been a portfolio manager for the
Convertible Fund since 1997 and joined the firm in 1995 as a research
analyst. He was previously a portfolio manager at Fiduciary Trust for
nine years and has over twelve years experience in investment
management and research.
8. In the section titled "Exchange Privileges" on page 69, the list of
Class A and Class B shares of a Fund which may be exchanged for shares
of an identical Class of The MainStay Funds is hereby deleted and
replaced with the following:
MainStay California Tax Free Fund
MainStay Capital Appreciation Fund
MainStay Convertible Fund
MainStay Government Fund
MainStay High Yield Corporate Bond Fund
MainStay International Bond Fund
MainStay International Equity Fund
MainStay Money Market Fund
MainStay New York Tax Free Fund
MainStay Strategic Income Fund
MainStay Tax Free Bond Fund
MainStay Total Return Fund
MainStay Value Fund