The MainStay Funds
Supplement dated March 20, 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). These
securities tend to offer yields above those that are rated higher and
are not considered speculative.
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.
<PAGE>
The MainStay Funds
Supplement dated March 20, 1997 to the
Statement of Additional Information dated May 1, 1996
I. The Government Fund's investment policy set out on page B-30 which reads
as follows:
"The Government Fund will not invest in any privately issued CMOs if,
as a result of such investment, more than 5% of the Fund's net assets
would be invested in any one CMO, more than 10% of the Fund's net
assets would be invested in CMOs and other investment company
securities in the aggregate, or the Fund would hold more than 3% of any
outstanding issue of CMOs."
is modified to read as follows:
"The Government Fund will not invest in any privately issued CMOs that
do not meet the requirements of Rule 3a-7 under the 1940 Act if, as a
result of such investment, more than 5% of the Fund's net assets would
be invested in any one such CMO, more than 10% of The Fund's net assets
would be invested in such CMOs and other investment company securities
in the aggregate, or the Fund would hold more than 3% of any
outstanding issue of such CMOs."
II. The Trust has adopted new procedures with regard to the segregation of
assets. The sections "Foreign Currency Transactions," "Writing Call
Options," "Writing Put Options," "Limitations on Purchase and Sale of
Futures Contracts and Options on Futures Contracts" and "Swap Agreements",
are hereby changed to reflect that each Fund may use any liquid asset for
segregation purposes.
