MAINSTAY INSTITUTIONAL FUNDS INC.
Supplement dated March 12, 1997
to the Prospectus dated May 1, 1996
New York Life Insurance Company, as Administrator, and Monitor Capital
Advisors, Inc., as Adviser, for the Indexed Equity Fund (the "Fund"), have
voluntarily agreed to waive a portion of their fees so that the Fund's total
operating expenses will not exceed .30% for the Institutional Class and .55% for
the Institutional Service Class of the value of the average daily net assets for
each such Class of shares. This expense limitation will remain in effect through
December 31, 1998. See page 53 of the Prospectus for additional information
about the Voluntary Expense Limitation.
Tom Kolefas is no longer with MacKay-Shields Financial Corporation,
MainStay Institutional Value Equity Fund's investment adviser. Jeffrey A. Simon
has assumed Mr. Kolefas' responsibilities as a portfolio manager of the Fund.
Accordingly, Mr. Kolefas' biography which appears on page 22 under the heading
"Who's Managing Your Money?" is hereby deleted and replaced with Mr. Simon's
biography as follows: Mr. Simon is a Director of MacKay-Shields and specializes
in equity securities. He joined MacKay-Shields in 1993 after working as a senior
equity research analyst and portfolio manager at National Securities and
Research Corporation (1991-1992) and Neuberger & Berman (1987-1991).
Michael Perelstein is no longer with MacKay-Shields Financial Corporation,
MainStay Institutional International Equity Fund's and International Bond Fund's
investment adviser. Joseph Portera has assumed Mr. Perelstein's responsibilities
as a portfolio manager of the International Bond Fund. Accordingly, Mr.
Perelstein's biography which appears on pages 20 and 25 under the heading "Who's
Managing Your Money?" is hereby deleted and replaced with Mr. Portera's
biography on page 25 as follows: 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
January 1995 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 20.
The Company's Shareholder Services Plan has been amended to modify the type
of shareholder services provided thereunder. To reflect this amendment, the last
sentence which appears under the heading "If you buy shares of the Institutional
Service Class..." on page 3, and the second paragraph which appears under the
heading "Shareholder Services Plan" on page 53, are hereby deleted and replaced
with the following: Each Fund may pay to service agents "service fees" as that
term is defined in the rules of the National Association of Securities Dealers
for services provided to shareholders of the Institutional Service Class of the
Fund. These fees are for personal services, including assistance in establishing
and maintaining shareholder accounts and assisting shareholders that have
questions or other needs relating to their accounts. Additionally, the following
text should be added to the description of New York Life Insurance Company under
the heading "Who Provides Customer Service and Maintains Financial Records?" on
page 37: New York Life or an affiliate is paid by the Funds, and in turn, may
pay unaffiliated third parties for providing shareholder services to
participants in retirement plans or other beneficial owners of the Funds whose
interests are held in an omnibus account. Such services may include receiving,
collecting and processing orders, providing and maintaining check writing and
wire transfer services, communicating with shareholders, maintaining account
records, answering account-related questions and correspondence, issuing reports
and confirming transactions and performing other accounting and recordkeeping
services.
