SEC File No. 33-36962
MAINSTAY INSTITUTIONAL FUNDS INC.
Asset Manager Fund
Supplement dated December 20, 1999 to
the Statement of Additional Information dated May 1, 1999
This Supplement to the Statement of Additional Information ("SAI")
supplements the information contained in the Company's Prospectus dated May 1,
1999, as supplemented on December 20, 1999 (the "Prospectus"), and should be
read in conjunction with the Prospectus.
The following is hereby added to the section titled "Investment Practices
and Instruments Common to Multiple Funds," on page 24 of the SAI:
Real Estate Investment Trusts
The Asset Manager Fund may invest in securities issued by equity real
estate investment trusts ("REITs"). REITs pool investors' funds for
investment primarily in income-producing commercial real estate or
real-estate related loans. REITs are similar to holding companies in
that they are essentially holding companies that rely on professional
managers to supervise their investments. A REIT is not taxed on income
distributed to shareholders if it complies with several requirements
relating to its organization, ownership, assets, and income and the
requirement that it distribute to its shareholders at least 95% of its
taxable income (other than net capital gains) for each taxable year.
Investment in REITs may be subject to many of the same risks as a
direct investment in real estate. This is due to the fact that the
value of the REIT may be affected by the value of the real estate
owned by the companies in which it invests. These risks include
changes in economic conditions, interest rates, property values,
property tax increases, overbuilding and increased competition,
environmental contamination zoning and natural disasters.
The following replaces the first three paragraphs under the section titled
"Special Considerations for EAFE Index Fund, Indexed Equity Fund, Asset Manager
Fund and Indexed Bond Fund" on page 37 of the SAI:
Standard & Poor's(R), "S&P" 500(R), "S&P(R)", "Standard & Poor's 500",
"500", "S&P MidCap 400 Index" and "S&P SmallCap 600 Index" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by Monitor Capital. S&P does not sponsor, endorse, sell or
promote the Indexed Equity Fund or the Asset Manager Fund or represent
the advisability of investing in the Funds.
The Indexed Equity Fund and the Asset Manager Fund are not sponsored,
endorsed, sold or promoted by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. ("S&P"). S&P makes no representation or
warranty, express or implied, to the owners of the Funds, or any
member of the public regarding the advisability of investing in
securities generally or in the Funds particularly or the ability of
the S&P 500 Index, the S&P MidCap 400 Index or the S&P SmallCap 600
Index to track general stock market performance. S&P's only
relationship to Monitor is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index, the S&P MidCap 400 Index
or the S&P SmallCap 600 Index which are determined, composed and
calculated by S&P without regard to Monitor or the Funds. S&P has no
obligation to take the needs of Monitor or the owners of the Funds
into consideration in determining, composing or calculating the S&P
500 Index, the S&P MidCap 400 Index or the S&P SmallCap 600 Index. S&P
is not responsible for and has not participated in the determination
of the prices and amount of the Funds or the timing of the issuance or
sale of the Funds or in the determination or calculation of the
equation by which the Funds are to be converted into cash. S&P has no
obligation or liability in connection with the administration,
marketing or trading of the Funds.
S&P does not guarantee the accuracy and/or the completeness of the S&P
500 Index, S&P MidCap 400 Index, S&P SmallCap 600 Index or any data
included therein and S&P shall have no liability for any errors,
omissions, or interruptions therein. S&P makes no warranty, express or
implied, as to results to be obtained by Monitor, owners of the Funds,
or any other person or entity from the use of the S&P Index or any
data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 Index, S&P
MidCap 400 Index, S&P SmallCap 600 Index or any data included therein.
Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect, or consequential
damages (including lost profits), even if notified of the possibility
of such damages.
The following is added to the section titled "Special Considerations for
EAFE Index Fund, Indexed Equity Fund, Asset Manager Fund and Indexed Bond Fund"
on page 38 of the SAI:
The Asset Manager Fund also invests in common stocks selected to
replicate the S&P MidCap 400 Index, the S&P SmallCap 600 Index and the
Morgan Stanley REIT Index.
The S&P MidCap 400 Index consists of 400 domestic common stocks chosen
for market size, liquidity, and industry group representation. The S&P
MidCap 400 Index is an unmanaged market-value weighted index in which
each stock's weight is proportionate to its market value. As of
November 30, 1999, the range of market capitalization of companies
within the S&P MidCap 400 Index was $195 million to $23.4 billion.
The S&P SmallCap 600 Index consists of 600 domestic common stocks
chosen for market size, liquidity, and industry group representation
(bid-asked spread, ownership, share turnover and number of no trade
days). The S&P SmallCap 600 Index is an unmanaged market-value
weighted index in which each stock's weight is proportionate to its
market value. As of November 30, 1999, the range of market
capitalization of companies in the S&P SmallCap 600 Index was $27
million to $3.3 billion.
The Morgan Stanley REIT Index is a capitalization-weighted index of
the most actively traded real estate investment trusts, and is
designed to be a measure of real estate equity performance. The Morgan
Stanley REIT Index is calculated by Morgan Stanley and Co., Inc. and
reflects reinvestment of all applicable dividends, capital gains and
interest.
