Key Features

MacKay Municipal Managers^TM is focused solely on municipal bonds. All of the firms resources are dedicated to investment excellence of municipal investing. The team’s experience, skill, and proficiency allows them to identify inefficiencies in the municipal bond market.

The team’s investment philosophy is to focus on exploiting market inefficiencies to consistently build a yield advantage and seek attractive after-tax total return through fundamental, in-depth research.

The municipal bond market is a decentralized and inefficient market consisting of over 2,000 dealers with no national exchange. In this type of market, access to key market participants is critical. The team’s long-term relationships and access to the most influential and leading market participants gives them access to a larger inventory of securities—helping potentially uncover bonds that have relative value and are mispriced by the market.

MacKay Municipal Managers^TM is a relative value manager, applying both top-down analysis and bottom-up credit research in the construction of the portfolios. The team’s approach is to invest with a rational and intuitive understanding of what drives markets. They have the experience and ability to analyze voluminous data, conduct exhaustive security-level analysis, and identify potential opportunities to capture desired risk-return outcomes.

Performance data quoted represents past performance. Past performance is no guarantee of future results. Due to market volatility, current performance may be less or higher than the figures shown. Investment return and principal value will fluctuate so that upon redemption, shares may be worth more or less than their original cost. For performance information current to the most recent month-end, please visit our web site at mainstayinvestments.com.

Before You Invest:
The Funds may invest in derivatives, which may increase the volatility of the Funds’ net asset value and may result in a loss to the Funds. Liquidity risk is the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth. Foreign securities may be subject to greater risks than U.S. investments, including currency fluctuations, less liquid trading markets, greater price volatility, political and economic instability, less publicly available information, and changes in tax or currency laws or monetary policy. These risks are likely to be greater for emerging markets than for less developed markets. The Funds may experience a portfolio turnover rate of over 100% and may generate short-term capital gains which are taxable to the shareholder. The Funds’ use of securities lending presents the risk of default by the borrower, which may result in a loss to the Fund. Mid-capitalization companies are generally less established and their stocks may be more volatile and less liquid than the securities of larger companies.

About the Barron’s ranking: To qualify for the Lipper/Barron's Fund Survey, a fund family must have at least three funds in Lipper's general U.S.-stock category, one in world equity (which combines global and international funds), one mixed-equity fund (which holds stocks and bonds), at least two taxable-bond funds, and one tax-exempt offering. Each fund's returns are adjusted for 12b-1 fees. Fund loads, or sales charges, aren't included in the calculation of returns, either. Each fund's return is measured against those of all funds in its Lipper category, such as, say, small-cap value. That leads to a percentile ranking, with 100 the highest and 1 the lowest, which is then weighted by asset size, relative to the fund family's other assets in its general classification, world equity, for instance. If a family's biggest funds do well, that boosts its overall ranking. Poor performance in a big fund would have the opposite effect. Finally, the score is multiplied by the weighting of its general classification, as determined by the entire Lipper universe of funds. The category weightings for the one-year results: general equity, 40.52%; world equity, 14.32%; mixed equity, 16.46%; taxable bond, 24.52%; tax-exempt bond, 4.18%. The scoring: Say a company has a fund in the general U.S. equity category with $50 million in assets that accounts for half of the company's assets in that category. Its ranking is the 75^th percentile. The first calculation would be 75 x 0.50, which comes to 37.5. That score is then multiplied by 40.52%, general equity's overall weighting in Lipper's universe. So it would be 37.5 x 0.4052, which totals 15.2. Similar calculations are done for every fund in the study. Then, all the numbers are added up for a total score. The fund family with the highest score wins, both for each category and overall. The same process is repeated for the five- and 10-year rankings. Ranking data from Lipper.

Source: Barron’s, 2/7/11. MainStay Funds ranked 40 for the one-year period, 17 for the five-year period, and three for the 10-year period ended December 31, 2010, out of 57, 53, and 46 fund families, respectively. Past performance is no guarantee of future results. All mutual funds are subject to market risk and will fluctuate in value.

Not FDIC/NCUA Insured. Not a Deposit. May Lose Value. No Bank Guarantee. Not Insured by Any Government Agency.

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