MacKay Municipal Managers Provides Mid-year Update on Top Five 2016 Municipal Market Insights

Princeton, NJ, July 28, 2016 - MacKay Municipal Managers™, the municipal bond team of fixed income investment advisory firm MacKay Shields LLC, today reported being on target with all five of the municipal market insights issued at the start of 2016. Highlights and updates include:

1. Market disruptions likely – both the probability and severity will be elevated.
The consensus views of future rate moves have been fluid and inconsistent this year, due in part to mixed economic data. More recently, the Brexit referendum has lifted economic uncertainty further, perpetuating volatility in the global markets.

2. Market technicals to drive returns - technical conditions to play a greater role.
Technical factors have played a heightened role in driving returns in 2016. Demand in the municipal market has been significant with year-to-date mutual fund inflows of $33 billion through June. So far this year, there has been $221 billion new issuance through June 2016 with 60 percent of that new issuance representing refinancing and advanced refundings in the muni market.

3. Revenue bonds outperform - defined revenue streams preferred over pension uncertainty.
This remains on track – the revenue bond segment of the Barclays Municipal Bond Index has returned 4.82%, outperforming the general obligation segment by 86 basis points through June, which returned 3.96%. During the same period, the Barclays Municipal Bond Index returned 4.33%.

4. Transportation sector outperforms - spending and usage to increase.
Consistent with the MacKay analysis at the start of the year, the transportation segment (a sector within the Barclays Municipal Bond Index) returned 4.95%, outperforming the Barclays Municipal Bond Index by 62 basis points, which returned 4.33% through June.

5. High-yield municipals to SPRING Ahead, but then investors should FALL back to investment grade.
The MacKay forecast was that high-yield municipal bonds would outperform during the first half of the year. However, MacKay believes that investment grade should outperform in the latter part of the year. This forecast remains on target as the Barclays High Yield Municipal Bond Index has returned 7.98%, outperforming the Barclays Municipal Bond Index by 365 basis points, which has returned 4.33% through June.

“The muni market has performed very much in line with our outlook issued at the beginning of 2016. Set against this landscape, our relative-value investment approach has continued to bring favorable results in a highly dynamic environment. Using an active management approach, we’re able to manage through changing conditions that impact municipal liquidity and provide positive opportunities for investors seeking tax-free income,” said John Loffredo, co-head of MacKay Municipal Managers™.

MacKay Municipal Managers™, which manages $18.7 billion as of June 30, 2016, is subadvisor to the MainStay High Yield Municipal Bond Fund (MMHAX, MMHIX), MainStay Tax Free Bond Fund (MTBAX, MTBIX), MainStay Tax Advantaged Short Term Bond Fund (MSTAX, MSTIX), MainStay California Tax Free Opportunities Fund (MSCAX, MCOIX) and the MainStay New York Tax Free Opportunities Fund (MNOAX, MNOIX).

To view the team’s mid-year muni update, please visit our Tax Advantaged Solutions page.

About MacKay Shields LLC

MacKay Shields LLC (“MacKay”) is an indirect wholly-owned subsidiary of New York Life Insurance Company and a wholly-owned subsidiary of New York Life Investment Management Holdings LLC. MacKay is a global, multi-product fixed-income focused investment management firm with $95.6 billion in assets under management as of June 30, 2016. MacKay manages fixed income strategies for high-net worth individuals, institutional clients and mutual funds, including unconstrained bond, global high yield, high yield, high yield active core, municipal high yield, short duration high yield, low volatility high yield, municipal short term, core investment grade, municipal investment grade, core plus, core plus opportunities, convertibles, emerging markets credit, and bank loans.

For additional information, please contact:

Allison Scott
New York Life Insurance Company
(212) 576-4517
allison_scott@newyorklife.com

Kevin Maher
New York Life Insurance Company
(212) 576-6955
kevin_b_maher@newyorklife.com

Mutual funds are subject to market risk and will fluctuate in value.

A portion of a municipal fund’s income may be subject to state and local taxes or the Alternative Minimum Tax. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise. Bonds are also subject to credit risk, in which the bond issuer may fail to pay interest and principal in a timely manner. High-yield securities (commonly referred to as “junk bonds”) are generally considered speculative because they present a greater risk of loss than higher-quality debt securities and may be subject to greater price volatility. High-yield municipal bonds may be subject to increased liquidity risk as compared to other high-yield debt securities.

Municipal securities risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes which could affect the market for and value of municipal securities. Such uncertainties could cause increased volatility in the municipal securities market and could negatively impact the Fund's net asset value and/or the distributions paid by the Fund. Securities purchased by the Fund that are liquid at the time of purchase may subsequently become illiquid due to events relating to the issuer of the securities, market events, economic conditions, or investor perceptions.

Past performance is no guarantee of future results. It is not possible to invest directly in an index.

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This material contains the opinions of the MacKay Municipal Managers™ team of MacKay Shields LLC, but not necessarily those of MacKay Shields LLC. The opinions expressed herein are subject to change without notice. This material is distributed for informational purposes only, and is not intended to constitute the giving of advice or the making of a recommendation. The investments or strategies presented are not appropriate for every investor and do not take into account the investment objectives or financial needs of particular investors. An investor should review with its financial advisors the terms and conditions and risks involved with specific products or services and consider this information in the context of its personal risk tolerance and investment goals. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. Any forward looking statements speak only as of the date they are made, and MacKay Shields LLC assumes no duty and does not undertake to update forward looking statements. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Historical evidence does not guarantee future results. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of MacKay Shields LLC.

MainStay Investments® is a registered service mark and name under which New York Life Investment Management LLC does business. MainStay Investments, an indirect subsidiary of New York Life Insurance Company, New York, NY 10010, provides investment advisory products and services. Securities distributed by NYLIFE Distributors LLC, 30 Hudson Street, Jersey City, New Jersey 07302. NYLIFE Distributors LLC is a Member FINRA/SIPC.

New York Life Investments engages the services of MacKay Shields LLC, an affiliated, federally registered advisor, to subadvise the Fund.