MainStay Funds: Investment Overview

At MainStay Investments, we deliver the investment products and expertise you’ve come to expect through:

Multi-Boutique ManagementWe offer access to leading institutional managers that drive

performance. Our multi-boutique approach simply focuses

our investment talent on what we do best.

Proven Wealth-Building ToolsWe provide actionable and effective solutions to help invest

and plan for all life stages. They are differentiating tools that

can be implemented immediately.

Our Commitment to YouWe proudly stand on a track record of accountability, integrity,

and commitment—a powerful combination in today’s marketplace.

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 75th 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.

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Table of Contents

Consistency Through Institutional Management 2

Building Blocks of a Diversified Portfolio 4

More Power Across the Style Box 5

The Principles of Sound Investing 6

Working With Your Financial Professional 7

2

Consistency Through Institutional Management

across attractive sectors, limits individual holding sizes, and maintains a strict sell discipline with low portfolio turnover.

Fixed Income Investors

Fixed Income Investors is a multi-product fixed income investment manager with demonstrated expertise and scale in every major fixed income sector. They employ a disciplined, team-oriented approach to managing fixed-income portfolios for clients in the institutional, retail, and CDO/CLO markets. With more than 70 experienced and highly specialized investment professionals dedicated to research, trading, and portfolio management, Fixed Income Investors provides investment management services to a wide array of institutional and retail clients via single- and multi-sector strategies.

Institutional Capital LLC

Founded in 1970, Institutional Capital LLC (ICAP) manages money for some of the largest and most-respected corporations and institutions in the world. ICAP has a solid track record of delivering consistent results with its value-oriented focus, team approach, and time-tested investment process. ICAP’s success is built upon its lasting commitment to teamwork and collaboration and the skill and experience of each and every team member. To ensure consistent application of ICAP’s investment philosophy, the firm’s analysts are developed “in-house” through a structured mentoring program with senior committee members. This program allows the experience of the team to be shared with the next generation. It also facilitates better communication within each step of the investment process. ICAP’s portfolio management team possesses, on average, 19 years of experience, including 14 years with the firm.

At MainStay Investments, we provide financial

advisors and their clients single access to

several established institutional management

teams. Collectively, these boutiques offer skilled

managers across asset classes, including both

domestic and international equities and fixed

income, as well as a broad range of investment

styles, each focusing on their particular area

of expertise.

The following teams manage a variety of

MainStay Funds.

Epoch Investment Partners, Inc.

Epoch Investment Partners, Inc. (Epoch) is a global asset management firm formed in April 2004 by experienced professionals. Epoch was created with the specific goal of responding to paradigm shifts within the sources of global equity investment returns and within the structure of the investment management business as a whole. The investment team consists of seasoned professionals who have worked together in the past and bring tremendous experience to the firm. On average, the members of the senior investment team possess more than 25 years of industry experience and the professional staff averages over 20 years in the industry.

Epoch strives to produce superior risk-adjusted returns by constructing portfolios with outstanding risk/reward profiles. Epoch’s goal is to produce an efficient portfolio on a risk/return basis. At the heart of their portfolio construction process is diversification. The team diversifies

NYLIM Fixed Income Investors

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MacKay Shields LLC

Established in 1938 and part of the New York Life family since 1984, MacKay Shields actively manages a range of mutual fund portfolios using a disciplined, research-driven process. The firm has expertise in international equity and fixed-income management. Relying upon their experience and sound fundamental judgment, MacKay Shields’ portfolio management teams have demonstrated an ability to safely navigate through many different investment cycles. The investment divisions support each other by exchanging the information, market research, and judgments that have surfaced through their investment processes. Clients, therefore, benefit from the knowledge and experience of all the investment professionals at MacKay Shields.

Madison Square Investors

Madison Square Investors offers quantitative investment solutions to a wide range of individual, corporate, public, endowment and foundation, and Taft-Hartley clients. The firm’s expertise is delivered through its long-only equity products of various capitalizations, 130/30 strategies, and asset allocation strategies. The firm is organized by teams, each with a particular area of focus or expertise. The teams employ models and processes that are unique to each product. Across all of the investment strategies, Madison Square Investors applies a disciplined investment process that brings together the important elements of security analysis, risk management, and superior portfolio construction.

Winslow Capital Management, Inc.

Winslow Capital Management, Inc. has been an investment advisor since 1992. The firm focuses solely on growth stock investing. At Winslow Capital, the portfolio managers also do the research to increase their understanding of a company’s fundamentals. Decision making and portfolio construction are implemented through a disciplined process on a team basis.

Unlike management firms with just one or two disciplines, MainStay

Investments takes advantage of a broad collection of investment

management teams. That’s because we believe that the key to

generating consistent returns is organizing around autonomous

institutional investment boutiques–each with its own investment

process and culture. Together, the boutiques offer a disciplined

investment approach, long-term performance strategies, and a

powerful mix of solution-based products.

Investment Manager Selection

Building Blocks of a Diversified Portfolio

MainStay Funds provides a range of benefits for investors. Each Fund is subadvised by a leading institutional manager according to a consistent and clearly defined investment strategy. This makes each Fund distinct, so you can confidently combine several in a diversified portfolio.

The fund categories are shown in generally accepted order of risk. Each individual Fund is subject to its own specific risks, which may vary within the category. More information about these risks can be found in the prospectus.

Relative Risk

Pote

ntia

l Ret

urn

MainStay High Yield Opportunities Fund

MainStay High Yield Corporate Bond Fund

MainStay Flexible Bond Opportunities Fund

MainStay High Yield Municipal Bond Fund

MainStay Tax Free Bond Fund

MainStay Government Fund

MainStay Intermediate Term Bond Fund

MainStay Indexed Bond Fund

MainStay Floating Rate Fund

MainStay Short Term Bond Fund

MainStay Money Market Fund

Income Funds MainStay Convertible Fund

MainStay Balanced Fund

MainStay Income Builder Fund

Blended Funds MainStay U.S. Small Cap Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Fund

MainStay Large Cap Growth Fund

MainStay GrowthEquity Fund

MainStay MAP Fund

MainStay ICAP Select Equity Fund

MainStay ICAP Equity Fund

MainStay S&P 500 Index Fund

MainStay Common Stock Fund

Equity Funds MainStay Epoch International Small Cap Fund

MainStay ICAP International Fund

MainStay International Equity Fund

MainStay Epoch Global Choice Fund

MainStay ICAP Global Fund

MainStay Epoch Global Equity Yield Fund

MainStay Global High Income Fund

International Funds

Lower Risk

Low

er R

etur

nHi

gher

Ret

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Higher Risk

4

5

More Power Across the Style Box

An investment in MainStay Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Please keep in mind that there are additional risks associated with investing in floating rate loans, small-cap, high-yield, and international or foreign market securities. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise.

All MainStay Funds are categorized according to the investment strategies described in the current prospectus.

1. For the equity portion of the portfolio.

Mid-Caps

MainStay Flexible Bond Opportunities Fund

MainStay Floating Rate Fund

MainStay Government Fund

MainStay High Yield Corporate Bond Fund

MainStay High Yield Opportunities Fund

MainStay Indexed Bond Fund

MainStay Intermediate Term Bond Fund

MainStay Short Term Bond Fund

Tax-Exempt Fixed Income

MainStay Money Market Fund

Money Market

MainStay Epoch Global Choice Fund

MainStay Epoch Global Equity Yield Fund

MainStay Epoch International Small Cap Fund

MainStay ICAP Global Fund

MainStay ICAP International Fund

MainStay International Equity Fund

MainStay Balanced Fund1

MainStay High Yield Municipal Bond Fund

MainStay Tax Free Bond Fund

MainStay Global High Income Fund

International/Global Fixed Income

MainStay Convertible Fund

Convertible Bonds

MainStay U.S. Small Cap Fund

Small-Caps

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Income Builder Fund1

MainStay Common Stock Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Fund

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay Growth Equity Fund

MainStay Large Cap Growth Fund

Domestic Fixed Income

International/Global Equity Large-Cap Value Large-Cap Blend

Large-Cap Growth

6

The Principles of Sound Investing

MainStay Asset Allocation Funds allow instant access to several underlying MainStay Funds based on your risk tolerance—meaning you can benefit from one portfolio encompassing more than one investment style, with one application to complete, one account to open, and one consolidated statement.

MainStay Retirement Funds are designed to help make investing for retirement less complicated. Each Fund is managed to meet your targeted investment horizon based on your current age and the year in which you plan to retire.

MainStay Investments provides pre-packaged solutions that allow you to employ the principles of sound investing within your portfolio. Each utilizes three time-tested investment principles—asset allocation, diversification, and rebalancing—as essential elements of its strategy.

Relative Risk Higher

Growth Allocation

Moderate Growth Allocation

Conservative Allocation

Moderate Allocation

60%40%

60%40%

80%

20%

100%

MainStay Asset Allocation Funds

Po

tent

ial R

etur

n

High

er

Equity Fixed Income

Asset Allocation

Proper asset allocation gives you the

potential to lower risk and increase

returns by spreading your investments

across a variety of asset classes and

investment styles that behave differently

during market cycles.

Rebalancing

As markets fluctuate, your investments

may shift. To ensure that your portfolio

does not become overly aggressive or

too conservative, periodic rebalancing

becomes essential.

Diversification

To create an optimal portfolio, you need

to do more than just determine the right

mix of stocks, bonds, and cash. Broad

diversification within each asset class

is critical, especially since the financial

markets are constantly moving and

today’s performance leaders may be

tomorrow’s laggards.

The “target date” in a target date fund is the approximate date an investor plans to start withdrawing money. Because target date funds are managed to specific retirement dates, investors may be taking on greater risk if the actual year of retirement differs dramatically from the original estimated date. Target date funds generally shift to a more conservative investment mix over time. While this may help to manage risk, it does not guarantee earnings growth, nor is the fund’s principal value guaranteed at any time including at the target date. Investors do not have the ability to actively manage the investments within target date funds. The portfolio managers control security selection and asset allocation. Target date funds allocate their investments among multiple asset classes, which can include U.S. and foreign equity and fixed-income securities.

7

Working With Your Financial Professional

Whatever your financial goals, your financial professional has the experience and training to give you insight and guidance as to the investments that are best suited to you based on your individual situation and risk tolerance. Most individuals have multiple concerns, for example, how to save and invest for a child’s college education while simultaneously ensuring a secure, comfortable retirement.

Retirement Investing

A secure retirement depends not only on how much you can save beforehand, but also on how your nest egg is invested. Your financial professional can help you consider your distribution options for your 401(k) or other qualified retirement plan assets.

Wealth Management

Perhaps your primary concerns include charitable contributions during your lifetime, minimizing estate taxes, and the future well-being of your family. Your financial professional can work in close coordination with your tax advisor and attorney so your assets are carefully managed in accordance with your wishes and in consideration of your family’s needs.

Your financial professional can work with you to develop an investment strategy to help you reach your specific goals. Importantly, this strategy can help you maintain investment discipline through turbulent market periods.

An investment strategy should include an overall asset allocation recommendation. It may also include an automatic investment program, by which you invest a regular amount each month or quarter. At least annually, you should meet with your financial professional to review your goals, strategy, and portfolio. Periodically, market conditions may cause you to choose to adjust your asset allocation. Consult your financial professional whenever your goals change or when major events occur in your life, including:

n Birth of a child

n Illness or death of a parent

n Marriage or divorce

n Change of job or early retirement

n Settlement or inheritance

These emotionally charged events can have a powerful financial impact on your life. You’ll want financial guidance at these pivotal times.

MainStay Investments provides additional guidance on how you can be better prepared at mainstayinvestments.com in the “Investor Education” section.

2. MainStay Retirement Funds may also invest in other, non-MainStay, mutual funds.

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Floating rate funds are generally considered to have speculative characteristics that involve default risk of principal and interest, collateral impairment, non-diversification, borrower industry concentration, and limited liquidity.

The principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value.

Growth stocks may be more volatile than other stocks because they are generally more sensitive to investor perceptions and market moves. During periods of growth stock underperformance, a Fund’s performance may suffer.

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 developed markets.

High-yield securities (“junk bonds”) are generally considered speculative because they present a greater risk of loss than higher-quality debt securities; these securities may also be subject to greater price volatility.

Stocks of small capitalization companies may be subject to higher price volatility, significantly lower trading volumes, and greater spreads between bid and ask prices, than stocks of larger companies. Small companies may be more vulnerable to adverse business or market developments than mid- or large-capitalization companies.

Mid-capitalization companies are generally less estab-lished and their stocks may be more volatile and less liquid than the securities of larger companies.

Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise.

MainStay Asset Allocation Funds and MainStay Retirement Funds2 are “fund of funds” that invest in other MainStay Funds. The cost of investing in the Funds may be higher than the cost of investing in a mutual fund that invests directly in individual stocks and bonds. By investing in the Funds, investors will indirectly bear fees and expenses charged by the underlying funds in which the Funds invest in addition to the Funds’ direct fees and expenses. In addition, the use of a fund of funds structure could affect the timing, amount, and character of distributions to the investor and may increase taxes payable by the investor.

The Funds’ performance depends on the advisor’s skill in determining the asset class allocations, the mix of underlying MainStay Funds, as well as the performance of those Funds. The underlying Funds’ performance may be lower than the performance of the asset class which they were selected to represent. The Funds may invest more than 25% of assets in one underlying fund which may significantly affect the net asset value of the Fund.

The Funds allocate their investments among multiple asset classes, which can include U.S. and foreign equity and fixed-income securities. The Funds may also allocate investments in growth and value stocks, real estate investment trusts, and corporate and U.S. government bonds.

The risks associated with an investment in the Funds are more fully described in the Funds’ prospectus.

About Risk

New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC. MainStay Investments is a registered name under which New York Life Investments does business. MainStay Investments, an indirect subsidiary of New York Life Insurance Company, New York, NY 10010, provides investment advisory products and services. New York Life Investments engages the services of federally registered advisors to subadvise the Funds. MacKay Shields LLC, Madison Square Investors, and Institutional Capital LLC are affiliates of New York Life Investments. Epoch Investment Partners, Inc. and Winslow Capital Management, Inc. are unaffiliated. Fixed Income Investors is a multi-product fixed-income investment manager and a division of New York Life Investments. Securities distributed by NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, New Jersey 07054.

NYLIM-A011650 00391995 CV MS393-10 MS41k-02/11

For more information, or a prospectus, call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com. Investors are asked to consider the investment objectives, risks, and charges and expenses of these investments carefully before investing. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing.

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

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For more information 800-MAINSTAY (624-6782) mainstayinvestments.com