MainStay Diversified Income Fund

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MainStay Diversified Income Fund

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> Performance

> Holdings

> Management

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Fund Performance

Share Class (Inception)
Category: Income	YTD %	1 Year %	3 Year %	5 Year %	10 Year %	Since Incep. %
Average Annual Total Returns as of 04/30/2008
NAV:
Class A (02/28/1997)	0.58	2.51	4.90	6.35	5.36	5.72
Class INV (02/28/2008)	0.55	2.48	4.89	6.34	5.35	5.71
Class B (02/28/1997)	0.43	1.85	4.13	5.58	4.57	4.94
Class C (09/01/1998)	0.32	1.74	4.09	5.55	4.56	4.93
With Sales Charges:
Class A (02/28/1997)	-3.95	-2.10	3.31	5.37	4.87	5.28
Class INV (02/28/2008)	-3.97	-2.13	3.30	5.37	4.87	5.28
Class B (02/28/1997)	-4.51	-3.02	3.21	5.25	4.57	4.94
Class C (09/01/1998)	-0.67	0.76	4.09	5.55	4.56	4.93
Average Annual Total Returns as of 03/31/2008
NAV:
Class A (02/28/1997)	-1.10	1.74	4.33	6.70	5.26	5.60
Class INV (02/28/2008)	-1.11	1.73	4.33	6.70	5.26	5.60
Class B (02/28/1997)	-1.17	1.09	3.60	5.90	4.48	4.82
Class C (09/01/1998)	-1.29	0.98	3.56	5.88	4.47	4.81
With Sales Charges:
Class A (02/28/1997)	-5.55	-2.84	2.74	5.72	4.78	5.16
Class INV (02/28/2008)	-5.56	-2.85	2.74	5.72	4.78	5.16
Class B (02/28/1997)	-6.06	-3.74	2.69	5.58	4.48	4.82
Class C (09/01/1998)	-2.26	0.02	3.56	5.88	4.47	4.81
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. Performance data shown at NAV does not reflect the deduction of the sales load, which, if reflected, would reduce the performance quoted.
Class A & INV: 4.5% maximum initial sales charge. Class B: CDSC up to 5% if redeemed within six years. Class C: 1% CDSC if redeemed within one year. Class I: No initial sales charge or CDSC, generally available to corporate & institutional investors with a minimum initial investment of $5 million. Gross Expenses: Class A 1.32%, INV 1.51%, B 2.20%, C 2.20%, I 1.04%

Growth of a Hypothetical $10,000 Investment at NAV

Class A shares 02/28/1997 to 03/31/2008. Based on total returns with reinvestment of distributions and does not reflect the effect of any sales charges, which would reduce performance shown. Performance for Class B and C shares will differ based on differences in their sales charges and expense structures. The Three Index Composite assumes equal investments, with all interest and capital gains reinvested, in the Lehman Brothers^® Aggregate Bond Index, the Credit Suisse First Boston™ High Yield Index, and the Citigroup Non-U.S. Dollar World Government Bond Index. These indices represent the U.S. government and domestic investment grade sector, the U.S. high yield sector, and the international bond sector, respectively. The Lehman Brothers^® Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade or better fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities, with maturities of at least one year. The Credit Suisse First Boston™ High Yield Index is a market-weighted index that includes publicly traded bonds rated below BBB by S&P and Baa by Moody's. The Citigroup Non-U.S. Dollar World Government Bond Index is an unmanaged index generally considered to be representative of the world bond market. Index results assume the reinvestment of all capital gain and dividend distributions. An investment cannot be made directly into an index.

Investment Advisor

MainStay is a division of New York Life Investment Management LLC (NYLIM), a world-class financial services organization that with its affiliates has more than $246 billion in assets under management as of March 31, 2008. NYLIM is the Investment Advisor for all MainStay Funds and serving as manager, runs the Funds' day-to-day business.

Investment Subadvisor

The Investment Advisor has delegated its portfolio management responsibilities for this Fund to its Investment Subadvisor, MacKay Shields LLC. MacKay Shields has specialized in money management for over 30 years, serving institutional and corporate clients.

Portfolio Manager(s)

Joseph Portera
Mr. Portera has managed MainStay Diversified Income and Global High Income Funds since inception and MainStay Government Fund since July 2000. Mr. Portera also manages the MainStay Total Return Fund and Intermediate Term Bond Fund. Mr. Portera is a Managing Director of MacKay Shields, specializing in international investing. He returned to MacKay Shields in December 1996 after working at Fiduciary Trust Company International as a Portfolio Manager in international bonds. Mr. Portera originally joined MacKay Shields in 1991.

J. Matthew Philo, CFA
Mr. Philo is a Portfolio Manager of MainStay High Yield Corporate Bond Fund and MainStay Diversified Income Fund. Mr. Philo, a Senior Managing Director of MacKay Shields LLC, has managed institutional accounts for MacKay Shields since September of 1996. From 1993 to September 1996, Mr. Philo was with Thorsell, Parker Partners Inc. as an analyst and portfolio manager focusing on mid-cap companies. He was previously with Moran Asset Management as an equity portfolio manager and analyst. He received a BA in Economics from the State University of New York at Albany and a MBA in Finance from New York University. Mr. Philo is a Chartered Financial Analyst.

Gary Goodenough
Mr. Goodenough became a manager of the Government Fund and the Total Return Fund in 2000, the Global High Income Fund in 2003, the Money Market Fund in 2006 and the Diversified Income Fund in 2008. Mr. Goodenough joined MacKay Shields as a Managing Director and Co-head of Fixed Income in 2000, and became a Senior Managing Director in 2004. Prior to joining MacKay Shields, Mr. Goodenough was a Senior Portfolio Manager at Loomis Sayles & Co. from December 1993 to May 2000. Prior to this, he was a Managing Director at Bear Stearns & Company and was a Managing Director of High Yield Bonds and a Managing Director of Global Bonds at Salomon Brothers.

Fund Objective

To provide current income and competitive overall return by investing primarily in domestic and foreign debt securities.

Investment Strategy

>	The Fund may invest in a wide array of domestic and foreign debt securities, seeking to provide current income and competitive overall return.
>	The portfolio managers intend to focus primarily on U.S. government and domestic investment-grade securities, high-yield corporate bonds, and international debt securities, seeking to combine high quality, higher return potential, and broad diversification by country, currency, industry, and type of security.
>	Ongoing economic and market monitoring, fundamental research, relative-value analysis, and individual security selection may allow the subadvisor to identify promising countries, bond market sectors, and securities.
>	Strict liquidity, diversification, and buy and sell disciplines may help assure that the Fund is appropriately invested at all times to pursue its allocation strategies and fundamental investment objective.

Fund Statistics

	Class A	Class INV	Class B	Class C
Total Net Assets	59.3M	10.8M	25.5M	13.5M
Beta¹	0.83	0.83	0.83	0.82
Standard Deviation²	3.70	3.70	3.68	3.68
Effective Maturity	6.9 Yrs
Number of Holdings	458
Effective Duration	4.6 Years
Purchases	$1,000 minimum initial investment, $50 subsequent

Investor Profile

>	Investors seeking potentially higher income and overall return by investing in multiple bond market sectors.
>	Investors seeking to add income potential to a growth-oriented portfolio.
>	Investors seeking to manage risk through multimarket diversification.

Why Multiple Markets?

Multimarket investments offer diversification to manage risk and exposure to more types of securities, which may increase opportunity potential.

¹Beta is a measure of historical volatility relative to an appropriate index based on its investment objective. A beta greater than 1.00 indicates volatility greater than the market's. Beta shown is based on monthly returns over the last three years.
²Standard Deviation measures how widely dispersed a fund's returns have been over a specified period of time (five years). A high standard deviation indicates that the range is wide, implying greater potential for volatility.

What You Should Know

Before You Invest

High-yield securities ("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. 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 in developed markets. The Fund may invest in derivatives, which may increase the volatility of the Fund's net asset value and may result in a loss to the Fund.

View the Prospectus

This mutual fund may be offered and sold only to persons in the United States. Please contact your investment professional or call 800-MAINSTAY (624-6782) for a prospectus or download it now. Please consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus contains this and other information about the investment company. Please read it carefully before you invest.

NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, NJ 07054.

These products are not federally insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, or similar agency.

All total returns are shown both with and without their maximum sales charge and assume capital gain and dividend distributions are reinvested.

Class A and R2 shares have an annual 12b-1 fee of .25%. Class B and C shares have an annual 12b-1 fee of 1.00%. Class I and R1 shares have no annual 12b-1 fee.

Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. The fee waivers and/or expense limitations are voluntary and may be discontinued at any time. Performance for Class C shares, first offered 9/1/98, includes the historical performance of Class B shares from inception (2/28/97) through 8/31/98 adjusted to reflect the applicable CDSC and fees and expenses for such shares. Performance for Class I shares, first offered 1/2/04, includes the historical performance of Class A shares from inception through 12/31/03 adjusted to reflect the applicable fees and expenses for such shares.

> Back to Top

>	First Offered
	Class A: 02/28/97
	Class INV: 02/28/08
	Class B: 02/28/97
	Class C: 09/01/98

>	Nasdaq Symbol
	Class A: MASAX
	Class INV: MSYDX
	Class B: MASBX
	Class C: MSICX

>	Cusip Number
	Class A: 56062F657
	Class INV: 56062X518
	Class B: 56062F640
	Class C: 56062F350

>	Fund Number
	Class A: 665
	Class INV: 2541
	Class B: 65
	Class C: 925

>	Download Prospectus
>	View Fact Sheet
>	Access Annual / Semiannual Report

>	Morningstar Style Box^TM

The Morningstar Style Box^TM reveals a fund's investment strategy. The vertical axis shows the average credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate, or long).

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