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| MainStay 130/30 High Yield Fund |
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Get to know each MainStay Fund with these in-depth views. Simply click on the tabs below for related information. |
| 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 (12/14/2007) |
1.31 |
n/a |
n/a |
n/a |
n/a |
0.73 |
| Class INV (02/28/2008) |
1.51 |
n/a |
n/a |
n/a |
n/a |
0.93 |
| Class C (12/14/2007) |
1.32 |
n/a |
n/a |
n/a |
n/a |
0.71 |
With Sales Charges: |
| Class A (12/14/2007) |
-3.25 |
n/a |
n/a |
n/a |
n/a |
-3.80 |
| Class INV (02/28/2008) |
-3.06 |
n/a |
n/a |
n/a |
n/a |
-3.61 |
| Class C (12/14/2007) |
0.32 |
n/a |
n/a |
n/a |
n/a |
-0.28 |
| Average Annual Total Returns as of 03/31/2008 |
| NAV: |
| Class A (12/14/2007) |
-0.43 |
n/a |
n/a |
n/a |
n/a |
-1.00 |
| Class INV (02/28/2008) |
-0.23 |
n/a |
n/a |
n/a |
n/a |
-0.80 |
| Class C (12/14/2007) |
-0.62 |
n/a |
n/a |
n/a |
n/a |
-1.22 |
With Sales Charges: |
| Class A (12/14/2007) |
-4.91 |
n/a |
n/a |
n/a |
n/a |
-5.46 |
| Class INV (02/28/2008) |
-4.72 |
n/a |
n/a |
n/a |
n/a |
-5.26 |
| Class C (12/14/2007) |
-1.60 |
n/a |
n/a |
n/a |
n/a |
-2.19 |
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.
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Class A & INV: 4.5% maximum initial sales charge. 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 & INV 3.94%, C 4.69%, I 3.69%
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Investment Advisor
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| 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.
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Portfolio Manager(s)
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| | | Louis N. Cohen, CFA | | Mr. Cohen joined MacKay Shields in October 2004 as Director of Research after MacKay Shields acquired the fixed income division of Pareto Partners. He is currently the Portfolio Manager for the MainStay 130/30 High Yield Fund. Mr. Cohen joined the fixed income team at UBS in 1991 as a Core/Core Plus Portfolio Manager and was Co-Chairman of the Credit Committee while at UBS. His extensive credit experience began at Bankers Trust in 1978 where he was in the Commercial Banking Department. In 1981 Mr. Cohen moved to specialize in fixed income as a FI Credit Analyst at Kidder Peabody. Mr. Cohen furthered his fixed income credit experience as a Fixed Income Credit Manager at several major firms, namely, Shearson, Drexel Burnham Lambert and Paine Webber prior to his move into portfolio management at UBS. With experience in the fixed income markets since 1978, Mr. Cohen received his B.A. and M.B.A from New York University and is a member and past President of the Capital Markets Credit Analyst Society, and a member of the New York Society of Security Analysts.
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| | | Michael Kimble, CFA | | Mr. Kimble joined MacKay Shields in October 2004 as Director and Co-Head of High Yield portfolio management when MacKay Shields acquired the fixed income active core division of Pareto Partners. Previously the Co-Head of Pareto Partners' High Yield Investments, Mr. Kimble began his investment career with positions at Citicorp and E.F. Hutton as a Fixed Income Credit Analyst. In 1988, Mr. Kimble moved to Home Insurance Company as a High Yield Bond Analyst and Portfolio Manager. Shortly thereafter, Mr. Kimble joined the UBS team in the same capacity. While at UBS, Mr. Kimble was Co-Chairman of the Credit Committee. He received a B.A. from Columbia University, an M.B.A from New York University and a JD from Fordham School of Law. With fixed income experience since 1984, Mr. Kimble is a member of the Capital Markets Credit Analyst Society, the New York Society of Security Analysts and the New York and Louisiana State Bar Associations. |
| | | Dan Roberts, Ph.D. | | Mr. Roberts joined MacKay Shields in October 2004 when the firm acquired the fixed income division of Pareto Partners. He is currently the Portfolio Manager for the MainStay 130/30 High Yield Fund. Mr. Roberts was Chief Investment Officer and an Equity Shareholder at Pareto Partners. Mr. Roberts assembled the US fixed income team while serving 10 years at UBS Asset Management, most recently as Managing Director and head of the Fixed Income Group. Prior to its acquisition by UBS, he was a Financial Economist for Chase Manhattan Bank, NA and later was head of Global Interest Rate and Currency Swaps Trading. In 1997, Mr. Roberts' fixed income group was lifted out of UBS by Forstmann-Leff International and was subsequently purchased by Pareto Partners. His regulatory and government experience includes two years at the U.S. Securities and Exchange Commission, serving at The White House with the President's Council of Economic Advisors and as Executive Director (Chief of Staff) of the U.S. Congress Joint Economic Committee. Mr. Roberts holds a B.B.A and a Ph.D. from University of Iowa and has been in the investment management industry since 1977.
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| | | Taylor Wagenseil | | Mr. Wagenseil became Director and Co-Head of High Yield portfolio management in 2004 after MacKay Shields acquired the fixed income division of Pareto Partners, where he was Co-Head of High Yield Investments and an equity shareholder. Mr. Wagenseil began his investment career with Citibank in 1979, specializing in troubled loan workouts and recoveries. In 1986, Mr. Wagenseil moved to Drexel Burnham Lambert as a Senior Vice President to head High Yield Commercial Paper Research. Mr. Wagenseil remained at Drexel through the bankruptcy and then joined Bear Stearns as a Managing Director in the Financial Restructuring Group. He was recruited to join UBS in 1993 as a Senior Portfolio Manager for High Yield and High Yield Arbitrage Portfolios. His public service and military experience includes the U.S. Navy (Lieutenant) during the Vietnam War and five years as the Commissioner, Department of Elderly Affairs for the City of Boston. Mr. Wagenseil received a B.A. from Dartmouth College and a M.B.A (Finance) from the Harvard Business School and has experience in the High Yield market since 1979. |
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Fund Objective
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| To seek maximum current income though investment in a diversified portfolio of high-yield debt securities. Capital appreciation is a secondary objective. |
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Investment Strategy
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Under normal circumstances, the Fund invests at least 80% of its assets in high- yield corporate debt securities (sometimes called "junk bonds"), including all types of high-yield domestic and foreign corporate debt securities that are rated below investment grade by Moody's Investor Service, Inc. ("Moody's") or Standard and Poor's ("S&P") or that are unrated but that are considered by MacKay Shields, the Fund's subadvisor, to be of comparable quality. The Fund will take long positions that MacKay Shields believes offer the potential for attractive returns. For long positions, MacKay Shields will seek to identify companies that are considered to have a high probability of outperforming the Merrill Lynch U.S. High Yield Master II Constrained Index (the "Index") over a market cycle. Based upon quantitative and qualitative analysis, the Fund may overweight issuers that MacKay Shields believes will outperform the index and underweight issuers that MacKay Shields believes will underperform the Index to increase performance and achieve this goal. Also, based upon this analysis, the Fund will sell short securities that it believes are likely to underperform the Index. This means that the Fund may sell a security that it does not own, which it may do, for example, when the portfolio manager thinks that the value of the security will decline. By employing this strategy, the Fund seeks to produce returns that exceed those of the Index. MacKay Shields believes that this long/short strategy enables it to reflect negative and positive views on individual securities and to seek higher performance than a long-only strategy. |
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The Fund will generally hold long positions, either directly or through derivatives, equal to approximately 130% of the Fund's net assets and short positions, either directly or through derivatives, equal to approximately 30% of the Fund's net assets. However, the long and short positions held by the Fund may vary over time as market opportunities develop. Under normal market conditions, the Fund's long positions may range from 120% to 140% and its short positions may range from 20% to 40%. |
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The Fund may use derivatives, such as swaps (including credit default swaps), to establish long and short bond positions without owning or taking physical custody of securities. In a typical swap transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on particular investments or instruments during the period of the swap. The payments may be adjusted for transaction costs, interest payments, the amount of dividends paid on the investment or instrument or other factors. |
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In pursuing the Fund's investment strategy, MacKay Shields seeks to identify investment opportunities based on the financial condition and competitiveness of individual companies and bond structure. The Fund's principal investments include, but are not limited to:
- domestic corporate debt securities,
- Yankee (dollar-denominated) Debt Securities, and
- Non-dollar corporate debt securities
- Derivatives (including credit default swaps)
- Sovereign debt
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The Fund's high-yield investments may also include convertible corporate bonds and loan participation interests (e.g., bank debt). |
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The Fund may invest up to 20% of its net assets in equity securities, including those of foreign issuers, and may invest up to 25% of its net assets in securities rated lower than B3 by Moody's and B- by S&P (including securities with the lowest rating from these agencies) or if unrated, determined by MacKay Shields to be of comparable quality. |
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In general, MacKay Shields overweights the Index benchmark weight with securities that it believes are underpriced and will outperform the Index, and underweights or sells securities "short" that it believes are overpriced and will underperform the Index in an attempt to produce returns that exceed those of the Index. MacKay Shields maintains internal restrictions on selling short securities that are held long by other funds or accounts that it manages. Therefore, the Fund's ability to sell short certain securities may be restricted. |
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In rising markets, the Fund expects that the long positions generally will appreciate more rapidly than the short positions and, in declining markets, that the short positions generally will decline faster than the long positions. Short sales allow the Fund to earn returns on securities that MacKay Shields believes will underperform and also allows the Fund to maintain additional long positions while keeping the Fund's net exposure to the market at a level similar to a "long only" strategy. As a result, the Fund intends to maintain an approximate 100% net long exposure to the high yield market. |
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Until the short sale is closed, the broker effecting the short sale typically holds the proceeds or other securities as collateral to secure the Fund's obligation to cover the short position. However, the Fund may use all or a portion of the cash proceeds that it receives in connection with short sales to purchase securities or for other Fund purposes. If the Fund does this, it must pledge replacement collateral as security to the broker and may use securities that it owns to meet any such collateral obligations. Additionally, the Fund must maintain sufficient liquid assets (less any additional collateral held by the broker), marked-to-market daily, to cover the short sale obligation. Generally, the Fund may not keep, and must return to the lender, any dividends or interest that accrue on the security during the period of the loan. |
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The Fund's underlying process for selecting securities is based on a quantitative and qualitative process that first screens securities for what MacKay Shields deems to be indicators of inappropriate risk (such as financial and liquidity risk, political risk and other risks) and discards or shorts those securities that MacKay Shields feels are not suitable for long investment. MacKay Shields then seeks to identify issuers with qualities such as: high credit worthiness, improving fundamentals, positive outlook and good liquidity. In examining these issuers for potential investment, MacKay Shields focuses on:
- quality of management and business plan;
- industry environment;
- competitive dynamics;
- cash flow; and
- liquidity.
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The Fund invests in, among other things, companies with market capitalizations that, at the time of investment, are similar to companies in the Index. MacKay Shields seeks to control the Fund's exposure to risk through, among other things, sector and industry constraints. These constraints may limit the Fund's ability to overweight or underweight particular sectors or industries to the applicable benchmark. MacKay Shields will further seek to reduce risk by diversifying the Fund's portfolio over a large number of securities. MacKay Shields will continuously rebalance the Fund's long and short positions in an attempt to exploit current perceived inefficiencies while maintaining an approximate net 100% long exposure. |
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MacKay Shields may sell a security or cover a short position for one or more of the following reasons:
- credit deterioration
- repositioning caused by a change in its ''top down'' outlook
- excessive downward price volatility; or
- recognition of an alternative investment with relatively better value.
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Consistent with the Fund's underlying process of selecting investments, credit deterioration is the most important factor in the Fund's decision to sell a security or cover a short position. |
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Fund Statistics
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Class A |
Class INV |
Class C |
| Total Net Assets |
.0M |
.0M |
.0M |
| Purchases | $1,000 minimum initial investment,
$50 subsequent | |
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What You Should Know
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| Principal Risks |
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The risks involved with investing in debt securities include (without limitation):
- Credit Risk: The purchaser of a debt security lends money to the issuer of that security. If the issuer does not pay back the loan, the holder of the security may experience a loss on its investment.
- Maturity Risk: A debt security with a longer maturity may fluctuate more in value than a debt security with a shorter maturity. Therefore, if the Fund holds debt securities with a longer average maturity, its net asset value may fluctuate in value more than if the Fund that holds debt securities with a shorter maturity.
- Market Risk: Like other securities, debt securities are subject to the forces of supply and demand. Low demand may negatively impact the price of a debt security. Interest Rate Risk: The value of debt securities usually changes when interest rates change. Generally, when interest rates go up, the value of a debt security goes down and when interest rates go down, the value of a debt security goes up
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The values of debt securities fluctuate depending upon various factors, including:
- interest rates,
- issuer creditworthiness,
- market conditions, and
- maturities
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The Fund principally invests in high-yield debt securities, which are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. These securities pay investors a premium-a high interest rate or yield-because of the increased risk of loss. These securities can be also subject to greater price volatility. High-yield debt securities are rated lower than Baa by Moody's or BBB by S&P or, if not rated, are determined to be of equivalent quality by the Subadvisor and are sometimes considered speculative. Investments in high-yield bonds or ''junk bonds'' involve special risks in addition to the risks associated with investments in higher rated debt securities. High-yield bonds may be regarded as predominantly speculative with respect to the issuer's continuing ability to meet principal and interest payments. Moreover, such securities may, under certain circumstances, be less liquid than higher rated debt securities. |
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The loans in which the Fund invests are usually rated less than investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. These securities pay investors a higher interest rate because of the increased risk of loss. Although certain floating rate loans are collateralized, there is no guarantee that the value of the collateral will be sufficient to repay the loan. In the event of a recession or serious credit event, among other eventualities, the Fund's net asset value ("NAV") could go down and you could lose money. An active trading market may not exist for many of the Fund's loans. In addition, some loans may be subject to restrictions on their resale, which may prevent the fund from obtaining the full value of the loan when it is sold. If this occurs, the Fund may experience a decline in its NAV. Some of the Fund's investments may be considered to be illiquid. |
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Short sales involve costs and risk. If a security sold short increases in price, the Fund may have to cover its short position at a higher price than the short sale price, resulting in a loss. The Fund will have substantial short positions and must borrow those securities to make delivery to the buyer. The Fund may not be able to borrow a security that it needs to deliver or it may not be able to close out a short position at an acceptable price and may have to sell related long positions before it had intended to do so. Thus, the Fund may not be able to successfully implement its short sale strategy due to the limited availability of desired securities or for other reasons. |
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When borrowing a security for delivery to a buyer, the Fund also may be required to pay a premium and other transaction costs, which would increase the cost of the security sold short. The Fund must normally repay to the lender an amount equal to any dividends or interest that accrue while the security from the short sale remains out on loan. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the premium, dividends, interest or expenses the Fund may be required to pay in connection with the short sale. Also, the lender of a security may terminate the loan at a time when the Fund is unable to borrow the same security for delivery. In that case, the Fund would need to purchase a replacement security at the then current market price or ''buy in'' by paying the lender an amount equal to the cost of purchasing the security. |
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Until the Fund replaces a borrowed security, it is required to maintain a segregated account of cash or liquid assets with a broker or custodian to cover the Fund's short position. Securities held in a segregated account cannot be sold while the position they are covering is outstanding, unless they are replaced with similar securities. Additionally, the Fund must maintain sufficient liquid assets (less any additional collateral held by the broker), marked-to-market daily, to cover the short sale obligation. This may limit the Fund's investment flexibility, as well as its ability to meet redemption requests or other current obligations. |
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Because the Fund's loss on a short sale arises from increases in the value of the security sold short, such loss is theoretically unlimited. In certain cases, purchasing a security to cover a short position can itself cause the price of the security to rise further, thereby exacerbating the loss. Conversely, gains on short sales, after transaction and related costs, are generally the difference between the price at which the Fund sold the borrowed security and the price it paid to purchase the security for delivery to the buyer. By contrast, the Fund's loss on a long position arises from decreases in the value of the security and is limited by the fact that a security's value cannot drop below zero. |
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By investing the proceeds received from selling securities short, the Fund could be deemed to be employing a form of leverage, which creates special risks. The Fund addresses these potential risks in accordance with applicable regulatory guidance. The use of leverage may increase the Fund's exposure to long equity positions and make any change in the Fund's NAV greater than it would be without the use of leverage. This could result in increased volatility of returns. There is no guarantee that the Fund will leverage its portfolio, or if it does, that the Fund's leveraging strategy will be successful. The Fund cannot guarantee that the use of leverage will produce a higher return on an investment. |
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Investment in common stocks and other equity securities is particularly subject to the risk of changing economic, stock market, industry and company conditions and the risks inherent in management's ability to anticipate such changes that can adversely affect the value of the Fund's holdings. Opportunities for greater gain often come with greater risk of loss. Some of the securities, therefore, may carry above-average risk, compared to common stock indices such as the Dow Jones Industrial Average or the S&P 500® Index. |
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Since the Fund invests in foreign securities, which are securities issued by companies organized outside the U.S. and may be traded in markets outside the U.S., it will be subject to risks that differ from the risks of investing in securities of U.S. issuers. These risk factors include:
- fluctuating currency values,
- less liquid trading markets,
- greater price volatility,
- political and economic instability,
- less publicly available information about issuers,
- changes in U.S. or foreign tax or currency laws, and
- changes in monetary policy.
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Additionally, investments in foreign securities involve difficulties in receiving or interpreting financial and economic information, possible imposition of taxes, higher brokerage and custodian fees, possible currency exchange controls or other government restrictions, including possible seizure or nationalization of foreign deposits or assets. There may also be difficulty in invoking legal protections across borders. |
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The risks are likely to be greater in emerging market countries than in countries with developed securities markets and more advanced regulatory regimes. Emerging market countries may have economic structures that are less mature and political systems that are less stable. Moreover, emerging market countries may have less developed securities markets, high inflation, and rapidly changing interest and currency exchange rates. |
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Some foreign securities may be issued by companies organized outside the U.S. but are traded in U.S. securities markets and are denominated in U.S. dollars. For example, American Depositary Receipts and shares of some large foreign-based companies are traded on principal U.S. exchanges. Other securities are not traded in the U.S. but are denominated in U.S. dollars. These securities are subject to some but not all of the risks of foreign investing. For example, foreign trading market or currency risks will not apply to dollar denominated securities traded in U.S. securities markets. |
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Some of the foreign securities in which the Fund invests will be denominated in foreign currency. Changes in foreign currency exchange rates will affect the value of securities denominated or quoted in foreign currencies. Exchange rate movements can be large and can endure for extended periods of time, affecting either favorably or unfavorably the value of the Fund's assets. However, the Fund may engage in foreign currency transactions to attempt to protect itself against fluctuations in currency exchange rates in relation to the U.S. dollar. |
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The Fund's investments include derivatives such as credit default swaps. The Fund may use derivatives to enhance return or reduce the risk of loss of (hedge) certain of its holdings. The Fund may invest up to 15% of its net assets in swaps, including credit default swaps. The Fund may use derivatives to try to enhance returns or reduce the risk of loss of (hedge) certain of its holdings. Regardless of the purpose, the Fund may lose money using derivatives. The use of derivatives may increase the volatility of the Fund's net asset value and may involve a small investment of cash relative to the magnitude of risk assumed. Also, the prices of credit default swaps can be very volatile and result in losses for the Fund. |
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Due to its trading strategies, the Fund may experience a portfolio turnover rate of over 100%. Portfolio turnover measures the amount of trading the Fund does during the year. Funds with high turnover rates (over 100%) often have higher transaction costs (which are paid by the Fund) and may generate short term capital gains (on which you will pay taxes, even if you do not sell any shares by year-end). |
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| 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.
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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.
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| Class A: 12/14/07 |
| Class INV: 02/28/08 |
| Class C: 12/14/07 |
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| Class A: MYHAX |
| Class INV: MYHNX |
| Class C: MYHYX |
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| Class A: 27885C445 |
| Class INV: 27885C387 |
| Class C: 27885C437 |
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| Class A: 2528 |
| Class INV: 2582 |
| Class C: 2529 |
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