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| New Investor Class Shares Effective February 28, 2008 |
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As previously communicated to all of our shareholders in the 2007 year-end statement, on February 28, 2008, MainStay Funds introduced new Investor Class shares for most MainStay Funds.
The new MainStay Investor Class shares are designed to accommodate and service shareholders with smaller account balances. Specifically, the new Investor Class shares are for accounts with assets less than $25,000 on a per Fund account level; for all SIMPLE IRAs; and for certain retirement plans regardless of account size. Investor Class has the same sales load structure as Class A shares, with initial and subsequent investment minimums of $1,000 and $50, respectively. Expenses are expected to be higher than Class A shares.
Meanwhile, Class A shares are now intended for accounts with assets of at least $25,000 on a per Fund account level and for shareholders who invest in MainStay through certain broker-dealers or retirement plans, regardless of account size. With a new minimum initial investment of $25,000, and no minimum on subsequent investments, the modified Class A shares are expected to benefit from lower expenses than Investor Class shares.
How Will This Impact My Existing MainStay Funds Investment?
Your Fund accounts may or may not be impacted, depending on the share class in which you are currently invested and your Fund account balances.
Current Class A Shareholders
Depending on the size and type of your Fund account, shares will either:
- Convert into Investor Class
For shareholders with accounts under $25,000 on a per Fund account level ($10,000 in the case of IRA or 403(b)(7) accounts that are making required minimum distributions); and for all SIMPLE IRAs; regardless of account size.
These conversions are expected to be managed on a tax-free basis and occur automatically on or about March 28, 2008, for most MainStay Funds, and on or about May 1, 2008, for MainStay ICAP Funds and all SIMPLE IRA shareholders. OR
- Remain in the modified Class A
For shareholders with accounts over $25,000 on a per Fund account level; or for shareholders who invest in MainStay through certain broker-dealers, including AdviserOne, or retirement plans regardless of account size.
Current Class B Shareholders
- Current Class B Shareholders remain in Class B.
- Under the existing conversion feature applicable to Class B shares generally held eight years, Class B shares will convert automatically to either Investor Class or Class A shares, depending on the Fund account size and other eligibility requirements at the time of conversion.
Ongoing Conversions
During automatic quarterly conversions, MainStay will convert any Investor Class shares to Class A shares when the Fund account balance exceeds the $25,000 Class A minimum or if the Fund account otherwise becomes eligible to invest in Class A shares.
It's important to also note that during semi-annual automatic conversions, MainStay will convert any Class A shares to Investor Class shares when the Class A Fund account balance falls below the $25,000 minimum ($10,000 in the case of IRA or 403(b)(7) accounts that are making required minimum distributions) or if the Fund account otherwise becomes ineligible to invest in Class A shares. Class A shares held in accounts falling below the minimum investment amount due to shareholder action (e.g., redemptions and exchanges) will be converted to Investor Class shares, unless otherwise qualified to hold Class A shares. In addition, and unless otherwise qualified to hold Class A shares, Class A accounts falling below the minimum investment due solely to market fluctuations may be converted to Investor Class shares.
These ongoing conversions are expected to be managed on a tax-free basis.
For More Information
For additional details about our new Investor Class shares, changes to Class A share class eligibility, and the automatic conversion between these share classes, please read the prospectus dated February 28, 2008. If you have any questions, please contact your financial advisor or call us directly at 800-MAINSTAY (624-6782), option 2, from 8:00 a.m. to 6:00 p.m. eastern time any business day.
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