for registered representative use only. not for use with the general public. opportunities in the...

FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC.

Opportunities in the Municipal Bond MarketFPA Meeting

September 2012

NYLIM- 27317 MS31gg-08/12

MacKay Municipal ManagersTM believes that municipal bonds offer high income and strong total return potential. In our opinion, credit selection, structural characteristics and spread tightening will most likely be the determining factors of municipal performance throughout the remainder of the year.

Opportunity Set of Current Environment:

– Higher absolute income than Treasuries.

– Eight states rated higher than US Government as rated by S&P.

– Demand expected to rise among retail and institutional investors looking for incremental income.

– U.S. deficits will keep pressure on federal government to raise revenue and let the Bush era tax cuts expire (this will likely cause an increase demand for municipal bonds in the U.S.)

– Medicare funding proposal for unearned income of 3.8% starting in 2013 will likely increase demand for municipal bonds in next 12 months.

– While high yield municipal bonds still offer value, opportunities in investment grade credits have become more compelling and we believe clients should consider increasing their allocation to investment grade municipal securities.

Supply is shrinking:

– Issuance remains low as states and municipalities close budget gaps and resolve pension funding issues.

– Direct bank lending to municipalities is siphoning off municipal supply.

Municipal Investment Outlook

FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC.2

MacKay Municipal ManagersTM Team of MacKay Shields was acquired by MacKay Shields LLC in 2009. MacKay Shields LLC is an affiliate of New York Life Investment Management LLC. New York Life Investments is a premier institutional investment management firm that is an indirect subsidiary of New York Life Insurance Company.

3FOR REGISTERED REPRESENTATIVE USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC.

3

Timely Strategy

Historical Federal Income Tax Rates (for highest tax bracket)

By historic standards, current tax rates are low. Large deficits over the past decade have led states to increase taxes and may put pressure on federal policy markers to raise federal taxes (once the current tax rates expire in 2012) to help manage the nation's mounting debt.

Source: Eugene Steuerle, The Urban Institute; Joseph Pechman, Federal Tax Policy; Joint Committee on Taxation, Summary of Conference Agreement on the Jobs and Growth Tax Relief Reconciliation Act of 2003, JCX-54-03, May 22, 2003; IRS Revised Tax Rate Schedules.

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30%Effects of Higher Income Tax Rates on Municipal Securities

Coupon (left scale)

Taxable equivalent yield (left scale)

Bond price (right scale)

An Effective Tax Management Tool

Higher tax rates Cause taxable-equivalent yields

to rise Can increase demand for

municipal securities, causing bond prices to rise (capital appreciation)

While current tax rates are low, municipal securities can provide a hedge against the potential of higher taxes

Value added. This hypothetical illustration shows how a municipal security can become more valuable to an investor in a period of rising income tax rates. This is for illustrative purposes only and does not apply to any specific investments.

35% 40% 45% 50% 55% 60% 65% 70%Marginal tax rate

Source: MacKay Shields, Bloomberg January 2012.

An Opportunity in the Municipal Market


Municipal spreads remain wide on tax-exempt municipals both relative to Treasurys and corporate bonds. Tax revenues have increased for nine consecutive quarters*. Tax-exempt bonds currently offer better value and potential upside than taxable bonds. Negative headlines regarding the creditworthiness of municipal bonds continue to create opportunities.

Source: Bloomberg, Thomson Reuters 6/30/12

30-year AAA/Treasury Yield Ratio

Past performance does not guarantee future results. See page 11 for disclosure information.Barclays Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax- exempt bond market. The index is composed of approximately 60% revenue bonds and 40% state government obligations. An investment cannot be made directly into an index.*Source: Rockefeller Institute, State Revenue Report, July 2012 (through Q2 ‘12).

Opportunities in the Investment Grade Municipal Market


While MacKay Municipal Managers™ view on municipal high yield bonds remains constructive, we have begun to shift our municipal allocation from a strong overweight to slight overweight to the sector.

As the presidential election approaches, and the potential for increased downgrades and additional uncertainties looms, the Team believes the value proposition of investment grade municipals has become more appealing.

Barclays Municipal High Yield Index to Municipal Investment Grade Index

Source: Barclays, July 2012.

0

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200

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Avg: 319 bpMin: 113 bpMax: 636 bpStd Dev: 115bp

7/31/12 Spread = 355bp

Opportunities in the Investment Grade Municipal Market


Spreads remain significantly wider, on a percentage basis, in A to AAA (now 41% above historical average) and BBB to AAA (now 19% above historical average) compared to spreads between high yield municipal to investment grade municipals.

The managers believe this indicates a better risk/reward trade‐off for investors and are better compensated with investment grade municipal bonds.

Additionally, the investment grade municipal bond universe consists of more than 46,000 issues with $3.5T outstanding, compared to the high yield municipal universe with approximately 3,000 issues and less than $100B in outstanding bonds

Barclays Municipal A Index to Municipal AAA Index

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Jul-02 Jul-04 Jul-06 Jul-08 Jul-10 Jul-12

Avg: 83 bpMin: 13 bpMax: 195 bpStd Dev: 65 bp

7/31/12 Spread = 117bp

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Avg: 181bpMin: 48 bpMax: 413 bpStd Dev: 94bp

7/31/12 Spread = 215p

Barclays Municipal BBB Index to Municipal AAA Index

Source: Barclays, July 2012. Source: Barclays, July 2012.

Historically Lower Default Rates


From the perspective of creditworthiness, high yield municipal securities have produced much lower default rates than comparable corporate bonds while demonstrating higher recovery rates as well.

The default rate for non-investment grade municipals is 7.94% versus 33.69% for non-investment grade corporates. 1

Per Moody’s, the average ultimate recovery for municipal bonds was 65% for the period 1970-2011, compared to 49% on corporate senior unsecured bonds over 1987-2010.

Rating Categories Cumulative Historical Default Rates

Moody’s1 Standard & Poor’s

Municipal Corporate

Municipal2

Corporate3

Aaa/AAA 0.00% 0.48% 0.00% 0.79%

Aa/AA 0.01% 0.86% 0.03% 0.82%

A/A 0.04% 2.22% 0.06% 1.84%

Baa/BBB 0.37% 4.71% 0.29% 5.22%

Ba/BB 3.92% 19.54% 1.77% 16.54%

B/B 21.85% 43.00% 8.84% 29.94%

Caa-C/CCC-C 23.68% 70.24% 38.09% 52.88%

Investment Grade 0.08% 2.61% 0.10% 2.68%

Non-Investment Grade

7.94% 33.69% 6.22% 25.16%

All 0.09% 11.06% 0.17% 10.18%

1. “U.S. Municipal Bond Defaults and Recoveries,1970-2011.” Moody’s Investors Service March 2012: Page 11 Exhibit 12, Average Cumulative Default Rates, 1970-2011, Municipals vs. Corporates.2. “U.S. Public Finance Defaults And Rating Transition Data: 2010 Update.” Standard & Poor’s Global Credit Portal RatingsDirect ® March 2, 2011: Page 34. Table 12, U. S. Public Finance Cumulative Average Obligor Default Rates, 1986-2010 (%). Note: Ten year average cumulative default rates.3. “2010 Annual U.S. Corporate Default Study And Rating Transitions.” Standard & Poor's Global Credit Portal, RatingsDirect ® March 30, 2011: Page 16. Table 11, U.S. Corporate Average Cumulative Default Rates (1981-2010) (%). Note: U.S. Corporate ten year average cumulative default rates.Past performance is no guarantee of future results.

Credit Ratings: AAA Credit ratings apply to the underlying debt securities and are rated by an independent rating agency such as Standard & Poor’s (S&P), Moody’s, and/or Fitch. S&P rates borrowers on a scale from AAA to D. AAA through BBB represent investment grade, while BB through D represent non-investment grade. Moody’s rates borrowers on a scale from Aaa through C. Aaa through Baa3 represent investment grade, while Ba1 through C represent non-investment grade. Fitch rates borrowers on a scale from AAA through D. AAA through BBB represent investment grade, while BB through D represent noninvestment grade.

9FOR REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED WITH THE GENERAL PUBLIC.

Where We Do Not See Value in Municipals

Short-intermediate bonds have been highly correlated with the comparable government Index. Both the level of interest rates and the spread between indexes are near historical lows. We do not believe this is an area of opportunity for municipal bond investors.

Source: Bloomberg, Barclays June 2012. Past performance is no guarantee of future results. It is not possible to invest directly in an index.

Barclays Managed Money Muni Short/Int (1-10 yrs) Index vs. 5-Year Government Bonds


MacKay Municipal Managers™ Top Five Insights for 2012

We believe that:

1. Municipals outperform taxable alternatives.

2. “BBB” municipals will lead the broad municipal index.

3. Security selection will drive performance as defaults and particularly downgrades increase across many segments of the municipal market.

4. Pragmatic state and local governance will separate winners from losers.

5. Taxes on earned and unearned income will increase in the future causing higher demand for municipal bonds.

See appendix for more information concerning the opinions expressed above.

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. There is no assurance that any forecasts, estimates or opinions expressed in this material will be realized.


Municipal Market Insights for 2012 - “Still Offering Value”

What's Driving the Muni Market? Five Insights on the Municipal Market by MacKay Municipal Managers™

As U.S. states and localities managed through 2011 with few defaults, the municipal market gained strength after a weak first quarter and ended the year up over 10%. Many investors are asking, “Is it too late to enter the market?” Our response: Municipals still offer value. We believe 2012 will be a year of watching state legislatures and county commissions to distinguish which issuers will continue to offerrelative safety to bond investors. In addition, we think the technical demand and supply outlook will be a driver of the overall market. Finally, it is our opinion that investors need to be cautious in evaluating bonds that are tied to real estate, such as continuing care retirement facilities, assessment districts (geared towards real estate land secured deals), and tax increment bonds1, as we believe theseissues will be the main areas of defaults.

With this is mind, we offer our five insights into the market for 2012:1. Municipals outperform taxable alternatives.There is still significant value in municipal bonds. While returns for 2011 were strong, we feel spreads will continue to tighten in 2012. Spreads, which initially widened during the financial crisis starting in 2008, and came under additional technical pressure in the fourth quarter of 2010, are still elevated. We also believe the combination of greater demand and manageable supply will cause spreadtightening and enable the municipal market to perform well on both an absolute and relative basis.

2. “BBB” municipals will lead the broad municipal index.Municipal bonds posted declines from November 2010 through April 2011, as mutual funds raised money to meet redemptions. The largest declines were recorded in the BBB segment of the market, as many high-yield municipal funds, seeking liquidity, sold liquid BBB bonds. While the spread on BBB to AAA municipal credits did tighten somewhat during the second half of 2011, the spread is still well over twice the historical average. We believe that the demand for yield, coupled with a credit rebalancing from high-yield muni funds that were forced sellers in 2010/11, will continue to compress the BBB to AAA spread.

3. Security selection will drive performance as defaults and particularly downgrades increase across many segments of the municipal market.In 2012, we believe that individual security selection will outperform sector-specific strategies. We anticipate that continued economic weakness and financial stress on state and local issuers will result in an increase in isolated defaults and credit rating downgrades across sectors. As a result, investors should not rely on sector trends but, rather, focus on individual security selection to identify bonds that will outperform.

4. Pragmatic state and local governance will separate winners from losers.States and local municipalities that have been successful in balancing their budgets by expenditure reductions and structural reform, including employee compensation and pension costs, should see their ratings improve with the onset of revenue collection improvements. States and municipalities that have adhered to stringent budget cuts should see a return to surplus collections, as has begun in such states as Massachusetts and Florida. On the other hand, those governments that have not dealt with budget reform and stuck to poor fiscal management with one-time budget solutions or by tax increases should continue to experience budget deficits as federal mandates and pension liabilities increase the likelihood of ratings downgrades.

5. Taxes on earned and unearned income will increase in the future causing higher demand for municipal bonds.We expect that dysfunctional governance in Washington will keep gridlock the norm, causing tax rates to increase on higher income earners. Increases will affect both marginal income tax rates and surtaxes. The net effect could increase the attractiveness of municipal bonds. In addition, we believe corporate tax rates have a high chance of declining.

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.

There is no assurance that any forecasts, estimates or opinions expressed in this material will be realized.


Solid Backing1

MacKay Municipal ManagersTM

Expertise Co-heads have over 19 years of experience working

together Co-heads previously headed the largest municipal asset

management group at MLIM/BlackRock Team has invested their own assets in selected

products

Municipal Opportunity 91,000 securities More than 75% owned by retail investors MacKay Municipal ManagersTM is a small municipal

boutique within MacKay Shields, with deep credit research and resources and the ability to act nimbly in the current environment

MacKay Shields LLC Acquired in 2009 by MacKay Shields

$68 billion is assets under management as of 6/30/12130+ employees

New York Life Investments $340 billion assets under management as of 6/30/12 with

affiliates 1,500+ employees in 16 offices globally

1. MacKay Municipal ManagersTM Team of MacKay Shields was acquired by MacKay Shields LLC in 2009. MacKay Shields LLC is an affiliate of New York Life Investment Management LLC. New York Life Investment Management LLC is a premier institutional investment management firm and an indirect subsidiary of New York Life Insurance Company . MacKay’s AUM is as of 6/30/12.

Expertise and Opportunity


Guiding Principles

We believe:

Dynamic financial markets require an equally dynamic investment process Current market inefficiencies can be best exploited by applying a relative-value, research-

driven approach Investing should be approached with a rational and intuitive understanding of what drives

markets Having an informed macro view and conducting detailed fundamental security analysis

provides deep perspective and helps to uncover information gaps Disciplined research assists us in identifying mispriced securities


Key Attributes – MainStay Municipal Strategies

1. AMT exposure as per the MainStay Funds 2011 Income Tax Information Notice.* SMA portfolios are not available in the New York Life Agency channel.

While they are allowed to use leverage, MainStay municipal strategies do not employ leverage as of 6/30/12. The investment professionals are investing their own money in the MainStay municipal funds, helping to keep their interests aligned alongside mutual fund shareholders. Strategy Specific Attributes are:

MainStay New York Tax Free Opportunities FundDiversified opportunistic portfolio: Team is “opportunistic” in its approach to actively manage individual credit exposure, as well as quality exposure, while constructing a New York portfolio that is at least 80% federal tax-exempt and New York state exempt. The Fund can also invest up to 20% in high yield municipal credit.

MainStay Tax Free Bond FundInvestment grade municipal bonds: The team’s quality focus has resulted in a Fund comprised only of investment grade securities.Limited Alternative Minimum Tax (AMT) exposure: The Fund has less than 5% in AMT exposure.1

MainStay High Yield Municipal Bond FundFocus on current income and total return65% of assets in bonds rated BBB+ and below (by S&P, Fitch, or Moody’s)

MainStay SMA Portfolio*Active managementCustomized solutions: institutional management to individual portfolios; idea generation followed by actionHigher minimum initial investmentCombination of opportunistic and traditional municipal strategies


Strong Performance for MainStay Tax Free Bond Fund and MainStay High Yield Municipal Bond FundSince MacKay Municipal Managers became sub-advisors for MainStay Tax Free Bond Fund on July 1, 2009, the Fund posted stronger performance than its benchmark and Lipper peers. MainStay High Yield Municipal Bond Fund also outpaced its benchmark and Lipper peers.

MainStay Tax Free Bond Fund Annualized Return (July 1, 2009 – June 30, 2012)•Class A shares Net Return: 9.00%•Barclays Municipal Bond Index 7.62%•Lipper General Municipal Debt Peer Average 8.26% •Class A shares ranked in the 27th percentile

MainStay High Yield Municipal Bond Fund (Since Inception on March 31, 2010 – June 30, 2012)•Class A shares Net Return: 12.36%•Barclays Municipal Bond Index 6.83%•Lipper High Yield Municipal Debt Peer Average 8.55%•Class A shares ranked in the 2nd percentile since inception, Class I shares ranked in the top percentile

Net returns include expenses but do not factor in sales charges. If sales charges are factored in, the returns shown would be lower. For the period ended 6/30/12 Lipper absolute ranks for MainStay Tax Free Bond Fund Class A shares were 64, 57, 87, and 94 for the one-, three-, five-, and 10-year periods from among 236, 212, 183, and 150 General Municipal Debt funds, respectively. For the period ended 6/30/12 Lipper absolute rank for MainStay Tax Free Bond Fund Class A shares from July 1, 2009 – June 30, 2012 was 57 from among 212 General Municipal Debt funds.For the period ended 6/30/12 Lipper absolute rank for MainStay High Yield Municipal Bond Fund Class A shares was 2 for the one-year period from among 113 High Yield Municipal Debt funds. Class I shares are generally available only to corporate and institutional investors.Past performance is no guarantee of future results.Lipper Inc. is an independent fund performance monitor. Results are based on total returns with capital gain and dividend distributions reinvested and do not reflect any deduction of sales charges. The highest (most favorable) percentile rank is 1 and the lowest (least favorable) percentile rank is 100. The top performing fund in a category will always receive a rank of 1. Percentile ranks within categories are most useful in those categories that have a large number of funds. The Lipper General Municipal Debt peer average is the average return of funds that invest primarily in municipal debt issues in the top four credit ratings. Lipper High Yield Municipal Debt peer average is the average return of funds that invest at least 50% of their assets in lower-rated municipal debt issues. The Barclays Municipal Bond Index is an unmanaged index that includes approximately 15,000 municipal bonds, rated Baa or better by Moody's, with a maturity of at least two years. An investment cannot be made directly into an index.


Annualized ReturnsAs of June 30, 2012

Not all funds or share classes are available at all firms. Please check with your firm's home office for details. 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 figures reflect a contractual fee waiver and/or expense limitation agreement in effect through 2/28/13, without which total returns may have been lower. This agreement shall renew automatically for one-year terms unless written notice is provided prior to the start of the next term or upon approval of the Board. For performance information current to the most recent month-end, please visit our web site at mainstayinvestments.com.Gross Expenses (total annual operating expenses) are: Class A: 0.89%, Investor Class: 0.98%, Class B: 1.23%, Class C: 1.23%, Class I: 0.64%.Net Expenses (total annual operating expenses minus waivers and/or reimbursements) are: Class A: 0.82%, Investor Class: 0.91%, Class B: 1.16%, Class C: 1.16%, Class I: 0.57%.

Average annual total returns include the change in share price and reinvestment of dividends and capital gain distributions. Performance for Class A and C shares respectively, includes the historical performance of Class B shares from inception (5/1/86) through 12/31/94 for Class A and through 8/31/98 for Class C, adjusted to reflect the applicable sales charge (or CDSC) and fees and expenses for such shares. Performance for Investor Class shares includes the historical performance of Class A shares from Fund inception (5/1/86) through 2/27/08, adjusted to reflect the applicable fees and expenses for such shares. Class I shares are generally available only to corporate and institutional investors.Effective 7/1/09, John Loffredo and Robert DiMella were appointed as portfolio managers of MainStay Tax Free Bond Fund. The Fund's investment objective and principal investment strategies remain unchanged, however, the Fund's primary benchmark index was changed from the Barclays 3-15 Year Blended Municipal Bond Index to the Barclays Municipal Bond Index because it is believed to be more reflective of the Fund's investment style.

Class A Investor Class Class B Class C Class I

First Offered 1/3/95 2/28/08 5/1/86 9/1/98 12/18/09

1 Year 7.48% 7.36% 7.07% 11.06% 12.83%

Since Inception 5.31 5.29 5.04 5.04 5.51

5 Years 4.10 4.01 4.36 4.71 5.28

10 Years 3.76 3.72 3.93 3.94 4.48

MainStay Tax Free Bond FundAnnualized Total Returns for period ended 6/30/12

(with maximum sales charges)


Max. Sales Charge 4.5% load 4.5% load 5% CDSC 1% CDSC no-load


Annualized ReturnsAs of June 30, 2012


First Offered 3/31/10 3/31/10 3/31/10 3/31/10

1 Year 12.17% 12.16% 15.59% 17.82%

Since Inception 9.81% 9.71% 11.17% 12.33%

5 Years - - - -

10 Years - - - -

MainStay High Yield Municipal Bond FundAnnualized Total Returns for period ended 6/30/12

(with maximum sales charges)

Class A Investor Class Class C Class I

Not all share classes are available at all firms. Please check with your firm's home office for details.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 figures reflect a contractual fee waiver and/or expense limitation agreement in effect through 2/28/13, without which total returns may have been lower. This agreement shall renew automatically for one-year terms unless written notice is provided prior to the start of the next term or upon approval of the Board. For performance information current to the most recent month-end, please visit our web site at mainstayinvestments.com.Gross Expenses (total annual operating expenses) are: Class A: 1.09%, Investor Class: 1.14%, Class C: 1.89%, Class I: 0.84%.Net Expenses (total annual operating expenses minus waivers and/or reimbursements) are: Class A: 0.90%, Investor Class: 0.95%, Class C: 1.70%, Class I: 0.65%.

Average annual total returns include the change in share price and reinvestment of dividends and capital gain distributions. Class I shares are generally available only to corporate and institutional investors.

Max. Sales Charge 4.5% load 4.5% load 1% CDSC no-load

About Risk


Before You Invest

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

MainStay Tax Free Bond Fund

A portion of the Fund’s income may be subject to state and local taxes or the alternative minimum tax. 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. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise.

MainStay New York Tax Free Opportunities Fund

A portion of the Fund’s income may be subject to state and local taxes or the alternative minimum tax. Income from municipal bonds held by the Fund could be declared taxable because of unfavorable changes in tax law, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. 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. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise.

MainStay High Yield Municipal Bond Fund

A portion of the Fund’s income may be subject to state and local taxes or the alternative minimum tax. 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. 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. Funds that invest in bonds are subject to interest-rate risk and can lose principal value when interest rates rise.

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.


Index Definitions/Disclosure

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 arecommendation of any particular security, strategy or investment product. Any forward looking statements speak only as of the date they are made, and MainStay Investments 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. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of MainStay Investments. (c) 2012, MainStay Investments.

There is no assurance that any forecasts, estimates or opinions expressed in this material will be realized.

Barclays Municipal Bond Index which is a rules-based, market-value-weighted index engineered for the long-term tax- exempt bond market. The index is composed of approximately 60% revenue bonds and 40% state government obligations.Barclays Municipal High Yield Bond Index is an unmanaged index made up of bonds that are non-investment grade, unrated, or rated below Ba1 by Moody's Investors Service with a remaining maturity of at least one year.BAA Municipal Index and AAA Municipal Index are subsets of the Barclays Municipal Bond Index. An investment cannot be made directly into an index.Barclays Managed Money Municipal Short Term Index is a rules-based, market-value weighted index comprised of publicly traded municipal bonds that cover the U.S. dollar denominated short term tax exempt bond market, including state and local general obligation bonds, revenue bonds, insured bonds, and pre-refunded bonds. This index covers municipal bonds with a 1-10 year maturity and a duration of approximately five years.

An investment cannot be made directly into an index. Past performance is not indicative of future results.

Credit Ratings: AAA Credit ratings apply to the underlying debt securities and are rated by an independent rating agency such as Standard & Poor’s (S&P), Moody’s, and/or Fitch. S&P rates borrowers on a scale from AAA to D. AAA through BBB represent investment grade, while BB through D represent non-investment grade. Moody’s rates borrowers on a scale from Aaa through C. Aaa through Baa3 represent investment grade, while Ba1 through C represent non-investment grade. Fitch rates borrowers on a scale from AAA through D. AAA through BBB represent investment grade, while BB through D represent noninvestment grade.

20

Please ask your clients to consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus or summary prospectus contains this and other information about the fund and can be obtained by contacting you, the financial professional. Instruct your clients to read the prospectus or summary prospectus carefully before investing.

mainstayinvestments.com

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. The MainStay Funds are managed by New York Life Investment Management LLC, an indirect subsidiary of New York Life Insurance Company, and distributed through NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, NJ 07054, a wholly owned subsidiary of New York Life Insurance Company. NYLIFE Distributors LLC is a Member of FINRA/SIPC.

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

For More Information


http://www.mainstayfunds.com/

for registered representative use only. not for use with the general public. opportunities in the...

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