N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number 811-04550

THE MAINSTAY FUNDS

(Exact name of Registrant as specified in charter)

51 Madison Avenue, New York, NY 10010

(Address of principal executive offices) (Zip code)

J. Kevin Gao, Esq.

169 Lackawanna Avenue

Parsippany, New Jersey 07054

(Name and address of agent for service)

Registrant’s telephone number, including area code: (212) 576-7000

Date of fiscal year end: October 31

Date of reporting period: October 31, 2013

FORM N-CSR

Item 1. Reports to Stockholders.

MainStay Unconstrained Bond Fund

Message from the President and Annual Report

October 31, 2013

This Page Intentionally Left Blank

Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	26
Notes to Financial Statements	32
Report of Independent Registered Public Accounting Firm	42
Federal Income Tax Information	43
Proxy Voting Policies and Procedures and Proxy Voting Record	43
Shareholder Reports and Quarterly Portfolio Disclosure	43
Board Members and Officers	44

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		0.05 4.76	%		10.48 11.50	%		5.72 6.21	%		1.52 1.52	%
Class A Shares	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		0.23 4.96			10.70 11.72			5.82 6.31			1.33 1.33
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		–0.95 4.05			10.41 10.68			5.42 5.42			2.27 2.27
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		3.05 4.05			10.66 10.66			5.41 5.41			2.27 2.27
Class I Shares4	No Sales Charge			5.32			12.00			6.64			1.08

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on January 2, 2004, include the historical performance of Class A shares through January 1, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Barclays U.S. Aggregate Bond Index5		–1.08	%		6.09	%		4.78	%
Bank of America Merrill Lynch U.S. Dollar 3-Month LIBOR Constant Maturity Index6		0.30			0.62			2.14
Morningstar Nontraditional Bond Category Average7		1.23			7.84			4.46

5. The Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasurys, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. The Barclays U.S. Aggregate Bond Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

6. The Bank of America Merrill Lynch U.S. Dollar 3-Month LIBOR Constant Maturity Index represents the London InterBank Offered Rate (“LIBOR”) with

a constant 3-month average maturity. LIBOR is a composite of interest rates at which banks borrow from one another in the London market, and it is a widely used benchmark for short-term interest rates. An investment cannot be made directly in an index.

7. The Morningstar nontraditional bond category average contains funds that pursue strategies divergent in one or more ways from conventional practice in the broader bond-fund universe. Morningstar category averages are equal-weighted returns based on constituents of the category at the end of the period.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Unconstrained Bond Fund

Cost in Dollars of a $1,000 Investment in MainStay Unconstrained Bond Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	999.10	$	6.25	$	1,019.00	$	6.31
Class A Shares	$	1,000.00	$	1,000.90	$	5.55	$	1,019.70	$	5.60
Class B Shares	$	1,000.00	$	995.50	$	10.01	$	1,015.20	$	10.11
Class C Shares	$	1,000.00	$	995.40	$	10.01	$	1,015.20	$	10.11
Class I Shares	$	1,000.00	$	1,002.20	$	4.29	$	1,020.90	$	4.33

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.24% for Investor Class, 1.10% for Class A, 1.99% for Class B and Class C and 0.85% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

Corporate Bonds	70.3	%
Short-Term Investment	11.4
Loan Assignments & Participations	6.9
Other Assets, Less Liabilities	3.5
Convertible Bonds	3.2
Foreign Bonds	2.0
Asset-Backed Securities	1.1
U.S. Government & Federal Agencies	1.0

Convertible Preferred Stocks	0.9	%
Common Stocks	0.6
Foreign Government Bonds	0.4
Warrants	0.2
Mortgage-Backed Securities	0.1
Futures Contracts Short	–0.6
Corporate Bond Sold Short	–1.0
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

Top Ten Holdings or Issuers Held as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Targa Resources Partners, L.P. / Targa Resources Partners Finance Corp., 4.25%–7.875%, due 10/15/18–11/15/23

2. Federal Home Loan Mortgage Corporation, 0.50%, due 9/14/15

3. General Motors Co.

4. First Data Corp., 7.375%–10.625%, due 6/15/19–6/15/21

5. Caesars Entertainment Operating Co., Inc., 4.488%–9.00%, due 1/26/18–2/15/20

  6. American International Group, Inc., 4.875%–5.75%, due 3/15/67

  7. Bank of America Corp.

  8. Freescale Semiconductor, Inc., 5.00%–9.25%, due 4/15/18–1/15/22

  9. Clear Channel Communications, Inc., 3.818%–9.00%, due 1/29/16–3/1/21

10. Liberty Mutual Group, Inc., 4.25%–10.75%, due 6/15/23–6/15/88

8 MainStay Unconstrained Bond Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Dan Roberts, PhD, Michael Kimble, CFA, Louis N. Cohen, CFA, and Taylor Wagenseil of MacKay Shields LLC, the Fund’s Subadvisor.

How did MainStay Unconstrained Bond Fund perform relative to its benchmarks and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Unconstrained Bond Fund returned 4.76% for Investor Class shares, 4.96% for Class A shares and 4.05% for Class B shares and Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund’s Class I shares returned 5.32%. For the 12 months ended October 31, 2013, all share classes outperformed the –1.08% return of the Barclays U.S. Aggregate Bond Index,¹ which is the Fund’s broad-based securities-market index; the 0.30% return of the Bank of America Merrill Lynch U.S. Dollar 3-Month LIBOR Constant Maturity Index,¹ which is the Fund’s secondary benchmark; and the 1.23% return of the Morningstar Nontraditional Bond Category Average,² which is an additional benchmark for the Fund. See page 5 for Fund returns with sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund’s outperformance relative to the Barclays U.S. Aggregate Bond Index was primarily driven by an overweight position in spread product,³ specifically high-yield corporate bonds. In light of a continuing low interest-rate environment, investors continued to hunger for yield and return, moving them to invest in riskier asset classes. High-yield corporate bonds and equities benefited from this demand. Stocks generally rose, and companies did not disappoint with their earnings. During the reporting period, the durability of corporate earnings had a positive influence on corporate-bond performance across the ratings spectrum.

Lower-risk assets, such as U.S. Treasury securities and agency mortgages, underperformed spread product during the reporting period. Fortunately, the Fund’s underweight positions in these asset classes helped the Fund’s performance relative to the Barclays U.S. Aggregate Bond Index. Additionally, we used U.S. Treasury futures to further reduce the Fund’s already short duration relative to that of the Barclays U.S. Aggregate Bond Index. This hedge helped the Fund’s performance as interest rates rose during the reporting period.

During the reporting period, how was the Fund’s performance materially affected by investments in derivatives?

During the reporting period, the Fund used U.S. Treasury futures to hedge the duration. The Fund’s short position in these contracts, which had a negative rate of return, was accretive to the overall Fund’s performance.

What was the Fund’s duration⁴ strategy during the reporting period?

The Fund’s duration was shorter than that of the Barclays U.S. Aggregate Bond Index, in large part because of the Fund’s overweight position in high-yield corporate bonds. These bonds tend to have shorter durations than investment-grade corporate bonds. They also tend to have a lower correlation to U.S. Treasury securities, so they have a lower sensitivity to interest rates but are not immune to interest-rate changes. To further insulate the Fund from a potential rise in interest rates, we increased the Fund’s exposure to a short position in U.S. Treasury futures. This position shortened the Fund’s already short duration relative to the Barclays U.S. Aggregate Bond Index. Exposure to lower-duration high-yield corporate bonds had a positive impact on the Fund’s performance, while exposure to U.S. Treasury futures had a minimal impact on performance during the reporting period.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

There were many macro factors to consider during the reporting period, including the Federal Reserve’s suggestion that it might taper its bond purchases, and the Fund experienced some periods of volatility. Nevertheless, we did not make any material changes to the Fund’s positioning. Since the Fund’s inception, we have judged the Federal Reserve’s accommodative monetary policy, along with improving economic data, to be a positive for spread products such as high-yield corporate bonds. In addition, improving profitability signaled that many corporations were doing more with less: less leverage, less short-term debt and smaller funding gaps. In our opinion, improving credit fundamentals would support narrower spreads—or less compensa- tion for assuming credit risk—alongside a favorable balance of supply and demand for corporate debt. For these reasons, we have maintained a risk profile that is relatively higher than that of the Barclays U.S. Aggregate Bond Index, specifically through the Fund’s relative overweight position in high-yield corporate bonds.

1. See footnote on page 6 for more information on this index.

2. See footnote on page 6 for more information on the Morningstar Nontraditional Bond Category Average.

3. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time. The term “spread product” may refer to securities or asset classes that typically trade at a spread to comparable U.S. Treasury securities.

4. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity.

mainstayinvestments.com 9

During the reporting period, which market segments were the strongest contributors to the Fund’s performance and which market segments were particu- larly weak?

An overweight position in high-yield corporate bonds was the driving force behind the Fund’s outperformance of the Barclays U.S. Aggregate Bond Index. (The Index consists entirely of investment-grade bonds.) Within the high-yield corporate bond sector, holdings in industries that tend to be more cyclical—such as financials, gaming, homebuilders, building materials and steel—were among the Fund’s strongest performers. To a lesser degree, positions in convertible bonds and bank loans were positive contributors to the Fund’s relative performance. Though the Fund’s position in investment-grade credit performed well relative to the Barclays U.S. Aggregate Bond Index, investment-grade corporate bonds underperformed high-yield corporate bonds during the reporting period.

With an overweight position in high-yield corporate bonds came underweight positions in U.S. Treasury securities and agency mortgages. These underweight sector positions contributed positively to the Fund’s relative performance, as U.S. Treasury securities and agency mortgages posted negative absolute returns during the reporting period.

Did the Fund make any significant purchases or sales during the reporting period?

While there were no significant changes in the Fund’s overall positioning during the reporting period, we added some positions and eliminated others. The Fund purchased bonds of U.S. Airways Group, Valeant Pharmaceuticals International and Sprint. We bought bonds of U.S. Airways Group as we believed that the fundamental landscape for airlines had improved. With consolidation and more revenue from ancillary services, airlines have been able to book relatively solid results. The Valeant Pharmaceuticals International bonds were issued to fund the company’s acquisition of Bausch and Lomb. The Sprint bonds were issued to fund a comprehensive capital-expenditure program, as the telecommunications company was being acquired

by Softbank, an investment-grade company. We believed that the bonds from Valeant Pharmaceuticals International and Sprint were issued at attractive levels.

During the reporting period, the Fund sold positions in oil & gas exploration & production company Plains Exploration & Production and telecommunications equipment company Lucent Technologies. We sold the Fund’s Plains Exploration & Production bonds after the company was upgraded to investment-grade following its acquisition by Freeport-McMoRan Copper & Gold. The bonds of Lucent Technologies rebounded during the reporting period, as the company refinanced debt and produced better results. The bonds, however, rose to a level that in our view made them an unattractive holding given their long duration and relatively tight spread.

How did the Fund’s sector weightings change during the reporting period?

Aside from the purchases and sales already mentioned, we made no significant changes to the Fund’s sector weightings relative to the Barclays U.S. Aggregate Bond Index. Instead, we maintained the Fund’s positioning as we sought to take advantage of a market where we believed credit spreads would continue to tighten. Any modest changes in sector weightings were driven by individual security selection rather than sector rotation.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund maintained its emphasis on spread product, with high-yield corporate bonds remaining the most substantially overweight sector relative to the Barclays U.S. Aggregate Bond Index. As of the same date, the Fund held underweight positions relative to the Index in sectors that are more rate-sensitive, such as U.S. Treasury securities and agency mortgage-backed securities. As of October 31, 2013, the Fund had a shorter duration than the Barclays U.S. Aggregate Bond Index.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Unconstrained Bond Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Long-Term Bonds 85.0%† Asset-Backed Securities 1.1%
Airlines 0.2%
Continental Airlines, Inc.
Series 2004-ERJ1, Class A 9.558%, due 3/1/21	$	93,101	$	103,342
Northwest Airlines, Inc. Series 2007-1, Class A 7.027%, due 5/1/21		345,012		376,926
United Air Lines, Inc. Series 2009-2, Class A 9.75%, due 7/15/18		536,983		616,188
				1,096,456
Home Equity 0.7%
Carrington Mortgage Loan Trust Series 2006-NC4, Class A5 0.23%, due 10/25/36 (a)(b)		510,767		428,384
Citigroup Mortgage Loan Trust Series 2007-AHL2, Class A3A 0.24%, due 5/25/37 (a)(b)		294,121		222,861
Equifirst Loan Securitization Trust Series 2007-1, Class A2A 0.23%, due 4/25/37 (a)(b)		94,228		92,264
First NLC Trust Series 2007-1, Class A1 0.24%, due 8/25/37 (a)(b)(c)		454,905		228,119
GSAA Home Equity Trust Series 2006-14, Class A1 0.22%, due 9/25/36 (a)(b)		958,012		465,541
Home Equity Loan Trust Series 2007-FRE1, Class 2AV1 0.30%, due 4/25/37 (a)(b)		235,638		218,814
HSI Asset Securitization Corp. Trust Series 2007-NC1, Class A1 0.27%, due 4/25/37 (a)(b)		374,729		335,103
JP Morgan Mortgage Acquisition Corp. Series 2007-HE1, Class AF1 0.27%, due 3/25/47 (a)(b)		269,470		191,162
Master Asset Backed Securities Trust Series 2006-HE4, Class A1 0.22%, due 11/25/36 (a)(b)		119,383		49,639
Merrill Lynch Mortgage Investors Trust Series 2007-MLN1, Class A2A 0.28%, due 3/25/37 (a)(b)		696,043		472,349
Morgan Stanley ABS Capital I, Inc.
Series 2006-HE6, Class A2B 0.27%, due 9/25/36 (a)(b)		394,958		230,743
Series 2006-HE8, Class A2B 0.27%, due 10/25/36 (a)(b)		213,448		113,275

	Principal Amount		Value
Home Equity (continued)
Morgan Stanley ABS Capital I, Inc. (continued)
Series 2007-HE4, Class A2A 0.28%, due 2/25/37 (a)(b)	$	107,566	$	47,090
Series 2007-NC2, Class A2FP 0.32%, due 2/25/37 (a)(b)		422,110		227,011
Renaissance Home Equity Loan Trust Series 2007-2, Class AF1 5.893%, due 6/25/37 (b)(d)		910,794		506,474
Securitized Asset Backed Receivables LLC Trust Series 2007-BR4, Class A2A 0.26%, due 5/25/37 (a)(b)		527,852		295,757
Soundview Home Equity Loan Trust
Series 2007-OPT1, Class 2A1 0.25%, due 6/25/37 (a)(b)		457,592		339,859
Series 2006-EQ2, Class A2 0.28%, due 1/25/37 (a)(b)		296,395		182,568
Specialty Underwriting & Residential Finance Trust Series 2006-BC4, Class A2B 0.28%, due 9/25/37 (a)(b)		1,230,652		655,567
				5,302,580
Student Loans 0.2%
Keycorp Student Loan Trust Series 2000-A, Class A2 0.582%, due 5/25/29 (a)		1,997,002		1,834,835
Total Asset-Backed Securities (Cost $9,427,549)				8,233,871
Convertible Bonds 3.2%
Airlines 0.2%
Airtran Holdings, Inc. 5.25%, due 11/1/16		647,000		1,044,905
United Airlines, Inc. 4.50%, due 1/15/15		356,000		662,382
				1,707,287
Biotechnology 0.2%
Cubist Pharmaceuticals, Inc. 1.125%, due 9/1/18 (c)		278,000		301,283
Gilead Sciences, Inc. 1.00%, due 5/1/14		307,000		968,393
				1,269,676
Coal 0.0%‡
Alpha Natural Resources, Inc. 2.375%, due 4/15/15		246,000		231,855

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings or issuers held, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Convertible Bonds (continued)
Commercial Services 0.1%
Hertz Global Holdings, Inc. 5.25%, due 6/1/14	$	95,000	$	264,991
ServiceSource International, Inc. 1.50%, due 8/1/18 (c)		667,000		667,000
				931,991
Computers 0.1%
EMC Corp. 1.75%, due 12/1/13		411,000		621,383
Distribution & Wholesale 0.1%
WESCO International, Inc. 6.00%, due 9/15/29		178,000		541,120
Entertainment 0.1%
International Game Technology 3.25%, due 5/1/14		470,000		519,938
Environmental Controls 0.1%
Covanta Holding Corp. 3.25%, due 6/1/14		603,000		684,028
Health Care—Products 0.2%
Teleflex, Inc. 3.875%, due 8/1/17		788,000		1,228,295
Health Care—Services 0.0%‡
WellPoint, Inc. 2.75%, due 10/15/42 (c)		276,000		359,835
Home Builders 0.0%‡
Ryland Group, Inc. (The) 0.25%, due 6/1/19		117,000		108,810
Household Products & Wares 0.1%
Jarden Corp. 1.875%, due 9/15/18 (c)		534,000		708,885
Insurance 0.0%‡
Radian Group, Inc. 2.25%, due 3/1/19		140,000		210,875
Internet 0.2%
At Home Corp. 4.75%, due 12/31/49 (e)(f)(g)(h)		504,238		50
Move, Inc. 2.75%, due 9/1/18 (c)		113,000		132,069

	Principal Amount		Value
Internet (continued)
priceline.com, Inc.
0.35%, due 6/15/20 (c)	$	316,000	$	346,020
1.00%, due 3/15/18		532,000		707,227
Shutterfly, Inc. 0.25%, due 5/15/18 (c)		261,000		278,781
				1,464,147
Iron & Steel 0.1%
Allegheny Technologies, Inc. 4.25%, due 6/1/14		275,000		285,141
Steel Dynamics, Inc. 5.125%, due 6/15/14		36,000		40,747
United States Steel Corp. 4.00%, due 5/15/14		190,000		198,906
				524,794
Lodging 0.1%
MGM Resorts International 4.25%, due 4/15/15		317,000		389,118
Machinery—Diversified 0.1%
Chart Industries, Inc. 2.00%, due 8/1/18		560,000		939,400
Media 0.0%‡
Liberty Interactive LLC 3.50%, due 1/15/31		223,000		117,075
Metal Fabricate & Hardware 0.1%
RTI International Metals, Inc. 1.625%, due 10/15/19		521,000		562,029
Mining 0.0%‡
Alcoa, Inc. 5.25%, due 3/15/14		76,000		110,200
Miscellaneous—Manufacturing 0.1%
Danaher Corp. (zero coupon), due 1/22/21		484,000		1,014,887
Oil & Gas 0.1%
Alon USA Energy, Inc. 3.00%, due 9/15/18 (c)		190,000		204,131
Cobalt International Energy, Inc. 2.625%, due 12/1/19		268,000		275,203
				479,334
Oil & Gas Services 0.2%
JPMorgan Chase & Co. (Convertible into Schlumberger, Ltd.) (zero coupon), due 5/5/15 (c)(i)		709,000		1,161,980

12 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Convertible Bonds (continued)
Oil & Gas Services (continued)
SEACOR Holdings, Inc. 2.50%, due 12/15/27 (c)	$	105,000	$	135,516
Subsea 7 S.A.
1.00%, due 10/5/17		200,000		209,540
3.50%, due 10/13/14		200,000		277,600
				1,784,636
Pharmaceuticals 0.2%
Biomarin Pharmaceutical, Inc. 0.75%, due 10/15/18		311,000		323,634
Salix Pharmaceuticals, Ltd. 1.50%, due 3/15/19		489,000		642,730
Teva Pharmaceutical Finance Co. LLC 0.25%, due 2/1/26		515,000		537,853
				1,504,217
Real Estate Investment Trusts 0.1%
Host Hotels & Resorts, L.P. 2.50%, due 10/15/29 (c)		430,000		626,725
SL Green Operating Partnership, L.P. 3.00%, due 10/15/17 (c)		454,000		578,566
				1,205,291
Semiconductors 0.2%
Intel Corp. 3.25%, due 8/1/39		386,000		505,662
Microchip Technology, Inc. 2.125%, due 12/15/37		99,000		164,835
Novellus Systems, Inc. 2.625%, due 5/15/41		381,000		636,508
Rambus, Inc. 1.125%, due 8/15/18 (c)		119,000		119,446
Xilinx, Inc. 2.625%, due 6/15/17		202,000		322,190
				1,748,641
Software 0.4%
Bottomline Technologies, Inc. 1.50%, due 12/1/17		339,000		420,572
Cornerstone OnDemand, Inc. 1.50%, due 7/1/18 (c)		578,000		660,004
Medidata Solutions, Inc. 1.00%, due 8/1/18 (c)		364,000		442,942
NetSuite, Inc. 0.25%, due 6/1/18 (c)		344,000		380,550
Nuance Communications, Inc. 2.75%, due 11/1/31		611,000		599,544
Salesforce.com, Inc. 0.25%, due 4/1/18 (c)		307,000		335,781
Workday, Inc. 0.75%, due 7/15/18 (c)		166,000		188,514
				3,027,907

	Principal Amount		Value
Telecommunications 0.1%
Ciena Corp. 4.00%, due 12/15/20	$	245,000	$	356,322
JDS Uniphase Corp. 0.625%, due 8/15/33 (c)		459,000		483,958
				840,280
Transportation 0.0%‡
XPO Logistics, Inc. 4.50%, due 10/1/17		170,000		241,931
Total Convertible Bonds (Cost $22,206,767)				25,077,865
Corporate Bonds 70.3%
Advertising 0.4%
Lamar Media Corp. 5.00%, due 5/1/23		3,525,000		3,357,562
Aerospace & Defense 1.5%
Alliant Techsystems, Inc. 6.875%, due 9/15/20		3,300,000		3,522,750
B/E Aerospace, Inc. 5.25%, due 4/1/22		3,250,000		3,339,375
Ducommun, Inc. 9.75%, due 7/15/18		782,000		873,885
TransDigm, Inc.
7.50%, due 7/15/21		1,250,000		1,362,500
7.75%, due 12/15/18		815,000		876,125
Triumph Group, Inc. 8.625%, due 7/15/18		1,305,000		1,415,925
				11,390,560
Airlines 0.8%
Continental Airlines, Inc.
7.875%, due 1/2/20		474,962		505,834
9.798%, due 10/1/22		637,725		711,064
Delta Air Lines, Inc.
Series 2011-1 Class A Pass Through Trust 5.30%, due 10/15/20		1,243,310		1,336,558
Series 2010-1 Class A Pass Through Trust 6.20%, due 1/2/20		340,494		373,692
Series 2010-2 Class B Pass Through Trust 6.75%, due 5/23/17		612,000		645,660
U.S. Airways, Inc. Class A Series 2012-1 Pass Through Trust 5.90%, due 4/1/26		2,776,703		2,915,539
				6,488,347

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Auto Manufacturers 2.0%
Chrysler Group LLC / CG Co-Issuer, Inc. 8.25%, due 6/15/21	$	4,590,000	$	5,192,437
Ford Motor Co.
6.625%, due 10/1/28		229,000		262,716
8.90%, due 1/15/32		3,009,000		3,888,910
¨General Motors Co. 3.50%, due 10/2/18 (c)		3,000,000		3,060,000
Navistar International Corp. 8.25%, due 11/1/21		2,931,000		2,993,284
				15,397,347
Auto Parts & Equipment 1.6%
Dana Holding Corp. 5.375%, due 9/15/21		4,750,000		4,856,875
Goodyear Tire & Rubber Co. (The) 6.50%, due 3/1/21		3,325,000		3,516,187
Schaeffler Finance B.V. 4.75%, due 5/15/21 (c)		3,475,000		3,466,313
Tomkins LLC / Tomkins, Inc. 9.00%, due 10/1/18		440,000		481,800
				12,321,175
Banks 7.0%
AgriBank FCB 9.125%, due 7/15/19		500,000		652,427
Banco de Bogota S.A. 5.375%, due 2/19/23 (c)		2,900,000		2,871,000
Banco do Brasil S.A. 5.875%, due 1/19/23 (c)		2,900,000		2,871,000
Banco Santander Mexico S.A. 4.125%, due 11/9/22 (c)		2,615,000		2,500,594
Bangkok Bank PCL 4.80%, due 10/18/20 (c)		250,000		264,467
¨Bank of America Corp.
3.30%, due 1/11/23		510,000		489,476
5.625%, due 7/1/20		3,590,000		4,114,172
7.625%, due 6/1/19		420,000		523,599
Bank of America NA 6.00%, due 10/15/36		2,828,000		3,259,570
Barclays Bank PLC 5.14%, due 10/14/20 (j)		2,037,000		2,173,530
BBVA Bancomer S.A. 6.75%, due 9/30/22 (c)		2,150,000		2,332,750
CIT Group, Inc.
4.25%, due 8/15/17		330,000		346,087
5.00%, due 5/15/17		2,003,000		2,153,225
Discover Bank 7.00%, due 4/15/20		2,445,000		2,886,398
Emigrant Bancorp, Inc. 6.25%, due 6/15/14 (c)		398,000		401,980

	Principal Amount		Value
Banks (continued)
Fifth Third Capital Trust IV 6.50%, due 4/15/67 (a)	$	3,350,000	$	3,308,125
Goldman Sachs Group, Inc. (The) 3.625%, due 1/22/23		3,327,000		3,245,705
JPMorgan Chase & Co. 7.90%, due 4/29/49 (a)		3,650,000		4,024,125
LBG Capital No.1 PLC 8.00%, due 12/29/49 (a)(c)		4,726,000		5,021,375
Mellon Capital III 6.369%, due 9/5/66 (a)	£	2,950,000		4,715,838
Mizuho Capital Investment, Ltd. 14.95%, due 12/29/49 (a)(c)	$	1,092,000		1,179,382
Morgan Stanley 4.875%, due 11/1/22		1,287,000		1,324,914
RBS Citizens Financial Group, Inc. 4.15%, due 9/28/22 (c)		2,270,000		2,229,605
Royal Bank of Scotland Group PLC 6.40%, due 10/21/19		856,000		993,449
				53,882,793
Beverages 0.3%
Embotelladora Andina S.A. 5.00%, due 10/1/23 (c)		1,980,000		2,035,486
Building Materials 1.1%
Associated Materials LLC / AMH New Finance, Inc. 9.125%, due 11/1/17		1,223,000		1,304,024
Cemex Espana Luxembourg 9.25%, due 5/12/20 (c)		2,460,000		2,681,400
Masco Corp. 7.125%, due 3/15/20		2,250,000		2,565,000
Texas Industries, Inc. 9.25%, due 8/15/20		840,000		928,200
USG Corp.
6.30%, due 11/15/16		615,000		658,050
9.75%, due 1/15/18		363,000		426,525
				8,563,199
Chemicals 1.1%
Dow Chemical Co. (The) 8.55%, due 5/15/19		1,084,000		1,403,013
Hexion U.S. Finance Corp. / Hexion Nova Scotia Finance ULC 8.875%, due 2/1/18		1,223,000		1,259,690
Huntsman International LLC 8.625%, due 3/15/21		3,568,000		4,005,080
Rockwood Specialties Group, Inc. 4.625%, due 10/15/20		1,753,000		1,801,207
				8,468,990

14 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Coal 0.7%
Alpha Natural Resources, Inc. 6.00%, due 6/1/19 (j)	$	1,560,000	$	1,341,600
Arch Coal, Inc. 7.25%, due 10/1/20		792,000		602,910
Cloud Peak Energy Resources LLC / Cloud Peak Energy Finance Corp. 8.25%, due 12/15/17 (j)		2,162,000		2,270,100
Peabody Energy Corp. 7.375%, due 11/1/16		1,025,000		1,153,125
				5,367,735
Commercial Services 2.0%
Avis Budget Car Rental LLC / Avis Budget Finance, Inc.
5.50%, due 4/1/23		2,122,000		2,079,560
8.25%, due 1/15/19		1,223,000		1,333,070
Hertz Corp. (The) 7.375%, due 1/15/21		1,630,000		1,809,300
Iron Mountain, Inc.
6.00%, due 8/15/23		2,600,000		2,645,500
7.75%, due 10/1/19		431,000		478,949
8.375%, due 8/15/21		1,293,000		1,396,440
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares)
6.50%, due 8/1/39 (e)(g)(h)(k)		5,000		74
9.75%, due 1/15/49 (e)(g)(h)(k)		160,000		2,352
Rent-A-Center, Inc. 4.75%, due 5/1/21 (c)		3,800,000		3,562,500
United Rentals North America, Inc. 8.375%, due 9/15/20		1,849,000		2,066,257
				15,374,002
Computers 0.9%
NCR Corp. 5.00%, due 7/15/22		3,815,000		3,757,775
SunGard Data Systems, Inc.
6.625%, due 11/1/19		1,050,000		1,097,250
7.625%, due 11/15/20		1,895,000		2,063,181
				6,918,206
Cosmetics & Personal Care 0.4%
Albea Beauty Holdings S.A. 8.375%, due 11/1/19 (c)		2,635,000		2,773,337
Diversified Financial Services 0.8%
Ford Holdings LLC 9.30%, due 3/1/30		127,000		175,708
GE Capital Trust II 5.50%, due 9/15/67 (a)	€	2,100,000		2,997,316
GE Capital Trust IV Series Reg S 4.625%, due 9/15/66 (a)		1,223,000		1,677,133

	Principal Amount		Value
Diversified Financial Services (continued)
General Electric Capital Corp. Series Reg S 6.50%, due 9/15/67 (a)	£	815,000	$	1,396,937
				6,247,094
Electric 1.1%
Abu Dhabi National Energy Co. 3.625%, due 1/12/23 (c)	$	2,500,000		2,350,000
CMS Energy Corp. 8.75%, due 6/15/19		533,000		687,262
Great Plains Energy, Inc.
4.85%, due 6/1/21		750,000		801,719
5.292%, due 6/15/22 (d)		663,000		723,677
NRG Energy, Inc. 8.50%, due 6/15/19		1,970,000		2,122,675
Puget Energy, Inc. 5.625%, due 7/15/22		905,000		976,297
Wisconsin Energy Corp. 6.25%, due 5/15/67 (a)		833,280		854,112
				8,515,742
Engineering & Construction 0.2%
MasTec, Inc. 4.875%, due 3/15/23		1,704,000		1,625,190
Entertainment 0.5%
Isle of Capri Casinos, Inc. 7.75%, due 3/15/19		1,174,000		1,259,115
Mohegan Tribal Gaming Authority 9.75%, due 9/1/21 (c)		2,377,000		2,561,218
United Artists Theatre Circuit, Inc. Series BA7 9.30%, due 7/1/15 (e)(g)		24,387		17,071
				3,837,404
Finance—Auto Loans 0.8%
Banque PSA Finance S.A. 5.75%, due 4/4/21 (c)		1,900,000		1,929,070
Ford Motor Credit Co. LLC
8.00%, due 12/15/16		22,000		26,133
8.125%, due 1/15/20		3,361,000		4,261,856
				6,217,059
Finance—Commercial 0.2%
Textron Financial Corp. 6.00%, due 2/15/67 (a)(c)		1,860,000		1,646,100
Finance—Consumer Loans 1.0%
HSBC Finance Capital Trust IX 5.911%, due 11/30/35 (a)(j)		4,575,000		4,720,851
SLM Corp.
4.75%, due 3/17/14	€	815,000		1,116,838
6.25%, due 1/25/16	$	408,000		444,210
8.00%, due 3/25/20		408,000		466,140

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Finance—Consumer Loans (continued)
Springleaf Finance Corp. 6.00%, due 6/1/20 (c)	$	1,000,000	$	985,000
				7,733,039
Finance—Credit Card 0.3%
American Express Co. 6.80%, due 9/1/66 (a)(j)		2,139,000		2,283,382
Finance—Investment Banker/Broker 0.2%
Jefferies Group LLC
5.125%, due 1/20/23		813,000		824,179
6.45%, due 6/8/27		1,100,000		1,146,937
				1,971,116
Finance—Other Services 0.4%
Icahn Enterprises, L.P. / Icahn Enterprises Finance Corp.
6.00%, due 8/1/20 (c)		1,200,000		1,230,000
7.75%, due 1/15/16 (j)		2,180,000		2,245,400
				3,475,400
Food 3.0%
ARAMARK Corp. 5.75%, due 3/15/20 (c)		4,250,000		4,451,875
Grupo Bimbo S.A.B. de C.V. 4.50%, due 1/25/22 (c)		2,504,000		2,556,802
JBS Finance II, Ltd. 8.25%, due 1/29/18 (c)		650,000		680,875
JBS USA LLC / JBS USA Finance, Inc. 8.25%, due 2/1/20 (c)		2,519,000		2,701,627
Kerry Group Financial Services 3.20%, due 4/9/23 (c)		2,795,000		2,611,696
Minerva Luxembourg S.A. 7.75%, due 1/31/23 (c)		2,500,000		2,425,000
Post Holdings, Inc. 7.375%, due 2/15/22 (c)		3,185,000		3,396,006
Smithfield Foods, Inc.
6.625%, due 8/15/22		845,000		889,363
7.75%, due 7/1/17		1,361,000		1,582,162
Virgolino de Oliveira Finance, Ltd. 11.75%, due 2/9/22 (c)		2,250,000		1,800,000
				23,095,406
Forest Products & Paper 0.7%
Domtar Corp. 10.75%, due 6/1/17		1,363,000		1,705,556
International Paper Co. 7.30%, due 11/15/39		693,000		864,955
MeadWestvaco Corp. 7.375%, due 9/1/19		1,800,000		2,165,348
Norske Skogindustrier A.S.A. 7.125%, due 10/15/33 (c)		815,000		391,200
				5,127,059

	Principal Amount		Value
Hand & Machine Tools 0.2%
Mcron Finance Sub LLC / Mcron Finance Corp. 8.375%, due 5/15/19 (c)	$	1,635,000	$	1,810,762
Health Care—Products 0.6%
Alere, Inc. 8.625%, due 10/1/18		1,323,000		1,437,109
Kinetic Concepts, Inc. / KCI U.S.A., Inc. 10.50%, due 11/1/18		2,825,000		3,185,187
				4,622,296
Health Care—Services 1.6%
CHS / Community Health Systems, Inc. 5.125%, due 8/15/18		4,000,000		4,160,000
DaVita HealthCare Partners, Inc. 5.75%, due 8/15/22		650,000		667,062
Fresenius Medical Care U.S. Finance, Inc. 6.50%, due 9/15/18 (c)		2,500,000		2,806,250
HCA, Inc.
5.875%, due 3/15/22		2,500,000		2,631,250
7.50%, due 2/15/22		2,000,000		2,247,500
				12,512,062
Home Builders 3.9%
Beazer Homes USA, Inc.
7.25%, due 2/1/23		1,000,000		965,000
8.125%, due 6/15/16 (j)		819,000		907,043
9.125%, due 6/15/18 (j)		1,700,000		1,814,750
D.R. Horton, Inc. 5.75%, due 8/15/23		4,250,000		4,409,375
K Hovnanian Enterprises, Inc. 7.25%, due 10/15/20 (c)		4,110,000		4,377,150
KB Home
7.25%, due 6/15/18		1,500,000		1,635,000
8.00%, due 3/15/20		2,250,000		2,475,000
Lennar Corp. 6.95%, due 6/1/18		204,000		227,970
MDC Holdings, Inc. 5.625%, due 2/1/20		1,608,000		1,676,046
Shea Homes, L.P. / Shea Homes Funding Corp. 8.625%, due 5/15/19		3,183,000		3,525,172
Standard Pacific Corp.
8.375%, due 5/15/18		815,000		945,400
8.375%, due 1/15/21		2,750,000		3,155,625
Toll Brothers Finance Corp. 6.75%, due 11/1/19		3,850,000		4,340,875
				30,454,406
Household Products & Wares 1.0%
Jarden Corp. 7.50%, due 1/15/20		3,823,000		4,147,955

16 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Household Products & Wares (continued)
Reynolds Group Issuer, Inc.
7.875%, due 8/15/19	$	1,025,000	$	1,132,625
9.875%, due 8/15/19		2,089,000		2,310,956
				7,591,536
Insurance 3.6%
Allstate Corp. (The) 6.50%, due 5/15/67 (a)		713,000		750,504
¨American International Group, Inc.
4.875%, due 3/15/67 (a)	€	4,000,000		5,323,735
Series A2 5.75%, due 3/15/67 (a)	£	450,000		704,934
Chubb Corp. (The) 6.375%, due 3/29/67 (a)	$	1,955,000		2,130,950
Farmers Exchange Capital 7.20%, due 7/15/48 (c)		603,000		696,637
¨Liberty Mutual Group, Inc.
4.25%, due 6/15/23		390,000		390,024
7.00%, due 3/7/67 (a)(c)		2,900,000		3,016,000
7.80%, due 3/7/87 (c)		453,000		493,770
10.75%, due 6/15/88 (a)(c)		938,000		1,425,760
Lincoln National Corp. 7.00%, due 5/17/66 (a)		3,537,000		3,651,953
Oil Insurance, Ltd. 3.23%, due 12/29/49 (a)(c)		3,652,000		3,324,657
Pacific Life Insurance Co.
7.90%, due 12/30/23 (c)		1,150,000		1,488,338
9.25%, due 6/15/39 (c)		504,000		706,975
Progressive Corp. (The) 6.70%, due 6/15/67 (a)		612,000		660,960
Swiss Re Capital I, L.P. 6.854%, due 5/29/49 (a)(c)		571,000		608,115
XL Group PLC 6.50%, due 12/29/49 (a)		2,336,000		2,291,616
				27,664,928
Iron & Steel 1.9%
AK Steel Corp. 8.75%, due 12/1/18		3,900,000		4,290,000
Allegheny Ludlum Corp. 6.95%, due 12/15/25 (j)		693,000		734,123
APERAM 7.375%, due 4/1/16 (c)		1,601,000		1,649,030
ArcelorMittal 6.75%, due 2/25/22		3,100,000		3,371,250
Cliffs Natural Resources, Inc.
3.95%, due 1/15/18		786,000		795,948
5.90%, due 3/15/20		1,140,000		1,191,241
Severstal Oao Via Steel Capital S.A. 5.90%, due 10/17/22 (c)		3,000,000		2,921,250
				14,952,842

	Principal Amount		Value
Leisure Time 0.1%
Royal Caribbean Cruises, Ltd. 7.25%, due 3/15/18	$	675,000	$	772,875
Lodging 1.2%
¨Caesars Entertainment Operating Co., Inc. 9.00%, due 2/15/20		3,019,000		2,830,312
MGM Resorts International
6.75%, due 10/1/20		1,994,000		2,173,460
8.625%, due 2/1/19		825,000		968,344
Starwood Hotels & Resorts Worldwide, Inc.
6.75%, due 5/15/18		90,000		106,528
7.15%, due 12/1/19		2,341,000		2,856,095
				8,934,739
Media 1.7%
CCO Holdings LLC / CCO Holdings Capital Corp. 7.00%, due 1/15/19 (j)		978,000		1,036,680
¨Clear Channel Communications, Inc.
5.50%, due 12/15/16		2,900,000		2,486,750
9.00%, due 3/1/21		1,405,000		1,415,538
Clear Channel Worldwide Holdings, Inc. Series B 7.625%, due 3/15/20		2,763,000		2,949,502
COX Communications, Inc. 6.95%, due 6/1/38 (c)		2,241,000		2,402,285
DISH DBS Corp.
6.75%, due 6/1/21		765,000		828,113
7.125%, due 2/1/16 (j)		815,000		900,575
Time Warner Cable, Inc. 8.75%, due 2/14/19		1,087,000		1,295,421
				13,314,864
Metal Fabricate & Hardware 0.1%
Mueller Water Products, Inc. 8.75%, due 9/1/20		557,000		623,840
Mining 1.6%
Aleris International, Inc.
7.625%, due 2/15/18		839,000		889,340
7.875%, due 11/1/20		2,463,000		2,610,780
FMG Resources August 2006 Pty., Ltd. 8.25%, due 11/1/19 (c)		2,100,000		2,331,000
Novelis, Inc.
8.375%, due 12/15/17		734,000		785,380
8.75%, due 12/15/20		1,223,000		1,360,588
Rio Tinto Finance USA, Ltd. 9.00%, due 5/1/19		1,500,000		1,964,686
Vedanta Resources PLC 8.25%, due 6/7/21 (c)		2,565,000		2,641,950
				12,583,724

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Miscellaneous—Manufacturing 0.1%
Polypore International, Inc. 7.50%, due 11/15/17	$	815,000	$	861,863
Office Furnishings 0.2%
Interface, Inc. 7.625%, due 12/1/18		1,674,000		1,820,475
Oil & Gas 6.4%
Berry Petroleum Co. 6.75%, due 11/1/20 (j)		3,523,000		3,707,957
Chesapeake Energy Corp. 6.625%, due 8/15/20		2,445,000		2,756,737
Concho Resources, Inc.
5.50%, due 4/1/23		1,014,000		1,052,025
6.50%, due 1/15/22		750,000		819,375
7.00%, due 1/15/21		2,002,000		2,232,230
Denbury Resources, Inc. 6.375%, due 8/15/21 (j)		4,030,000		4,302,025
ENI S.p.A. 4.15%, due 10/1/20 (c)		2,000,000		2,064,200
EP Energy LLC / EP Energy Finance, Inc. 9.375%, due 5/1/20		3,400,000		3,927,000
Frontier Oil Corp. 6.875%, due 11/15/18		571,000		613,825
Hilcorp Energy I, L.P. / Hilcorp Finance Co.
7.625%, due 4/15/21 (c)		1,223,000		1,326,955
8.00%, due 2/15/20 (c)		1,000,000		1,085,000
Linn Energy LLC / Linn Energy Finance Corp.
6.50%, due 5/15/19		2,250,000		2,244,375
7.75%, due 2/1/21		815,000		841,488
MEG Energy Corp. 6.50%, due 3/15/21 (c)		1,032,000		1,077,150
Murphy Oil USA, Inc. 6.00%, due 8/15/23 (c)		3,693,000		3,748,395
Petrobras Global Finance B.V. 4.375%, due 5/20/23		2,600,000		2,402,644
Plains Exploration & Production Co.
6.125%, due 6/15/19		2,250,000		2,459,547
6.875%, due 2/15/23		500,000		553,750
Precision Drilling Corp.
6.50%, due 12/15/21		1,136,000		1,209,840
6.625%, due 11/15/20 (j)		2,417,000		2,574,105
QEP Resources, Inc. 5.375%, due 10/1/22		3,350,000		3,274,625
Rosneft Finance S.A. 7.25%, due 2/2/20 (c)		1,405,000		1,605,213
SM Energy Co. 5.00%, due 1/15/24 (c)		1,970,000		1,925,675

	Principal Amount		Value
Oil & Gas (continued)
Swift Energy Co.
7.125%, due 6/1/17	$	750,000	$	765,000
8.875%, due 1/15/20		658,000		687,610
				49,256,746
Oil & Gas Services 1.6%
Basic Energy Services, Inc. 7.75%, due 2/15/19		4,350,000		4,513,125
CGG
6.50%, due 6/1/21		600,000		624,000
9.50%, due 5/15/16		1,075,000		1,130,094
Dresser-Rand Group, Inc. 6.50%, due 5/1/21		1,292,000		1,372,750
Hornbeck Offshore Services, Inc.
5.00%, due 3/1/21		4,255,000		4,180,537
5.875%, due 4/1/20		848,000		871,320
				12,691,826
Packaging & Containers 0.8%
Ardagh Packaging Finance PLC 9.125%, due 10/15/20 (c)		1,000,000		1,077,500
Ardagh Packaging Finance PLC / Ardagh MP Holdings USA, Inc. 7.00%, due 11/15/20 (c)		2,000,000		1,990,000
Ball Corp. 6.75%, due 9/15/20 (j)		2,648,000		2,879,700
				5,947,200
Pharmaceuticals 0.7%
Perrigo Co. 2.95%, due 5/15/23		2,745,000		2,683,858
Valeant Pharmaceuticals International 7.50%, due 7/15/21 (c)		2,500,000		2,775,000
				5,458,858
Pipelines 4.5%
Access Midstream Partners, L.P. / ACMP Finance Corp.
4.875%, due 5/15/23		3,560,000		3,542,200
5.875%, due 4/15/21		600,000		643,500
Atlas Pipeline Partners, L.P. / Atlas Pipeline Finance Corp. 6.625%, due 10/1/20		3,381,000		3,550,050
Energy Transfer Partners, L.P.
4.65%, due 6/1/21 (j)		1,490,000		1,560,301
7.60%, due 2/1/24 (c)		662,000		817,006
Kinder Morgan, Inc. 5.00%, due 2/15/21		3,838,000		3,855,309
MarkWest Energy Partners, L.P. / MarkWest Energy Finance Corp. 6.75%, due 11/1/20		1,223,000		1,339,185
Panhandle Eastern Pipe Line Co., L.P. 8.125%, due 6/1/19		2,037,000		2,505,370

18 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Pipelines (continued)
Regency Energy Partners, L.P. / Regency Energy Finance Corp. 6.875%, due 12/1/18	$	1,750,000	$	1,890,000
Spectra Energy Partners, L.P. 4.75%, due 3/15/24		1,269,000		1,334,229
¨Targa Resources Partners, L.P. / Targa Resources Partners Finance Corp.
4.25%, due 11/15/23 (c)		5,160,000		4,824,600
5.25%, due 5/1/23		1,625,000		1,625,000
6.375%, due 8/1/22		875,000		931,875
7.875%, due 10/15/18		1,170,000		1,269,450
Tesoro Logistics, L.P. / Tesoro Logistics Finance Corp. 6.125%, due 10/15/21		3,500,000		3,622,500
Williams Cos., Inc. (The) 3.70%, due 1/15/23		2,000,000		1,838,832
				35,149,407
Real Estate Investment Trusts 0.7%
Geo Group, Inc. (The) 6.625%, due 2/15/21		1,223,000		1,294,851
Host Hotels & Resorts, L.P.
3.75%, due 10/15/23		472,000		447,739
5.875%, due 6/15/19		1,875,000		2,034,499
Ventas Realty, L.P. / Ventas Capital Corp. 2.70%, due 4/1/20		1,421,000		1,378,614
				5,155,703
Retail 1.5%
AmeriGas Finance LLC / AmeriGas Finance Corp. 7.00%, due 5/20/22		1,200,000		1,296,000
AmeriGas Partners, L.P. / AmeriGas Finance Corp.
6.25%, due 8/20/19		1,460,000		1,562,200
6.50%, due 5/20/21		741,000		792,870
Brinker International, Inc. 2.60%, due 5/15/18		1,875,000		1,875,711
CVS Caremark Corp.
4.75%, due 5/18/20		2,445,000		2,716,635
5.789%, due 1/10/26 (c)(g)		76,631		84,184
Macy’s Retail Holdings, Inc. 3.875%, due 1/15/22		1,925,000		1,922,463
Suburban Propane Partners L.P. / Suburban Energy Finance Corp. 7.50%, due 10/1/18		934,000		1,002,882
				11,252,945
Semiconductors 0.8%
¨Freescale Semiconductor, Inc.
5.00%, due 5/15/21 (c)		2,950,000		2,868,875

	Principal Amount		Value
Semiconductors (continued)
¨Freescale Semiconductor, Inc. (continued)
6.00%, due 1/15/22 (c)	$	1,709,000	$	1,728,226
9.25%, due 4/15/18 (c)		1,239,000		1,339,669
				5,936,770
Software 0.9%
Fidelity National Information Services, Inc. 7.875%, due 7/15/20		489,000		538,642
¨First Data Corp.
7.375%, due 6/15/19 (c)		3,502,000		3,769,028
8.875%, due 8/15/20 (c)		550,000		613,250
10.625%, due 6/15/21 (c)		1,749,000		1,877,989
				6,798,909
Telecommunications 4.1%
CC Holdings GS V LLC / Crown Castle GS III Corp. 2.381%, due 12/15/17		2,203,000		2,180,798
CommScope, Inc. 8.25%, due 1/15/19 (c)		2,930,000		3,215,675
GTP Towers Issuer LLC 8.112%, due 2/15/15 (c)		1,650,000		1,701,304
Hughes Satellite Systems Corp. 7.625%, due 6/15/21		1,695,000		1,856,025
Intelsat Luxembourg S.A. 7.75%, due 6/1/21 (c)		2,035,000		2,146,925
MetroPCS Wireless, Inc. 7.875%, due 9/1/18		1,386,000		1,496,880
SBA Tower Trust 4.254%, due 4/15/40 (c)		2,860,000		2,912,129
Sprint Capital Corp.
6.90%, due 5/1/19		612,000		659,430
8.75%, due 3/15/32		2,060,000		2,229,950
Sprint Communications, Inc. 7.00%, due 8/15/20		1,800,000		1,930,500
Sprint Corp. 7.25%, due 9/15/21 (c)		2,000,000		2,155,000
T-Mobile USA, Inc. 6.542%, due 4/28/20		2,000,000		2,120,000
Telefonica Emisiones SAU
4.57%, due 4/27/23		2,550,000		2,541,572
5.462%, due 2/16/21		396,000		419,568
Verizon Communications, Inc. 5.15%, due 9/15/23		3,573,000		3,876,662
				31,442,418
Transportation 1.5%
Bristow Group, Inc. 6.25%, due 10/15/22		2,990,000		3,139,500
CHC Helicopter S.A. 9.25%, due 10/15/20		3,234,000		3,492,720
Hapag-Lloyd A.G. 9.75%, due 10/15/17 (c)		500,000		523,750

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Transportation (continued)
PHI, Inc. 8.625%, due 10/15/18	$	3,119,000	$	3,329,532
Ukraine Railways via Shortline PLC 9.50%, due 5/21/18 (c)		1,700,000		1,445,000
				11,930,502
Total Corporate Bonds (Cost $527,240,516)				543,655,226
Foreign Bonds 2.0%
Ireland 0.3%
UT2 Funding PLC 5.321%, due 6/30/16	€	1,440,000		1,906,280
Liberia 0.1%
Royal Caribbean Cruises, Ltd. Series Reg S 5.625%, due 1/27/14		525,000		718,521
Luxembourg 0.3%
Ageas Hybrid Financing S.A. 5.125%, due 6/29/49 (a)		1,825,000		2,521,256
United Kingdom 1.3%
Barclays Bank PLC Series Reg S 10.00%, due 5/21/21	£	449,000		956,897
Canada Square Operations Ltd. 7.50%, due 5/29/49 (a)		2,450,000		3,889,045
Rexam PLC 6.75%, due 6/29/67 (a)	€	978,000		1,400,912
Santander UK PLC 4.814%, due 9/28/49 (a)	£	2,700,000		3,852,968
				10,099,822
Total Foreign Bonds (Cost $14,187,007)				15,245,879
Foreign Government Bonds 0.4%
Cayman Islands 0.0%‡
Government of the Cayman Islands 5.95%, due 11/24/19 (c)	$	200,000		224,000
Colombia 0.0%‡
Republic of Colombia 7.375%, due 3/18/19		200,000		244,500
El Salvador 0.1%
Republic of El Salvador
7.65%, due 6/15/35		163,000		172,372

	Principal Amount		Value
El Salvador (continued)
Republic of El Salvador (continued)
8.25%, due 4/10/32 (c)	$	163,000	$	185,820
				358,192
Indonesia 0.1%
Republic of Indonesia 5.875%, due 3/13/20 (c)		300,000		328,500
Philippines 0.0%‡
Republic of Philippines 6.50%, due 1/20/20		150,000		180,000
Portugal 0.2%
Portugal Obrigacoes do Tesouro OT Series Reg S 4.95%, due 10/25/23	€	1,500,000		1,850,823
Total Foreign Government Bonds (Cost $2,865,350)				3,186,015
Loan Assignments & Participations 6.9% (l)
Advertising 0.4%
Acosta, Inc. Term Loan B 4.25%, due 3/2/18	$	3,241,875		3,247,954
Airlines 0.3%
U.S. Airways Group, Inc. Term Loan B1 4.25%, due 5/23/19		2,000,000		2,000,714
United Airlines, Inc. New Term Loan B 4.00%, due 4/1/19		621,875		625,140
				2,625,854
Auto Parts & Equipment 0.3%
Allison Transmission, Inc. New Term Loan B3 3.75%, due 8/23/19		1,995,000		2,006,846
Building Materials 0.1%
Quikrete Holdings, Inc. 2nd Lien Term Loan 7.00%, due 3/26/21		1,000,000		1,019,167
Chemicals 0.2%
PQ Corp. Term Loan 4.50%, due 8/7/17		1,488,750		1,498,055

20 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Loan Assignments & Participations (continued)
Diversified Financial Services 0.3%
Springleaf Financial Funding Company Term Loan B2 4.75%, due 9/25/19	$	2,500,000	$	2,511,457
Electric 0.3%
Calpine Corp. Term Loan B1 4.00%, due 4/2/18		1,072,500		1,077,497
NRG Energy, Inc. REFI Term Loan B 2.75%, due 7/2/18		1,044,750		1,042,850
				2,120,347
Entertainment 0.4%
Scientific Games International, Inc. New Term Loan B 4.25%, due 10/18/20		3,000,000		3,001,071
Food 0.6%
Del Monte Foods Co. Term Loan 4.00%, due 3/8/18		2,673,633		2,674,970
HJ Heinz Co. Term Loan B2 3.50%, due 6/5/20		1,995,000		2,008,139
				4,683,109
Hand & Machine Tools 0.5%
Milacron LLC New Term Loan 4.25%, due 3/28/20		4,185,733		4,170,037
Health Care—Services 0.0%‡
Community Health Systems, Inc. Extended Term Loan 3.76%, due 1/25/17		172,741		173,221
Lodging 0.6%
¨Caesars Entertainment Operating Co., Inc. Extended Term Loan B5 4.488%, due 1/26/18		3,500,000		3,203,046
MGM Resorts International Term Loan B 3.50%, due 12/20/19		992,500		991,259
				4,194,305
Machinery 0.4%
Gardner Denver, Inc. USD Term Loan 4.25%, due 7/30/20		3,250,000		3,250,370

	Principal Amount		Value
Media 0.2%
Charter Communications Operating, LLC Term Loan F 3.00%, due 1/4/21	$	15,504	$	15,338
¨Clear Channel Communications, Inc.
Term Loan B 3.818%, due 1/29/16		484,400		469,781
Term Loan D 6.918%, due 1/30/19		1,428,771		1,365,548
				1,850,667
Mining 0.9%
FMG Resources August 2006 Pty., Ltd. Term Loan 5.25%, due 10/18/17		1,831,500		1,834,414
Noranda Aluminum Acquisition Corp. New Term Loan B 5.75%, due 2/28/19		2,537,121		2,315,123
Novelis, Inc. New Term Loan 3.75%, due 3/10/17		1,556,024		1,561,860
Oxbow Carbon LLC 2nd Lien Term Loan 8.00%, due 1/17/20		1,000,000		1,017,500
				6,728,897
Oil & Gas 0.8%
MEG Energy Corp. REFI Term Loan 3.75%, due 3/31/20		2,940,066		2,952,928
Quicksilver Resources, Inc. New 2nd Lien Term Loan 7.00%, due 6/21/19		2,850,000		2,788,249
				5,741,177
Pharmaceuticals 0.3%
Valeant Pharmaceuticals International, Inc. Term Loan E 4.50%, due 8/5/20		2,233,125		2,260,481
Real Estate 0.0%‡
Realogy Corp. Extended Letter of Credit 4.445%, due 10/10/16		99,794		99,794
Software 0.3%
BMC Software Finance, Inc. USD Term Loan 5.00%, due 9/10/20		2,000,000		2,018,334
Total Loan Assignments & Participations (Cost $53,175,306)				53,201,143

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Mortgage-Backed Securities 0.1%
Commercial Mortgage Loans (Collateralized Mortgage Obligations) 0.1%
Banc of America Commercial Mortgage, Inc. Series 2005-J, Class 1A1 2.723%, due 11/25/35 (m)	$	365,798	$	315,181
Bayview Commercial Asset Trust Series 2006-4A, Class A1 0.40%, due 12/25/36 (a)(c)(e)		55,488		46,899
Deutsche ALT-A Securities, Inc. Alternate Loan Trust Series 2005-5, Class 1A3 5.50%, due 11/25/35 (a)		144,659		131,559
WaMu Mortgage Pass-Through Certificates Series 2006-AR14, Class 1A1 2.254%, due 11/25/36 (m)		195,435		162,746
Wells Fargo Mortgage Backed Securities Trust Series 2006-AR10, Class 5A2 2.614%, due 7/25/36 (m)		237,712		226,752
Total Mortgage-Backed Securities (Cost $885,459)				883,137
U.S. Government & Federal Agencies 1.0%
¨Federal Home Loan Mortgage Corporation 1.0%
0.50%, due 9/14/15		7,650,000		7,654,162
Government National Mortgage Association (Mortgage Pass-Through Securities) 0.0%‡
6.00%, due 8/15/32		1		1
United States Treasury Notes 0.0%‡
2.125%, due 8/15/21		70,000		69,891
Total U.S. Government & Federal Agencies (Cost $7,722,312)				7,724,054
Total Long-Term Bonds (Cost $637,710,266)				657,207,190
	Shares
Common Stocks 0.6%
Auto Manufacturers 0.3%
¨General Motors Co. (k)		45,730		1,689,724
Motors Liquidation Co. GUC Trust (k)		11,598		421,007
				2,110,731
Banks 0.3%
Citigroup, Inc.		41,400		2,019,492

	Shares		Value
Building Materials 0.0%‡
U.S. Concrete, Inc. (e)(k)		16,290	$	355,936
Total Common Stocks (Cost $3,709,491)				4,486,159
Convertible Preferred Stocks 0.9%
Aerospace & Defense 0.1%
United Technologies Corp. 7.50%		12,500		791,000
Auto Manufacturers 0.1%
¨General Motors Co. 4.75%		8,550		438,786
Auto Parts & Equipment 0.0%‡
Goodyear Tire & Rubber Co. (The) 5.875%		5,900		353,646
Banks 0.2%
¨Bank of America Corp. 7.25% Series L		781		841,527
Wells Fargo & Co. 7.50% Series L		800		911,200
				1,752,727
Food 0.0%‡
Post Holdings, Inc. (c) 3.75%		1,700		185,190
Hand & Machine Tools 0.1%
Stanley Black & Decker, Inc. 4.75%		6,100		778,970
Insurance 0.1%
Maiden Holdings, Ltd. 7.25%		2,500		116,975
MetLife, Inc. 5.00%		24,075		691,675
				808,650
Iron & Steel 0.2%
ArcelorMittal 6.00%		48,000		1,143,840
Oil & Gas 0.1%
Energy XXI Bermuda, Ltd. 5.625%		600		186,187
Sanchez Energy Corp. (c) 4.875%		2,700		192,122
				378,309
Total Convertible Preferred Stocks (Cost $6,163,804)				6,631,118

22 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Number of Warrants			Value
Warrants 0.2%
Auto Manufacturers 0.2%
¨General Motors Co.
Strike Price $10.00 Expires 7/10/16 (k)		34,575		$	961,185
Strike Price $18.33 Expires 7/10/19 (k)		34,575			676,979
					1,638,164
Media 0.0%‡
ION Media Networks, Inc.
Second Lien Expires 12/18/16 (e)(g)(h)(k)		11			0	(n)
Unsecured Debt Expires 12/18/16 (e)(g)(h)(k)		11			0	(n)
					0	(n)
Total Warrants (Cost $1,526,502)					1,638,164
	Principal Amount
Short-Term Investment 11.4%
Repurchase Agreement 11.4%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $88,394,012 (Collateralized by a Federal Home Loan Mortgage Corp. security with a rate of 1.96% and a maturity date of 11/7/22, with a Principal Amount of $97,735,000 and a Market Value of $90,163,763)	$	88,394,012			88,394,012
Total Short-Term Investment (Cost $88,394,012)					88,394,012
Total Investments, Before Investments Sold Short (Cost $737,504,075) (q)		98.1	%		758,356,643
Long-Term Bond Sold Short (1.0%) Corporate Bond Sold Short (1.0%)
Corporate Bond Sold Short (1.0%)
Apparel (1.0%)
Levi Strauss & Co. 7.625%, due 5/15/20		(6,800,000	)		(7,463,000	)
Total Investment Sold Short (Proceeds $6,809,632)		(1.0	)%		(7,463,000	)
Total Investments, Net of Investments Sold Short (Cost $730,694,443)		97.1			750,893,643
Other Assets, Less Liabilities		2.9			22,361,706
Net Assets		100.0	%	$	773,255,349

	Contracts Short			Unrealized Appreciation (Depreciation) (o)
Futures Contracts (0.6%)
United States Treasury Notes December 2013 (10 Year) (p)		(130	)	$	(451,263	)
United States Treasury Notes December 2013 (2 Year) (p)		(1,051	)		(774,457	)
United States Treasury Notes December 2013 (5 Year) (p)		(1,487	)		(3,279,764	)
Total Futures Contracts Short (Settlement Value $429,169,423)					(4,505,484	)
Total Futures Contracts (Settlement Value $429,169,423)				$	(4,505,484	)

‡ Less than one-tenth of a percent.

(a) Floating rate—Rate shown is the rate in effect as of October 31, 2013.

(b) Subprime mortgage investment or other asset-backed security. The total market value of these securities as of October 31, 2013 is $5,302,580, which represents 0.7% of the Fund's net assets.

(c) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(d) Step coupon—Rate shown is the rate in effect as of October 31, 2013.

(e) Illiquid security—The total market value of these securities as of October 31, 2013 is $422,382, which represents 0.1% of the Fund's net assets.

(f) Issue in default.

(g) Fair valued security—The total market value of these securities as of October 31, 2013, is $103,731, which represents less than one-tenth of a percent of the Fund's net assets.

(h) Restricted security.

(i) Synthetic Convertible Bond—Security structured by an investment bank that provides exposure to a specific company's stock, represents 0.2% of the Fund's net assets.

(j) Security, or a portion thereof, is maintained in a segregated account at the Fund’s custodian as collateral for securities Sold Short (See Note 2(P)).

(k) Non-income producing security.

(l) Floating Rate Loan—generally pays interest at rates which are periodically re-determined at a margin above the London InterBank Offered Rate or other short-term rates. The rate shown is the weighted average interest rate of all contracts within the floating rate loan facility as of October 31, 2013.

(m) Collateral strip rate—A bond whose interest is based on the weighted net interest rate of the collateral. The coupon rate adjusts periodically based on a predetermined schedule. Rate shown is the rate in effect as of October 31, 2013.

(n) Less than one dollar.

(o) Represents the difference between the value of the contracts at the time they were opened and the value as of October 31, 2013.

(p) As of October 31, 2013, cash in the amount of $1,792,800 is on deposit with a broker for futures transactions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 23

Portfolio of Investments October 31, 2013 (continued)

(q) As of October 31, 2013, cost is $737,744,115 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	27,976,779
Gross unrealized depreciation		(7,364,251	)
Net unrealized appreciation	$	20,612,528

The following abbreviations are used in the above portfolio:

£—British Pound Sterling

€—Euro

As of October 31, 2013, the Fund held the following foreign currency forward contracts:

Foreign Currency Sale Contracts

Expiration Date

Counterparty

Contract Amount Sold

Contract Amount Purchased

Unrealized Appreciation (Depreciation)

Euro vs U.S. Dollar

12/17/13

JPMorgan Chase Bank

EUR  14,258,000

USD  19,002,625

USD

(357,616

)

Pound Sterling vs. U.S. Dollar

12/17/13

JPMorgan Chase Bank

GBP    9,919,000

15,734,221

(164,761

)

Net unrealized appreciation (depreciation) on foreign currency forward contracts

USD

(522,377

)

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets and liabilities.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Securities	$	—	$	8,233,871	$	—		$	8,233,871
Convertible Bonds (b)		—		25,077,815		50			25,077,865
Corporate Bonds (c)		—		543,551,545		103,681			543,655,226
Foreign Bonds		—		15,245,879		—			15,245,879
Foreign Government Bonds		—		3,186,015		—			3,186,015
Loan Assignments & Participations (d)		—		53,101,349		99,794			53,201,143
Mortgage-Backed Securities		—		883,137		—			883,137
U.S. Government & Federal Agencies		—		7,724,054		—			7,724,054
Total Long-Term Bonds		—		657,003,665		203,525			657,207,190
Common Stocks		4,486,159		—		—			4,486,159
Convertible Preferred Stocks		6,259,741		371,377		—			6,631,118
Warrants (e)		1,638,164		—		0	(d)		1,638,164
Short-Term Investment
Repurchase Agreement		—		88,394,012		—			88,394,012
Total Investments in Securities	$	12,384,064	$	745,769,054	$	203,525		$	758,356,643

24 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Liability Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Investments in Securities Sold Short (a)
Long-Term Bonds Sold Short
Corporate Bonds Sold Short	$	—		$	(7,463,000	)	$	—	$	(7,463,000	)
Total Investments in Securities Sold Short		—			(7,463,000	)		—		(7,463,000	)
Other Financial Instruments
Foreign Currency Forward Contracts (f)		—			(522,377	)		—		(522,377	)
Futures Contracts Short (f)		(4,505,484	)		—			—		(4,505,484	)
Total Other Financial Instruments		(4,505,484	)		(522,377	)		—		(5,027,861	)
Total Investments in Securities Sold Short and Other Financial Instruments	$	(4,505,484	)	$	(7,985,377	)	$	—	$	(12,490,861	)

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The Level 3 security valued at $50 is held in Internet within the Convertible Bonds section of the Portfolio of Investments.

(c) The Level 3 securities valued at $2,426, $17,071 and $84,184 are held in Commercial Services, Entertainment and Retail, respectively, within the Corporate Bonds section of the Portfolio of Investments.

(d) The Level 3 security valued at $99,794 represents a Loan Assignment & Participation whose value was obtained from an independent pricing service which used a single broker quote to measure such value as referenced in the Portfolio of Investments.

(e) The Level 3 securities valued at less than one dollar are held in Media within the Warrants section of the Portfolio of Investments.

(f) The value listed for these securities reflects unrealized appreciation (depreciation) as shown on the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

As of October 31, 2013, a convertible preferred stock with a value of $392,906 was transferred from Level 1 to Level 2 as the price of this security was based on evaluated bid pricing compared with the prior year price which was based on quoted prices. The value as of October 31, 2013, for this security is based on an evaluated bid price in active markets for identical investments.

During the year ended October 31, 2013, a security with a total value of $119,693 transferred from Level 2 to Level 3. The transfer occurred as a result of the value for certain Loan Assignments & Participations obtained from the independent pricing service which were derived based on single broker quote.

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012			Accrued Discounts (Premiums)			Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)			Purchases		Sales			Transfers in to Level 3		Transfers out of Level 3		Balance as of October 31, 2013			Change in Unrealized Appreciation (Depreciation) from Investments Still Held at October 31, 2013  (a)
Long-Term Bonds
Convertible Bonds
Internet	$	50		$	—		$	—		$	—		$	—	$	—		$	—	$	—	$	50		$	—
Corporate Bonds
Auto Manufacturers		1,137			—			—			—			—		(1,137	)(b)		—		—		—			—
Commercial Services		2,640			—			—			(214	)		—		—			—		—		2,426			(214	)
Entertainment		24,511			877			836			1,475			—		(10,628	)		—		—		17,071			(877	)
Retail		90,612			(108	)		(109	)		(1,859	)		—		(4,352	)		—		—		84,184			(1,450	)
Loan Assignments & Participations
Real Estate		—			1,767			1,311			(2,678	)		—		(20,299	)		119,693		—		99,794			(2,678	)
Common Stocks
Media		1,003			—			(31,487	)		30,484			—		—			—		—		—			—
Warrants
Media		0	(b)		—			—			—			—		—			—		—		0	(c)		—
Total	$	119,953		$	2,536		$	(29,499	)	$	26,071		$	—	$	(35,279	)	$	119,693	$	—	$	203,525		$	(5,219	)

(a) Included in “Net change in unrealized appreciation (depreciation) on investments” in the Statement of Operations.

(b) Sales include security that was written off during the year.

(c) Less than one dollar.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 25

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $649,110,063)	$	669,962,631
Repurchase agreement, at value (identified cost $88,394,012)		88,394,012
Cash collateral on deposit at broker		1,792,800
Cash denominated in foreign currencies (identified cost $516,174)		513,809
Cash		8,477
Receivables:
Fund shares sold		22,183,019
Dividends and interest		10,095,091
Investment securities sold		1,749,786
Other assets		42,800
Total assets		794,742,425
Liabilities
Investments sold short (proceeds $6,809,632)		7,463,000
Payables:
Investment securities purchased		11,164,122
Fund shares redeemed		906,027
Manager (See Note 3)		365,379
Interest on investments sold short		239,086
NYLIFE Distributors (See Note 3)		174,367
Transfer agent (See Note 3)		120,602
Broker fees and charges on short sales		42,859
Shareholder communication		35,864
Variation margin on futures contracts		24,148
Professional fees		17,941
Custodian		5,248
Trustees		1,519
Accrued expenses		5,412
Dividend payable		399,125
Unrealized depreciation on foreign currency forward contracts		522,377
Total liabilities		21,487,076
Net assets	$	773,255,349
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	833,706
Additional paid-in capital		759,603,504
		760,437,210
Distributions in excess of net investment income		(72,263	)
Accumulated net realized gain (loss) on investments, investments sold short, futures transactions and foreign currency transactions		(2,294,084	)
Net unrealized appreciation (depreciation) on investments and futures contracts		16,347,084
Net unrealized appreciation (depreciation) on investments sold short		(653,368	)
Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(509,230	)
Net assets	$	773,255,349

Investor Class
Net assets applicable to outstanding shares	$	28,340,590
Shares of beneficial interest outstanding		3,034,034
Net asset value per share outstanding	$	9.34
Maximum sales charge (4.50% of offering price)		0.44
Maximum offering price per share outstanding	$	9.78
Class A
Net assets applicable to outstanding shares	$	317,916,834
Shares of beneficial interest outstanding		34,270,951
Net asset value per share outstanding	$	9.28
Maximum sales charge (4.50% of offering price)		0.44
Maximum offering price per share outstanding	$	9.72
Class B
Net assets applicable to outstanding shares	$	19,254,447
Shares of beneficial interest outstanding		2,084,131
Net asset value and offering price per share outstanding	$	9.24
Class C
Net assets applicable to outstanding shares	$	113,183,427
Shares of beneficial interest outstanding		12,260,103
Net asset value and offering price per share outstanding	$	9.23
Class I
Net assets applicable to outstanding shares	$	294,560,051
Shares of beneficial interest outstanding		31,721,410
Net asset value and offering price per share outstanding	$	9.29

26 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	27,006,558
Dividends		403,246
Total income		27,409,804
Expenses
Manager (See Note 3)		3,123,506
Distribution/Service—Investor Class (See Note 3)		67,386
Distribution/Service—Class A (See Note 3)		587,153
Distribution/Service—Class B (See Note 3)		184,373
Distribution/Service—Class C (See Note 3)		768,108
Transfer agent (See Note 3)		572,525
Interest on investments sold short		517,027
Registration		98,619
Shareholder communication		92,368
Broker fees and charges on short sales		88,929
Professional fees		73,953
Custodian		31,787
Trustees		10,880
Miscellaneous		17,643
Total expenses		6,234,257
Net investment income (loss)		21,175,547
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency Transactions
Net realized gain (loss) on:
Security transactions		(3,153,929	)
Futures transactions		2,020,039
Foreign currency transactions		(405,489	)
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		(1,539,379	)
Net change in unrealized appreciation (depreciation) on:
Investments		9,684,321
Investments sold short		(35,472	)
Futures contracts		(4,313,465	)
Translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(431,534	)
Net change in unrealized appreciation (depreciation) on investments, investments sold short, futures contracts and foreign currency transactions		4,903,850
Net realized and unrealized gain (loss) on investments, investments sold short, futures transactions and foreign currency transactions		3,364,471
Net increase (decrease) in net assets resulting from operations	$	24,540,018

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 27

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	21,175,547		$	20,023,806
Net realized gain (loss) on investments, futures transactions, investments sold short, swap transactions and foreign currency transactions		(1,539,379	)		2,938,912
Net change in unrealized appreciation (depreciation) on investments, investments sold short, futures contracts, swap contracts and foreign currency transactions		4,903,850			19,495,517
Net increase (decrease) in net assets resulting from operations		24,540,018			42,458,235
Dividends to shareholders:
From net investment income:
Investor Class		(1,079,562	)		(1,099,420	)
Class A		(9,897,802	)		(9,264,000	)
Class B		(612,922	)		(684,741	)
Class C		(2,568,418	)		(2,334,598	)
Class I		(6,993,037	)		(7,148,524	)
Total dividends to shareholders		(21,151,741	)		(20,531,283	)
Capital share transactions:
Net proceeds from sale of shares		536,959,441			150,767,499
Net asset value of shares issued to shareholders in reinvestment of dividends		17,368,631			16,294,896
Cost of shares redeemed		(189,205,998	)		(204,697,285	)
Increase (decrease) in net assets derived from capital share transactions		365,122,074			(37,634,890	)
Net increase (decrease) in net assets		368,510,351			(15,707,938	)
Net Assets
Beginning of year		404,744,998			420,452,936
End of year	$	773,255,349		$	404,744,998
Distributions in excess of net investment income at end of year	$	(72,263	)	$	(307,796	)

28 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.28		$	8.78		$	9.12		$	8.47		$	7.20
Net investment income (loss) (a)		0.39			0.44			0.43			0.52			0.40
Net realized and unrealized gain (loss) on investments		0.06			0.50			(0.32	)		0.68			1.50
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.01			(0.00	)‡		(0.05	)		0.02
Total from investment operations		0.44			0.95			0.11			1.15			1.92
Less dividends and distributions:
From net investment income		(0.38	)		(0.45	)		(0.45	)		(0.50	)		(0.62	)
Return of capital		—			—			—			—			(0.03	)
Total dividends and distributions		(0.38	)		(0.45	)		(0.45	)		(0.50	)		(0.65	)
Net asset value at end of year	$	9.34		$	9.28		$	8.78		$	9.12		$	8.47
Total investment return (b)		4.76	%		10.98	%		1.33	%		13.97	%		28.35	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.12	%		4.89	%		4.85	%		5.93	%		5.26	%
Net expenses (excluding short sale expenses)		1.15	%		1.19	%		1.24	%		1.41	%		1.42	%
Expenses (including short sales expenses, before waiver/reimbursement)		1.27	%		1.52	%		1.42	%		1.45	%		1.70	%
Short sale expenses		0.12	%		0.33	%		0.18	%		—			—
Portfolio turnover rate		23	%		25	%		26	%		80	%		154	%(c)
Net assets at end of year (in 000’s)	$	28,341		$	24,551		$	20,415		$	16,654		$	12,200

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls was 117% for the year ended October 31, 2009.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.22		$	8.73		$	9.06		$	8.42		$	7.16
Net investment income (loss) (a)		0.40			0.45			0.45			0.54			0.41
Net realized and unrealized gain (loss) on investments		0.06			0.49			(0.31	)		0.67			1.49
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.01			(0.00	)‡		(0.05	)		0.02
Total from investment operations		0.45			0.95			0.14			1.16			1.92
Less dividends and distributions:
From net investment income		(0.39	)		(0.46	)		(0.47	)		(0.52	)		(0.62	)
Return of capital		—			—			—			—			(0.04	)
Total dividends and distributions		(0.39	)		(0.46	)		(0.47	)		(0.52	)		(0.66	)
Net asset value at end of year	$	9.28		$	9.22		$	8.73		$	9.06		$	8.42
Total investment return (b)		4.96	%		11.26	%		1.54	%		14.19	%		28.56	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.25	%		5.08	%		5.04	%		6.19	%		5.41	%
Net expenses (excluding short sale expenses)		1.00	%		1.00	%		1.03	%		1.18	%		1.27	%
Expenses (including short sales expenses, before waiver/reimbursement)		1.12	%		1.33	%		1.22	%		1.21	%		1.37	%
Short sale expenses		0.12	%		0.33	%		0.19	%		—			—
Portfolio turnover rate		23	%		25	%		26	%		80	%		154	%(c)
Net assets at end of year (in 000’s)	$	317,917		$	192,009		$	169,649		$	109,694		$	60,555

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls was 117% for the year ended October 31, 2009.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 29

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.18		$	8.70		$	9.03		$	8.39		$	7.14
Net investment income (loss) (a)		0.31			0.37			0.36			0.45			0.34
Net realized and unrealized gain (loss) on investments		0.07			0.48			(0.31	)		0.68			1.48
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.01			(0.00	)‡		(0.05	)		0.02
Total from investment operations		0.37			0.86			0.05			1.08			1.84
Less dividends and distributions:
From net investment income		(0.31	)		(0.38	)		(0.38	)		(0.44	)		(0.56	)
Return of capital		—			—			—			—			(0.03	)
Total dividends and distributions		(0.31	)		(0.38	)		(0.38	)		(0.44	)		(0.59	)
Net asset value at end of year	$	9.24		$	9.18		$	8.70		$	9.03		$	8.39
Total investment return (b)		4.05	%		10.15	%		0.59	%		13.13	%		27.35	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.38	%		4.14	%		4.10	%		5.15	%		4.54	%
Net expenses (excluding short sales expenses)		1.90	%		1.94	%		1.99	%		2.16	%		2.17	%
Expenses (including short sales expenses, before waiver/reimbursement)		2.02	%		2.27	%		2.16	%		2.20	%		2.46	%
Short sale expenses		0.12	%		0.33	%		0.17	%		—			—
Portfolio turnover rate		23	%		25	%		26	%		80	%		154	%(c)
Net assets at end of year (in 000’s)	$	19,254		$	17,591		$	16,754		$	19,352		$	19,176

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls was 117% for the year ended October 31, 2009.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.18		$	8.69		$	9.03		$	8.39		$	7.14
Net investment income (loss) (a)		0.31			0.37			0.36			0.46			0.34
Net realized and unrealized gain (loss) on investments		0.06			0.49			(0.32	)		0.67			1.48
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.01			(0.00	)‡		(0.05	)		0.02
Total from investment operations		0.36			0.87			0.04			1.08			1.84
Less dividends and distributions:
From net investment income		(0.31	)		(0.38	)		(0.38	)		(0.44	)		(0.56	)
Return of capital		—			—			—			—			(0.03	)
Total dividends and distributions		(0.31	)		(0.38	)		(0.38	)		(0.44	)		(0.59	)
Net asset value at end of year	$	9.23		$	9.18		$	8.69		$	9.03		$	8.39
Total investment return (b)		4.05	%		10.16	%		0.48	%		13.14	%		27.36	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.34	%		4.14	%		4.09	%		5.23	%		4.50	%
Net expenses (excluding short sale expenses)		1.90	%		1.94	%		1.99	%		2.16	%		2.17	%
Expenses (including short sales expenses, before waiver/reimbursement)		2.02	%		2.27	%		2.19	%		2.20	%		2.45	%
Short sale expenses		0.12	%		0.33	%		0.20	%		—			—
Portfolio turnover rate		23	%		25	%		26	%		80	%		154	%(c)
Net assets at end of year (in 000’s)	$	113,183		$	59,159		$	50,280		$	28,334		$	12,948

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls was 117% for the year ended October 31, 2009.

30 MainStay Unconstrained Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.23		$	8.73		$	9.07		$	8.42		$	7.17
Net investment income (loss) (a)		0.41			0.47			0.46			0.58			0.43
Net realized and unrealized gain (loss) on investments		0.07			0.51			(0.31	)		0.66			1.48
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.01			(0.00	)‡		(0.05	)		0.02
Total from investment operations		0.47			0.99			0.15			1.19			1.93
Less dividends and distributions:
From net investment income		(0.41	)		(0.49	)		(0.49	)		(0.54	)		(0.64	)
Return of capital		—			—			—			—			(0.04	)
Total dividends and distributions		(0.41	)		(0.49	)		(0.49	)		(0.54	)		(0.68	)
Net asset value at end of year	$	9.29		$	9.23		$	8.73		$	9.07		$	8.42
Total investment return (b)		5.32	%		11.41	%		1.79	%		14.59	%		28.78	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.45	%		5.32	%		5.20	%		6.57	%		5.75	%
Net expenses (excluding short sale expenses)		0.75	%		0.76	%		0.78	%		0.92	%		0.95	%
Expenses (including short sales expenses, before waiver/reimbursement)		0.87	%		1.08	%		1.02	%		0.95	%		1.12	%
Short sale expenses		0.12	%		0.32	%		0.24	%		—			—
Portfolio turnover rate		23	%		25	%		26	%		80	%		154	%(c)
Net assets at end of year (in 000’s)	$	294,560		$	111,435		$	163,356		$	5,183		$	319

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) The portfolio turnover rates not including mortgage dollar rolls was 117% for the year ended October 31, 2009.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 31

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Unconstrained Bond Fund, (the “Fund”), a diversified fund.

The Fund currently offers five classes of shares. Class A and Class B shares commenced operations on February 28, 1997. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on January 2, 2004. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek total return by investing primarily in domestic and foreign debt securities.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund's securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The

Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

32 MainStay Unconstrained Bond Fund

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•  Benchmark Yields	•  Reported Trades
•  Broker Dealer Quotes	•  Issuer Spreads
•  Two-sided markets	•  Benchmark securities
•  Bids/Offers	•  Reference Data (corporate actions or material event notices)
•  Industry and economic events	•  Comparable bonds
•  Equity and credit default swap curves	•  Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund held securities with a value of $103,731 that were fair valued in such a manner.

Equity securities and Exchange Traded Funds, whether sold short or purchased, are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Futures contracts are valued at the last posted settlement price on the market where such futures are primarily traded. Options contracts are valued at the last posted settlement price on the market where such options are principally traded. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund's Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Foreign currency forward contracts are valued at their fair market values measured on the basis of the mean between the last current bid and ask prices based on dealer or exchange quotations and are generally categorized as Level 2 in the hierarchy.

Loan assignments, participations and commitments are valued at the average of bid quotations obtained from the engaged independent pricing agent and are generally categorized as Level 2 in the hierarchy. Certain loan assignments, participations and commitments may be valued by single broker quotes obtained from the pricing agent with significant unobservable inputs and are generally categorized as Level 3 in the hierarchy. For these loan assignments, participations and commitments the Manager may consider additional factors such as liquidity of the Fund’s investments. As of October 31, 2013, the Fund held securities with a value of $99,794 that were valued by single broker quotes and/or deemed to be illiquid.

Credit default swaps are valued at prices supplied by a pricing agent or brokers selected by the Fund’s Manager in consultation with the Fund’s Subadvisor whose prices reflect broker/dealer supplied valuations and electronic data processing techniques. Swaps are marked-to-market daily and the change in value, if any, is recorded as unrealized appreciation or depreciation. These securities are generally categorized as Level 2 in the hierarchy.

The valuation techniques and significant amounts of unobservable inputs used in the fair valuation measurement of the Fund’s Level 3 securities are outlined in the tables below. A significant increase or decrease in any of those inputs in isolation would result in a significantly higher or lower fair value measurement.

mainstayinvestments.com 33

Notes to Financial Statements (continued)

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund’s Manager or Subadvisor might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund's liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisor measure the liquidity of the Fund's investments; in doing so, the Manager or Subadvisor may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund's tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Foreign Taxes.  Investment income received by the Fund from foreign sources may be subject to foreign income taxes. These foreign income taxes are generally withheld at the source, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least monthly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., foreign currency, interest rate, security, or securities index). The Fund is subject to equity price risk and/or interest rate risk in the normal course of investing in these

34 MainStay Unconstrained Bond Fund

transactions. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin.” When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund may invest in futures contracts to help manage the duration and yield curve of the portfolio while minimizing the exposure to wider bid/ask spreads in traditional bonds. The Fund's investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund.

(J)  Loan Assignments, Participations and Commitments.  The Fund may invest in loan assignments and loan participations (“loans”). Loans are agreements to make money available (a “commitment”) to a borrower in a specified amount, at a specified rate and within a specified time. Such loans are typically senior, secured and collateralized in nature. The Fund records an investment when the borrower withdraws money and records interest as earned. These loans pay interest at rates that are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate.

The loans in which the Fund invests are generally readily marketable, but may be subject to some restrictions on resale. For example, the Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments. The Fund assumes the credit risk of the borrower, the selling participant and any other persons interpositioned between the Fund and the borrower (“intermediate participants”). In the event that the borrower, selling participant or intermediate participants become insolvent or enters into bankruptcy, the Fund may incur certain costs and delays in realizing payment, or may suffer a loss of principal and/or interest.

Unfunded commitments represent the remaining obligation of the Fund to the borrower. At any point in time, up to the maturity date of the issue, the borrower may demand the unfunded portion. These unfunded amounts are marked to market and any unrealized gains and losses are recorded in the Statement of Assets and Liabilities. As of October 31, 2013, the Fund did not hold any unfunded commitments.

(K)  Swap Contracts.  The Fund may enter into credit default, interest rate, index and currency exchange rate swap contracts (“swaps”) for the purpose of attempting to obtain a desired return at a lower cost to the Fund, rather than directly investing in an instrument yielding that desired return or to hedge against credit and interest rate risk. In a typical swap transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on a particular investment or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount. The payments may be adjusted for transaction costs, interest payments, the amount of interest paid on the investment or instrument or other factors. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the custodian bank or broker in accordance with the swap.

Credit default swaps, in particular, are contracts whereby one party makes periodic payments to a counterparty in exchange for the right to receive a specified return in the event of a default by a third party on its obligation. Such periodic payments are accrued daily and recorded as a realized gain or loss. Credit default swaps may be used to provide a measure of protection against defaults of sovereign or corporate issuers.

Swaps are “marked-to-market” daily based upon quotations from pricing agents, brokers, or market makers and the change in value, if any, is recorded as unrealized appreciation or depreciation. Any payments made or received upon entering a swap would be amortized or accreted over the life of the swap and recorded as a realized gain or loss. Early termination of a swap is recorded as a realized gain or loss.

The Fund bears the risk of loss of the amount expected to be received under a swap in the event of the default or bankruptcy of the swap counterparty. The Fund may be able to eliminate its exposure under a swap either by assignment or other disposition, or by entering into an offsetting swap with the same party or a similar creditworthy party. Swaps are not actively traded on financial markets. Entering into swaps involves elements of credit, market, and documentation risk in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibilities that there will be no liquid market for these swaps, that the counterparty to the swaps may default on its obligation to perform or disagree as to the meaning of the contractual terms in the swaps and that there may be unfavorable changes in interest rates, the price of the index or the security underlying these transactions. As of October 31, 2013, the Fund did not hold any swap contracts.

(L)  Foreign Currency Forward Contracts.  The Fund may enter into foreign currency forward contracts, which are agreements to buy or sell currencies of different countries on a specified future date at a specified rate. The Fund is subject to foreign currency exchange rate risk in the normal course of investing in these transactions. During the period the forward contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. Cash movement occurs on settlement date. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract. The Fund may enter into foreign currency forward contracts to reduce currency risk versus the benchmark or for trade settlement.

mainstayinvestments.com 35

Notes to Financial Statements (continued)

The use of foreign currency forward contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract amount reflects the extent of the Fund’s involvement in these financial instruments. Risks arise from the possible movements in the foreign exchange rates underlying these instruments. While the Fund may enter into forward contracts to reduce currency exchange risks, changes in currency exchange rates may result in poorer overall performance for the Fund than if it had not engaged in such transactions. Exchange rate movements can be large, depending on the currency, and can last for extended periods of time, affecting the value of the Fund’s assets. Moreover, there may be an imperfect correlation between the Fund’s holdings of securities denominated in a particular currency and the forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to the risk of currency exchange loss. The unrealized appreciation (depreciation) on forward contracts reflects the Fund's exposure at valuation date to credit loss in the event of a counterparty’s failure to perform its obligations.

(M)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities—at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses—at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund’s books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(N)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants, if such warrants are

not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights.

(O)  Dollar Rolls.  The Fund may enter into dollar roll transactions in which it sells mortgage-backed securities (“MBS”) from its portfolio to a counterparty from whom it simultaneously agrees to buy a similar security on a delayed delivery basis. The dollar roll transactions of the Fund are classified as purchase and sale transactions. The securities sold in connection with the dollar rolls are removed from the portfolio and a realized gain or loss is recognized. The securities the Fund has agreed to acquire are included at market value in the Portfolio of Investments and liabilities for such purchase commitments are included as payables for investments purchased. During the roll period, the Fund foregoes principal and interest paid on the securities. The Fund is compensated by the difference between the current sales price and the forward price for the future as well as by the earnings on the cash proceeds of the initial sale. Dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Fund maintains liquid assets from its portfolio having a value not less than the repurchase price, including accrued interest. Dollar roll transactions involve certain risks, including the risk that the MBS returned to the Fund at the end of the roll period, while substantially similar, could be inferior to what was initially sold to the counterparty.

(P)  Securities Sold Short.  The Fund may engage in sale of securities they do not own (“short sales”) as part of its investment strategy. When the Fund enters into a short sale, it must segregate the cash proceeds from the security sold short or other securities as collateral for its obligation to deliver the security upon conclusion of the sale. During the period a short position is open, depending on the nature and type of security, short positions held are reflected as liabilities and are marked to market in accordance with the valuation methodologies previously detailed (See Note 2(A)). Liabilities for securities sold short are closed out by purchasing the applicable securities for delivery to the counterparty broker. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon termination of a short sale if the market price on the date the short position is closed out is less or greater, respectively, than the proceeds originally received. Any such gain or loss may be offset, completely or in part, by the change in the value of the hedged investments. Interest on short positions held is accrued daily while dividends declared on short positions existing on the record date are recorded on the ex-dividend date. Both the interest and dividends paid on short sales are recorded as expenses on the Statement of Operations. Short sales involve risk of loss in excess of the related amounts reflected on the Statement of Assets and Liabilities.

(Q)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund's cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or

36 MainStay Unconstrained Bond Fund

irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(R)  Restricted Securities.  A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933, as amended. The Fund may not have the right to demand that such securities be registered. Disposal of these securities may involve time-consuming negotiations and expenses and it may be difficult to obtain a prompt sale at an acceptable price. (See Note 5)

(S)  Concentration of Risk.  The Fund’s principal investments include high-yield securities (sometimes called “junk bonds”), 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 also be subject to greater price volatility.

The Fund may invest in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(T)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(U)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Asset Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk		Equity Contracts Risk		Interest Rate Contracts Risk		Total
Warrants	Investments in securities, at value	$	—	$	1,638,164	$	—	$	1,638,164
Total Fair Value		$	—	$	1,638,164	$	—	$	1,638,164

Liability Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Futures Contracts	Net Assets-Net unrealized appreciation (depreciation) on investments and futures contracts (a)	$	—		$	—	$	(4,505,484	)	$	(4,505,484	)
Forward Contracts	Unrealized depreciation on foreign currency forward contracts		(522,377	)		—		—			(522,377	)
Total Fair Value		$	(522,377	)	$	—	$	(4,505,484	)	$	(5,027,861	)

(a) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Portfolio of Investments. Only current day's variation margin is reported within the Statement of Assets and Liabilities.

mainstayinvestments.com 37

Notes to Financial Statements (continued)

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk		Total
Futures Contracts	Net realized gain (loss) on futures transactions	$	—		$	—	$	2,020,039	$	2,020,039
Forward Contracts	Net realized gain (loss) on foreign currency transactions		(321,547	)		—		—		(321,547	)
Total Realized Gain (Loss)		$	(321,547	)	$	—	$	2,020,039	$	1,698,492

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Warrants	Net change in unrealized appreciation (depreciation) on investments	$	—		$	714,320	$	—		$	714,320
Futures Contracts	Net change in unrealized appreciation (depreciation) on futures contracts		—			—		(4,313,465	)		(4,313,465	)
Forward Contracts	Net change in unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(438,939	)		—		—			(438,939	)
Total Change in Unrealized Appreciation (Depreciation)		$	(438,939	)	$	714,320	$	(4,313,465	)	$	(4,038,084	)

Number of Contracts, Notional Amounts or Shares/Units (1)

	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Warrants		—			69,172		—			69,172
Futures Contracts Long		—			—		160			160
Futures Contracts Short		—			—		(1,535	)		(1,535	)
Forward Contracts Long	$	21,726,638		$	—	$	—		$	21,726,638
Forward Contracts Short	$	(26,593,641	)	$	—	$	—		$	(26,593,641	)

(1) Amount disclosed represents the weighted average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or the

“Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.60% up to $500 million; 0.55% from $500 million to $1 billion; and 0.50% in excess of $1 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund's average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in

38 MainStay Unconstrained Bond Fund

excess of $100 million. The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.61% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.02% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $3,123,506.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund's shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $25,440 and $161,882, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $61, $5,832, $32,566 and $16,272, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund's transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses

incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	60,750
Class A		177,833
Class B		41,548
Class C		173,475
Class I		118,919

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class A $ 12,666,210 4.0 % 

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary   Income	Accum ulated Capital and Other Gain (Loss)			Other Temporary Differences			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
$539,481	$	(6,772,146	)	$	(399,125	)	$	19,449,929	$	12,818,139

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments, mark to market of futures contracts, debt versus equity adjustments, modified debt instruments and contingent payment debt instruments (CPDI). The other temporary differences are primarily due to dividends payable.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
$211,727	$	(211,727	)	$	—

The reclassifications for the Fund are primarily due to foreign currency gain (loss), defaulted bond adjustments, return of capital distributions received, reclassification of consent fees and debt versus equity adjustments and CPDI.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period.

mainstayinvestments.com 39

Notes to Financial Statements (continued)

However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $6,772,146 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No

capital gain distributions shall be made until any capital loss carryfor wards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)		Long-Term Capital Loss Amounts (000’s)
2017 Unlimited	$	473 60	$	— 6,239
Total	$	533	$	6,239

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	21,151,741	$	20,531,283

Note 5–Restricted Securities

As of October 31, 2013, the Fund held the following restricted securities:

Security	Date(s) of Acquisition		Principal Amount/Number of Warrants/Shares		Cost		10/31/13 Value			Percent of Net Assets
At Home Corp. Convertible Bond 4.75%, due 12/31/49		7/25/01	$	504,238	$	8,348	$	50			0.0	%‡
ION Media Networks, Inc. Warrant, Second Lien, Expires 12/18/16		12/20/10		11		—		—	(a)		0.0	‡
Warrant, Unsecured Debt, Expires 12/18/16		3/12/10		11		34		—	(a)		0.0	‡
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares) Corporate Bond 6.50%		1/23/08		5,000		—		74			0.0	‡
Corporate Bond 9.75%		9/4/09		160,000		—		2,352			0.0	‡
Total					$	8,382	$	2,476			0.0	%‡

‡ Less than one-tenth of a percent.

(a) Less than one dollar.

Note 6–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 7–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds

Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 8–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of U.S. government securities were $21,988 and $14,314, respectively. Purchases and sales of securities, other than U.S. government securities and short-term securities, were $373,717 and $95,483, respectively.

40 MainStay Unconstrained Bond Fund

Note 9–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		953,290		$	8,941,118
Shares issued to shareholders in reinvestment of dividends and distributions		111,036			1,037,427
Shares redeemed		(615,979	)		(5,761,901	)
Net increase (decrease) in shares outstanding before conversion		448,347			4,216,644
Shares converted into Investor Class (See Note 1)		267,504			2,503,603
Shares converted from Investor Class (See Note 1)		(327,795	)		(3,066,080	)
Net increase (decrease)		388,056		$	3,654,167
Year ended October 31, 2012:
Shares sold		645,626		$	5,806,996
Shares issued to shareholders in reinvestment of dividends and distributions		117,500			1,052,185
Shares redeemed		(386,730	)		(3,460,373	)
Net increase (decrease) in shares outstanding before conversion		376,396			3,398,808
Shares converted into Investor Class (See Note 1)		267,436			2,409,801
Shares converted from Investor Class (See Note 1)		(322,045	)		(2,917,361	)
Net increase (decrease)		321,787		$	2,891,248
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		19,841,663		$	183,880,705
Shares issued to shareholders in reinvestment of dividends and distributions		881,190			8,164,324
Shares redeemed		(7,533,681	)		(69,786,432	)
Net increase (decrease) in shares outstanding before conversion		13,189,172			122,258,597
Shares converted into Class A (See Note 1)		380,806			3,537,523
Shares converted from Class A (See Note 1)		(131,904	)		(1,227,175	)
Net increase (decrease)		13,438,074		$	124,568,945
Year ended October 31, 2012:
Shares sold		6,407,382		$	57,237,916
Shares issued to shareholders in reinvestment of dividends and distributions		783,280			6,966,213
Shares redeemed		(6,213,341	)		(55,242,568	)
Net increase (decrease) in shares outstanding before conversion		977,321			8,961,561
Shares converted into Class A (See Note 1)		510,146			4,547,209
Shares converted from Class A (See Note 1)		(92,202	)		(841,580	)
Net increase (decrease)		1,395,265		$	12,667,190

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		692,585		$	6,423,923
Shares issued to shareholders in reinvestment of dividends and distributions		56,233			519,654
Shares redeemed		(391,635	)		(3,614,466	)
Net increase (decrease) in shares outstanding before conversion		357,183			3,329,111
Shares converted from Class B (See Note 1)		(188,867	)		(1,747,871	)
Net increase (decrease)		168,316		$	1,581,240
Year ended October 31, 2012:
Shares sold		622,150		$	5,562,910
Shares issued to shareholders in reinvestment of dividends and distributions		64,184			567,924
Shares redeemed		(332,778	)		(2,938,588	)
Net increase (decrease) in shares outstanding before conversion		353,556			3,192,246
Shares converted from Class B (See Note 1)		(364,335	)		(3,198,069	)
Net increase (decrease)		(10,779	)	$	(5,823	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		7,432,245		$	68,600,894
Shares issued to shareholders in reinvestment of dividends and distributions		209,833			1,934,961
Shares redeemed		(1,829,732	)		(16,894,460	)
Net increase (decrease)		5,812,346		$	53,641,395
Year ended October 31, 2012:
Shares sold		1,767,987		$	15,711,137
Shares issued to shareholders in reinvestment of dividends and distributions		173,766			1,539,397
Shares redeemed		(1,279,580	)		(11,345,180	)
Net increase (decrease)		662,173		$	5,905,354
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		29,088,460		$	269,112,801
Shares issued to shareholders in reinvestment of dividends and distributions		616,901			5,712,265
Shares redeemed		(10,063,639	)		(93,148,739	)
Net increase (decrease)		19,641,722		$	181,676,327
Year ended October 31, 2012:
Shares sold		7,440,219		$	66,448,540
Shares issued to shareholders in reinvestment of dividends and distributions		696,110			6,169,177
Shares redeemed		(14,758,457	)		(131,710,576	)
Net increase (decrease)		(6,622,128	)	$	(59,092,859	)

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund's management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

mainstayinvestments.com 41

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Unconstrained Bond Fund (the “Fund”), formerly the MainStay Flexible Bond Opportunities Fund, one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Unconstrained Bond Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

42 MainStay Unconstrained Bond Fund

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $221,657 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 1.1% to arrive at the amount eligible for the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or subsitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures

and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

mainstayinvestments.com 43

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

44 MainStay Unconstrained Bond Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 45

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

46 MainStay Unconstrained Bond Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

mainstayinvestments.com 47

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32039 MS322-13 MSUB11-12/13 NL016

MainStay Government Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	12
Financial Statements	16
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	29
Federal Income Tax Information	30
Proxy Voting Policies and Procedures and Proxy Voting Record	30
Shareholder Reports and Quarterly Portfolio Disclosure	30
Board Members and Officers	31

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an

e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–7.04 –2.66	%		3.12 4.07	%		3.16 3.64	%		1.16 1.16	%
Class A Shares	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–6.89 –2.50			3.25 4.21			3.25 3.72			1.02 1.02
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		–8.15 –3.40			2.93 3.28			2.89 2.89			1.91 1.91
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		–4.36 –3.41			3.29 3.29			2.88 2.88			1.91 1.91
Class I Shares4	No Sales Charge			–2.24			4.51			4.13			0.77

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on January 2, 2004, include the historical performance of Class B shares through January 1, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Barclays U.S. Government Bond Index5		–1.37	%		4.15	%		4.37	%
Morningstar Intermediate Government Category Average6		–1.66			4.67			3.91

5. The Barclays U.S. Government Bond Index consists of publicly issued debt of the U.S. Treasury and government agencies. The Barclays U.S. Government Bond Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume the reinvestment of all income and capital gains. An investment cannot be made directly in an Index.

6. The Morningstar intermediate government category average is representative of funds that have at least 90% of their bond holdings in bonds backed by U.S. government or by U.S. government-linked agencies. These funds have durations between 3.5 and 6 years and/or average effective maturities between 4 and 10 years. Results are based on total returns with all dividends and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Government Fund

Cost in Dollars of a $1,000 Investment in MainStay Government Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	974.00	$	6.02	$	1,019.10	$	6.16
Class A Shares	$	1,000.00	$	974.70	$	5.13	$	1,020.00	$	5.24
Class B Shares	$	1,000.00	$	970.10	$	9.73	$	1,015.30	$	9.96
Class C Shares	$	1,000.00	$	970.10	$	9.73	$	1,015.30	$	9.96
Class I Shares	$	1,000.00	$	976.20	$	3.89	$	1,021.30	$	3.97

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.21% for Investor Class, 1.03% for Class A, 1.96% for Class B and Class C and 0.78% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

See Portfolio of Investments beginning on page 12 for specific holdings within these categories.

Top Ten Holdings as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Federal National Mortgage Association (Mortgage Pass-Through Securities), 3.50%, due 11/1/25

2. Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities), 4.00%, due 3/1/41

3. Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities), 4.00%, due 2/1/41

4. Overseas Private Investment Corporation, 5.142%, due 12/15/23

5. Federal National Mortgage Association (Mortgage Pass-Through Securities), 6.00%, due 3/1/35 TBA

  6. Tennessee Valley Authority, 4.65%, due 6/15/35

  7. Federal National Mortgage Association (Mortgage Pass-Through Securities), 4.50%, due 1/1/41

  8. Government National Mortgage Association (Mortgage Pass-Through Securities), 4.00%, due 10/15/41

  9. Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities), 4.00%, due 12/1/40

10. Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities), 3.50%, due 11/1/25

8 MainStay Government Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Dan Roberts, PhD, Louis N. Cohen, CFA, and Steven H. Rich, PhD, of MacKay Shields LLC, the Fund’s Subadvisor.

How did MainStay Government Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Government Fund returned –2.66% for Investor Class shares, –2.50% for Class A shares, –3.40% for Class B shares and –3.41% for Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund’s Class I shares returned –2.24%. For the 12 months ended October 31, 2013, all share classes underperformed the –1.37% return of the Barclays U.S. Government Bond Index,¹ which is the Fund’s broad-based securities-market index. Over the same period, all share classes underperformed the –1.66% return of the Morningstar² intermediate government category average. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund’s performance relative to the Barclays U.S. Government Bond Index was affected primarily by four factors during the reporting period—duration³ positioning, yield-curve⁴ posture, sector weightings and issue selection.

The Fund’s duration was consistently shorter than that of the Barclays U.S. Government Bond Index during the reporting period. Having a shorter duration left the Fund less sensitive to changes in U.S. Treasury yields than the benchmark, which helped relative performance as U.S. Treasury yields rose during the reporting period. Peer funds with longer durations would have faced similar disadvantages relative to the Fund.

During the reporting period, the spread⁵ between the two- and 30-year benchmark points on the Treasury yield curve widened. The Fund benefited from the curve reshaping relative to its peers that were more concentrated in longer-duration securities.

Agency mortgage pass-throughs⁶ are the largest class of securities in the Fund. Agency mortgage pass-throughs imparted a yield advantage over lower-yielding government-related securities, such as U.S. Treasury securities and agency debentures. This effect was a positive contributor to the Fund’s absolute return during the reporting period. (Contributions take weightings and total returns into account.) Notwithstanding this yield advantage, on a total return basis agency mortgage pass-throughs underperformed comparable-duration U.S. Treasury

securities during the reporting period. As a result, peer funds with less exposure to mortgages than the Fund would have benefited. Moreover, mortgage-sector exposure detracted from the Fund’s performance relative to the Barclays U.S. Government Bond Index, which holds no mortgages.

Mortgages underperformed U.S. Treasury securities largely because of four factors. First, if the Federal Reserve were to taper its mortgage-purchase program, the mortgage sector would lose a key source of incremental demand. This possibility temporarily decreased prices of agency mortgage-backed securities during the reporting period, but when the anticipated tapering did not occur at the Federal Reserve’s September meeting, the prices of mortgage-backed securities partially recovered. Second, U.S. Treasury yields and mortgage rates moved higher. Under these circumstances, refinancing opportunities wane, prepayment rates slow and the durations of mortgage pass-throughs extend. Third, new government policies to assist homeowners whose loans exceed their respective home values could lower refinancing barriers and raise prepayment rates. This is especially true among higher-coupon mortgage pass-through securities, where eligible underwater loans are concentrated. In anticipation of faster prepayments, the price of mortgage pass-throughs with coupons of 4% or more declined. Fourth, the prices of agency mortgage pass-throughs fell during the summer as mortgage real estate investment trusts sold bonds to reduce leverage as the value of their assets fell with higher U.S. Treasury rates. The sales were executed at soft levels because dealers were reluctant to hold these bonds. In turn, the sales reset prices lower.

The Fund’s mortgage allocation favors mortgage-backed securities issued by Fannie Mae and Freddie Mac and deemphasizes Ginnie Mae issues. Relative to peers, the Fund may have been underweight Ginnie Mae securities. The possibility of Japanese investors looking overseas for better yields buoyed the prospects of Ginnie Mae securities early in the reporting period. However, when demand did not materialize, Ginnie Mae prices fell sharply. This effect would have benefited the Fund relative to peers with larger Ginnie Mae allocations.

Some mortgage pass-throughs tend to be better protected against the borrowers’ call options because of structural features. An example is a pool of smaller-balance loans, as the small balance moderates the borrower’s refinancing incentive

1. See footnote on page 6 for more information on the Barclays U.S. Government Bond Index.

2. See footnote on page 6 for more information on the Morningstar intermediate government category average.

3. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity.

4. The yield curve is a line that plots the yields of various securities of similar quality—typically U.S. Treasury issues—across a range of maturities. The U.S. Treasury yield curve serves as a benchmark for other debt and is used in economic forecasting.

5. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The term may also refer to the difference in yield between two specific securities or types of securities at a given time.

6. Mortgage pass-through securities (also referred to as mortgage pass-throughs) consist of a pool of residential mortgage loans in which homeowners’ monthly payments of principal, interest and prepayments pass from the original bank through a government agency or an investment bank to investors.

mainstayinvestments.com 9

as mortgage rates fall. The Fund emphasized call protection among its residential mortgage-backed holdings. We moderate the pace of prepayments in a low-interest-rate environment by owning securities where the borrowers’ incentives to refinance are muted. This included securities backed by 15-year loan terms; securities backed by lower-balance mortgages and securities backed by newer-production, lower-rate loans. In securitizations of higher-rate loans, we focused our attention on mortgages, originated in 2003 or earlier, where elevated loan-to-value ratios may not permit borrowers to refinance. During the reporting period, securities with call protection tended to underperform generic mortgage collateral. This portion of the mortgage sector was hampered during the reporting period by rising mortgage rates, which tended to make the call protection less valuable.

The Federal Reserve’s willingness to pump liquidity into the market (by keeping the federal funds rate close to zero) and its willingness to pressure longer-term rates lower (through direct purchases of securities, known as quantitative easing) are efforts to stimulate aggregate demand by making it more attractive to invest further out on the risk spectrum. These efforts are supportive of credit-related products, such as corporate bonds and commercial mortgage-backed securities. The Fund’s modest exposure to these sectors, which are not in the benchmark, contributed to the Fund’s performance. Peer funds with higher exposure to credit-related sectors, however, would have had a relative advantage during the reporting period.

Low turnover helped the Fund relative to its peers by limiting transaction costs. We also sought to preserve yield by keeping the Fund nearly fully invested, avoiding large cash balances.

What was the Fund’s duration strategy during the reporting period?

The Fund normally maintained an intermediate duration of approximately four years. The duration of the Barclays U.S. Government Bond Index was one year longer.

In the current market environment, we prefer to keep the Fund’s duration on the shorter side. In periods when U.S. Treasury yields rise, this positioning helps the Fund relative to the benchmark and peer funds that have longer durations. During the reporting period we used U.S. Treasury futures to dampen the Fund’s interest-rate sensitivity. The use of these instruments allowed us to keep the Fund’s duration near the four-year target while rising U.S. Treasury yields extended mortgage durations.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

The Fund emphasized agency mortgage pass-throughs because we believed that they could offer better relative value than comparable-duration U.S. Treasury securities or agency debentures. Our emphasis on this sector introduced incremental yield to the Fund, and it positioned the Fund to benefit should the yield spread between mortgage-backed securities and comparable-duration U.S. Treasury securities compress.

Most of the Fund’s residential mortgage exposure was taken via mortgage pass-throughs rather than collateralized mortgage obligations. The compensation currently demanded by the market for the better convexity⁷ of collateralized mortgage obligations appears overdone.

The Fund maintained a limited allocation to lower-coupon mortgage pass-through securities. These tend to be the longest-duration securities in the sector, and their performance could slow as U.S. Treasury yields and mortgage rates begin to rise. We de-emphasized Ginnie Mae securities on valuation concerns, because the price differential between Ginnie Mae and Fannie Mae pass-through securities had exceeded historical norms.

We maintained the Fund’s moderate exposure to credit risk as a secondary driver of Fund performance for two reasons. First, we believed that the prospects of the credit-related sectors (investment-grade corporate bonds, commercial mortgage-backed securities and asset-backed securities) were aligned with the decision by the Federal Reserve’s monetary policymaking committee to maintain the federal funds target rate in a range close to zero. Second, we felt that relatively low interest rates would probably spark healthy demand for higher-yielding products. The Fund ended the period with an 11% allocation to non-government-related securities.

During the reporting period, which market segments were the strongest contributors to the Fund’s performance and which market segments were particularly weak?

Agency mortgage pass-throughs collateralized by loans less likely to be refinanced were the weakest performers during the reporting period. Lower-balance loans often provide a measure of call protection, because the lower balance limits the borrower’s incentive to refinance. As mortgage rates rose toward the end of the reporting period, the market sharply recalibrated the worth of the call protection. Mortgage pass-throughs whose durations are longer than average (such as newer-production lower-coupon securities) had weaker performance because the

7. Convexity is a mathematical measure of the sensitivity of an interest-bearing bond to changes in interest rates.

10 MainStay Government Fund

longer durations made the securities’ total returns more sensitive to rising U.S. Treasury yields.

Securities issued by the Tennessee Valley Authority were also weak performers, as their prices softened when a proposal to divest the government’s ownership of the utility emerged in the 2014 budget proposal from the White House.

Treasury inflation-protected securities (TIPS) underperformed nominal U.S. Treasury securities during the reporting period. The underperformance largely resulted from uneven economic growth and muted inflation expectations. The Fund’s allocation to TIPS may be lower than the allocations in peer funds. As a result, the Fund may have benefited from the better performance of nominal U.S. Treasury securities.

How did the Fund’s sector weightings change during the reporting period?

The Fund’s sector weightings remained relatively stable during the reporting period. The bulk of our trading activity focused on staying fully invested by reinvesting principal payments from the Fund’s mortgage securities. With the new purchases, we emphasized mortgage securities whose underlying loans were

less likely to be refinanced. We also undertook several mortgage dollar rolls⁸ for security types in which the Fund maintains exposure in generic pools of mortgage loans rather than in specified pools. Several corporate bonds in the Fund were called, and several commercial mortgage-backed securities holdings matured.

During the summer, we sold U.S. Treasury futures. The short position in U.S. Treasury futures moderated the Fund’s interest-rate sensitivity by offsetting the extension of mortgage durations as U.S. Treasury yields rose.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund held underweight positions relative to the Barclays U.S. Government Index in U.S. Treasury securities and agency debentures and an overweight position in agency mortgage pass-throughs. As of the same date, the Fund also held modestly overweight positions in asset-backed securities, corporate bonds and commercial mortgage-backed securities.

8. A mortgage dollar roll is a transaction in which the Fund sells mortgage-related securities from its portfolio to a counterparty from whom it simultaneously agrees to buy a similar security on a delayed delivery basis. The Fund will maintain liquid assets having a value not less than the repurchase price. Mortgage dollar roll transactions involve certain risks, including the risk that the mortgage-backed security returned to the Fund at the end of the roll, while substantially similar, could be inferior to what was initially sold to the counterparty.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

mainstayinvestments.com 11

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Long-Term Bonds 98.1%† Asset-Backed Security 1.3%
Utilities 1.3%
Atlantic City Electric Transition Funding LLC Series 2002-1, Class A4 5.55%, due 10/20/23	$	2,525,000	$	2,928,141
Total Asset-Backed Security (Cost $2,551,290)				2,928,141
Corporate Bonds 4.6%
Agriculture 1.2%
Altria Group, Inc. 2.85%, due 8/9/22		1,110,000		1,030,958
9.70%, due 11/10/18		1,149,000		1,542,940
				2,573,898
Pipelines 1.1%
Plains All American Pipeline, L.P. / PAA Finance Corp. 5.00%, due 2/1/21		2,300,000		2,519,843
Real Estate Investment Trusts 0.9%
Host Hotels & Resorts, L.P. 3.75%, due 10/15/23		2,150,000		2,039,488
Telecommunications 1.4%
Crown Castle Towers LLC 4.883%, due 8/15/40 (a)		2,900,000		3,119,246
Total Corporate Bonds (Cost $10,132,328)				10,252,475
Mortgage-Backed Securities 4.5%
Commercial Mortgage Loans (Collateralized Mortgage Obligations) 3.9%
Bear Stearns Commercial Mortgage Securities Trust Series 2005-PW10, Class A4 5.405%, due 12/11/40 (b)		1,970,000		2,100,118
CD 2006-CD3 Mortgage Trust Series 2006-CD3, Class A5 5.617%, due 10/15/48		710,000		779,234
CD 2007-CD5 Mortgage Trust Series 2007-CD5, Class A4 5.886%, due 11/15/44 (b)		1,433,575		1,628,028
DBUBS Mortgage Trust Series 2011-LC2A, Class A2 3.386%, due 7/10/44 (a)		520,000		544,242
Four Times Square Trust Series 2006-4TS, Class A 5.401%, due 12/13/28 (a)		620,000		699,675

	Principal Amount		Value
Commercial Mortgage Loans (Collateralized Mortgage Obligations) (continued)
GE Capital Commercial Mortgage Corp. Series 2004-C2, Class A4 4.893%, due 3/10/40	$	488,045	$	489,899
JP Morgan Chase Commercial Mortgage Securities Trust Series 2011-C4, Class A3 4.106%, due 7/15/46 (a)		1,055,000		1,138,645
Series 2007-CB20, Class A3 5.819%, due 2/12/51		600,000		604,186
RBSCF Trust Series 2010-MB1, Class A2 3.686%, due 4/15/24 (a)		800,000		826,054
				8,810,081
Residential Mortgages (Collateralized Mortgage Obligations) 0.6%
Citigroup Mortgage Loan Trust, Inc. Series 2006-AR6, Class 1A1 5.605%, due 8/25/36 (c)		438,497		399,868
Mortgage Equity Conversion Asset Trust Series 2007-FF2, Class A 0.60%, due 2/25/42 (a)(b)(d)(e)		1,406,813		1,026,952
				1,426,820
Total Mortgage-Backed Securities (Cost $10,276,802)				10,236,901
U.S. Government & Federal Agencies 87.7%
Fannie Mae Strip (Collateralized Mortgage Obligations) 0.0%‡
Series 360, Class 2, IO 5.00%, due 8/1/35 (f)		461,527		80,925
Series 361, Class 2, IO 6.00%, due 10/1/35 (f)		95,139		17,778
				98,703
Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities) 19.9%
2.375%, due 1/13/22		2,250,000		2,205,716
2.375%, due 6/1/35 (b)		296,377		315,321
2.413%, due 2/1/37 (b)		92,397		97,797
2.50%, due 3/1/35 (b)		43,322		46,087
3.50%, due 10/1/25		697,961		735,630
¨3.50%, due 11/1/25		3,952,354		4,166,829
4.00%, due 3/1/25		1,828,600		1,940,133
4.00%, due 7/1/25		583,146		621,032
4.00%, due 8/1/31		241,273		254,915
4.00%, due 8/1/39		423,517		447,358
¨4.00%, due 12/1/40		4,129,656		4,354,026
¨4.00%, due 2/1/41		6,564,810		6,916,180
¨4.00%, due 3/1/41		7,696,608		8,119,217

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

12 MainStay Government Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
U.S. Government & Federal Agencies (continued)
Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities) (continued)
4.00%, due 4/1/41	$	701,270	$	737,211
4.00%, due 1/1/42		3,571,592		3,767,286
4.00%, due 12/1/42		982,373		1,029,974
4.50%, due 3/1/41		1,172,164		1,264,311
4.50%, due 8/1/41		1,593,577		1,712,223
5.00%, due 1/1/20		188,723		200,730
5.00%, due 6/1/33		877,952		952,029
5.00%, due 8/1/33		732,036		794,196
5.00%, due 5/1/36		773,559		834,304
5.00%, due 10/1/39		1,282,917		1,407,100
5.50%, due 1/1/21		543,619		590,670
5.50%, due 11/1/35		663,007		728,165
5.50%, due 11/1/36		186,088		204,293
6.50%, due 4/1/37		150,762		168,615
				44,611,348
Federal National Mortgage Association (Mortgage Pass-Through Securities) 51.1%
2.027%, due 11/1/34 (b)		298,450		315,680
2.333%, due 4/1/34 (b)		439,382		465,291
3.00%, due 10/1/32		1,281,887		1,293,930
3.50%, due 11/1/20		3,117,346		3,301,490
3.50%, due 10/1/25		1,554,935		1,643,918
¨3.50%, due 11/1/25		10,551,808		11,160,710
3.50%, due 11/1/32		916,775		954,782
3.50%, due 2/1/41		2,916,629		2,993,652
3.50%, due 11/1/41		2,921,929		3,002,705
3.50%, due 12/1/41		364,224		374,312
3.50%, due 1/1/42		2,331,283		2,398,137
3.50%, due 3/1/42		2,640,912		2,710,749
3.50%, due 8/1/42		1,818,849		1,844,417
3.50%, due 12/1/42		964,019		990,812
3.50%, due 2/1/43		1,437,956		1,477,896
3.50%, due 5/1/43		926,572		951,458
4.00%, due 9/1/31		2,433,102		2,590,857
4.00%, due 2/1/41		1,082,917		1,145,477
4.00%, due 3/1/41		3,003,116		3,183,138
4.00%, due 10/1/41		704,523		746,494
4.00%, due 3/1/42		1,991,650		2,089,491
4.00%, due 4/1/42		920,467		965,532
4.00%, due 6/1/42		2,259,797		2,362,563
4.00%, due 7/1/42		2,135,860		2,232,364
4.50%, due 7/1/18		2,461,767		2,616,130
4.50%, due 11/1/18		1,508,570		1,602,673
4.50%, due 6/1/23		812,334		864,314
4.50%, due 6/1/39		3,491,236		3,772,460
4.50%, due 7/1/39		2,880,757		3,121,422
4.50%, due 8/1/39		1,986,770		2,149,061
4.50%, due 9/1/40		2,051,282		2,223,999

	Principal Amount		Value
Federal National Mortgage Association (Mortgage Pass-Through Securities) (continued)
4.50%, due 12/1/40	$	2,890,525	$	3,106,265
¨4.50%, due 1/1/41		4,418,874		4,790,587
4.50%, due 2/1/41		1,127,596		1,220,653
4.50%, due 8/1/41		1,184,941		1,276,525
5.00%, due 9/1/17		734,090		778,487
5.00%, due 9/1/20		62,954		66,800
5.00%, due 11/1/33		860,248		937,478
5.00%, due 6/1/35		821,386		892,309
5.00%, due 10/1/35		362,571		393,782
5.00%, due 1/1/36		192,189		208,727
5.00%, due 2/1/36		1,364,093		1,481,373
5.00%, due 5/1/36		945,741		1,027,225
5.00%, due 6/1/36		173,405		188,278
5.00%, due 9/1/36		248,042		269,435
5.00%, due 3/1/40		1,912,329		2,093,291
5.00%, due 2/1/41		3,269,655		3,620,512
5.50%, due 1/1/17		48,516		51,456
5.50%, due 2/1/17		1,102,437		1,169,329
5.50%, due 6/1/19		748,467		804,586
5.50%, due 11/1/19		859,623		924,130
5.50%, due 4/1/21		1,201,304		1,301,156
5.50%, due 6/1/33		2,569,636		2,818,535
5.50%, due 11/1/33		1,476,250		1,613,817
5.50%, due 12/1/33		1,781,934		1,951,032
5.50%, due 6/1/34		428,219		467,628
5.50%, due 12/1/34		148,957		162,526
5.50%, due 3/1/35		742,014		807,420
5.50%, due 12/1/35		188,087		205,203
5.50%, due 4/1/36		607,931		662,927
5.50%, due 9/1/36		191,511		209,075
5.50%, due 7/1/37		363,186		404,508
6.00%, due 12/1/16		102,283		107,047
6.00%, due 11/1/32		447,882		496,566
6.00%, due 1/1/33		323,186		358,346
6.00%, due 3/1/33		384,402		420,604
6.00%, due 9/1/34		149,524		165,817
¨6.00%, due 3/1/35 TBA (g)		5,300,000		5,804,949
6.00%, due 9/1/35		1,136,062		1,260,233
6.00%, due 10/1/35		416,245		463,392
6.00%, due 6/1/36		426,661		467,840
6.00%, due 11/1/36		898,160		994,116
6.00%, due 4/1/37		162,925		175,328
6.50%, due 10/1/31		258,612		297,298
6.50%, due 2/1/37		107,133		125,032
				114,587,537
Government National Mortgage Association (Mortgage Pass-Through Securities) 9.7%
4.00%, due 7/15/39		761,492		810,802
4.00%, due 9/20/40		3,034,149		3,258,669

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount			Value
U.S. Government & Federal Agencies (continued)
Government National Mortgage Association (Mortgage Pass-Through Securities) (continued)
4.00%, due 11/20/40	$	435,133		$	467,284
4.00%, due 1/15/41		2,863,410			3,067,787
¨4.00%, due 10/15/41		4,066,346			4,359,834
4.50%, due 5/20/40		3,604,728			3,919,720
5.00%, due 2/20/41		869,560			952,269
5.50%, due 10/1/35 TBA (g)		2,950,000			3,222,760
6.00%, due 8/15/32		535,544			595,484
6.00%, due 12/15/32		291,560			325,900
6.50%, due 8/15/28		194,087			221,894
6.50%, due 4/15/31		531,229			615,851
					21,818,254
¨Overseas Private Investment Corporation 2.8%
5.142%, due 12/15/23		5,648,253			6,369,072
Tennessee Valley Authority 4.2%
¨4.65%, due 6/15/35		5,605,000			5,773,795
6.25%, due 12/15/17		2,980,000			3,556,585
					9,330,380
Total U.S. Government & Federal Agencies (Cost $190,377,429)					196,815,294
Total Long-Term Bonds (Cost $213,337,849)					220,232,811
Short-Term Investment 5.6%
Repurchase Agreement 5.6%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $12,544,250 (Collateralized by a Federal National Mortgage Association security with a rate of 2.17% and a maturity date of 11/7/22, with a Principal Amount of $13,550,000 and a Market Value of $12,796,728)		12,544,250			12,544,250
Total Short-Term Investment (Cost $12,544,250)					12,544,250
Total Investments (Cost $225,882,099) (j)		103.7	%		232,777,061
Other Assets, Less Liabilities		(3.7	)		(8,405,181	)
Net Assets		100.0	%	$	224,371,880

	Contracts Short			Unrealized Appreciation (Depreciation) (h)
Futures Contracts (0.4%)
United States Treasury Notes December 2013 (5 Year) (i)		(220	)	$	(485,237	)
United States Treasury Notes December 2013 (10 Year) (i)		(90	)		(312,413	)
Total Futures Contracts Short (Settlement Value $38,233,594)				$	(797,650	)

‡ Less than one-tenth of a percent.

(a) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(b) Floating rate—Rate shown is the rate in effect as of October 31, 2013.

(c) Collateral strip rate—A bond whose interest is based on the weighted net interest rate of the collateral. The coupon rate adjusts periodically based on a predetermined schedule. Rate shown is the rate in effect as of October 31, 2013.

(d) Illiquid security—The total market value of this security as of October 31, 2013 is $1,026,952, which represents 0.5% of the Fund’s net assets.

(e) Fair valued security—The total market value of this security as of October 31, 2013 is $1,026,952, which represents 0.5% of the Fund’s net assets.

(f) Collateralized Mortgage Obligation Interest Only Strip—Pays a fixed or variable rate of interest based on mortgage loans or mortgage pass-through securities. The principal amount of the underlying pool represents the notional amount on which the current interest is calculated. The value of these stripped securities may be particularly sensitive to changes in prevailing interest rates and are typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities.

(g) TBA—Securities purchased on a forward commitment basis with an approximate principal amount and maturity date. The actual principal amount and maturity date will be determined upon settlement. The market value of these securities as of October 31, 2013, is $9,027,709, which represents 4.0% of the Fund’s net assets. All or a portion of these securities were acquired under a mortgage dollar roll agreement.

(h) Represents the difference between the value of the contracts at the time they were opened and the value as of October 31, 2013.

(i) As of October 31, 2013, cash in the amount of $330,750 is on deposit with a broker for futures transactions.

(j) As of October 31, 2013, cost is $225,882,099 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	8,757,175
Gross unrealized depreciation		(1,862,213	)
Net unrealized appreciation	$	6,894,962

14 MainStay Government Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets and liabilities.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Security	$	—	$	2,928,141	$	—	$	2,928,141
Corporate Bonds		—		10,252,475		—		10,252,475
Mortgage-Backed Securities (b)		—		9,209,949		1,026,952		10,236,901
U.S. Government & Federal Agencies		—		196,815,294		—		196,815,294
Total Long-Term Bonds		—		219,205,859		1,026,952		220,232,811
Short-Term Investment
Repurchase Agreement		—		12,544,250		—		12,544,250
Total Investments in Securities	$	—	$	231,750,109	$	1,026,952	$	232,777,061

Liability Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments
Futures Contracts Short (c)	$	(797,650	)	$	—	$	—	$	(797,650	)
Total Other Financial Instruments	$	(797,650	)	$	—	$	—	$	(797,650	)

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The Level 3 security valued at $1,026,952 is held in Residential Mortgages (Collateralized Mortgage Obligations) within the Mortgage-Backed Securities section of the Portfolio of Investments.

(c) The value listed for these securities reflects unrealized appreciation (depreciation) as shown on the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012		Accrued Discounts (Premiums)		Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)			Purchases		Sales			Transfers into Level 3		Transfers out of Level 3		Balance as of October 31, 2013		Change in Unrealized Appreciation (Depreciation) from Investments Still Held at October 31, 2013 (a)
Long-Term Bonds
Mortgage-Backed Securities
Residential Mortgage (Collateralized Mortgage Obligation)	$	1,101,621	$	627	$	1,407	$	(78,108	)	$	84,811	$	(83,406	)(b)	$	—	$	—	$	1,026,952	$	(105,415	)
Total	$	1,101,621	$	627	$	1,407	$	(78,108	)	$	84,811	$	(83,406	)	$	—	$	—	$	1,026,952	$	(105,415	)

(a) Included in “Net change in unrealized appreciation (depreciation) on investments” in the Statement of Operations.

(b) Sales include principal reductions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $225,882,099)	$	232,777,061
Cash collateral on deposit at broker		330,750
Receivables:
Interest		944,479
Fund shares sold		130,080
Variation margin on futures contracts		12,344
Investment securities sold		8,561
Other assets		18,737
Total assets		234,222,012
Liabilities
Payables:
Investment securities purchased		9,015,984
Fund shares redeemed		483,999
Transfer agent (See Note 3)		113,872
Manager (See Note 3)		89,674
NYLIFE Distributors (See Note 3)		65,507
Shareholder communication		30,087
Professional fees		13,587
Custodian		3,011
Trustees		536
Accrued expenses		4,217
Dividend payable		29,658
Total liabilities		9,850,132
Net assets	$	224,371,880
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	261,588
Additional paid-in capital		216,853,844
		217,115,432
Distributions in excess of net investment income		(29,658	)
Accumulated net realized gain (loss) on investments and futures transactions		1,188,794
Net unrealized appreciation (depreciation) on investments and futures contracts		6,097,312
Net assets	$	224,371,880

Investor Class
Net assets applicable to outstanding shares	$	50,200,070
Shares of beneficial interest outstanding		5,836,197
Net asset value per share outstanding	$	8.60
Maximum sales charge (4.50% of offering price)		0.41
Maximum offering price per share outstanding	$	9.01
Class A
Net assets applicable to outstanding shares	$	143,234,359
Shares of beneficial interest outstanding		16,714,819
Net asset value per share outstanding	$	8.57
Maximum sales charge (4.50% of offering price)		0.40
Maximum offering price per share outstanding	$	8.97
Class B
Net assets applicable to outstanding shares	$	14,783,267
Shares of beneficial interest outstanding		1,725,538
Net asset value and offering price per share outstanding	$	8.57
Class C
Net assets applicable to outstanding shares	$	12,593,448
Shares of beneficial interest outstanding		1,470,719
Net asset value and offering price per share outstanding	$	8.56
Class I
Net assets applicable to outstanding shares	$	3,560,736
Shares of beneficial interest outstanding		411,530
Net asset value and offering price per share outstanding	$	8.65

16 MainStay Government Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	8,201,943
Expenses
Manager (See Note 3)		1,388,530
Distribution/Service—Investor Class (See Note 3)		135,888
Distribution/Service—Class A (See Note 3)		398,327
Distribution/Service—Class B (See Note 3)		185,706
Distribution/Service—Class C (See Note 3)		197,146
Transfer agent (See Note 3)		685,392
Registration		76,350
Shareholder communication		60,724
Professional fees		59,773
Custodian		18,933
Trustees		5,199
Miscellaneous		12,511
Total expenses before waiver/reimbursement		3,224,479
Expense waiver/reimbursement from Manager (See Note 3)		(158,810	)
Net expenses		3,065,669
Net investment income (loss)		5,136,274
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts
Net realized gain (loss) on:
Security transactions		898,798
Futures transactions		321,536
Net realized gain (loss) on investments and futures transactions		1,220,334
Net change in unrealized appreciation (depreciation) on:
Investments		(12,708,797	)
Futures contracts		(797,650	)
Net change in unrealized appreciation (depreciation) on investments and futures contracts		(13,506,447	)
Net realized and unrealized gain (loss) on investments and futures transactions		(12,286,113	)
Net increase (decrease) in net assets resulting from operations	$	(7,149,839	)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	5,136,274		$	6,699,419
Net realized gain (loss) on investments and futures transactions		1,220,334			1,112,552
Net change in unrealized appreciation (depreciation) on investments and futures contracts		(13,506,447	)		5,113,508
Net increase (decrease) in net assets resulting from operations		(7,149,839	)		12,925,479
Dividends and distributions to shareholders:
From net investment income:
Investor Class		(1,111,828	)		(1,402,870	)
Class A		(3,529,657	)		(4,505,357	)
Class B		(240,849	)		(386,316	)
Class C		(251,321	)		(479,756	)
Class I		(100,949	)		(123,869	)
		(5,234,604	)		(6,898,168	)
From net realized gain on investments:
Investor Class		(199,692	)		(160,179	)
Class A		(601,802	)		(479,452	)
Class B		(75,460	)		(69,111	)
Class C		(94,570	)		(81,368	)
Class I		(19,247	)		(10,359	)
		(990,771	)		(800,469	)
Total dividends and distributions to shareholders		(6,225,375	)		(7,698,637	)
Capital share transactions:
Net proceeds from sale of shares		15,207,807			45,617,984
Net asset value of shares issued to shareholders in reinvestment of dividends and distributions		5,625,135			6,706,090
Cost of shares redeemed		(70,561,537	)		(64,943,577	)
Increase (decrease) in net assets derived from capital share transactions		(49,728,595	)		(12,619,503	)
Net increase (decrease) in net assets		(63,103,809	)		(7,392,661	)
Net Assets
Beginning of year		287,475,689			294,868,350
End of year	$	224,371,880		$	287,475,689
Undistributed (distributions in excess of) net investment income at end of year	$	(29,658	)	$	37,350

18 MainStay Government Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.05		$	8.90		$	9.03		$	8.75		$	8.16
Net investment income (loss) (a)		0.18			0.21			0.23			0.21			0.26
Net realized and unrealized gain (loss) on investments		(0.42	)		0.17			(0.00	)‡		0.28			0.59
Total from investment operations		(0.24	)		0.38			0.23			0.49			0.85
Less dividends and distributions:
From net investment income		(0.18	)		(0.21	)		(0.27	)		(0.21	)		(0.26	)
From net realized gain on investments		(0.03	)		(0.02	)		(0.09	)		—			—
Total dividends and distributions		(0.21	)		(0.23	)		(0.36	)		(0.21	)		(0.26	)
Net asset value at end of year	$	8.60		$	9.05		$	8.90		$	9.03		$	8.75
Total investment return (b)		(2.66	%)		4.42	%		2.73	%		5.67	%		10.67	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		2.01	%		2.32	%		2.61	%		2.37	%		2.99	%
Net expenses		1.19	%		1.17	%		1.17	%		1.15	%		1.04	%
Expenses (before waiver/reimbursement)		1.25	%		1.28	%		1.31	%		1.32	%		1.34	%
Portfolio turnover rate (c)		28	%		37	%		62	%		132	%		103	%
Net assets at end of year (in 000’s)	$	50,200		$	57,666		$	59,533		$	62,350		$	63,591

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls were 7%, 16%, 43%, 19% and 45% for the years ended October 31, 2013, 2012, 2011, 2010 and 2009, respectively.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.02		$	8.86		$	9.00		$	8.72		$	8.13
Net investment income (loss) (a)		0.19			0.22			0.24			0.22			0.27
Net realized and unrealized gain (loss) on investments		(0.41	)		0.19			(0.01	)		0.28			0.59
Total from investment operations		(0.22	)		0.41			0.23			0.50			0.86
Less dividends and distributions:
From net investment income		(0.20	)		(0.23	)		(0.28	)		(0.22	)		(0.27	)
From net realized gain on investments		(0.03	)		(0.02	)		(0.09	)		—			—
Total dividends and distributions		(0.23	)		(0.25	)		(0.37	)		(0.22	)		(0.27	)
Net asset value at end of year	$	8.57		$	9.02		$	8.86		$	9.00		$	8.72
Total investment return (b)		(2.50	%)		4.70	%		2.76	%		5.81	%		10.71	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		2.17	%		2.46	%		2.74	%		2.49	%		3.11	%
Net expenses		1.03	%		1.03	%		1.03	%		1.03	%		0.92	%
Expenses (before waiver/reimbursement)		1.09	%		1.14	%		1.17	%		1.20	%		1.21	%
Portfolio turnover rate (c)		28	%		37	%		62	%		132	%		103	%
Net assets at end of year (in 000’s)	$	143,234		$	174,621		$	176,253		$	187,828		$	187,771

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls were 7%, 16%, 43%, 19% and 45% for the years ended October 31, 2013, 2012, 2011, 2010 and 2009, respectively.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.02		$	8.86		$	9.00		$	8.71		$	8.13
Net investment income (loss) (a)		0.11			0.14			0.16			0.14			0.19
Net realized and unrealized gain (loss) on investments		(0.42	)		0.19			(0.00	)‡		0.29			0.59
Total from investment operations		(0.31	)		0.33			0.16			0.43			0.78
Less dividends and distributions:
From net investment income		(0.11	)		(0.15	)		(0.21	)		(0.14	)		(0.20	)
From net realized gain on investments		(0.03	)		(0.02	)		(0.09	)		—			—
Total dividends and distributions		(0.14	)		(0.17	)		(0.30	)		(0.14	)		(0.20	)
Net asset value at end of year	$	8.57		$	9.02		$	8.86		$	9.00		$	8.71
Total investment return (b)		(3.40	%)		3.77	%		1.85	%		5.02	%		9.62	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.26	%		1.57	%		1.85	%		1.62	%		2.24	%
Net expenses		1.94	%		1.92	%		1.92	%		1.90	%		1.79	%
Expenses (before waiver/reimbursement)		2.00	%		2.03	%		2.06	%		2.07	%		2.09	%
Portfolio turnover rate (c)		28	%		37	%		62	%		132	%		103	%
Net assets at end of year (in 000’s)	$	14,783		$	21,826		$	25,644		$	36,859		$	45,178

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls were 7%, 16%, 43%, 19% and 45% for the years ended October 31, 2013, 2012, 2011, 2010 and 2009, respectively.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.01		$	8.86		$	9.00		$	8.71		$	8.12
Net investment income (loss) (a)		0.11			0.14			0.16			0.14			0.19
Net realized and unrealized gain (loss) on investments		(0.42	)		0.18			(0.00	)‡		0.29			0.60
Total from investment operations		(0.31	)		0.32			0.16			0.43			0.79
Less dividends and distributions:
From net investment income		(0.11	)		(0.15	)		(0.21	)		(0.14	)		(0.20	)
From net realized gain on investments		(0.03	)		(0.02	)		(0.09	)		—			—
Total dividends and distributions		(0.14	)		(0.17	)		(0.30	)		(0.14	)		(0.20	)
Net asset value at end of year	$	8.56		$	9.01		$	8.86		$	9.00		$	8.71
Total investment return (b)		(3.41	%)		3.66	%		1.85	%		5.02	%		9.75	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.24	%		1.57	%		1.86	%		1.62	%		2.23	%
Net expenses		1.94	%		1.92	%		1.92	%		1.90	%		1.80	%
Expenses (before waiver/reimbursement)		2.00	%		2.03	%		2.06	%		2.07	%		2.09	%
Portfolio turnover rate (c)		28	%		37	%		62	%		132	%		103	%
Net assets at end of year (in 000’s)	$	12,593		$	27,610		$	29,441		$	33,523		$	32,659

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rates not including mortgage dollar rolls were 7%, 16%, 43%, 19% and 45% for the years ended October 31, 2013, 2012, 2011, 2010 and 2009, respectively.

20 MainStay Government Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	9.10		$	8.94		$	9.08		$	8.79		$	8.19
Net investment income (loss) (a)		0.21			0.24			0.26			0.24			0.30
Net realized and unrealized gain (loss) on investments		(0.41	)		0.19			(0.00	)‡		0.29			0.61
Total from investment operations		(0.20	)		0.43			0.26			0.53			0.91
Less dividends and distributions:
From net investment income		(0.22	)		(0.25	)		(0.31	)		(0.24	)		(0.31	)
From net realized gain on investments		(0.03	)		(0.02	)		(0.09	)		—			—
Total dividends and distributions		(0.25	)		(0.27	)		(0.40	)		(0.24	)		(0.31	)
Net asset value at end of year	$	8.65		$	9.10		$	8.94		$	9.08		$	8.79
Total investment return (b)		(2.24	%)		4.92	%		2.99	%		6.14	%		11.21	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		2.42	%		2.69	%		2.99	%		2.74	%		3.52	%
Net expenses		0.78	%		0.78	%		0.78	%		0.78	%		0.51	%
Expenses (before waiver/reimbursement)		0.84	%		0.89	%		0.92	%		0.95	%		0.97	%
Portfolio turnover rate (c)		28	%		37	%		62	%		132	%		103	%
Net assets at end of year (in 000’s)	$	3,561		$	5,753		$	3,998		$	4,284		$	1,746

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) The portfolio turnover rates not including mortgage dollar rolls were 7%, 16%, 43%, 19% and 45% for the years ended October 31, 2013, 2012, 2011, 2010 and 2009, respectively.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Government Fund (the “Fund”), a diversified fund.

The Fund currently offers five classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on May 1, 1986. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on January 2, 2004. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek current income.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via tele-

conference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable

22 MainStay Government Fund

inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•   Benchmark Yields	•   Reported Trades
•   Broker Dealer Quotes	•   Issuer Spreads
•   Two-sided markets	•   Benchmark securities
•   Bids / Offers	•   Reference Data (corporate actions or material event notices)
•   Industry and economic events	•   Comparable bonds
•   Equity and credit default swap curves	•   Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund’s Manager or Subadvisor might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund’s liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisor measure the liquidity of the Fund’s investments; in doing so, the Manager or Subadvisor may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

mainstayinvestments.com 23

Notes to Financial Statements (continued)

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least monthly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method and include gains and losses from repayments of principal on mortgage-backed securities. Interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method. Income from payment-in-kind securities is recorded daily based on the effective interest method of accrual.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisors to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager will continue to monitor the cred-

itworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(H)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., foreign currency, interest rate, security, or securities index). The Fund is subject to equity price risk and/or interest rate risk in the normal course of investing in these transactions. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by ‘‘marking-to-market’’ such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as ‘‘variation margin.’’ When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund’s investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund.

(I)  Dollar Rolls.  The Fund may enter into dollar roll transactions in which it sells mortgage-backed securities (“MBS”) from its portfolio to a counterparty from whom it simultaneously agrees to buy a similar security on a delayed delivery basis. The dollar roll transactions of the Fund are classified as purchase and sale transactions. The securities sold in connection with the dollar rolls are removed from the portfolio and a realized gain or loss is recognized. The securities the Fund has agreed to acquire are included at market value in the Portfolio of Investments and liabilities for such purchase commitments are included as payables

24 MainStay Government Fund

for investments purchased. During the roll period, the Fund foregoes principal and interest paid on the securities. The Fund is compensated by the difference between the current sales price and the forward price for the future as well as by the earnings on the cash proceeds of the initial sale. Dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Fund maintains liquid assets from its portfolio having a value not less than the repurchase price, including accrued interest. Dollar roll transactions involve certain risks, including the risk that the MBS returned to the Fund at the end of the roll period, while substantially similar, could be inferior to what was initially sold to the counterparty.

(J)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(K)  Concentration of Risk.  The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(L)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(M)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Liability Derivatives

	Statement of Assets and Liabilities Location	Interest Rate Contracts Risk			Total
Futures Contracts	Net Assets-Net unrealized appreciation (depreciation) on investments and futures contracts (a)	$	(797,650	)	$	(797,650	)
Total Fair Value		$	(797,650	)	$	(797,650	)

(a) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Portfolio of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Interest Rate Contracts Risk		Total
Futures Contracts	Net realized gain (loss) on futures transactions	$	321,536	$	321,536
Total Realized Gain (Loss)		$	321,536	$	321,536

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Interest Rate Contracts Risk			Total
Futures Contracts	Net change in unrealized appreciation (depreciation) on futures contracts	$	(797,650	)	$	(797,650	)
Total Change in Unrealized Appreciation (Depreciation)		$	(797,650	)	$	(797,650	)

mainstayinvestments.com 25

Notes to Financial Statements (continued)

Number of Contracts, Notional Amounts or Shares/Units (1)

	Interest Rate Contracts Risk			Total
Futures Contracts Long		(293	)		(293	)

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or the “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

Effective February 28, 2013, the Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of its average daily net assets as follows: 0.50% up to $500 million; 0.475% from $500 million to $1 billion; and 0.45% in excess of $1 billion.

Prior to February 28, 2013, the Fund paid the Manager a monthly fee for services performed and facilities furnished at an annual rate of its average daily net assets as follows: 0.60% up to $500 million; 0.575% from $500 million to $1 billion; and 0.55% in excess of $1 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement, furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million.

The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.54% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets. The fund accounting fee was discontinued February 28, 2013.

Additionally, New York life Investments had contractually agreed to waive fees and/or reimburse expenses so that the management fee does not exceed 0.5% up to $500 million; 0.475% from $500 million to $1 billion; and 0.45% in excess of $1 billion.

New York Life Investments has contractually agreed to waive fees and/or reimburse expenses so that Total Annual Fund Operating Expenses

for the Fund’s Class A shares do not exceed 1.03% of its average daily net assets. New York Life Investments will apply an equivalent waiver or reimbursement, in an equal number of basis points, to the other share classes of the Fund. This agreement will remain in effect until February 28, 2014, and shall renew automatically for one-year terms unless New York Life Investments provides written notice of termination prior to the start of the next term or upon approval of the Board. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $1,388,530 and waived its fees and/or reimbursed expenses in the amount of $158,810.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $6,905 and $8,313, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $39, $2,477, $36,758 and $829, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM

26 MainStay Government Fund

Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	202,255
Class A		332,439
Class B		69,008
Class C		73,058
Class I		8,632

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary   Income	Accumulated Capital and Other Gain (Loss)		Other Temporary Differences			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
$—	$	391,144	$	(29,658	)	$	6,894,962	$	7,256,448

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to mark to market of futures contracts. The other temporary differences are primarily due to dividends payable.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
	$31,322	$	(31,322	)	$	—

The reclassifications for the Fund are primarily due to distribution re-designations and mortgage dollar rolls.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	5,193,857	$	6,898,168
Long-Term Capital Gain		1,031,518		800,469
Total	$	6,225,375	$	7,698,637

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of U.S. government securities were $69,525 and $115,428, respectively. Purchases and sales of securities, other than U.S. government securities and short-term securities, were $2,234 and $12,733, respectively.

mainstayinvestments.com 27

Notes to Financial Statements (continued)

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		232,544		$	2,064,076
Shares issued to shareholders in reinvestment of dividends and distributions		141,775			1,249,696
Shares redeemed		(1,143,964	)		(10,028,573	)
Net increase (decrease) in shares outstanding before conversion		(769,645	)		(6,714,801	)
Shares converted into Investor Class (See Note 1)		372,245			3,264,966
Shares converted from Investor Class (See Note 1)		(135,809	)		(1,198,876	)
Net increase (decrease)		(533,209	)	$	(4,648,711	)
Year ended October 31, 2012:
Shares sold		412,800		$	3,701,825
Shares issued to shareholders in reinvestment of dividends and distributions		165,025			1,479,583
Shares redeemed		(979,647	)		(8,792,514	)
Net increase (decrease) in shares outstanding before conversion		(401,822	)		(3,611,106	)
Shares converted into Investor Class (See Note 1)		426,787			3,827,336
Shares converted from Investor Class (See Note 1)		(347,894	)		(3,123,154	)
Net increase (decrease)		(322,929	)	$	(2,906,924	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		793,360		$	6,970,145
Shares issued to shareholders in reinvestment of dividends and distributions		425,500			3,736,011
Shares redeemed		(3,972,078	)		(34,779,426	)
Net increase (decrease) in shares outstanding before conversion		(2,753,218	)		(24,073,270	)
Shares converted into Class A (See Note 1)		257,563			2,262,787
Shares converted from Class A (See Note 1)		(147,227	)		(1,280,945	)
Net increase (decrease)		(2,642,882	)	$	(23,091,428	)
Year ended October 31, 2012:
Shares sold		2,981,393		$	26,634,948
Shares issued to shareholders in reinvestment of dividends and distributions		486,925			4,350,002
Shares redeemed		(4,423,774	)		(39,645,645	)
Net increase (decrease) in shares outstanding before conversion		(955,456	)		(8,660,695	)
Shares converted into Class A (See Note 1)		554,513			4,951,502
Shares converted from Class A (See Note 1)		(124,452	)		(1,117,443	)
Net increase (decrease)		(525,395	)	$	(4,826,636	)

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		284,431		$	2,497,083
Shares issued to shareholders in reinvestment of dividends and distributions		31,518			277,771
Shares redeemed		(662,796	)		(5,774,188	)
Net increase (decrease) in shares outstanding before conversion		(346,847	)		(2,999,334	)
Shares converted from Class B (See Note 1)		(347,821	)		(3,047,932	)
Net increase (decrease)		(694,668	)	$	(6,047,266	)
Year ended October 31, 2012:
Shares sold		460,007		$	4,114,324
Shares issued to shareholders in reinvestment of dividends and distributions		45,752			408,147
Shares redeemed		(470,076	)		(4,205,073	)
Net increase (decrease) in shares outstanding before conversion		35,683			317,398
Shares converted from Class B (See Note 1)		(509,203	)		(4,538,241	)
Net increase (decrease)		(473,520	)	$	(4,220,843	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		240,284		$	2,123,089
Shares issued to shareholders in reinvestment of dividends and distributions		29,113			256,527
Shares redeemed		(1,861,629	)		(16,340,739	)
Net increase (decrease)		(1,592,232	)	$	(13,961,123	)
Year ended October 31, 2012:
Shares sold		786,623		$	7,017,951
Shares issued to shareholders in reinvestments of dividends and distributions		39,185			349,640
Shares redeemed		(1,086,482	)		(9,710,415	)
Net increase (decrease)		(260,674	)	$	(2,342,824	)
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		174,827		$	1,553,414
Shares issued to shareholders in reinvestment of dividends and distributions		11,838			105,130
Shares redeemed		(407,043	)		(3,638,611	)
Net increase (decrease)		(220,378	)	$	(1,980,067	)
Year ended October 31, 2012:
Shares sold		459,198		$	4,148,936
Shares issued to shareholders in reinvestment of dividends and distributions		13,153			118,718
Shares redeemed		(287,451	)		(2,589,930	)
Net increase (decrease)		184,900		$	1,677,724

Note 9–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

28 MainStay Government Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Government Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Government Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 29

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years. Accordingly, the Fund paid $1,031,518 as a long term capital gain distribution.

In February 2014 shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

30 MainStay Government Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 31

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

32 MainStay Government Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 33

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

34 MainStay Government Fund

MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31968 MS322-13 MSG11-12/13 NL007

MainStay High Yield Corporate Bond Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	25
Notes to Financial Statements	32
Report of Independent Registered Public Accounting Firm	42
Federal Income Tax Information	43
Proxy Voting Policies and Procedures and Proxy Voting Record	43
Shareholder Reports and Quarterly Portfolio Disclosure	43
Board Members and Officers	44

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		2.41 7.24	%		12.99 14.03	%		7.25 7.74	%		1.03 1.03	%
Class A Shares	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		2.33 7.15			13.02 14.07			7.27 7.76			1.00 1.00
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		1.36 6.36			12.90 13.15			6.93 6.93			1.78 1.78
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		5.36 6.36			13.14 13.14			6.93 6.93			1.78 1.78
Class I Shares4	No Sales Charge			7.40			14.31			8.03			0.75
Class R1 Shares5	No Sales Charge			7.32			14.16			7.90			0.87
Class R2 Shares6	No Sales Charge			7.06			13.92			7.67			1.10
Class R6 Shares7	No Sales Charge			7.65			14.36			8.05			0.59

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on January 2, 2004, include the historical performance of Class B shares through January 1, 2004, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class I shares would likely have been different.

5. Performance figures for Class R1 shares, first offered on June 29, 2012, include the historical performance of Class B shares through June 28, 2012, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class R1 shares would likely have been different.

6. Class R2 shares, first offered on December 14, 2007, but did not commence investment operations until May 1, 2008. Performance figures for Class R2 shares include the historical performance of Class B shares through April 30, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class R2 shares would likely have been different.

7. Performance figures for Class R6 shares, first offered on June 17, 2013, include the historical performance of Class I shares. Performance for Class R6 shares would likely have been different because of differences in expenses attributable to each share class.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Credit Suisse High Yield Index8		8.87	%		17.01	%		8.63	%
Average Lipper High Yield Fund9		8.19			15.21			7.50

8. The Credit Suisse High Yield Index is a market-weighted index that includes publicly traded bonds rated below BBB by Standard & Poor’s and below Baa by Moody’s. The Credit Suisse High Yield Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all income and capital gains. An investment cannot be made directly in an index.

9. The average Lipper high yield fund is representative of funds that, by portfolio practice, aim at high (relative) current yield from fixed income

securities, have no quality or maturity restrictions, and tend to invest in lower-grade debt issues. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay High Yield Corporate Bond Fund

Cost in Dollars of a $1,000 Investment in MainStay High Yield Corporate Bond Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,013.50	$	5.23	$	1,020.00	$	5.24
Class A Shares	$	1,000.00	$	1,013.70	$	5.18	$	1,020.10	$	5.19
Class B Shares	$	1,000.00	$	1,009.90	$	9.02	$	1,016.20	$	9.05
Class C Shares	$	1,000.00	$	1,008.20	$	9.01	$	1,016.20	$	9.05
Class I Shares	$	1,000.00	$	1,013.30	$	3.91	$	1,021.30	$	3.92
Class R1 Shares	$	1,000.00	$	1,014.50	$	4.47	$	1,020.80	$	4.48
Class R2 Shares	$	1,000.00	$	1,011.70	$	5.68	$	1,019.60	$	5.70
Class R6 Shares2,3	$	1,000.00	$	1,027.90	$	2.23	$	1,016.40	$	2.22

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.03% for Investor Class, 1.02% for Class A, 1.78% for Class B and C, 0.77% for Class I, 0.88% for Class R1, 1.12% for Class R2 and 0.59% for Class R6) multiplied by the average account value over the period, divided by 365 and multiplied by 184 days for Investor Class, Class A, Class B, Class C, Class I, Class R1 and Class R2 (to reflect the one-half year period) and 136 days for Class R6 (to reflect the since-inception period). The table above represents actual expenses incurred during the six-month period.

2. Expenses paid during the period reflect ongoing costs for the period from inception through October 31, 2013. Had these shares been offered for the full six-month period ended October 31, 2013, and had the Fund provided a hypothetical 5% annualized return, expenses paid during the period would have been $3.01 for Class R6 and the ending account value would have been $1,022.20 for Class R6.

3. The inception date for Class R6 shares was June 17, 2013.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Holdings or Issuers Held as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Texas Industries, Inc., 9.25%, due 8/15/20

2. GenOn Energy, Inc., 7.875%–9.50%, due 6/15/17–10/15/18

3. Nationstar Mortgage LLC / Nationstar Capital Corp., 6.50%–10.875%, due 4/1/15–7/1/21

4. Schaeffler Finance B.V., 4.75%–8.50%, due 2/15/17–5/15/21

5. Seagate HDD Cayman, 4.75%–7.00%, due 11/1/21–6/1/23

  6. MetroPCS Wireless, Inc., 6.25%–6.625%, due 4/1/21–4/1/23

  7. Concho Resources, Inc., 5.50%–7.00%, due 1/15/21–4/1/23

  8. Ally Financial, Inc., 6.25%–8.30%, due 2/12/15–11/1/31

  9. Algeco Scotsman Global Finance PLC, 8.50%–10.75%, due 10/15/18–10/15/19

10. HCA, Inc., 4.75%–9.00%, due 12/15/14–9/15/25

8 MainStay High Yield Corporate Bond Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers J. Matthew Philo, CFA, and Andrew Susser of MacKay Shields LLC, the Fund’s Subadvisor.

How did MainStay High Yield Corporate Bond Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay High Yield Corporate Bond Fund returned 7.24% for Investor Class shares, 7.15% for Class A shares and 6.36% for Class B and Class C shares for the 12 months ended October 31, 2013. Over the same period, Class I shares returned 7.40%, Class R1 shares returned 7.32%, Class R2 shares returned 7.06% and Class R6 shares returned 7.65%. For the 12 months ended October 31, 2013, all share classes underperformed the 8.87% return of the Credit Suisse High Yield Index,¹ which is the Fund’s broad- based securities-market index, and the 8.19% return of the average Lipper² high yield fund. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund’s performance relative to the Credit Suisse High Yield Index resulted from our bottom-up investment style, which focuses on individual companies and seeks to maximize risk-adjusted returns. The Fund remained conservatively positioned throughout the reporting period because we believed that valuations (as measured by spreads)³ and the resiliency of credit profiles in the higher-quality portion of the high-yield corporate bond market were more attractive. In addition, we viewed valuations in the higher-risk segment of the high-yield market to be generally unattractive. We believe that the riskier segment of the high-yield market is particularly vulnerable because of weak credit profiles and the challenging outlook for corporate earnings. Nevertheless, the Fund’s underweight position relative to the broad high-yield market in credit risk detracted from relative performance during the reporting period, as credits rated CCC⁴ significantly outperformed the rest of the market.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

The U.S. high-yield corporate bond market generated strong returns for the 12 months ended October 31, 2013, as market liquidity and exceptionally low interest rates continued to fuel demand for income-generating assets.

Because the Fund uses a bottom-up investment style, the factors that prompt significant decisions are specific to each

individual company. During the reporting period, we generally believed that valuations for most of the riskier high-yield bonds were unattractive, and we positioned the Fund more conservatively.

During the reporting period, which industries were the strongest positive contributors to the Fund’s absolute performance and which industries were particularly weak?

The strongest positive industry contributions to the Fund’s absolute performance came from investments in energy, financials and transportation. Although no industries generated negative absolute returns during the reporting period, positions in the metals & mining, aerospace and retail industries contributed the least to the Fund’s absolute performance.

Did the Fund make any significant purchases or sales during the reporting period?

The Fund purchased the bonds of MetroPCS in anticipation of its May 2013 merger with T-Mobile US, 74% of which is owned by Deutsche Telekom AG. We believed that the combined company would generate meaningful free cash flow and lower leverage. In addition, we felt that Deutsche Telekom’s ownership position in both the debt and the equity would provide meaningful support. The Fund also initiated a position in Rex Energy, an oil and gas producer. Most of the company’s assets are in proved reserves and had ample reserve asset coverage.

During the reporting period, the Fund sold its position in Brazilian private oil and gas company OGX Petroleo after losing confidence in the company’s asset value. OGX Petroleo has had very disappointing production and cost performance. The Fund also eliminated its position in department store J.C. Penney. The Fund’s bonds in gaming company Station Casinos were called.

How did the Fund’s industry weightings change during the reporting period?

During the reporting period, there were no material changes to the industry weights in the Fund. There was a small increase in the Fund’s exposure to housing and industries because of attractive valuations and yield levels. During the reporting period, the Fund reduced its exposure in the gaming/leisure and health care industries.

1. See footnote on page 6 for more information on the Credit Suisse High Yield Index.

2. See footnote on page 6 for more information on Lipper Inc.

3. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time.

4. An obligation rated ‘CCC’ by Standard & Poor’s (“S&P”) is deemed by S&P to be currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation. It is the opinion of S&P that in the event of adverse business, financial or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund.

mainstayinvestments.com 9

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund held overweight positions relative to the Credit Suisse High Yield Index in the transportation and housing industries. As of the same date, the Fund was underweight relative to the Credit Suisse High Yield Index in the media and energy industries.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay High Yield Corporate Bond Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Long-Term Bonds 94.8%† Convertible Bonds 0.1%
Electric 0.1%
Somerset Cayuga Holding Co., Inc. 20.00%, due 6/15/17 (a)(b)(c)(d)(e)	$	4,132,968	$	6,075,462
Internet 0.0%‡
At Home Corp. 4.75%, due 12/15/49 (c)(d)(e)(f)		61,533,853		6,154
Total Convertible Bonds (Cost $4,159,725)				6,081,616
Corporate Bonds 91.3%
Advertising 0.3%
Lamar Media Corp. 5.875%, due 2/1/22		11,000,000		11,357,500
7.875%, due 4/15/18		7,490,000		7,976,850
9.75%, due 4/1/14		9,780,000		10,122,300
				29,456,650
Aerospace & Defense 1.7%
AAR Corp. 7.25%, due 1/15/22		20,565,000		21,696,075
7.25%, due 1/15/22 (a)		8,795,000		9,278,725
Alliant Techsystems, Inc. 5.25%, due 10/1/21 (a)		3,655,000		3,677,844
6.875%, due 9/15/20		12,270,000		13,098,225
B/E Aerospace, Inc. 5.25%, due 4/1/22		29,690,000		30,506,475
DAE Aviation Holdings, Inc. 11.25%, due 8/1/15 (a)		13,569,000		13,619,884
GenCorp, Inc. 7.125%, due 3/15/21 (a)		22,564,000		24,143,480
TransDigm, Inc. 5.50%, due 10/15/20		4,840,000		4,876,300
7.75%, due 12/15/18		24,730,000		26,584,750
				147,481,758
Apparel 0.5%
Hanesbrands, Inc. 8.00%, due 12/15/16		6,915,000		7,244,154
William Carter Co. (The) 5.25%, due 8/15/21 (a)		17,520,000		17,782,800
Wolverine World Wide, Inc. 6.125%, due 10/15/20		13,709,000		14,600,085
				39,627,039
Auto Manufacturers 0.7%
Allied Specialty Vehicles, Inc. 8.50%, due 11/1/19 (a)		26,100,000		26,100,000

	Principal Amount		Value
Auto Manufacturers (continued)
Jaguar Land Rover Automotive PLC 5.625%, due 2/1/23 (a)	$	8,495,000	$	8,431,288
8.125%, due 5/15/21 (a)		9,590,000		10,884,650
Oshkosh Corp. 8.25%, due 3/1/17		9,644,000		10,222,640
8.50%, due 3/1/20		2,010,000		2,221,050
				57,859,628
Auto Parts & Equipment 5.1%
Allison Transmission, Inc. 7.125%, due 5/15/19 (a)		31,185,000		33,601,837
Chassix, Inc. 9.25%, due 8/1/18 (a)		12,000,000		12,870,000
Continental Rubber of America Corp. 4.50%, due 9/15/19 (a)		18,400,000		19,296,080
Cooper-Standard Automotive, Inc. 8.50%, due 5/1/18		45,044,000		48,422,300
Cooper-Standard Holding, Inc. 7.375%, due 4/1/18 (a)(b)		10,675,000		10,755,063
Dana Holding Corp. 6.50%, due 2/15/19		17,319,000		18,531,330
6.75%, due 2/15/21		6,898,000		7,501,575
Delphi Corp. 5.875%, due 5/15/19		22,280,000		23,728,200
6.125%, due 5/15/21		1,300,000		1,430,000
Exide Technologies 8.625%, due 2/1/18 (f)		64,863,000		50,593,140
International Automotive Components Group S.A. 9.125%, due 6/1/18 (a)		13,960,000		14,378,800
¨Schaeffler Finance B.V. 4.75%, due 5/15/21 (a)		36,944,000		36,851,640
7.75%, due 2/15/17 (a)		45,603,000		51,759,405
8.50%, due 2/15/19 (a)		12,575,000		14,146,875
Schaeffler Holding Finance B.V. 6.875%, due 8/15/18 (a)(b)		48,612,000		51,771,780
Tenneco, Inc. 6.875%, due 12/15/20		10,225,000		11,196,375
7.75%, due 8/15/18		1,300,000		1,404,000
Titan International, Inc. 6.875%, due 10/1/20 (a)		8,640,000		8,856,000
TRW Automotive, Inc. 4.50%, due 3/1/21 (a)		9,065,000		9,246,300
7.00%, due 3/15/14 (a)		7,680,000		7,852,800
7.25%, due 3/15/17 (a)		4,400,000		5,049,000
8.875%, due 12/1/17 (a)		11,595,000		12,174,866
				451,417,366

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings or issuers held as of October 31, 2013, excluding short-term investments. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Banks 1.1%
¨Ally Financial, Inc. 6.25%, due 12/1/17	$	9,836,000	$	10,893,370
7.50%, due 9/15/20		10,228,000		11,966,760
8.00%, due 11/1/31		27,822,000		32,843,871
8.30%, due 2/12/15		22,520,000		24,406,050
Provident Funding Associates, L.P. 6.75%, due 6/15/21 (a)		10,950,000		11,196,375
10.125%, due 2/15/19 (a)		6,460,000		7,186,750
				98,493,176
Beverages 0.6%
Constellation Brands, Inc. 4.25%, due 5/1/23		10,885,000		10,435,994
Cott Beverages, Inc. 8.125%, due 9/1/18		10,215,000		11,019,431
8.375%, due 11/15/17		32,284,000		33,736,780
				55,192,205
Building Materials 3.6%
Boise Cascade Co. 6.375%, due 11/1/20		17,300,000		18,078,500
6.375%, due 11/1/20 (a)		4,325,000		4,519,625
Building Materials Corp. of America 6.75%, due 5/1/21 (a)		11,681,000		12,703,088
6.875%, due 8/15/18 (a)		17,498,000		18,635,370
7.00%, due 2/15/20 (a)		8,265,000		8,884,875
7.50%, due 3/15/20 (a)		18,875,000		20,337,813
CPG Merger Sub LLC 8.00%, due 10/1/21 (a)		7,570,000		7,834,950
Gibraltar Industries, Inc. 6.25%, due 2/1/21		8,525,000		8,823,375
Griffon Corp. 7.125%, due 4/1/18		6,185,000		6,610,219
Headwaters, Inc. 7.625%, due 4/1/19		18,665,000		19,878,225
Jeld-Wen, Inc. 12.25%, due 10/15/17 (a)		20,585,000		23,518,362
¨Texas Industries, Inc. 9.25%, due 8/15/20		98,575,000		108,925,375
USG Corp. 6.30%, due 11/15/16		6,565,000		7,024,550
7.875%, due 3/30/20 (a)		13,850,000		15,235,000
Vulcan Materials Co. 6.40%, due 11/30/17		2,579,000		2,836,900
6.50%, due 12/1/16		23,345,000		25,854,587
7.50%, due 6/15/21		3,655,000		4,107,306
				313,808,120
Chemicals 2.5%
Axiall Corp. 4.875%, due 5/15/23 (a)		12,288,000		11,781,120

	Principal Amount		Value
Chemicals (continued)
Celanese U.S. Holdings LLC 4.625%, due 11/15/22	$	13,465,000	$	13,229,363
Eagle Spinco, Inc. 4.625%, due 2/15/21 (a)		1,639,000		1,585,733
Ineos Finance PLC 7.50%, due 5/1/20 (a)		18,965,000		20,719,262
8.375%, due 2/15/19 (a)		11,120,000		12,398,800
Kraton Polymers LLC / Kraton Polymers Capital Corp. 6.75%, due 3/1/19		17,200,000		17,931,000
Nexeo Solutions LLC / Nexeo Solutions Finance Corp. 8.375%, due 3/1/18		15,240,000		15,163,800
NOVA Chemicals Corp. 5.25%, due 8/1/23 (a)		1,250,000		1,275,000
8.625%, due 11/1/19		7,035,000		7,773,675
Olin Corp. 5.50%, due 8/15/22		12,924,000		12,988,620
8.875%, due 8/15/19		23,156,000		25,471,600
Phibro Animal Health Corp. 9.25%, due 7/1/18 (a)		51,425,000		55,410,437
PolyOne Corp. 5.25%, due 3/15/23		27,026,000		26,857,087
7.375%, due 9/15/20		726,000		804,045
				223,389,542
Coal 2.3%
Arch Coal, Inc. 7.00%, due 6/15/19		39,783,000		30,831,825
7.25%, due 10/1/20		6,520,000		4,963,350
8.75%, due 8/1/16		4,240,000		4,240,000
9.875%, due 6/15/19		6,170,000		5,244,500
CONSOL Energy, Inc. 6.375%, due 3/1/21		2,729,000		2,858,628
8.00%, due 4/1/17		48,731,000		51,654,860
Peabody Energy Corp. 6.00%, due 11/15/18		11,520,000		12,153,600
6.25%, due 11/15/21		14,950,000		15,435,875
6.50%, due 9/15/20		31,490,000		33,221,950
7.875%, due 11/1/26		1,642,000		1,691,260
Penn Virginia Resource Partners, L.P. /Penn Virginia Resource Finance Corp. 8.25%, due 4/15/18		16,531,000		17,564,187
Penn Virginia Resource Partners, L.P. /Penn Virginia Resource Finance Corp. II 6.50%, due 5/15/21 (a)		13,510,000		13,915,300
8.375%, due 6/1/20		7,236,000		8,031,960
				201,807,295

12 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Commercial Services 4.4%
ADT Corp. (The) 6.25%, due 10/15/21 (a)	$	10,200,000	$	10,824,750
Alliance Data Systems Corp. 5.25%, due 12/1/17 (a)		20,200,000		20,831,250
6.375%, due 4/1/20 (a)		14,980,000		15,616,650
American Capital, Ltd. 6.50%, due 9/15/18 (a)		23,610,000		24,495,375
Avis Budget Car Rental LLC / Avis Budget Finance, Inc. 5.50%, due 4/1/23		16,776,000		16,440,480
8.25%, due 1/15/19		5,240,000		5,711,600
9.75%, due 3/15/20		16,240,000		19,000,800
Catalent Pharma Solutions, Inc. 7.875%, due 10/15/18		5,265,000		5,343,975
Cenveo Corp. 8.875%, due 2/1/18		16,760,000		16,885,700
Great Lakes Dredge & Dock Corp. 7.375%, due 2/1/19		25,171,000		25,863,202
Hertz Corp. (The) 4.25%, due 4/1/18 (a)		8,740,000		8,761,850
5.875%, due 10/15/20		2,385,000		2,510,213
Jaguar Holding Co. I 9.375%, due 10/15/17 (a)(b)		12,570,000		13,324,200
Knowledge Universe Education LLC 7.75%, due 2/1/15 (a)		29,180,000		28,742,300
PHH Corp. 7.375%, due 9/1/19		11,294,000		11,943,405
9.25%, due 3/1/16		12,151,000		14,064,782
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares) 6.50% (c)(d)(e)(g)		460,000		6,762
9.75% (c)(d)(e)(g)		26,020,000		382,494
Service Corporation International 5.375%, due 1/15/22 (a)		6,000,000		6,060,000
Sotheby's 5.25%, due 10/1/22 (a)		10,335,000		9,869,925
Speedy Cash Intermediate Holdings Corp. 10.75%, due 5/15/18 (a)		24,985,000		26,733,950
Sunstate Equipment Co. LLC / Sunstate Equipment Co., Inc. 12.00%, due 6/15/16 (a)(b)		33,225,000		35,467,687
United Rentals North America, Inc. 5.75%, due 7/15/18		12,005,000		12,875,363
6.125%, due 6/15/23		245,000		251,738
7.375%, due 5/15/20		3,624,000		4,040,760
7.625%, due 4/15/22		19,217,000		21,523,040
Valassis Communications, Inc. 6.625%, due 2/1/21		16,510,000		16,468,725

	Principal Amount		Value
Commercial Services (continued)
WEX, Inc. 4.75%, due 2/1/23 (a)	$	15,700,000	$	14,601,000
				388,641,976
Computers 1.5%
iGATE Corp. 9.00%, due 5/1/16		19,286,000		20,732,450
NCR Corp. 4.625%, due 2/15/21		13,235,000		13,069,563
5.00%, due 7/15/22		5,600,000		5,516,000
¨Seagate HDD Cayman 4.75%, due 6/1/23 (a)		83,115,000		80,829,337
7.00%, due 11/1/21		5,640,000		6,232,200
SunGard Data Systems, Inc. 4.875%, due 1/15/14		8,070,000		8,110,350
				134,489,900
Distribution & Wholesale 0.6%
American Tire Distributors, Inc. 9.75%, due 6/1/17		34,845,000		37,022,812
LKQ Corp. 4.75%, due 5/15/23 (a)		17,545,000		16,711,613
				53,734,425
Diversified Financial Services 1.3%
CNG Holdings, Inc. 9.375%, due 5/15/20 (a)		21,424,000		20,299,240
Community Choice Financial, Inc. 10.75%, due 5/1/19		29,730,000		28,243,500
12.75%, due 5/1/20 (a)(c)		9,500,000		9,381,250
Ford Holdings LLC 9.30%, due 3/1/30		18,155,000		25,117,951
9.375%, due 3/1/20		1,695,000		2,183,621
National Money Mart Co. 10.375%, due 12/15/16		23,490,000		24,429,600
				109,655,162
Electric 2.2%
Calpine Corp. 5.875%, due 1/15/24 (a)		11,600,000		11,629,000
6.00%, due 1/15/22 (a)		24,390,000		25,304,625
7.50%, due 2/15/21 (a)		4,175,000		4,509,000
¨GenOn Energy, Inc. 7.875%, due 6/15/17		62,580,000		69,150,900
9.50%, due 10/15/18		32,230,000		37,064,500
GenOn REMA LLC Series C 9.681%, due 7/2/26		6,425,000		6,682,000
Mirant Americas Generation LLC 9.125%, due 5/1/31		21,690,000		23,208,300
PNM Resources, Inc. 9.25%, due 5/15/15		6,241,000		6,958,715

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Electric (continued)
Public Service Co. of New Mexico 7.95%, due 5/15/18	$	5,812,000	$	7,002,088
				191,509,128
Electrical Components & Equipment 0.9%
Anixter, Inc. 5.625%, due 5/1/19		8,110,000		8,515,500
Belden, Inc. 5.50%, due 9/1/22 (a)		39,566,000		39,566,000
General Cable Corp. 5.75%, due 10/1/22 (a)		27,250,000		27,113,750
				75,195,250
Electronics 0.3%
Kemet Corp. 10.50%, due 5/1/18		22,314,000		21,588,795
Engineering & Construction 0.7%
New Enterprise Stone & Lime Co., Inc. 11.00%, due 9/1/18		32,115,000		17,261,812
13.00%, due 3/15/18 (d)		40,935,291		42,982,056
Weekley Homes LLC / Weekley Finance Corp. 6.00%, due 2/1/23 (a)		3,280,000		3,173,400
				63,417,268
Entertainment 2.2%
Affinity Gaming LLC / Affinity Gaming Finance Corp. 9.00%, due 5/15/18		37,760,000		40,969,600
GLP Capital LP / GLP Financing II, Inc. 4.375%, due 11/1/18 (a)		7,880,000		8,037,600
4.875%, due 11/1/20 (a)		10,505,000		10,583,787
5.375%, due 11/1/23 (a)		9,750,000		9,847,500
MU Finance PLC 8.375%, due 2/1/17 (a)		24,801,547		26,165,632
NAI Entertainment Holdings / NAI Entertainment Finance Corp. 5.00%, due 8/1/18 (a)		15,890,000		16,287,250
Pinnacle Entertainment, Inc. 7.50%, due 4/15/21		8,209,000		9,009,377
Production Resource Group, Inc. 8.875%, due 5/1/19		15,391,000		11,543,250
Rivers Pittsburgh Borrower L.P. / Rivers Pittsburgh Finance Corp. 9.50%, due 6/15/19 (a)		3,468,000		3,814,800
Speedway Motorsports, Inc. 6.75%, due 2/1/19		4,760,000		5,051,550
Sterling Entertainment Enterprise LLC 9.75%, due 12/31/19 (c)(d)(e)		35,000,000		36,312,500

	Principal Amount		Value
Entertainment (continued)
United Artists Theatre Circuit, Inc. Series BA7 9.30%, due 7/1/15 (c)(d)	$	598,934	$	419,254
Vail Resorts, Inc. 6.50%, due 5/1/19		15,710,000		16,691,875
				194,733,975
Environmental Controls 0.3%
Clean Harbors, Inc. 5.125%, due 6/1/21		6,755,000		6,847,881
5.25%, due 8/1/20		17,015,000		17,482,913
				24,330,794
Finance—Auto Loans 1.3%
Credit Acceptance Corp. 9.125%, due 2/1/17		15,005,000		15,830,275
Ford Motor Credit Co. LLC 12.00%, due 5/15/15		16,960,000		19,733,859
General Motors Financial Co., Inc. 4.25%, due 5/15/23 (a)		15,249,000		14,639,040
4.75%, due 8/15/17 (a)		23,985,000		25,364,137
6.75%, due 6/1/18		30,400,000		34,428,000
				109,995,311
Finance—Consumer Loans 0.1%
TMX Finance LLC / TitleMax Finance Corp. 8.50%, due 9/15/18 (a)		9,920,000		10,540,000
Finance—Mortgage Loan/Banker 0.1%
Stearns Holdings, Inc. 9.375%, due 8/15/20 (a)		11,050,000		11,505,813
Finance—Other Services 1.7%
Cantor Commercial Real Estate Co., L.P. 7.75%, due 2/15/18 (a)		19,115,000		19,927,388
¨Nationstar Mortgage LLC / Nationstar Capital Corp. 6.50%, due 8/1/18		13,000,000		13,455,000
6.50%, due 7/1/21		13,196,000		12,965,070
7.875%, due 10/1/20		24,060,000		25,714,125
9.625%, due 5/1/19		20,419,000		23,022,422
10.875%, due 4/1/15		29,132,000		30,133,412
SquareTwo Financial Corp. 11.625%, due 4/1/17		21,265,000		22,487,738
				147,705,155
Food 2.4%
American Seafoods Group LLC / American Seafoods Finance, Inc. 10.75%, due 5/15/16 (a)		15,408,000		15,947,280
American Stores Co. 8.00%, due 6/1/26		33,624,000		43,206,840

14 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Food (continued)
ASG Consolidated LLC / ASG Finance, Inc. 15.00%, due 5/15/17 (a)(b)	$	19,366,566	$	19,366,566
B&G Foods, Inc. 4.625%, due 6/1/21		21,925,000		21,404,281
C&S Group Enterprises LLC 8.375%, due 5/1/17 (a)		8,170,000		8,721,475
Ingles Markets, Inc. 5.75%, due 6/15/23 (a)		36,535,000		35,804,300
KeHE Distributors LLC / KeHE Distributors Finance Corp. 7.625%, due 8/15/21 (a)		8,740,000		9,045,900
Land O’ Lakes, Inc. 6.00%, due 11/15/22 (a)		30,135,000		31,302,731
TreeHouse Foods, Inc. 7.75%, due 3/1/18		8,120,000		8,586,900
Wells Enterprises, Inc. 6.75%, due 2/1/20 (a)		18,856,000		19,374,540
				212,760,813
Forest Products & Paper 0.5%
Clearwater Paper Corp. 7.125%, due 11/1/18		9,720,000		10,449,000
Georgia-Pacific LLC 7.25%, due 6/1/28		2,370,000		2,918,935
8.875%, due 5/15/31		19,841,000		27,969,937
Smurfit Kappa Acquisitions 4.875%, due 9/15/18 (a)		1,740,000		1,783,500
				43,121,372
Health Care—Products 1.3%
ConvaTec Healthcare E S.A. 10.50%, due 12/15/18 (a)		23,509,000		26,623,942
Hanger, Inc. 7.125%, due 11/15/18		18,850,000		20,098,812
Hologic, Inc. 6.25%, due 8/1/20		11,205,000		11,905,313
Mallinckrodt International Finance S.A. 4.75%, due 4/15/23 (a)		8,330,000		8,026,730
Teleflex, Inc. 6.875%, due 6/1/19		15,330,000		16,019,850
Universal Hospital Services, Inc. 7.625%, due 8/15/20		33,180,000		34,839,000
				117,513,647
Health Care—Services 3.2%
Centene Corp. 5.75%, due 6/1/17		14,370,000		15,339,975
CHS / Community Health Systems, Inc. 5.125%, due 8/15/18		6,365,000		6,619,600
7.125%, due 7/15/20		3,970,000		4,178,425

	Principal Amount		Value
Health Care—Services (continued)
Fresenius Medical Care U.S. Finance, Inc. 6.50%, due 9/15/18 (a)	$	4,730,000	$	5,309,425
6.875%, due 7/15/17		130,000		146,900
Fresenius Medical Care U.S. Finance II, Inc. 5.625%, due 7/31/19 (a)		11,680,000		12,497,600
5.875%, due 1/31/22 (a)		8,100,000		8,586,000
HCA Holdings, Inc. 6.25%, due 2/15/21		14,175,000		14,883,750
7.75%, due 5/15/21		5,431,000		5,946,945
¨HCA, Inc. 4.75%, due 5/1/23		4,525,000		4,360,969
5.875%, due 3/15/22		19,855,000		20,897,387
5.875%, due 5/1/23		2,432,000		2,450,240
6.50%, due 2/15/16		3,615,000		3,958,425
6.50%, due 2/15/20		9,224,000		10,261,700
7.50%, due 2/15/22		5,451,000		6,125,561
7.58%, due 9/15/25		1,920,000		1,996,800
7.69%, due 6/15/25		705,000		742,013
7.875%, due 2/15/20		2,120,000		2,300,200
8.00%, due 10/1/18		4,984,000		5,856,200
8.36%, due 4/15/24		2,494,000		2,799,515
8.50%, due 4/15/19		7,912,000		8,495,510
9.00%, due 12/15/14		3,930,000		4,244,400
Health Management Associates, Inc. 7.375%, due 1/15/20		8,190,000		9,131,850
INC Research LLC 11.50%, due 7/15/19 (a)		24,240,000		26,421,600
MPH Intermediate Holding Co. 2 8.375%, due 8/1/18 (a)		26,170,000		27,184,087
MultiPlan, Inc. 9.875%, due 9/1/18 (a)		34,020,000		37,592,100
ResCare, Inc. 10.75%, due 1/15/19		14,300,000		15,980,250
Tenet Healthcare Corp. 4.375%, due 10/1/21 (a)		15,000,000		14,400,000
				278,707,427
Holding Companies—Diversified 0.4%
CFG Holdings, Ltd. / CFG Finance LLC 11.50%, due 11/15/19 (a)		25,895,000		27,448,700
Leucadia National Corp. 8.125%, due 9/15/15		7,255,000		8,089,325
				35,538,025
Home Builders 1.9%
Allegion US Holding Co., Inc. 5.75%, due 10/1/21 (a)		9,675,000		10,037,813
Ashton Woods USA LLC / Ashton Woods Finance Co. 6.875%, due 2/15/21 (a)		9,845,000		9,697,325

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Home Builders (continued)
Brookfield Residential Properties, Inc. 6.125%, due 7/1/22 (a)	$	21,153,000	$	20,994,352
D.R. Horton, Inc. 4.75%, due 2/15/23		8,690,000		8,374,988
5.75%, due 8/15/23		13,225,000		13,720,937
Meritage Homes Corp. 7.00%, due 4/1/22		5,640,000		5,978,400
Ryland Group, Inc. (The) 5.375%, due 10/1/22		6,120,000		5,936,400
6.625%, due 5/1/20		6,722,000		7,108,515
Standard Pacific Corp. 6.25%, due 12/15/21		10,330,000		10,639,900
Taylor Morrison Communities, Inc. / Monarch Communities, Inc. 5.25%, due 4/15/21 (a)		15,340,000		14,956,500
7.75%, due 4/15/20 (a)		12,191,000		13,471,055
Toll Brothers Finance Corp. 4.375%, due 4/15/23		15,060,000		14,194,050
WCI Communities, Inc. 6.875%, due 8/15/21 (a)		19,380,000		18,895,500
Woodside Homes Co. LLC / Finance, Inc. 6.75%, due 12/15/21 (a)		14,500,000		14,355,000
				168,360,735
Household Products & Wares 0.5%
Jarden Corp. 7.50%, due 5/1/17		19,505,000		22,577,037
Prestige Brands, Inc. 8.125%, due 2/1/20		290,000		321,900
8.25%, due 4/1/18		6,236,000		6,625,750
Spectrum Brands Escrow Corp. 6.375%, due 11/15/20 (a)		5,315,000		5,647,188
6.625%, due 11/15/22 (a)		5,315,000		5,673,763
Spectrum Brands, Inc. 6.75%, due 3/15/20		2,195,000		2,359,625
				43,205,263
Housewares 0.2%
Libbey Glass, Inc. 6.875%, due 5/15/20		17,537,000		18,852,275
Insurance 1.2%
A-S Co-issuer Subsidiary, Inc. / A-S Merger Sub LLC 7.875%, due 12/15/20 (a)		18,025,000		18,655,875
American Equity Investment Life Holding Co. 6.625%, due 7/15/21		21,000,000		21,761,250
CNO Financial Group, Inc. 6.375%, due 10/1/20 (a)		7,345,000		7,730,612

	Principal Amount		Value
Insurance (continued)
Fidelity & Guaranty Life Holdings, Inc. 6.375%, due 4/1/21 (a)	$	17,150,000	$	17,878,875
Ironshore Holdings (U.S.), Inc. 8.50%, due 5/15/20 (a)		16,890,000		19,618,715
Onex USI Aquisition Corp. 7.75%, due 1/15/21 (a)		19,260,000		19,645,200
				105,290,527
Internet 0.6%
Cogent Communications Group, Inc. 8.375%, due 2/15/18 (a)		32,215,000		35,275,425
Equinix, Inc. 4.875%, due 4/1/20		2,000,000		2,007,500
5.375%, due 4/1/23		9,700,000		9,627,250
7.00%, due 7/15/21		2,000,000		2,185,000
IAC / InterActiveCorp. 4.75%, due 12/15/22		4,552,000		4,313,020
				53,408,195
Investment Management / Advisory Services 0.2%
Janus Capital Group, Inc. 6.70%, due 6/15/17		9,070,000		10,246,225
Patriot Merger Corp. 9.00%, due 7/15/21 (a)		5,450,000		5,695,250
				15,941,475
Iron & Steel 0.5%
Allegheny Ludlum Corp. 6.95%, due 12/15/25		6,860,000		7,267,079
Allegheny Technologies, Inc. 5.875%, due 8/15/23		11,020,000		11,335,734
9.375%, due 6/1/19		7,475,000		9,173,985
Bluescope Steel, Ltd. / Bluescope Steel Finance 7.125%, due 5/1/18 (a)		17,247,000		17,807,528
Commercial Metals Co. 4.875%, due 5/15/23		2,325,000		2,208,750
				47,793,076
Leisure Time 0.9%
Brunswick Corp. 4.625%, due 5/15/21 (a)		15,291,000		14,602,905
Carlson Wagonlit B.V. 6.875%, due 6/15/19 (a)		61,575,000		63,730,125
				78,333,030
Lodging 1.5%
Choice Hotels International, Inc. 5.70%, due 8/28/20		2,480,000		2,585,400
5.75%, due 7/1/22		23,185,000		24,402,212
Eldorado Resorts LLC / Eldorado Capital Corp. 8.625%, due 6/15/19 (a)		22,865,000		24,065,412

16 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Lodging (continued)
Felcor Lodging, L.P. 5.625%, due 3/1/23	$	2,860,000	$	2,817,100
Hilton Worldwide Finance LLC / Hilton Worldwide Finance Corp. 5.625%, due 10/15/21 (a)		23,195,000		23,832,863
MGM Resorts International 6.625%, due 12/15/21		1,093,000		1,168,144
MTR Gaming Group, Inc. 11.50%, due 8/1/19 (b)		23,801,720		26,181,892
Playa Resorts Holding B.V. 8.00%, due 8/15/20 (a)		8,780,000		9,295,825
ROC Finance LLC / ROC Finance 1 Corp. 12.125%, due 9/1/18 (a)		16,630,000		17,960,400
				132,309,248
Machinery—Diversified 0.2%
Briggs & Stratton Corp. 6.875%, due 12/15/20		7,945,000		8,679,913
SPL Logistics Escrow LLC / SPL Logistics Finance Corp. 8.875%, due 8/1/20 (a)		10,485,000		11,245,162
				19,925,075
Media 3.5%
CCO Holdings LLC / CCO Holdings Capital Corp. 5.125%, due 2/15/23		17,860,000		16,609,800
5.25%, due 9/30/22		13,483,000		12,674,020
7.00%, due 1/15/19		16,260,000		17,235,600
7.25%, due 10/30/17		5,405,000		5,715,788
Cogeco Cable, Inc. 4.875%, due 5/1/20 (a)		18,860,000		18,482,800
Crown Media Holdings, Inc. 10.50%, due 7/15/19		17,875,000		20,109,375
CSC Holdings LLC 7.625%, due 7/15/18		14,890,000		17,160,725
7.875%, due 2/15/18		1,145,000		1,325,338
DISH DBS Corp. 4.625%, due 7/15/17		24,720,000		25,708,800
5.125%, due 5/1/20		32,550,000		32,956,875
7.125%, due 2/1/16		3,995,000		4,414,475
Nielsen Finance LLC / Nielsen Finance Co. 4.50%, due 10/1/20		17,995,000		17,635,100
7.75%, due 10/15/18		32,338,000		35,248,420
ProQuest LLC / ProQuest Notes Co. 9.00%, due 10/15/18 (a)		34,995,000		35,694,900
Quebecor Media, Inc. 5.75%, due 1/15/23		28,340,000		27,418,950
7.75%, due 3/15/16		7,869,000		8,006,707

	Principal Amount		Value
Media (continued)
Videotron, Ltd. 5.00%, due 7/15/22	$	12,525,000	$	12,305,812
				308,703,485
Metal Fabricate & Hardware 1.1%
A. M. Castle & Co. 12.75%, due 12/15/16		34,161,000		38,601,930
Mueller Water Products, Inc. 7.375%, due 6/1/17		24,270,000		24,998,100
8.75%, due 9/1/20		12,109,000		13,562,080
Shale-Inland Holdings LLC / Shale-Inland Finance Corp. 8.75%, due 11/15/19 (a)		16,350,000		16,758,750
				93,920,860
Mining 1.9%
Hecla Mining Co. 6.875%, due 5/1/21 (a)		44,170,000		43,286,600
Kaiser Aluminum Corp. 8.25%, due 6/1/20		25,465,000		28,839,112
New Gold, Inc. 6.25%, due 11/15/22 (a)		18,540,000		18,261,900
7.00%, due 4/15/20 (a)		33,015,000		34,170,525
Novelis, Inc. 8.375%, due 12/15/17		15,425,000		16,504,750
8.75%, due 12/15/20		7,350,000		8,176,875
St. Barbara, Ltd. 8.875%, due 4/15/18 (a)		24,435,000		20,525,400
				169,765,162
Miscellaneous—Manufacturing 1.8%
Actuant Corp. 5.625%, due 6/15/22		9,720,000		9,744,300
Amsted Industries, Inc. 8.125%, due 3/15/18 (a)		34,517,000		36,544,873
FGI Operating Co. LLC / FGI Finance, Inc. 7.875%, due 5/1/20		25,440,000		26,775,600
Koppers, Inc. 7.875%, due 12/1/19		12,155,000		13,188,175
LSB Industries, Inc. 7.75%, due 8/1/19 (a)		11,900,000		12,584,250
Polypore International, Inc. 7.50%, due 11/15/17		21,740,000		22,990,050
SPX Corp. 6.875%, due 9/1/17		25,425,000		28,571,344
7.625%, due 12/15/14		5,235,000		5,601,450
				156,000,042
Office Furnishings 0.3%
Interface, Inc. 7.625%, due 12/1/18		23,280,000		25,317,000

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Oil & Gas 8.8%
Antero Resources Finance Corp. 5.375%, due 11/1/21 (a)(c)	$	17,180,000	$	17,459,175
Approach Resources, Inc. 7.00%, due 6/15/21		3,000,000		3,120,000
Berry Petroleum Co. 6.75%, due 11/1/20		1,690,000		1,778,725
10.25%, due 6/1/14		9,915,000		10,410,750
Calumet Specialty Products Partners, L.P. / Calumet Finance Corp. 9.375%, due 5/1/19		34,845,000		38,590,838
9.625%, due 8/1/20		14,000,000		15,697,500
Chesapeake Energy Corp. 6.50%, due 8/15/17		30,590,000		34,260,800
Chesapeake Oilfield Operating LLC / Chesapeake Oilfield Finance, Inc. 6.625%, due 11/15/19		33,565,000		35,159,337
Comstock Resources, Inc. 7.75%, due 4/1/19		10,327,000		10,791,715
9.50%, due 6/15/20		13,700,000		15,207,000
¨Concho Resources, Inc. 5.50%, due 10/1/22		9,145,000		9,533,663
5.50%, due 4/1/23		32,025,000		33,225,937
6.50%, due 1/15/22		24,386,000		26,641,705
7.00%, due 1/15/21		10,325,000		11,512,375
Continental Resources, Inc. 5.00%, due 9/15/22		24,475,000		25,484,594
7.125%, due 4/1/21		8,775,000		9,828,000
7.375%, due 10/1/20		15,775,000		17,569,406
Frontier Oil Corp. 6.875%, due 11/15/18		8,390,000		9,019,250
Linn Energy LLC / Linn Energy Finance Corp. 6.50%, due 5/15/19		23,890,000		23,830,275
7.00%, due 11/1/19 (a)		13,250,000		13,216,875
Murphy Oil USA, Inc. 6.00%, due 8/15/23 (a)		11,000,000		11,165,000
Newfield Exploration Co. 5.625%, due 7/1/24		17,210,000		17,554,200
7.125%, due 5/15/18		13,020,000		13,508,250
Oasis Petroleum, Inc. 6.50%, due 11/1/21		11,600,000		12,557,000
6.875%, due 3/15/22 (a)		15,660,000		16,912,800
7.25%, due 2/1/19		18,840,000		20,253,000
PDC Energy, Inc. 7.75%, due 10/15/22		14,500,000		15,732,500
PetroHawk Energy Corp. 7.25%, due 8/15/18		7,865,000		8,525,660
10.50%, due 8/1/14		3,478,000		3,564,950
PetroQuest Energy, Inc. 10.00%, due 9/1/17		63,915,000		65,832,450

	Principal Amount		Value
Oil & Gas (continued)
Range Resources Corp. 5.00%, due 8/15/22	$	5,600,000	$	5,593,000
5.00%, due 3/15/23		16,680,000		16,638,300
8.00%, due 5/15/19		9,425,000		10,108,313
Rex Energy Corp. 8.875%, due 12/1/20		35,800,000		38,664,000
Rosetta Resources, Inc. 5.625%, due 5/1/21		9,600,000		9,696,000
SM Energy Co. 5.00%, due 1/15/24 (a)		18,470,000		18,054,425
6.50%, due 11/15/21		8,300,000		9,005,500
6.50%, due 1/1/23		2,535,000		2,712,450
6.625%, due 2/15/19		17,149,000		18,263,685
Stone Energy Corp. 7.50%, due 11/15/22		12,980,000		13,856,150
8.625%, due 2/1/17		10,470,000		11,072,025
Summit Midstream Holdings LLC / Summit Midstream Finance Corp. 7.50%, due 7/1/21 (a)		6,720,000		7,072,800
W&T Offshore, Inc. 8.50%, due 6/15/19		28,605,000		30,821,887
Whiting Petroleum Corp. 6.50%, due 10/1/18		12,970,000		13,813,050
WPX Energy, Inc. 6.00%, due 1/15/22		18,240,000		19,152,000
				772,467,315
Oil & Gas Services 1.0%
Expro Finance Luxembourg SCA 8.50%, due 12/15/16 (a)		30,255,000		31,692,113
Forum Energy Technologies, Inc. 6.25%, due 10/1/21 (a)		15,340,000		15,991,950
Hiland Partners, L.P. / Hiland Partners Finance Corp. 7.25%, due 10/1/20 (a)		12,375,000		13,179,375
Pioneer Energy Services Corp. 9.875%, due 3/15/18		25,620,000		27,541,500
				88,404,938
Packaging & Containers 1.2%
AEP Industries, Inc. 8.25%, due 4/15/19		20,344,000		21,971,520
Ball Corp. 5.00%, due 3/15/22		11,245,000		11,329,337
Owens-Brockway Glass Container, Inc. 7.375%, due 5/15/16		4,910,000		5,529,888
Plastipak Holdings, Inc. 6.50%, due 10/1/21 (a)		26,145,000		27,190,800
Silgan Holdings, Inc. 5.00%, due 4/1/20		17,270,000		17,183,650

18 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Packaging & Containers (continued)
Tekni-Plex, Inc. 9.75%, due 6/1/19 (a)	$	16,207,000	$	18,313,910
				101,519,105
Pharmaceuticals 1.7%
Grifols, Inc. 8.25%, due 2/1/18		36,155,000		38,821,431
Lantheus Medical Imaging, Inc. 9.75%, due 5/15/17		21,390,000		19,251,000
Mylan, Inc. 7.875%, due 7/15/20 (a)		9,295,000		10,641,650
NBTY, Inc. 9.00%, due 10/1/18		13,725,000		15,063,188
Valeant Pharmaceuticals International 6.375%, due 10/15/20 (a)		22,784,000		24,321,920
6.50%, due 7/15/16 (a)		8,000,000		8,280,000
6.75%, due 10/1/17 (a)		3,947,000		4,243,025
6.75%, due 8/15/18 (a)		6,530,000		7,150,350
7.00%, due 10/1/20 (a)		2,548,000		2,745,470
7.50%, due 7/15/21 (a)		11,700,000		12,987,000
Warner Chilcott Co., LLC / Warner Chilcott Co., LLC 7.75%, due 9/15/18		4,340,000		4,730,600
				148,235,634
Pipelines 1.3%
Access Midstream Partners, L.P. / ACMP Finance Corp. 6.125%, due 7/15/22		7,284,000		7,812,090
ANR Pipeline Co. 7.375%, due 2/15/24		2,555,000		3,206,280
9.625%, due 11/1/21		10,349,000		14,562,420
Atlas Pipeline Partners, L.P. / Atlas Pipeline Finance Corp. 6.625%, due 10/1/20		22,864,000		24,007,200
Copano Energy LLC / Copano Energy Finance Corp. 7.125%, due 4/1/21		11,307,000		13,000,302
MarkWest Energy Partners, L.P. / MarkWest Energy Finance Corp. 5.50%, due 2/15/23		16,000,000		16,560,000
6.75%, due 11/1/20		21,170,000		23,181,150
NuStar Logistics, L.P. 6.75%, due 2/1/21		13,145,000		13,555,781
				115,885,223
Real Estate 1.1%
CBRE Services, Inc. 5.00%, due 3/15/23		31,662,000		30,751,718

	Principal Amount		Value
Real Estate (continued)
Crescent Resources LLC / Crescent Ventures, Inc. 10.25%, due 8/15/17 (a)	$	12,210,000	$	13,308,900
Howard Hughes Corp. (The) 6.875%, due 10/1/21 (a)		20,500,000		21,217,500
Mattamy Group Corp. 6.50%, due 11/15/20 (a)		26,770,000		26,435,375
				91,713,493
Real Estate Investment Trusts 1.1%
Geo Group, Inc. (The) 6.625%, due 2/15/21		18,300,000		19,375,125
Host Hotels & Resorts, L.P. 4.75%, due 3/1/23		18,205,000		18,686,304
5.25%, due 3/15/22		13,645,000		14,435,332
6.00%, due 10/1/21		21,920,000		24,263,949
Series Q 6.75%, due 6/1/16		6,835,000		6,932,693
Sabra Health Care, L.P. / Sabra Capital Corp. 5.375%, due 6/1/23		5,570,000		5,444,675
8.125%, due 11/1/18		9,676,000		10,498,460
				99,636,538
Retail 3.8%
AmeriGas Finance LLC / AmeriGas Finance Corp. 6.75%, due 5/20/20		3,795,000		4,136,550
7.00%, due 5/20/22		9,697,000		10,472,760
AmeriGas Partners, L.P. / AmeriGas Finance Corp. 6.25%, due 8/20/19		13,025,000		13,936,750
6.50%, due 5/20/21		4,828,000		5,165,960
Asbury Automotive Group, Inc. 8.375%, due 11/15/20		42,865,000		47,687,312
AutoNation, Inc. 6.75%, due 4/15/18		18,661,000		21,460,150
Building Materials Holding Corp. 9.00%, due 9/15/18 (a)		19,145,000		20,102,250
Cash America International, Inc. 5.75%, due 5/15/18 (a)		23,100,000		22,060,500
DineEquity, Inc. 9.50%, due 10/30/18		52,380,000		58,272,750
L Brands, Inc. 5.625%, due 2/15/22		3,545,000		3,651,350
5.625%, due 10/15/23		8,645,000		8,839,513
6.625%, due 4/1/21		12,715,000		13,986,500
8.50%, due 6/15/19		3,395,000		4,086,731
Penske Automotive Group, Inc. 5.75%, due 10/1/22		27,530,000		27,461,175
PVH Corp. 7.375%, due 5/15/20		10,230,000		11,201,850

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Retail (continued)
Radio Systems Corp. 8.375%, due 11/1/19 (a)	$	14,460,000	$	15,978,300
Sally Holdings LLC / Sally Capital, Inc. 5.75%, due 6/1/22		13,640,000		14,151,500
6.875%, due 11/15/19		9,595,000		10,602,475
Sonic Automotive, Inc. 5.00%, due 5/15/23		6,626,000		6,162,180
7.00%, due 7/15/22		11,875,000		12,825,000
				332,241,556
Shipbuilding 0.2%
Huntington Ingalls Industries, Inc. 6.875%, due 3/15/18		10,605,000		11,413,631
7.125%, due 3/15/21		6,905,000		7,483,294
				18,896,925
Software 0.2%
ACI Worldwide, Inc. 6.375%, due 8/15/20 (a)		2,710,000		2,831,950
Activision Blizzard, Inc. 5.625%, due 9/15/21 (a)		15,215,000		15,747,525
6.125%, due 9/15/23 (a)		2,400,000		2,508,000
				21,087,475
Storage & Warehousing 1.0%
¨ Algeco Scotsman Global Finance PLC 8.50%, due 10/15/18 (a)		45,100,000		48,369,750
10.75%, due 10/15/19 (a)		29,790,000		30,907,125
Mobile Mini, Inc. 7.875%, due 12/1/20		4,285,000		4,702,788
				83,979,663
Telecommunications 7.5%
Crown Castle International Corp. 5.25%, due 1/15/23		48,655,000		48,168,450
7.125%, due 11/1/19		21,153,000		22,845,240
DigitalGlobe, Inc. 5.25%, due 2/1/21 (a)		12,507,000		12,100,523
Frontier Communications Corp. 8.25%, due 4/15/17		5,000,000		5,781,250
9.25%, due 7/1/21		11,130,000		13,119,488
GCI, Inc. 8.625%, due 11/15/19		16,511,000		17,542,937
Hughes Satellite Systems Corp. 6.50%, due 6/15/19		18,430,000		19,766,175
7.625%, due 6/15/21		20,475,000		22,420,125
Inmarsat Finance PLC 7.375%, due 12/1/17 (a)		948,000		985,920
Intelsat Jackson Holdings S.A. 5.50%, due 8/1/23 (a)		2,100,000		2,026,500
7.25%, due 4/1/19		15,530,000		16,733,575
7.25%, due 10/15/20		21,420,000		23,240,700
7.50%, due 4/1/21		13,600,000		14,824,000

	Principal Amount		Value
Telecommunications (continued)
Lynx I Corp. 5.375%, due 4/15/21 (a)	$	9,000,000	$	9,045,000
¨MetroPCS Wireless, Inc. 6.25%, due 4/1/21 (a)		20,085,000		21,013,931
6.625%, due 4/1/23 (a)		61,085,000		63,910,181
Sable International Finance, Ltd. 7.75%, due 2/15/17 (a)		30,273,000		31,862,332
8.75%, due 2/1/20 (a)		9,650,000		10,904,500
Satelites Mexicanos S.A. de C.V. 9.50%, due 5/15/17		32,049,000		34,693,042
SBA Telecommunications, Inc. 5.75%, due 7/15/20		27,640,000		28,745,600
8.25%, due 8/15/19		9,721,000		10,535,134
Sprint Capital Corp. 6.875%, due 11/15/28		50,143,000		47,635,850
Sprint Communications, Inc. 9.125%, due 3/1/17		11,835,000		13,965,300
9.25%, due 4/15/22		13,690,000		16,222,650
Sprint Corp. 7.875%, due 9/15/23 (a)		27,190,000		29,501,150
T-Mobile USA, Inc. 6.464%, due 4/28/19		13,420,000		14,225,200
6.731%, due 4/28/22		54,000,000		57,037,500
tw telecom holdings, Inc. 5.375%, due 10/1/22		3,035,000		3,027,413
5.375%, due 10/1/22 (a)		20,100,000		20,049,750
Virgin Media Finance PLC 8.375%, due 10/15/19		15,258,000		16,650,292
Virgin Media Secured Finance PLC 5.25%, due 1/15/21		12,470,000		12,653,010
				661,232,718
Transportation 1.1%
Florida East Coast Holdings Corp. 10.50%, due 8/1/17 (b)		4,008,504		4,168,844
Florida East Coast Railway Corp. 8.125%, due 2/1/17		51,149,000		53,834,323
Syncreon Global Ireland, Ltd. / Syncreon Global Finance US, Inc. 9.50%, due 5/1/18 (a)		37,370,000		40,639,875
				98,643,042
Trucking & Leasing 0.8%
Flexi-Van Leasing, Inc. 7.875%, due 8/15/18 (a)		15,865,000		16,816,900
NESCO LLC / NESCO Holdings Corp. 11.75%, due 4/15/17 (a)		17,155,000		19,299,375
TRAC Intermodal LLC / TRAC Intermodal Corp. 11.00%, due 8/15/19		25,970,000		29,540,875
				65,657,150

20 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Vitamins & Nutrition Products 0.4%
Alphabet Holding Co., Inc. 7.75%, due 11/1/17 (b)	$	37,029,000	$	38,278,729
Total Corporate Bonds (Cost $7,669,271,393)				8,018,221,967
Loan Assignments & Participations 2.7% (h)
Auto Manufacturers 0.3%
Chrysler Group LLC New Term Loan B 4.25%, due 5/24/17		23,144,836		23,318,284
Auto Parts & Equipment 0.8%
Exide Technologies, Inc. DIP Second-Out Term Loan 3.25%, due 10/14/14		71,055,750		71,943,947
Distribution & Wholesale 0.1%
Performance Food Group Co. 2nd Lien Term Loan 6.25%, due 11/14/19		9,476,250		9,381,488
Diversified Financial Services 0.3%
Ocwen Financial Corp. Term Loan 5.00%, due 2/15/18		5,945,125		5,994,172
VFH Parent LLC Refi Term Loan B 5.775%, due 7/8/16		19,582,135		19,663,734
				25,657,906
Finance—Other Services 0.2%
BATS Global Markets, Inc. Term Loan 7.00%, due 12/14/18		14,450,000		14,522,250
Lodging 0.3%
Cannery Casino Resorts LLC New Term Loan B 6.00%, due 10/2/18		8,477,757		8,475,112
New 2nd Lien Term Loan 10.00%, due 10/2/19		14,640,000		13,566,405
Four Seasons Holdings, Inc. 1st Lien Term Loan 4.25%, due 6/27/20		6,000,000		6,052,500
2nd Lien Term Loan 6.25%, due 12/28/20		3,500,000		3,587,500
				31,681,517

	Principal Amount		Value
Metal Fabricate & Hardware 0.2%
Neenah Foundry Co. Term Loan 6.75%, due 4/26/17 (c)(e)	$	18,232,500	$	18,141,338
Miscellaneous—Manufacturing 0.2%
FGI Operating Co. LLC Term Loan 5.50%, due 4/19/19		21,608,830		21,730,379
Pharmaceuticals 0.2%
Patheon, Inc. Term Loan 7.25%, due 12/6/18		14,132,250		14,344,234
Retail 0.1%
Dunkin’ Brands, Inc. Term Loan B3 3.75%, due 2/14/20		5,951,323		5,966,201
Total Loan Assignments & Participations (Cost $232,724,522)				236,687,544
Yankee Bonds 0.7% (i)
Forest Products & Paper 0.5%
Smurfit Kappa Treasury Funding Ltd. 7.50%, due 11/20/25		37,630,000		41,393,000
Insurance 0.2%
Fairfax Financial Holdings, Ltd. 7.375%, due 4/15/18		9,497,000		10,785,449
8.30%, due 4/15/26		5,395,000		6,153,364
				16,938,813
Total Yankee Bonds (Cost $48,811,427)				58,331,813
Total Long-Term Bonds (Cost $7,954,967,067)				8,319,322,940
	Shares
Common Stocks 0.3%
Coal 0.0%‡
Upstate NY Power Producers (c)(d)(e)(g)		51,473		977,987
Entertainment 0.1%
Affinity Gaming LLC (c)(e)(g)		275,000		2,956,250
Lodging 0.0%‡
Majestic Star Casino LLC Membership Units (c)(d)(e)(g)		446,020		579,826

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
Metal Fabricate & Hardware 0.1%
Neenah Enterprises, Inc. (c)(d)(e)(g)		717,799	$	9,195,005
Mining 0.1%
Goldcorp, Inc.		429,710		10,927,524
Total Common Stocks (Cost $25,925,056)				24,636,592
Preferred Stock 0.1%
Savings & Loans 0.1%
GMAC Capital Trust I 8.125%		414,600		11,136,156
Total Preferred Stock (Cost $10,172,918)				11,136,156
	Number of Warrants
Warrants 0.0%‡
Food 0.0%‡
ASG Corp. Expires 5/15/18 (c)(e)(g)		12,510		1,563,750
Media 0.0%‡
ION Media Networks, Inc.
Second Lien Expires 12/18/16 (c)(d)(e)(g)		1,141		12
Unsecured Debt Expires 12/18/16 (c)(d)(e)(g)		1,126		11
				23
Total Warrants (Cost $3,435)				1,563,773

	Principal Amount			Value
Short-Term Investment 2.4%
Repurchase Agreement 2.4%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $214,388,857 (Collateralized by Government Agency securities with rates between 2.11% and 2.17% and a maturity date of 11/7/22, with a Principal Amount of $232,060,000 and a Market Value of $218,680,067)	$	214,388,857		$	214,388,857
Total Short-Term Investment (Cost $214,388,857)					214,388,857
Total Investments (Cost $8,205,457,333) (j)		97.6	%		8,571,048,318
Other Assets, Less Liabilities		2.4			212,483,192
Net Assets		100.0	%	$	8,783,531,510

‡ Less than one-tenth of a percent.

(a) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(b) PIK ("Payment in Kind")—interest or dividend payment is made with additional securities.

(c) Illiquid security—The total market value of these securities as of October 31, 2013 is $103,457,230, which represents 1.2% of the Fund’s net assets.

(d) Fair valued security—The total market value of these securities as of October 31, 2013, is $96,937,523, which represents 1.1% of the Fund's net assets.

(e) Restricted security.

(f) Issue in default.

(g) Non-income producing security.

(h) Floating Rate Loan—generally pays interest at rates which are periodically re-determined at a margin above the London InterBank Offered Rate or other short-term rates. The rate shown is the weighted average interest rate of all contracts within the floating rate loan facility as of October 31, 2013.

(i) Yankee Bond—Dollar-denominated bond issued in the United States by a foreign bank or corporation.

(j) As of October 31, 2013, cost is $8,201,491,037 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	434,709,828
Gross unrealized depreciation		(65,152,547	)
Net unrealized appreciation	$	369,557,281

22 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Long-Term Bonds
Convertible Bonds (b)	$	—	$	—	$	6,081,616	$	6,081,616
Corporate Bonds (c)		—		7,938,118,901		80,103,066		8,018,221,967
Loan Assignments & Participations (d)		—		198,181,060		38,506,484		236,687,544
Yankee Bonds		—		58,331,813		—		58,331,813
Total Long-Term Bonds		—		8,194,631,774		124,691,166		8,319,322,940
Common Stocks (e)		13,883,774		—		10,752,818		24,636,592
Preferred Stock		11,136,156		—		—		11,136,156
Warrants (f)		1,563,750		—		23		1,563,773
Short-Term Investment
Repurchase Agreement		—		214,388,857		—		214,388,857
Total Investments in Securities	$	26,583,680	$	8,409,020,631	$	135,444,007	$	8,571,048,318

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The Level 3 securities valued at $6,075,462 and $6,154 are held in Electric and Internet, respectively, within the Convertible Bonds section of the Portfolio of Investments.

(c) The Level 3 securities valued at $389,256, $42,982,056 and $36,731,754 are held in Commercial Services, Engineering & Construction and Entertainment, respectively, within the Corporate Bonds section of the Portfolio of Investments.

(d) The Level 3 securities valued at $14,522,250, $9,640,000 and $14,344,234 are held in Finance-Other Services, Lodging and Pharmaceuticals, respectively, within the Loan Assignments & Participations whose value was obtained from an independent pricing service which used a single broker quote to measure such value as referenced in the Portfolio of Investments.

(e) The Level 3 securities valued at $977,987, $579,826 and $9,195,005 are held in Coal, Lodging and Metal Fabricate & Hardware, respectively, within the Common Stocks section of the Portfolio of Investments.

(f) The Level 3 securities valued at $23 are held in Media within the Warrants section of the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have an transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, a security with a value of $10,820,350 transferred from Level 3 to Level 2. The transfer occurred as a result of the value of the security obtained from an independent pricing service using the average of multiple bid quotations as of October 31, 2013. The fair value obtained for this security from an independent pricing service as of October 31, 2012, used a single broker quote with significant unobservable input.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 23

Portfolio of Investments October 31, 2013 (continued)

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012		Accrued Discounts (Premiums)			Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)			Purchases			Sales			Transfers in to Level 3		Transfers out of Level 3			Balance as of October 31, 2013		Change in Unrealized Appreciation (Depreciation) from Investments Still Held as of October 31, 2013 (a)
Long-Term Bonds
Convertible Bonds
Electric	$	4,644,000	$	—		$	—		$	711,738		$	719,724	(b)	$	—		$	—	$	—		$	6,075,462	$	711,738
Internet		6,154		—			—			—			—			—			—		—			6,154		—
Corporate Bonds
Auto Parts & Equipment		23,166		—			—			(23,166	)		—			—			—		—			—		—
Commercial Services		423,680		—			—			(34,424	)		—			—			—		—			389,256		(34,424	)
Electric		1,584,413		(453	)		(239,981	)		453			—			(1,344,432	)		—		—			—		—
Engineering and Construction		—		—			—			31,966			42,950,090			—			—		—			42,982,056		31,966
Entertainment		601,972		26,372			25,416			1,339,019			35,000,000			(261,025	)		—		—			36,731,754		1,286,128
Food		24,114,750		—			355,500			(770,250	)		—			(23,700,000	)		—		—			—		—
Insurance		33,264		—			(11,138,510	)		11,105,246			—			—			—		—			—		—
Loan Assignments & Participations
Apparel		10,897,400		3,861			409,892			(413,753	)		—			(10,897,400	)(c)		—		—			—		—
Finance		9,311,347		7,242			49,323			(142,604	)		—			(9,225,308	)(c)		—		—			—		—
Finance—Other Services		—		125,353			140,414			824,118			15,982,365			(2,550,000	)(c)		—		—			14,522,250		824,118
Lodging		10,820,350		1,975			—			188,025			9,450,000			—			—		(10,820,350	)		9,640,000		188,025
Metal, Fabricate & Hardware		18,367,500		—			—			—			—			(18,367,500	)(c)		—		—			—		—
Pharmaceuticals		—		49,903			2,906			577,425			13,821,063			(107,063	)(c)		—		—			14,344,234		577,425
Common Stocks
Coal		875,041		—			—			102,946			—			—			—		—			977,987		102,946
Lodging		892,040		—			—			(312,214	)		—			—			—		—			579,826		(312,214	)
Media		155,074		—			(5,770,382	)		5,615,308			—			—			—		—			—		—
Metal, Fabricate & Hardware		4,263,726		—			—			4,931,279			—			—			—		—			9,195,005		4,931,279
Warrants
Media		23		—			—			—			—			—			—		—			23		—
Total	$	87,013,900	$	214,253		$	(16,165,422	)	$	23,731,112		$	117,923,242		$	(66,452,728	)	$	—	$	(10,820,350	)	$	135,444,007	$	8,306,987

(a) Included in “Net change in unrealized appreciation (depreciation) on investments and unfunded commitments” in the Statement of Operations.

(b) Purchases include securities received from a restructure.

(c) Sales include principal reductions.

24 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $8,205,457,333)	$	8,571,048,318
Cash		30,013,555
Receivables:
Dividends and interest		159,873,102
Investment securities sold		70,472,346
Fund shares sold		18,339,148
Other assets		115,616
Total assets		8,849,862,085
Liabilities
Payables:
Investment securities purchased		31,419,019
Fund shares redeemed		19,627,157
Manager (See Note 3)		4,046,806
Transfer agent (See Note 3)		2,640,240
NYLIFE Distributors (See Note 3)		1,776,778
Shareholder communication		254,422
Professional fees		46,664
Trustees		20,184
Custodian		13,954
Accrued expenses		40,519
Dividend payable		6,444,832
Total liabilities		66,330,575
Net assets	$	8,783,531,510
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	14,447,249
Additional paid-in capital		8,549,362,592
		8,563,809,841
Distributions in excess of net investment income		(7,556,977	)
Accumulated net realized gain (loss) on investments		(138,312,339	)
Net unrealized appreciation (depreciation) on investments		365,590,985
Net assets	$	8,783,531,510

Investor Class
Net assets applicable to outstanding shares	$	307,642,838
Shares of beneficial interest outstanding		50,136,629
Net asset value per share outstanding	$	6.14
Maximum sales charge (4.50% of offering price)		0.29
Maximum offering price per share outstanding	$	6.43
Class A
Net assets applicable to outstanding shares	$	4,055,185,125
Shares of beneficial interest outstanding		667,032,963
Net asset value per share outstanding	$	6.08
Maximum sales charge (4.50% of offering price)		0.29
Maximum offering price per share outstanding	$	6.37
Class B
Net assets applicable to outstanding shares	$	197,272,820
Shares of beneficial interest outstanding		32,609,038
Net asset value and offering price per share outstanding	$	6.05
Class C
Net assets applicable to outstanding shares	$	814,588,881
Shares of beneficial interest outstanding		134,610,693
Net asset value and offering price per share outstanding	$	6.05
Class I
Net assets applicable to outstanding shares	$	3,393,780,102
Shares of beneficial interest outstanding		557,858,614
Net asset value and offering price per share outstanding	$	6.08
Class R1
Net assets applicable to outstanding shares	$	28,208
Shares of beneficial interest outstanding		4,641
Net asset value and offering price per share outstanding	$	6.08
Class R2
Net assets applicable to outstanding shares	$	15,007,852
Shares of beneficial interest outstanding		2,468,096
Net asset value and offering price per share outstanding	$	6.08
Class R6
Net assets applicable to outstanding shares	$	25,684
Shares of beneficial interest outstanding		4,220
Net asset value and offering price per share outstanding	$	6.09

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 25

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	599,759,076
Dividends (a)		1,324,586
Total income		601,083,662
Expenses
Manager (See Note 3)		47,731,675
Distribution/Service—Investor Class (See Note 3)		766,943
Distribution/Service—Class A (See Note 3)		10,208,558
Distribution/Service—Class B (See Note 3)		2,138,786
Distribution/Service—Class C (See Note 3)		8,334,879
Distribution/Service—Class R2 (See Note 3)		38,610
Transfer agent (See Note 3)		15,710,419
Shareholder communication		1,518,778
Registration		511,049
Professional fees		436,774
Trustees		180,053
Custodian		86,890
Shareholder service (See Note 3)		15,470
Miscellaneous		238,362
Total expenses		87,917,246
Net investment income (loss)		513,166,416
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments		173,772,699
Net change in unrealized appreciation (depreciation) on investments		(94,237,946	)
Net realized and unrealized gain (loss) on investments		79,534,753
Net increase (decrease) in net assets resulting from operations	$	592,701,169

(a) Dividends recorded net of foreign withholding taxes in the amount of $64,696.

26 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	513,166,416		$	473,017,437
Net realized gain (loss) on investments and foreign currency transactions		173,772,699			71,387,872
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions		(94,237,946	)		277,786,667
Net increase (decrease) in net assets resulting from operations		592,701,169			822,191,976
Dividends to shareholders:
From net investment income:
Investor Class		(20,852,106	)		(20,410,149	)
Class A		(281,250,098	)		(262,174,237	)
Class B		(13,085,525	)		(15,149,227	)
Class C		(51,239,807	)		(46,677,653	)
Class I		(233,684,269	)		(169,537,188	)
Class R1		(1,924	)		(612	)
Class R2		(1,056,452	)		(796,551	)
Class R6		(771	)		—
Total dividends to shareholders		(601,170,952	)		(514,745,617	)
Capital share transactions:
Net proceeds from sale of shares		2,899,836,530			3,214,367,404
Net asset value of shares issued to shareholders in reinvestment of dividends		504,021,939			395,312,467
Cost of shares redeemed		(3,037,427,701	)		(1,839,351,086	)
Increase (decrease) in net assets derived from capital share transactions		366,430,768			1,770,328,785
Net increase (decrease) in net assets		357,960,985			2,077,775,144
Net Assets
Beginning of year		8,425,570,525			6,347,795,381
End of year	$	8,783,531,510		$	8,425,570,525
Distributions in excess of net investment income at end of year	$	(7,556,977	)	$	(10,568,229	)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 27

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.13		$	5.88		$	5.97		$	5.60		$	4.63
Net investment income (loss) (a)		0.36			0.39			0.41			0.41			0.40
Net realized and unrealized gain (loss) on investments		0.07			0.28			(0.08	)		0.38			1.01
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.43			0.67			0.33			0.79			1.41
Less dividends and distributions:
From net investment income		(0.42	)		(0.42	)		(0.42	)		(0.41	)		(0.41	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.42	)		(0.42	)		(0.42	)		(0.42	)		(0.44	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.14		$	6.13		$	5.88		$	5.97		$	5.60
Total investment return (c)		7.24	%		11.82	%		5.69	%		14.73	%		32.60	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.88	%		6.53	%		6.80	%		7.03	%		8.18	%
Net expenses		1.02	%		1.03	%		1.05	%		1.08	%		1.15	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	307,643		$	301,074		$	285,656		$	282,489		$	265,507

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.08		$	5.84		$	5.92		$	5.56		$	4.60
Net investment income (loss) (a)		0.36			0.39			0.41			0.40			0.40
Net realized and unrealized gain (loss) on investments		0.06			0.27			(0.07	)		0.39			1.00
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.42			0.66			0.34			0.79			1.40
Less dividends and distributions:
From net investment income		(0.42	)		(0.42	)		(0.42	)		(0.42	)		(0.41	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.42	)		(0.42	)		(0.42	)		(0.43	)		(0.44	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.08		$	6.08		$	5.84		$	5.92		$	5.56
Total investment return (c)		7.15	%		11.76	%		5.94	%		14.69	%		32.74	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.89	%		6.56	%		6.86	%		7.07	%		8.19	%
Net expenses		1.01	%		1.00	%		0.99	%		1.03	%		1.08	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	4,055,185		$	4,086,134		$	3,355,007		$	3,409,419		$	3,169,962

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

28 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.05		$	5.81		$	5.90		$	5.54		$	4.57
Net investment income (loss) (a)		0.31			0.34			0.36			0.36			0.36
Net realized and unrealized gain (loss) on investments		0.06			0.27			(0.08	)		0.38			1.00
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.37			0.61			0.28			0.74			1.36
Less dividends and distributions:
From net investment income		(0.37	)		(0.37	)		(0.37	)		(0.37	)		(0.36	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.37	)		(0.37	)		(0.37	)		(0.38	)		(0.39	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.05		$	6.05		$	5.81		$	5.90		$	5.54
Total investment return (c)		6.36	%		10.94	%		4.95	%		13.81	%		31.57	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.13	%		5.78	%		6.05	%		6.27	%		7.49	%
Net expenses		1.77	%		1.78	%		1.80	%		1.83	%		1.91	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	197,273		$	221,723		$	267,752		$	375,368		$	453,918

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.05		$	5.81		$	5.90		$	5.54		$	4.57
Net investment income (loss) (a)		0.31			0.34			0.36			0.36			0.36
Net realized and unrealized gain (loss) on investments		0.06			0.27			(0.08	)		0.38			1.00
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.37			0.61			0.28			0.74			1.36
Less dividends and distributions:
From net investment income		(0.37	)		(0.37	)		(0.37	)		(0.37	)		(0.36	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.37	)		(0.37	)		(0.37	)		(0.38	)		(0.39	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.05		$	6.05		$	5.81		$	5.90		$	5.54
Total investment return (c)		6.36	%		10.93	%		4.95	%		13.81	%		31.57	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.13	%		5.78	%		6.05	%		6.28	%		7.29	%
Net expenses		1.77	%		1.78	%		1.80	%		1.83	%		1.90	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	814,589		$	819,807		$	654,224		$	698,491		$	651,209

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 29

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.08		$	5.84		$	5.92		$	5.56		$	4.60
Net investment income (loss) (a)		0.37			0.40			0.42			0.42			0.41
Net realized and unrealized gain (loss) on investments		0.07			0.28			(0.06	)		0.38			1.00
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.44			0.68			0.36			0.80			1.41
Less dividends and distributions:
From net investment income		(0.44	)		(0.44	)		(0.44	)		(0.43	)		(0.42	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.44	)		(0.44	)		(0.44	)		(0.44	)		(0.45	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.08		$	6.08		$	5.84		$	5.92		$	5.56
Total investment return (c)		7.40	%		12.02	%		6.19	%		14.98	%		32.84	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		6.13	%		6.81	%		7.11	%		7.34	%		8.38	%
Net expenses		0.76	%		0.75	%		0.74	%		0.78	%		0.83	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	3,393,780		$	2,982,526		$	1,775,230		$	1,736,365		$	1,141,889

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

Class R1	Year ended October 31, 2013			June 29, 2012** through October 31, 2012
Net asset value at beginning of period	$	6.08		$	5.92
Net investment income (loss) (a)		0.37			0.14
Net realized and unrealized gain (loss) on investments		0.06			0.16
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡
Total from investment operations		0.43			0.30
Less dividends:
From net investment income		(0.43	)		(0.14	)
Net asset value at end of period	$	6.08		$	6.08
Total investment return (b)		7.32	%		5.17	%(c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		6.03	%		6.49	%††
Net expenses		0.86	%		0.87	%††
Portfolio turnover rate		40	%		29	%
Net assets at end of period (in 000's)	$	28		$	26

** Commencement of operations.

†† Annualized.

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the period.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R1 shares are not subject to sales charges.

(c) Total investment return is not annualized.

30 MainStay High Yield Corporate Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class R2	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	6.08		$	5.84		$	5.93		$	5.56		$	4.60
Net investment income (loss) (a)		0.35			0.38			0.40			0.40			0.39
Net realized and unrealized gain (loss) on investments		0.07			0.28			(0.07	)		0.39			1.01
Net realized and unrealized gain (loss) on foreign currency transactions		—			0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.42			0.66			0.33			0.79			1.40
Less dividends and distributions:
From net investment income		(0.42	)		(0.42	)		(0.42	)		(0.41	)		(0.41	)
Return of capital		—			—			—			(0.01	)		(0.03	)
Total dividends and distributions		(0.42	)		(0.42	)		(0.42	)		(0.42	)		(0.44	)
Redemption fee (b)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	6.08		$	6.08		$	5.84		$	5.93		$	5.56
Total investment return (c)		7.06	%		11.66	%		5.67	%		14.78	%		32.31	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.79	%		6.46	%		6.76	%		6.99	%		7.59	%
Net expenses		1.11	%		1.10	%		1.09	%		1.13	%		1.18	%
Portfolio turnover rate		40	%		29	%		45	%		41	%		41	%
Net assets at end of year (in 000's)	$	15,008		$	14,280		$	9,927		$	9,120		$	6,240

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) The redemption fee was discontinued as of April 1, 2010.

(c) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R2 shares are not subject to sales charges.

Class R6	June 17, 2013** through October 31, 2013
Net asset value at beginning of period	$	6.11
Net investment income (loss) (a)		0.14
Net realized and unrealized gain (loss) on investments		0.03
Total from investment operations		0.17
Less dividends:
From net investment income		(0.19	)
Net asset value at end of period	$	6.09
Total investment return (b)		2.79	%(c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		6.24	%††
Net expenses		0.59	%††
Portfolio turnover rate		40	%
Net assets at end of period (in 000's)	$	26

** Inception date.

†† Annualized.

(a) Per share data based on average shares outstanding during the period.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R6 shares are not subject to sales charges.

(c) Total investment return is not annualized.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 31

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay High Yield Corporate Bond Fund (the “Fund”), a diversified fund.

The Fund currently offers eight classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on May 1, 1986. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on January 2, 2004. Class R2 shares were first offered to the public on December 14, 2007, but did not commence operations until May 1, 2008. Investor Class shares commenced operations on February 28, 2008. Class R1 shares commenced operations on June 29, 2012. Class R6 shares commenced operations on June 17, 2013. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions of such shares made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I, Class R1, Class R2 and Class R6 shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The eight classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class, Class A and Class R2 shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I, Class R1 and Class R6 shares are not subject to a distribution and/or service fee. Class R1 and Class R2 shares are subject to a shareholder service fee. This is in addition to any fees paid under a distribution plan, where applicable.

The Fund’s investment objective is to seek maximum current income through investment in a diversified portfolio of high-yield debt securities. Capital appreciation is a secondary objective.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally

4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

32 MainStay High Yield Corporate Bond Fund

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Benchmark Yields	•    Reported Trades
•    Broker Dealer Quotes	•    Issuer Spreads
•    Two-sided markets	•    Benchmark securities
•    Bids/Offers	•    Reference Data (corporate actions or material event notices)
•    Industry and economic events	•    Comparable bonds
•    Equity and credit default swap curves	•    Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund held securities with a value of $96,937,523 that were fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund's Manager, in consultation with the Fund's Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund's Manager, in consultation with the Fund's Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market.

Loan assignments, participations and commitments are valued at the average of bid quotations obtained from the engaged independent pricing agent and are generally categorized as Level 2 in the hierarchy. Certain loan assignments, participations and commitments may be valued by a single broker quote obtained from the pricing agent with significant unobservable inputs and are generally categorized as Level 3 in the hierarchy. For these loan assignments, participations and commitments, the Manager may consider additional factors such as liquidity of the Fund's investments. As of October 31, 2013, the Fund held securities with a value of $38,506,484 that were valued by a single broker quote and/or deemed to be illiquid.

The valuation techniques and significant amounts of unobservable inputs used in the fair valuation measurement of the Fund's Level 3 securities are outlined in the tables below. A significant increase or decrease in any of those inputs in isolation would result in a significantly higher or lower fair value measurement.

mainstayinvestments.com 33

Notes to Financial Statements (continued)

MainStay High Yield Corporate Bond Fund

Asset Class	Fair Value at 10/31/13		Valuation Technique	Unobservable Inputs	Range
Convertible Bonds (2 positions)	$	6,081,616	Income/Market Approach	Estimated Recovery Rate		$0.00–$0.01
				Liquidity Discount		20	%
				Discount Rate		9	%
Corporate Bonds (5 positions)		80,103,066	Income/Market Approach	Estimated Remaining Cash/Collateral		$324M
				Liquidity Discount		15	%
				Offered Quote		$105.00
				Discount Rate		30	%
				Distribution Percentage		73	%
				EBITDA Multiple		12
				Probability of Success		20	%
Common Stocks (3 positions)		10,752,818	Income/Market Approach	Estimated Remaining Claims/Value		$0.01
				Liquidity Discount		10%-20	%
				Offered Quote		$2
				EBITDA Multiple		5.5
Warrants (2 positions)		23	Income Approach	Probability of Liquidity Event		0	%
	$	96,937,523

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund's Manager or Subadvisor might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund's liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisor measure the liquidity of the Fund's investments; in doing so, the Manager or Subadvisor may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund's policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund's tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an

uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund's tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund's financial statements. The Fund's federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least monthly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

34 MainStay High Yield Corporate Bond Fund

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund's Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund's custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(H)  Loan Assignments, Participations and Commitments.  The Fund may invest in loan assignments and loan participations ("loans"). Loans are agreements to make money available (a "commitment") to a borrower in a specified amount, at a specified rate and within a specified time. Such loans are typically senior, secured and collateralized in nature. The Fund records an investment when the borrower withdraws money and records interest as earned. These loans pay interest at rates that are periodically reset by reference to a base

lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate.

The loans in which the Fund invests are generally readily marketable, but may be subject to some restrictions on resale. For example, the Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments. The Fund assumes the credit risk of the borrower, the selling participant and any other persons interpositioned between the Fund and the borrower ("intermediate participants"). In the event that the borrower, selling participant or intermediate participants become insolvent or enters into bankruptcy, the Fund may incur certain costs and delays in realizing payment, or may suffer a loss of principal and/or interest.

Unfunded commitments represent the remaining obligation of the Fund to the borrower. At any point in time, up to the maturity date of the issue, the borrower may demand the unfunded portion. These unfunded amounts are marked to market and any unrealized gains and losses are recorded in the Statement of Assets and Liabilities. As of October 31, 2013, the Fund did not hold any unfunded commitments.

(I)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities—at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses—at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund's books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(J)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

mainstayinvestments.com 35

Notes to Financial Statements (continued)

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants, if such warrants are not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights.

(K)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company ("State Street"). State Street will manage the Fund's cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund's portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower's inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(L)  Restricted Securities.  A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933, as amended. The Fund may not have the right to demand that such securities be registered. Disposal of these securities may involve time-consuming negotiations and expenses and it may be difficult to obtain a prompt sale at an acceptable price. (See Note 5)

(M)  Concentration of Risk.  The Fund's principal investments include high-yield securities (sometimes called ‘‘junk bonds’’), 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 also be subject to greater price volatility.

The Fund may invest in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of debt securities held

by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(N)  Indemnifications.  Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(O)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund's derivative and hedging activities, including how such activities are accounted for and their effect on the Fund's financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Asset Derivatives

	Statement of Assets and Liabilities Location	Equity Contracts Risk		Total
Warrants	Investments in securities, at value	$	1,563,773	$	1,563,773
Total Fair Value		$	1,563,773	$	1,563,773

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Equity Contracts Risk		Total
Warrants	Net realized gain (loss) on investments	$	57	$	57
Total Realized Gain (Loss)		$	57	$	57

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Equity Contracts Risk		Total
Warrants	Net change in unrealized appreciation (depreciation) on investments	$	1,188,450	$	1,188,450
Total Change in Unrealized Appreciation (Depreciation)		$	1,188,450	$	1,188,450

36 MainStay High Yield Corporate Bond Fund

Number of Contracts, Notional Amounts or Shares/Units (1)

	Equity Contracts Risk		Total
Warrants		14,972		14,972

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer ("CCO") of the Fund. MacKay Shields LLC (“MacKay Shields" or the "Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement ("Subadvisory Agreement") between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.60% up to $500 million; 0.55% from $500 million up to $5 billion; 0.525% from $5 billion up to $7 billion; and 0.50% in excess of $7 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate was 0.55% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $47,731,675.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution, Service and Shareholder Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution

plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class, Class A and Class R2 Plans, the Distributor receives a monthly distribution fee from the Investor Class, Class A and Class R2 shares at an annual rate of 0.25% of the average daily net assets of the Investor Class, Class A and Class R2 shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares, along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I, Class R1 and R6 shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund's shares and service activities.

In accordance with the Shareholder Services Plan for the Class R1 and Class R2 shares, the Manager has agreed to provide, through its affiliates or independent third parties, various shareholder and administrative support services to shareholders of the Class R1 and Class R2 shares. For its services, the Manager, its affiliates or independent third party service providers are entitled to a Shareholder Service Fee accrued daily and paid monthly at an annual rate of 0.10% of the average daily net assets of the Class R1 and Class R2 shares. This is in addition to any fees paid under a distribution plan, where applicable.

Shareholder Service Fees incurred by the Fund for the year ended October 31, 2013, were as follows:

Class R1	$	27
Class R2		15,443

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $151,077 and $1,114,232, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $42, $38,657, $243,264 and $127,680, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund's transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	580,607
Class A		7,283,413
Class B		404,357
Class C		1,577,156
Class I		5,837,274
Class R1		49
Class R2		27,563

mainstayinvestments.com 37

Notes to Financial Statements (continued)

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class I	$	4,446,548	0.1	%
Class R1		28,208	100.0
Class R6		25,684	100.0

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income	Accum- ulated Capital and Other Gain (Loss)			Other Temporary Differences			Unrealized Appreciation (Depreciation)		Total Accum- ulated Gain (Loss)
$    —	$	(143,390,780	)	$	(6,444,832	)	$	369,557,281	$	219,721,669

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments, debt versus equity adjustments, modified debt instruments and defaulted bonds. The other temporary differences are primarily due to dividends payable and defaulted bond income accruals.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments		Additional Paid-In Capital
$91,015,788	$	3,666,537	$	(94,682,325	)

The reclassifications for the Fund are primarily due to defaulted bonds, return of capital distributions received, consent fees and taxable over-distribution.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $143,390,780 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000's)		Long-Term Capital Loss Amounts (000's)
2017	$	143,391	$	—

The Fund utilized $162,752,248 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	601,170,952	$	514,745,617

38 MainStay High Yield Corporate Bond Fund

Note 5–Restricted Securities

As of October 31, 2013, the Fund held the following restricted securities:

Security	Date(s) of Acquisition		Principal Amount/ Number of Warrants/ Shares		Cost			10/31/13 Value		Percent of Net Assets
Affinity Gaming LLC Common Stock		5/4/12		275,000	$	3,093,750		$	2,956,250		0.1	%
ASG Corp. Warrant Expires 5/15/18		4/30/10		12,510		—			1,563,750		0.0	‡
At Home Corp. Convertible Bond 4.75%, due 12/15/49		5/29/01	$	61,533,853		0	(a)		6,154		0.0	‡
ION Media Networks, Inc.
Warrant, Second Lien, Expires 12/18/16		12/20/10		1,141		—			12		0.0	‡
Warrant, Unsecured Debt, Expires 12/18/16		3/12/10		1,126		3,435			11		0.0	‡
Majestic Star Casino LLC Membership Units Common Stock		12/1/11		446,020		892,040			579,826		0.0	‡
Neenah Enterprises, Inc. Common Stock		7/29/10		717,799		6,079,757			9,195,005		0.1
Neenah Foundry Co. Term Loan Loan Assignments & Participations 6.75%, due 4/26/17		5/10/13	$	18,232,500		17,511,264			18,141,338		0.2
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares) Corporate Bond 6.50%		1/23/08		460,000		—			6,762		0.0	‡
Corporate Bond 9.75%		9/4/09		26,020,000		—			382,494		0.0	‡
Somerset Cayuga Holding Co., Inc. (PIK) Convertible Bond 20.00%, due 6/15/17		6/29/12-6/15/13	$	4,132,968		4,159,725			6,075,462		0.1
Sterling Entertainment Enterprise LLC Corporate Bond 9.75%, due 12/31/19		12/21/12	$	35,000,000		35,000,000			36,312,500		0.4
Upstate NY Power Producers Common Stock		5/11/99-2/28/11		51,473		875,042			977,987		0.0	‡
Total					$	67,615,013		$	76,197,551		0.9	%

‡ Less than one-tenth of a percent.

(a) Less than one dollar.

Note 6–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund's net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 7–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the "Credit Agreement"), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to

the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 8–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $3,628,142 and $3,307,692, respectively.

mainstayinvestments.com 39

Notes to Financial Statements (continued)

Note 9–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,464,668		$	39,906,460
Shares issued to shareholders in reinvestment of dividends and distributions		3,094,163			18,986,445
Shares redeemed		(7,095,281	)		(43,666,594	)
Net increase (decrease) in shares outstanding before conversion		2,463,550			15,226,311
Shares converted into Investor Class (See Note 1)		3,766,462			23,193,781
Shares converted from Investor Class (See Note 1)		(5,207,042	)		(31,988,318	)
Net increase (decrease)		1,022,970		$	6,431,774
Year ended October 31, 2012:
Shares sold		7,022,882		$	42,082,705
Shares issued to shareholders in reinvestment of dividends and distributions		3,071,615			18,351,068
Shares redeemed		(6,538,943	)		(39,082,873	)
Net increase (decrease) in shares outstanding before conversion		3,555,554			21,350,900
Shares converted into Investor Class (See Note 1)		4,234,891			25,323,256
Shares converted from Investor Class (See Note 1)		(7,225,762	)		(43,507,617	)
Net increase (decrease)		564,683		$	3,166,539
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		176,899,981		$	1,079,330,549
Shares issued to shareholders in reinvestment of dividends and distributions		37,600,362			228,639,903
Shares redeemed		(226,349,874	)		(1,379,492,285	)
Net increase (decrease) in shares outstanding before conversion		(11,849,531	)		(71,521,833	)
Shares converted into Class A (See Note 1)		7,986,442			48,713,215
Shares converted from Class A (See Note 1)		(1,363,094	)		(8,326,527	)
Net increase (decrease)		(5,226,183	)	$	(31,135,145	)
Year ended October 31, 2012:
Shares sold		193,127,685		$	1,146,792,748
Shares issued to shareholders in reinvestment of dividends and distributions		32,625,015			193,460,933
Shares redeemed		(142,057,127	)		(841,837,904	)
Net increase (decrease) in shares outstanding before conversion		83,695,573			498,415,777
Shares converted into Class A (See Note 1)		14,730,943			87,433,351
Shares converted from Class A (See Note 1)		(1,103,995	)		(6,662,559	)
Net increase (decrease)		97,322,521		$	579,186,569

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,323,004		$	38,471,123
Shares issued to shareholders in reinvestment of dividends and distributions		1,855,402			11,235,612
Shares redeemed		(7,020,671	)		(42,574,998	)
Net increase (decrease) in shares outstanding before conversion		1,157,735			7,131,737
Shares converted from Class B (See Note 1)		(5,198,658	)		(31,592,151	)
Net increase (decrease)		(4,040,923	)	$	(24,460,414	)
Year ended October 31, 2012:
Shares sold		6,604,436		$	38,989,318
Shares issued to shareholders in reinvestment of dividends and distributions		2,050,794			12,084,707
Shares redeemed		(7,427,186	)		(43,862,277	)
Net increase (decrease) in shares outstanding before conversion		1,228,044			7,211,748
Shares converted from Class B (See Note 1)		(10,662,616	)		(62,586,431	)
Net increase (decrease)		(9,434,572	)	$	(55,374,683	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		25,883,806		$	157,661,057
Shares issued to shareholders in reinvestment of dividends and distributions		6,279,139			38,021,472
Shares redeemed		(33,021,320	)		(200,410,718	)
Net increase (decrease)		(858,375	)	$	(4,728,189	)
Year ended October 31, 2012:
Shares sold		36,115,148		$	213,680,344
Shares issued to shareholders in reinvestment of dividends and distributions		5,245,653			30,986,839
Shares redeemed		(18,460,357	)		(109,192,900	)
Net increase (decrease)		22,900,444		$	135,474,283
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		257,666,944		$	1,577,377,732
Shares issued to shareholders in reinvestment of dividends and distributions		33,919,506			206,353,124
Shares redeemed		(224,166,121	)		(1,364,179,264	)
Net increase (decrease)		67,420,329		$	419,551,592
Year ended October 31, 2012:
Shares sold		297,440,593		$	1,764,443,264
Shares issued to shareholders in reinvestment of dividends and distributions		23,496,250			139,728,874
Shares redeemed		(134,590,051	)		(800,213,225	)
Net increase (decrease)		186,346,792		$	1,103,958,913

40 MainStay High Yield Corporate Bond Fund

Class R1	Shares			Amount
Year ended October 31, 2013:
Shares issued to shareholders in reinvestment of dividends and distributions		317		$	1,924
Net increase (decrease)		317		$	1,924
Period ended October 31, 2012 (a):
Shares sold		4,223		$	25,000
Shares issued to shareholders in reinvestment of dividends and distributions		101			612
Net increase (decrease)		4,324		$	25,612
Class R2	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,155,793		$	7,064,609
Shares issued to shareholders in reinvestment of dividends and distributions		128,602			782,688
Shares redeemed		(1,164,547	)		(7,103,842	)
Net increase (decrease)		119,848		$	743,455
Year ended October 31, 2012:
Shares sold		1,402,056		$	8,354,025
Shares issued to shareholders in reinvestment of dividends and distributions		117,875			699,434
Shares redeemed		(871,521	)		(5,161,907	)
Net increase (decrease)		648,410		$	3,891,552

Class R6	Shares		Amount
Period ended October 31, 2013 (b):
Shares sold		4,092	$	25,000
Shares issued to shareholders in reinvestment of dividends and distributions		128		771
Net increase (decrease)		4,220	$	25,771

(a) Class R1 shares were first offered on June 29, 2012.

(b) Class R6 shares were first offered on June 17, 2013.

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund's management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

mainstayinvestments.com 41

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay High Yield Corporate Bond Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay High Yield Corporate Bond Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

42 MainStay High Yield Corporate Bond Fund

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $487,173 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

mainstayinvestments.com 43

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

44 MainStay High Yield Corporate Bond Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 45

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

46 MainStay High Yield Corporate Bond Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

mainstayinvestments.com 47

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32113 MS322-13 MSHY11-12/13 NL008

MainStay Money Market Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	10
Financial Statements	14
Notes to Financial Statements	19
Report of Independent Registered Public Accounting Firm	24
Federal Income Tax Information	25
Proxy Voting Policies and Procedures and Proxy Voting Record	25
Shareholder Reports and Quarterly Portfolio Disclosure	25
Board Members and Officers	26

An investment in the 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.

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

An investment in the 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.

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge	One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3,4	No Sales Charge		0.01	%		0.04	%		1.42	%		0.91	%
Class A Shares3	No Sales Charge		0.01			0.04			1.43			0.69
Class B Shares3	No Sales Charge		0.01			0.04			1.42			0.91
Class C Shares3	No Sales Charge		0.01			0.04			1.42			0.91
7-Day Current Yield: 0.01%

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns would have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. As of October 31, 2013, MainStay Money Market Fund had an effective 7-day yield of 0.01% for Investor Class, Class A, B and C shares. The 7-day current

yield was 0.01% for Investor Class, Class A, B and C shares. These yields reflect certain expense limitations. Had these expense limitations not been in effect, the effective 7-day yield would have been –0.75%, –0.50%, –0.75%, and –0.75%, for Investor Class, Class A, B and C shares, respectively, and the 7-day current yield would have been –0.75%, –0.50%, –0.75%, and –0.75%, for Investor Class, Class A, B and C shares, respectively. The current yield reflects the Fund’s earnings better than the Fund’s total return.

4. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

The footnote on the next page is an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Average Lipper Money Market Fund5		0.01	%		0.09	%		1.42	%

5. The average Lipper money market fund is an equally weighted performance average adjusted for capital gains distributions and income dividends of all of the money market funds in the Lipper Universe. Lipper Inc., a wholly-owned subsidiary of Thomson Reuters, is an independent monitor of mutual

fund performance. Results do not reflect any deduction of sales charges. Lipper averages are not class specific. Lipper returns are unaudited. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Money Market Fund

Cost in Dollars of a $1,000 Investment in MainStay Money Market Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,000.10	$	0.66	$	1,024.60	$	0.66
Class A Shares	$	1,000.00	$	1,000.10	$	0.66	$	1,024.60	$	0.66
Class B Shares	$	1,000.00	$	1,000.10	$	0.66	$	1,024.60	$	0.66
Class C Shares	$	1,000.00	$	1,000.10	$	0.66	$	1,024.60	$	0.66

1. Expenses are equal to the Fund’s annualized expense ratio of each class (0.13% for Investor Class, Class A, Class B and Class C) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

See Portfolio of Investments beginning on page 10 for specific holdings within these categories.

8 MainStay Money Market Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Thomas J. Girard and David E. Clement, CFA, of New York Life Investments,¹ the Fund’s Manager.

How did MainStay Money Market Fund perform relative to its peers during the 12 months ended October 31, 2013?

As of October 31, 2013, MainStay Money Market Fund provided a 7-day current yield of 0.01% for Investor Class, Class A, Class B and Class C shares. As of the same date, the Fund provided a 7-day effective yield of 0.01% for all share classes. For the 12 months ended October 31, 2013, all share classes returned 0.01%. All share classes performed in line with the 0.01% return of the average Lipper² money market fund for the 12 months ended October 31, 2013. Performance figures for the Fund reflect certain fee waivers and/or expense limitations without which total returns would have been lower.

What factors affected the Fund’s performance during the reporting period?

Short-term corporate securities and floating-rate bonds remained inexpensive but attractive as issues became more difficult to locate during the second half of the reporting period. Asset-backed securities continued to contribute to the Fund’s performance. Because of their 13-month legal final maturity, however, they initially lengthened the weighted average maturity of the Fund.

The Fund’s allocation to industrial commercial paper detracted from performance during the government’s partial shutdown; and during the shutdown, demand for these securities increased. Over the entire reporting period, however, the supply of industrial commercial paper declined. These factors increased volatility and made investing in the sector more difficult.

As dealers pruned their balance sheets, repurchase agreement levels dropped because there was less collateral to finance.

What was the Fund’s duration³ strategy during the reporting period?

We kept the Fund’s average weighted duration target between 45 and 55 days. We shortened the Fund’s weighted average maturity to participate in the primary asset-backed securities market and lengthened weighted average maturity afterward. We increased the Fund’s participation in longer-dated (12- to 13-month) U.S. Treasury coupons during the reporting period, which added to the Fund’s duration.

The Federal Reserve’s decision to delay the tapering of its asset purchases temporarily reduced the likelihood of higher short-term interest rates. This allowed the Fund’s weighted average maturity to drift during the reporting period, depending on the supply of attractive longer-maturity instruments. The U.S. Treasury yield curve,⁴ although flatter, continued to slope upward during the reporting period.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

With the Federal Reserve likely to remain accommodative during the reporting period, the Fund continued to look for yield advantages among longer-maturity instruments such as U.S. Treasury coupons and asset-backed securities. The continuing upward slope of the yield curve added to the attractiveness of longer-dated maturities. The partial government shutdown caused increased volatility among shorter-maturity instruments toward the end of the reporting period. As supply decreased and spreads tightened, the investment environment became more challenging.

During the reporting period, which market segments were the strongest positive contributors to the Fund’s performance and which market segments were particularly weak?

Asset-backed securities and floating-rate corporate bonds continued to offer relative value and remained the Fund’s strongest contributors to performance. (Contributions take weightings and total returns into account.) As supply declined in industrial commercial paper and repurchase agreements, spreads tightened in these sectors. Yields on industrial commercial paper traded just above those on U.S. Treasury bills during much of the reporting period and detracted from the Fund’s performance. Declining supply for repurchase agreements caused yields to rally in this sector as well, which further detracted from the Fund’s performance.

Did the Fund make any significant purchases or sales during the reporting period?

Significant purchases included the National Rural Utilities Cooperative Finance floating-rate notes due 2/18/14; E.I. du Pont de Nemours & Co. floating-rate notes due 3/25/14; an ARI Fleet Lease 2013-A A1 ABS note due 4/15/14 and a Carmax Auto Owner Trust 2013-4 A1 ABS note due 11/17/14. Since the Fund typically holds securities until they mature, there were no significant sales during the reporting period.

How did the Fund’s sector weightings change during the reporting period?

We increased the Fund’s weightings in commercial paper, corporate bonds and certificates of deposit. Over the same period, we decreased the Fund’s weightings in agency securities.

1. “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.

2. See footnote on page 6 for more information on Lipper Inc.

3. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration for money market funds is expressed as a number of days and is considered a more accurate sensitivity gauge than average maturity.

4. The yield curve is a line that plots the yields of various securities of similar quality—typically U.S. Treasury issues—across a range of maturities. The U.S. Treasury yield curve serves as a benchmark for other debt and is used in economic forecasting.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

mainstayinvestments.com 9

Portfolio of Investments October 31, 2013

	Principal Amount		Amortized Cost
Short-Term Investments 100.6%†
Certificates of Deposit 5.3%
Royal Bank of Canada
0.174%, due 3/13/14 (a)	$	3,935,000	$	3,935,000
0.254%, due 4/15/14 (a)		3,925,000		3,925,000
0.31%, due 1/30/14 (a)		3,775,000		3,775,000
Toronto-Dominion Bank (The)
0.219%, due 9/2/14 (a)		3,980,000		3,980,000
0.224%, due 11/15/13 (a)		4,600,000		4,600,000
Wells Fargo Bank NA 0.224%, due 3/7/14 (a)		4,000,000		4,000,000
				24,215,000
Financial Company Commercial Paper 20.0%
CPPIB Capital, Inc. 0.10%, due 11/26/13 (b)(c)		5,655,000		5,654,607
Glaxosmithkline Finance PLC 0.10%, due 11/15/13 (b)(c)		3,835,000		3,834,851
John Deere Bank SA 0.09%, due 11/20/13 (b)(c)		7,000,000		6,999,668
John Deere Capital Corp. 0.07%, due 12/5/13 (b)(c)		4,000,000		3,999,736
JPMorgan Chase & Co. 0.326%, due 1/16/14 (b)		3,800,000		3,800,000
Massachusetts Mutual Life Insurance Co. 0.20%, due 11/20/13 (b)(c)		4,505,000		4,504,525
National Australia Funding Delaware, Inc. 0.14%, due 11/25/13 (b)(c)		12,000,000		11,998,880
National Rural Utilities Cooperative Finance Corp.
0.09%, due 11/19/13 (b)		3,775,000		3,774,830
0.10%, due 11/7/13 (b)		3,770,000		3,769,937
Nationwide Life Insurance Co. 0.16%, due 11/21/13 (b)(c)		3,770,000		3,769,665
Nestle Finance International Ltd. 0.065%, due 11/25/13 (b)		9,435,000		9,434,591
PACCAR Financial Corp. 0.08%, due 11/19/13 (b)		5,425,000		5,424,783
Principal Life Insurance Co. 0.10%, due 11/15/13 (b)(c)		3,360,000		3,359,869
Siemens Capital Co., LLC 0.08%, due 12/17/13 (b)(c)		5,690,000		5,689,418
Southern Co. Funding Corp. 0.14%, due 11/5/13 (b)(c)		5,665,000		5,664,912
U.S. Bank NA 0.13%, due 11/6/13 (b)		9,485,000		9,485,000
				91,165,272

	Principal Amount		Amortized Cost
Other Commercial Paper 35.2%
3M Co.
0.05%, due 11/18/13 (b)(c)	$	545,000	$	544,987
0.06%, due 12/2/13 (b)(c)		9,725,000		9,724,497
Air Products & Chemicals, Inc. 0.06%, due 11/21/13 (b)(c)		4,000,000		3,999,867
Automatic Data Processing, Inc. 0.09%, due 11/7/13 (b)(c)		3,700,000		3,699,944
Colgate-Palmolive Co.
0.04%, due 11/20/13 (b)(c)		3,795,000		3,794,920
0.05%, due 11/13/13 (b)(c)		4,000,000		3,999,933
ConocoPhillips Qatar Funding Ltd. 0.07%, due 11/25/13 (b)(c)		5,700,000		5,699,734
E.I. du Pont de Nemours & Co. 0.08%, due 11/19/13 (b)(c)		4,000,000		3,999,840
Exxon Mobil Corp. 0.14%, due 11/14/13 (b)		5,000,000		4,999,747
Florida Power & Light Co. 0.25%, due 11/5/13 (b)		5,000,000		4,999,861
General Dynamics Corp.
0.12%, due 12/4/13 (b)(c)		5,000,000		4,999,450
0.15%, due 12/12/13 (b)(c)		1,895,000		1,894,676
Honeywell International, Inc. 0.05%, due 11/26/13 (b)(c)		1,510,000		1,509,948
Illinois Tool Works, Inc.
0.06%, due 11/6/13 (b)(c)		1,320,000		1,319,989
0.06%, due 11/22/13 (b)(c)		1,325,000		1,324,954
Kimberly-Clark Worldwide, Inc. 0.08%, due 11/12/13 (b)(c)		3,845,000		3,844,906
Merck & Co., Inc. 0.05%, due 11/4/13 (b)(c)		5,000,000		4,999,979
Microsoft Corp.
0.06%, due 11/13/13 (b)(c)		4,361,000		4,360,913
0.08%, due 12/11/13 (b)(c)		5,550,000		5,549,507
Monsanto Co. 0.11%, due 11/18/13 (b)(c)		9,610,000		9,609,501
NetJets, Inc. 0.05%, due 11/4/13 (b)(c)		1,515,000		1,514,994
Parker Hannifin Corp.
0.10%, due 11/27/13 (b)(c)		4,985,000		4,984,640
0.14%, due 12/11/13 (b)(c)		6,800,000		6,798,942
PepsiCo, Inc. 0.06%, due 11/12/13 (b)(c)		4,000,000		3,999,927
Province of Ontario Canada 0.05%, due 11/6/13 (b)		5,660,000		5,659,961
Province of Quebec Canada 0.10%, due 12/20/13 (b)(c)		3,935,000		3,934,464
Sanofi 0.08%, due 11/6/13 (b)(c)		7,000,000		6,999,922

† Percentages indicated are based on Fund net assets.

10 MainStay Money Market Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Amortized Cost
Short-Term Investments (continued)
Other Commercial Paper (continued)
Southern Co. (The) 0.14%, due 12/2/13 (b)(c)	$	5,660,000	$	5,659,318
UnitedHealth Group, Inc.
0.15%, due 11/1/13 (b)(c)		3,895,000		3,895,000
0.22%, due 11/7/13 (b)(c)		3,835,000		3,834,859
0.28%, due 11/15/13 (b)(c)		3,380,000		3,379,632
Wal-Mart Stores, Inc. 0.05%, due 11/27/13 (b)(c)		8,000,000		7,999,711
WGL Holdings, Inc.
0.14%, due 11/22/13 (b)(c)		2,400,000		2,399,804
0.15%, due 11/18/13 (b)(c)		2,000,000		1,999,858
0.16%, due 11/15/13 (b)(c)		1,020,000		1,019,937
0.16%, due 11/21/13 (b)(c)		700,000		699,938
0.18%, due 11/12/13 (b)(c)		2,530,000		2,529,861
0.25%, due 11/7/13 (b)(c)		3,425,000		3,424,857
Wisconsin Gas LLC 0.18%, due 11/13/13 (b)		4,800,000		4,799,712
				160,412,490
Other Notes 11.7%
American Honda Finance Corp. 0.296%, due 11/8/13 (a)(c)		3,805,000		3,805,000
ARI Fleet Lease Trust Series 2013-A, Class A1 0.26%, due 4/15/14 (c)		924,129		924,129
CarMax Auto Owner Trust Series 2013-4, Class A1 0.24%, due 11/17/14		1,897,000		1,897,000
CCG Receivables Trust Series 2013-1, Class A1 0.37%, due 4/14/14 (c)		807,292		807,292
Coca-Cola Co. (The) 0.204%, due 3/14/14 (a)		3,805,000		3,805,261
E.I. du Pont de Nemours & Co. 0.671%, due 3/25/14 (a)		3,695,000		3,701,916
Enterprise Fleet Financing LLC
Series 2013-1, Class A1 0.26%, due 3/20/14 (c)		704,456		704,456
Series 2013-2, Class A1 0.29%, due 8/20/14 (c)		1,700,621		1,700,621
Fifth Third Auto Trust Series 2013-A, Class A1 0.22%, due 4/15/14		325,506		325,506
GE Equipment Transportation LLC Series 2013-1, Class A1 0.26%, due 3/24/14		352,776		352,776
GreatAmerica Leasing Receivables Funding LLC Series 2013-1, Class A1 0.24%, due 2/18/14 (c)		281,993		281,993

	Principal Amount		Amortized Cost
Other Notes (continued)
Honda Auto Receivables Owner Trust Series 2013-4, Class A1 0.24%, due 11/18/14	$	1,250,000	$	1,250,000
Hyundai Auto Receivables Trust Series 2013-B, Class A1 0.25%, due 7/15/14		1,749,441		1,749,441
International Bank for Reconstruction & Development (zero coupon), due 11/1/13		9,910,000		9,910,000
John Deere Owner Trust
Series 2013-A, Class A1 0.25%, due 5/2/14		823,856		823,856
Series 2013-B, Class A1 0.25%, due 9/26/14		3,079,979		3,079,979
M&T Bank Auto Receivables Trust Series 2013-1A, Class A1 0.25%, due 9/15/14 (c)		1,679,972		1,679,972
Mercedes-Benz Auto Lease Trust Series 2013-A, Class A1 0.27%, due 5/15/14		584,108		584,108
MetLife Institutional Funding II 0.314%, due 1/10/14 (a)(c)		3,750,000		3,750,000
MMAF Equipment Finance LLC Series 2013-AA, Class A1 0.28%, due 9/5/14 (c)		1,964,663		1,964,663
National Rural Utilities Cooperative Finance Corp. 0.318%, due 2/18/14 (a)		3,800,000		3,800,000
Nissan Auto Lease Trust Series 2013-A, Class A1 0.23%, due 6/16/14		1,205,473		1,205,473
Procter & Gamble Co. (The) 0.165%, due 2/14/14 (a)		3,790,000		3,789,588
Volvo Financial Equipment LLC Series 2013-1A, Class A1 0.26%, due 4/15/14 (c)		651,275		651,275
World Omni Auto Receivables Trust Series 2013-A, Class A1 0.23%, due 6/16/14		997,046		997,046
				53,541,351
Treasury Debt 16.7%
United States Treasury Bills
0.011%, due 11/7/13 (b)		8,000,000		7,999,986
0.012%, due 11/14/13 (b)		8,000,000		7,999,965
0.03%, due 11/21/13 (b)		13,795,000		13,794,770
United States Treasury Notes
0.125%, due 12/31/13		3,790,000		3,789,695
0.125%, due 7/31/14		4,000,000		3,999,381
0.25%, due 11/30/13		3,800,000		3,800,077
0.25%, due 1/31/14		3,790,000		3,790,617
0.25%, due 2/28/14		3,795,000		3,795,860

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Amortized Cost
Treasury Debt (continued)
United States Treasury Notes (continued)
0.25%, due 3/31/14	$	3,840,000	$	3,841,873
0.25%, due 4/30/14		3,865,000		3,866,920
0.25%, due 5/31/14		3,835,000		3,837,070
0.25%, due 8/31/14		3,775,000		3,777,809
0.25%, due 9/30/14		3,845,000		3,848,793
0.25%, due 10/31/14		3,895,000		3,899,758
2.625%, due 6/30/14		4,000,000		4,065,568
				76,108,142
Treasury Repurchase Agreements 11.7%
Bank of America N.A. 0.08%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $20,000,044 (Collateralized by a United States Treasury Note with a rate of 1.25% and a maturity date of 4/15/14, with a Principal Amount of $18,343,700 and a Market Value of $20,400,076)		20,000,000		20,000,000
Deutsche Bank Securities, Inc. 0.10%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $22,185,062 (Collateralized by a United States Treasury Note with a rate of 0.875% and a maturity date of 1/31/17, with a Principal Amount of $22,460,400 and a Market Value of $22,628,797)		22,185,000		22,185,000

	Principal Amount			Amortized Cost
Treasury Repurchase Agreements (continued)
TD Securities (U.S.A.) LLC 0.08%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $11,000,024 (Collateralized by United States Treasury securities with rates between 0.00% and 2.125% and maturity dates between 12/26/13 and 2/15/41, with a Principal Amount of $10,995,600 and a Market Value of $11,220,050)	$	11,000,000		$	11,000,000
					53,185,000
Total Short-Term Investments (Amortized Cost $458,627,255) (d)		100.6	%		458,627,255
Other Assets, Less Liabilities		(0.6	)		(2,768,120	)
Net Assets		100.0	%	$	455,859,135

(a) Floating rate—Rate shown is the rate in effect as of October 31, 2013.

(b) Interest rate presented is yield to maturity.

(c) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(d) The amortized cost also represents the aggregate cost for federal income tax purposes.

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Short-Term Investments
Certificates of Deposit	$	—	$	24,215,000	$	—	$	24,215,000
Financial Company Commercial Paper		—		91,165,272		—		91,165,272
Other Commercial Paper		—		160,412,490		—		160,412,490
Other Notes		—		53,541,351		—		53,541,351
Treasury Debt		—		76,108,142		—		76,108,142
Treasury Repurchase Agreements		—		53,185,000		—		53,185,000
Total Investments in Securities	$	—	$	458,627,255	$	—	$	458,627,255

(a) For a complete listing of investments, see the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

12 MainStay Money Market Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The table below sets forth the diversification of MainStay Money Market Fund investments by industry.

Industry Diversification (Unaudited)

	Amortized Cost			Percent †
Aerospace & Defense	$	6,894,126			1.5	%
Automobile ABS		13,017,752			2.8
Banks		49,498,880			10.9
Beverages		7,805,188			1.7
Chemicals		21,311,124			4.7
Commercial Services		3,699,944			0.8
Cosmetics & Personal Care		15,429,347			3.4
Electric		16,324,091			3.6
Electronics		1,509,948			0.3
Finance—Auto Loans		9,229,783			2.0
Finance—Consumer Loans		3,999,736			0.9
Finance—Other Services		15,179,618			3.3
Finance—Investment Fund		5,654,607			1.2
Food		9,434,591			2.1
Gas		16,873,967			3.7
Health Care—Services		11,109,491			2.4
Insurance		15,384,059			3.4
Machinery—Diversified		6,999,668			1.5
Miscellaneous—Manufacturing		30,387,427			6.7
Multi-National		9,910,000			2.2
Oil & Gas		10,699,481			2.4
Other ABS		7,961,834			1.7
Pharmaceuticals		11,999,901			2.6
Regional (State & Province)		9,594,425			2.1
Repurchase Agreements		53,185,000			11.7
Retail		7,999,711			1.8
Software		9,910,420			2.2
Sovereign		76,108,142			16.7
Transportation		1,514,994			0.3
		458,627,255			100.6
Other Assets, Less Liabilities		(2,768,120	)		(0.6	)
Net Assets	$	455,859,135			100.0	%

† Percentages indicated are based on Fund net assets.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (amortized cost $405,442,255)	$	405,442,255
Repurchase agreements, at value (amortized cost $53,185,000)		53,185,000
Cash		511
Receivables:
Fund shares sold		1,328,761
Interest		67,269
Manager (See Note 3)		47,735
Other assets		41,201
Total assets		460,112,732
Liabilities
Payables:
Fund shares redeemed		2,136,444
Investment securities purchased		1,897,000
Transfer agent (See Note 3)		162,692
Shareholder communication		35,313
Professional fees		12,936
Custodian		3,116
Trustees		993
Accrued expenses		5,028
Dividend payable		75
Total liabilities		4,253,597
Net assets	$	455,859,135
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	4,559,059
Additional paid-in capital		451,297,558
		455,856,617
Undistributed net investment income		2,498
Accumulated net realized gain (loss) on investments		20
Net assets	$	455,859,135

Investor Class
Net assets applicable to outstanding shares	$	58,774,409
Shares of beneficial interest outstanding		58,783,825
Net asset value and offering price per share outstanding	$	1.00
Class A
Net assets applicable to outstanding shares	$	290,027,711
Shares of beneficial interest outstanding		290,055,591
Net asset value and offering price per share outstanding	$	1.00
Class B
Net assets applicable to outstanding shares	$	73,803,409
Shares of beneficial interest outstanding		73,810,501
Net asset value and offering price per share outstanding	$	1.00
Class C
Net assets applicable to outstanding shares	$	33,253,606
Shares of beneficial interest outstanding		33,255,959
Net asset value and offering price per share outstanding	$	1.00

14 MainStay Money Market Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	706,018
Expenses
Manager (See Note 3)		2,020,783
Transfer agent (See Note 3)		937,885
Registration		102,033
Shareholder communication		69,456
Professional fees		59,623
Custodian		24,685
Trustees		9,142
Miscellaneous		15,783
Total expenses before waiver/reimbursement		3,239,390
Expense waiver/reimbursement from Manager (See Note 3)		(2,571,716	)
Net expenses		667,674
Net investment income (loss)		38,344
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments		20
Net increase (decrease) in net assets resulting from operations	$	38,364

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	38,344		$	39,781
Net realized gain (loss) on investments		20			1,714
Net increase (decrease) in net assets resulting from operations		38,364			41,495
Dividends to shareholders:
From net investment income:
Investor Class		(3,866	)		(2,729	)
Class A		(25,645	)		(28,256	)
Class B		(6,101	)		(6,389	)
Class C		(2,729	)		(2,410	)
Total dividends to shareholders		(38,341	)		(39,784	)
Capital share transactions:
Net proceeds from sale of shares		630,608,506			485,458,380
Net asset value of shares issued to shareholders in reinvestment of dividends		37,152			39,626
Cost of shares redeemed		(606,229,520	)		(627,822,156	)
Increase (decrease) in net assets derived from capital share transactions		24,416,138			(142,324,150	)
Net increase (decrease) in net assets		24,416,161			(142,322,439	)
Net Assets
Beginning of year		431,442,974			573,765,413
End of year	$	455,859,135		$	431,442,974
Undistributed net investment income at end of year	$	2,498		$	387

16 MainStay Money Market Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income (loss)		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net realized and unrealized gain (loss) on investments		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Less dividends and distributions:
From net investment income		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Return of capital		—			—			—			(0.00	)‡		—
Total dividends and distributions		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Net asset value at end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total investment return		0.01	%		0.01	%		0.01	%		0.02	%		0.12	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.01	%		0.00	%‡		0.01	%		0.01	%		0.13	%
Net expenses		0.16	%		0.18	%		0.18	%		0.25	%		0.50	%
Expenses (before waiver/reimbursement)		0.90	%		0.91	%		0.91	%		0.94	%		0.95	%
Net assets at end of year (in 000’s)	$	58,774		$	59,129		$	63,169		$	64,360		$	67,220

‡ Less than one cent per share.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income (loss)		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net realized and unrealized gain (loss) on investments		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Less dividends and distributions:
From net investment income		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Return of capital		—			—			—			(0.00	)‡		—
Total dividends and distributions		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Net asset value at end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total investment return		0.01	%		0.01	%		0.01	%		0.02	%		0.16	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.01	%		0.01	%		0.01	%		0.01	%		0.18	%
Net expenses		0.15	%		0.17	%		0.17	%		0.25	%		0.47	%
Expenses (before waiver/reimbursement)		0.65	%		0.69	%		0.71	%		0.72	%		0.73	%
Net assets at end of year (in 000’s)	$	290,028		$	259,119		$	373,790		$	301,795		$	279,766

‡ Less than one cent per share.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income (loss)		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net realized and unrealized gain (loss) on investments		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Less dividends and distributions:
From net investment income		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Return of capital		—			—			—			(0.00	)‡		—
Total dividends and distributions		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Net asset value at end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total investment return		0.01	%		0.01	%		0.01	%		0.02	%		0.12	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.01	%		0.01	%		0.01	%		0.01	%		0.14	%
Net expenses		0.16	%		0.18	%		0.18	%		0.25	%		0.51	%
Expenses (before waiver/reimbursement)		0.90	%		0.91	%		0.91	%		0.94	%		0.95	%
Net assets at end of year (in 000’s)	$	73,803		$	84,982		$	102,908		$	118,529		$	144,464

‡ Less than one cent per share.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net investment income (loss)		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Net realized and unrealized gain (loss) on investments		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Total from investment operations		0.00	‡		0.00	‡		0.00	‡		0.00	‡		0.00	‡
Less dividends and distributions:
From net investment income		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Return of capital		—			—			—			(0.00	)‡		—
Total dividends and distributions		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡		(0.00	)‡
Net asset value at end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total investment return		0.01	%		0.01	%		0.01	%		0.02	%		0.12	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.01	%		0.01	%		0.01	%		0.01	%		0.15	%
Net expenses		0.15	%		0.18	%		0.18	%		0.25	%		0.52	%
Expenses (before waiver/reimbursement)		0.90	%		0.91	%		0.91	%		0.94	%		0.95	%
Net assets at end of year (in 000’s)	$	33,254		$	28,212		$	33,898		$	27,307		$	33,194

‡ Less than one cent per share.

18 MainStay Money Market Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Money Market Fund (the “Fund”), a diversified fund.

The Fund currently offers four classes of shares at net asset value (“NAV”) without the imposition of a front-end sales charge or a contingent deferred sales charge (“CDSC”). Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on May 1, 1986. Class C shares commenced operations on September 1, 1998. Investor Class shares commenced operations on February 28, 2008. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The four classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions.

The Fund’s investment objective is to seek a high level of current income while preserving capital and maintaining liquidity.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Valuation of Shares.  The Fund seeks to maintain a NAV of $1.00 per share, although there is no assurance that it will be able to do so on a continuous basis. The Fund has adopted certain investment, portfolio and dividend and distribution policies designed to enable it to do as such. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

(B)  Securities Valuation.  Securities are valued at their amortized cost per the requirements of Rule 2a-7 under the 1940 Act, as amended. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security.

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to

the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”).

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

Securities valued at amortized cost are not obtained from a quoted price in an active market and are generally categorized as Level 2 in the hierarchy. The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable

mainstayinvestments.com 19

Notes to Financial Statements (continued)

inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Benchmark Yields	•    Reported Trades
•    Broker Dealer Quotes	•    Issuer Spreads
•    Two-sided markets	•    Benchmark securities
•    Bids/Offers	•    Reference Data (corporate actions or material event notices)
•    Industry and economic events	•    Comparable bonds
•    Equity and credit default swap curves	•    Monthly payment information

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use some of the following fair value techniques: multi-dimensional relational pricing models and option adjusted spread pricing. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

(C)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare dividends of net investment income, if any, at least daily and intends to pay them at least monthly and declares and pays distributions of net realized capital gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Interest income is accrued daily and discounts and premiums on securities purchased for the Fund are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Concentration of Risk.  The Fund’s investments may include securities such as variable rate master demand notes, floating-rate notes and mortgage-related and asset-backed securities. If expectations about changes in interest rates, or assessments of an issuer’s credit worthiness or market conditions are incorrect, these types of investments could lose money.

The Fund may also invest in U.S. dollar denominated securities of foreign issuers, which carry certain risks in addition to the usual risks inherent in domestic instruments. These risks include those resulting from future adverse political or economic developments and possible imposition of foreign governmental laws or restrictions. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(J)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in

20 MainStay Money Market Fund

the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

Note 3–Fees and Related Party Transactions

(A)  Manager.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. New York Life Investments is responsible for the day-to-day portfolio management of the Fund.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.45% up to $500 million; 0.40% from $500 million to $1 billion; and 0.35% in excess of $1 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% on from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate (exclusive of any applicable waivers/reimbursement) was 0.47% for the year ended October 31, 2013 inclusive of a fee for fund accounting services of 0.02% of the Fund’s average daily net assets.

New York Life Investments has contractually agreed to waive fees and/or reimburse expenses so that Total Annual Fund Operating Expenses do not exceed the following percentages of average daily net assets: Investor Class, 0.80%; Class A, 0.70%; Class B, 0.80%; and Class C, 0.80%. This agreement will remain in effect until February 28, 2014, and shall renew automatically for one-year terms unless New York Life Investments provides written notice of termination prior to the start of the next term or upon approval of the Board. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

New York Life Investments may limit expenses of the Fund to the extent it deems appropriate to enhance the yield of the Fund, or a particular class of the Fund, during periods when expenses have a significant impact on the yield of the Fund, or a particular class of the Fund, as applicable, because of low interest rates. This expense limitation policy

is voluntary and in addition to any contractual arrangements that may be in place with respect to the Fund and described in the Fund’s prospectus.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $2,020,783 and waived its fees in the amount of $172,534. Additionally, New York Life Investments reimbursed fees in the amount of $2,399,182, without which the Fund’s total returns would have been lower.

State Street Bank and Trust Company (“State Street”), 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Contingent Deferred Sales Charge.  Although the Fund does not assess a CDSC upon redemption of Class B or Class C shares of the Fund, the applicable CDSC will be assessed when shares were redeemed from the Fund if the shareholder previously exchanged his or her investment into the Fund from another fund within the MainStay Group of Funds. The Fund was advised that NYLIFE Distributors LLC (the “Distributor”), an indirect wholly owned subsidiary of New York Life, received from shareholders the proceeds from CDSCs of Investor Class, Class A, Class B and Class C of $189, $41,199, $88,403 and $16,270, respectively for the year ended October 31, 2013.

(C)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	216,151
Class A		310,028
Class B		294,646
Class C		117,060

(D)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

mainstayinvestments.com 21

Notes to Financial Statements (continued)

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income		Accumulated Capital and Other Gain (Loss)		Other Temporary Differences			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
	$2,593	$	—	$	(75	)	$	—	$	2,518

The other temporary differences are primarily due to dividends payable.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
$2,108	$	(1,714	)	$	(394	)

The reclassifications for the Fund are primarily due to distribution redesignations and nondeductible expenses.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	38,341	$	39,784

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Capital Share Transactions

Investor Class (at $1 per share)	Shares
Year ended October 31, 2013:
Shares sold		48,055,250
Shares issued to shareholders in reinvestment of dividends		3,768
Shares redeemed		(43,658,818	)
Net increase (decrease) in shares outstanding before conversion		4,400,200
Shares converted into Investor Class (See Note 1)		4,675,952
Shares converted from Investor Class (See Note 1)		(9,430,974	)
Net increase (decrease)		(354,822	)
Year ended October 31, 2012:
Shares sold		47,190,238
Shares issued to shareholders in reinvestment of dividends		3,611
Shares redeemed		(47,219,449	)
Net increase (decrease) in shares outstanding before conversion		(25,600	)
Shares converted into Investor Class (See Note 1)		5,001,213
Shares converted from Investor Class (See Note 1)		(9,015,937	)
Net increase (decrease)		(4,040,324	)
Class A (at $1 per share)	Shares
Year ended October 31, 2013:
Shares sold		511,132,269
Shares issued to shareholders in reinvestment of dividends		24,798
Shares redeemed		(485,284,727	)
Net increase (decrease) in shares outstanding before conversion		25,872,340
Shares converted into Class A (See Note 1)		9,586,355
Shares converted from Class A (See Note 1)		(4,550,353	)
Net increase (decrease)		30,908,342
Year ended October 31, 2012:
Shares sold		384,368,212
Shares issued to shareholders in reinvestment of dividends		26,705
Shares redeemed		(503,689,928	)
Net increase (decrease) in shares outstanding before conversion		(119,295,011	)
Shares converted into Class A (See Note 1)		9,324,253
Shares converted from Class A (See Note 1)		(4,701,096	)
Net increase (decrease)		(114,671,854	)

22 MainStay Money Market Fund

Class B (at $1 per share)	Shares
Year ended October 31, 2013:
Shares sold		19,124,303
Shares issued to shareholders in reinvestment of dividends		6,007
Shares redeemed		(30,028,189	)
Net increase (decrease) in shares outstanding before conversion		(10,897,879	)
Shares converted from Class B (See Note 1)		(280,980	)
Net increase (decrease)		(11,178,859	)
Year ended October 31, 2012:
Shares sold		22,048,636
Shares issued to shareholders in reinvestment of dividends		6,966
Shares redeemed		(39,373,145	)
Net increase (decrease) in shares outstanding before conversion		(17,317,543	)
Shares converted from Class B (See Note 1)		(608,433	)
Net increase (decrease)		(17,925,976	)

Class C (at $1 per share)	Shares
Year ended October 31, 2013:
Shares sold		52,296,685
Shares issued to shareholders in reinvestment of dividends		2,579
Shares redeemed		(47,257,784	)
Net increase (decrease)		5,041,480
Year ended October 31, 2012:
Shares sold		31,851,294
Shares issued to shareholders in reinvestment of dividends		2,345
Shares redeemed		(37,539,635	)
Net increase (decrease)		(5,685,996	)

Note 7–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

mainstayinvestments.com 23

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Money Market Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Money Market Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

24 MainStay Money Market Fund

Federal Income Tax Information

(Unaudited)

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q and every month on Form N-MFP. In addition, the Fund will make available its complete schedule of portfolio holdings on its website at www.mainstayinvestments.com, five days after month-end. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). Form N-MFP will be made available to the public by the SEC 60 days after the month to which the information pertains, and a link to each of the most recent 12 months of filings on Form N-MFP will be provided on the Fund’s website. You can also obtain and review copies of Forms N-Q and N-MFP by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

mainstayinvestments.com 25

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

26 MainStay Money Market Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 27

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

28 MainStay Money Market Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

mainstayinvestments.com 29

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31924 MS322-13 MSMM11-12/13 NL012

MainStay Tax Free Bond Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	21
Notes to Financial Statements	27
Report of Independent Registered Public Accounting Firm	34
Federal Income Tax Information	35
Proxy Voting Policies and Procedures and Proxy Voting Record	35
Shareholder Reports and Quarterly Portfolio Disclosure	35
Board Members and Officers	36

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–7.79 –3.45	%		5.41 6.39	%		3.21 3.69	%		0.91 0.91	%
Class A Shares	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–7.86 –3.52			5.48 6.46			3.25 3.73			0.84 0.84
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		–8.38 –3.73			5.78 6.10			3.42 3.42			1.16 1.16
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		–4.65 –3.72			6.12 6.12			3.42 3.42			1.16 1.16
Class I Shares4	No Sales Charge			–3.18			6.71			3.97			0.59

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on December 21, 2009, include the historical performance of Class B shares through December 20, 2009, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Barclays Municipal Bond Index5		–1.72	%		6.37	%		4.53	%
Average Lipper General & Insured Municipal Debt Fund6		–3.13			6.37			3.71

5. The Barclays Municipal Bond Index is an unmanaged index considered representative of the broad market for investment-grade, tax-exempt bonds with a maturity of at least one year. Bonds subject to the alternative minimum tax or with floating or zero coupons are excluded. The Barclays Municipal Bond Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume the reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

6. The average Lipper general & insured municipal debt fund is representative of funds that, by portfolio practice, either invest primarily in municipal debt issues rated in the top four credit ratings or invest primarily in municipal debt issues insured as to timely payment. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Tax Free Bond Fund

Cost in Dollars of a $1,000 Investment in MainStay Tax Free Bond Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	939.80	$	4.20	$	1,020.90	$	4.38
Class A Shares	$	1,000.00	$	939.70	$	3.91	$	1,021.20	$	4.08
Class B Shares	$	1,000.00	$	938.20	$	5.42	$	1,019.60	$	5.65
Class C Shares	$	1,000.00	$	939.20	$	5.43	$	1,019.60	$	5.65
Class I Shares	$	1,000.00	$	941.90	$	2.69	$	1,022.40	$	2.80

1. Expenses are equal to the Fund’s annualized expense ratio of each class (0.86% for Investor Class, 0.80% for Class A, 1.11% for Class B, 1.11% for Class C and 0.55% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

California	22.6	%
Texas	10.4
Michigan	7.9
Illinois	7.0
New Jersey	6.5
New York	6.0
Florida	4.3
U.S. Virgin Islands	4.2
Louisiana	2.7
Maryland	2.4
Guam	2.2
Massachusetts	2.0
Georgia	1.7
Pennsylvania	1.7
Connecticut	1.7
Nebraska	1.7
South Carolina	1.6
District of Columbia	1.6
Tennessee	1.3
Indiana	1.3

Arizona	1.2	%
Maine	0.9
Wisconsin	0.8
Washington	0.8
Ohio	0.8
Rhode Island	0.7
Kentucky	0.6
Colorado	0.6
Hawaii	0.6
Minnesota	0.5
Alabama	0.5
North Carolina	0.4
North Dakota	0.3
New Hampshire	0.2
Wyoming	0.1
Utah	0.1
Vermont	0.1
Other Assets, Less Liabilities	0.0	‡
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Issuers Held as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Maryland Health & Higher Educational Facilities Authority, Medstar Health, Revenue Bonds, 5.00%, due 8/15/38

2. Chicago, Illinois O’Hare International Airport, Revenue Bonds, 5.00%–5.625%, due 1/1/29–1/1/35

3. Texas Municipal Gas Acquisition & Supply Corp. III, Revenue Bonds, 5.00%, due 12/15/30

4. Texas Private Activity Bond Surface Transportation Corp., LBJ Infrastructure, Revenue Bonds, 7.00%–7.50%, due 6/30/32–6/30/40

5. Anaheim Public Financing Authority, Public Improvement Project, Revenue Bonds, 4.75%, due 9/1/33

  6. Virgin Islands Public Finance Authority, Revenue Bonds, 5.00%–6.75%, due 10/1/32–10/1/37

  7. Hillsborough County Industrial Development Authority, Tampa General Hospital Project, Revenue Bonds, 5.00%, due 10/1/31

  8. City of Orlando, Tourist Development Tax Revenue, 3rd Lien, 6th Cent Contract, Revenue Bonds, 5.50%, due 11/1/38

  9. Antonio B Won Pat International Airport Authority, Guam Airport, Revenue Bonds, 5.00%–6.125%, due 10/1/21–10/1/43

10. Chicago Board of Education, General Obligation, 5.50%, due 12/1/39

8 MainStay Tax Free Bond Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers John Loffredo, CFA, Robert DiMella, CFA, and Michael Petty of MacKay Shields LLC, the Fund’s Subadvisor.

How did MainStay Tax Free Bond Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Tax Free Bond Fund returned –3.45% for Investor Class shares, –3.52% for Class A shares, –3.73% for Class B shares and –3.72% for Class C shares for the 12 months ended October 31, 2013. Over the same period, Class I shares returned –3.18%. All share classes underperformed the –1.72% return of the Barclays Municipal Bond Index,¹ which is the Fund’s broad-based securities-market index, and the –3.13% return of the average Lipper² general & insured municipal debt fund for the 12 months ended October 31, 2013. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund was positioned with a longer-maturity, lower investment-grade rating profile than the Barclays Municipal Bond Index. This strategy performed well during the first six months of the reporting period as credit spreads³ narrowed. As municipal mutual fund outflows increased from June through August 2013, however, the municipal yield curve⁴ steepened and credit spreads widened. These conditions detracted from the Fund’s performance relative to the benchmark. On the upside, a lack of Puerto Rico bonds was a positive contributor to the Fund’s performance, as Puerto Rico was the worst-performing sector of the Barclays Municipal Bond Index. (Contributions take weightings and total returns into account.)

What was the Fund’s duration⁵ strategy during the reporting period?

The Fund’s duration for the first six months of the reporting period was shorter than that of the Barclays Municipal Bond Index. As municipal rates increased substantially from June through August, we increased the Fund’s duration relative to the benchmark. We continue to use a position in U.S. Treasury futures to hedge some of the Fund’s higher exposure in longer-maturity issues.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

A combination of factors affected the municipal market during the reporting period. Among these were stronger economic

data, which prompted speculation about a rotation from bonds to equities, and suggestions that the Federal Reserve might taper its bond purchases. Financial difficulties in Detroit and Puerto Rico also affected the market. Together, these forces drew money away from municipal mutual funds in 2013. This caused municipal yields to move materially higher and drove bond prices lower. This rapid change in market sentiment created opportunities for the Fund to reposition itself in several ways. We focused on selling securities that had fallen in value, as we sought to realize losses that could offset current and future gains in the Fund. During periods of institutional market illiquidity, we targeted the strong appetite for individual bonds among retail investors to execute sales at prices we viewed as favorable relative to the market. We used the proceeds to buy bonds that became available because of industry outflows.

During the reporting period, which market segments were the strongest positive contributors to the Fund’s performance and which market segments were particularly weak?

Relative to the Barclays Municipal Bond Index, the most significant positive contribution to the Fund’s performance came from our decision to avoid securities issued by the Commonwealth of Puerto Rico. Puerto Rico bonds underperformed the general municipal market by more than 15 percentage points. The most significant detractors from the Fund’s relative performance were yield-curve positioning and credit quality. Longer-maturity municipals underperformed municipal bonds with shorter maturities, and credit spreads widened during the reporting period. Even so, the higher-quality, defensively structured portion of the Fund produced strong relative performance.

Did the Fund make any significant purchases or sales during the reporting period?

The Fund remains focused on diversification and liquidity, so no individual purchase or sale would have been considered significant.

How did the Fund’s sector weightings change during the reporting period?

There were no material changes to Fund’s sector weightings during the reporting period. Sectors that we continue to favor were marginally increased, including local general obligation bonds and municipal bonds in the transportation and health care sectors. We reduced the Fund’s exposure to the education

1. See footnote on page 6 for more information on the Barclays Municipal Bond Index.

2. See footnote on page 6 for more information on Lipper Inc.

3. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time.

4. The yield curve is a line that plots the yields of various securities of similar quality—typically U.S. Treasury issues—across a range of maturities. The U.S. Treasury yield curve serves as a benchmark for other debt and is used in economic forecasting.

5. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity.

mainstayinvestments.com 9

sector but still maintain an overweight position relative to the Barclays Municipal Bond Index. From a state perspective, we opportunistically increased the Fund’s exposure to Texas and New Jersey after a sell-off during the summer pushed prices lower.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund was overweight relative to the Barclays Municipal Bond Index in the local general obligation, transportation and education sectors. From a quality perspec-

tive, we still favor credits rated A and BBB.⁶ In combination, these two ratings categories represented more than 61% of the Fund’s total assets as of October 31, 2013. As of the same date, the Fund’s duration was slightly longer than that of the benchmark.

6. An obligation rated ‘A’ by Standard & Poor’s (“S&P”) is deemed by S&P to be somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. In the opinion of S&P, however, the obligor’s capacity to meet its financial commitment on the obligation is still strong. An obligation rated ‘BBB’ by S&P is deemed by S&P to exhibit adequate protection parameters. It is the opinion of S&P, however, that adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. When applied to Fund holdings, ratings are based solely on the creditworthiness of the bonds in the portfolio and are not meant to represent the security or safety of the Fund.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Tax Free Bond Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Municipal Bonds 100.0%†
Alabama 0.5%
Alabama Water Pollution Control Authority, Revenue Bonds
Series B, Insured: AMBAC 4.125%, due 2/15/14	$	1,550,000	$	1,540,374
Jefferson County, Alabama, Revenue Bonds Insured: AGM 5.50%, due 1/1/21		2,380,000		2,379,667
				3,920,041
Arizona 1.2%
Salt Verde Financial Corp., Revenue Bonds 5.00%, due 12/1/37		10,000,000		10,063,900
California 22.6%
Alum Rock Union Elementary School District, Election, Unlimited General Obligation
Series A, Insured: GTY 5.00%, due 8/1/33		3,040,000		3,196,469
¨Anaheim Public Financing Authority, Public Improvement Project, Revenue Bonds
Series A-1, Insured: NATL-RE 4.75%, due 9/1/33		16,390,000		16,417,371
Anaheim, California, School District, Unlimited General Obligation Insured: AGM 6.25%, due 8/1/40		4,700,000		5,323,079
California Communities, Installment Sale, Certificates of Participation
Series B 5.25%, due 6/1/42		2,500,000		2,517,050
California Educational Facilities Authority, Revenue Bonds 6.125%, due 10/1/30		1,525,000		1,768,787
California Health Facilities Financing Authority, Catholic Healthcare, Revenue Bonds
Series A 6.00%, due 7/1/34		3,000,000		3,306,150
California State Public Works Board, Capital Project, Revenue Bonds
Series I-1 6.625%, due 11/1/34		1,520,000		1,528,041
California State Public Works Board, University Project, Revenue Bonds
Series H 5.00%, due 9/1/29		7,455,000		7,999,364

	Principal Amount		Value
California (continued)
California State Public Works Revenue, Various Capital Project, Revenue Bonds
Series G1 5.75%, due 10/1/30	$	1,400,000	$	1,539,496
California State, Unlimited General Obligation
6.00%, due 11/1/35		2,500,000		2,906,050
6.25%, due 11/1/34		4,000,000		4,704,200
California Statewide Communities Development Authority, Aspire Public Schools, Revenue Bonds 6.375%, due 7/1/45		1,990,000		1,967,095
California Statewide Communities Development Authority, Revenue Bonds 5.25%, due 11/1/30		1,475,000		1,550,284
Ceres Unified School District, Unlimited General Obligation
Series A (zero coupon), due 8/1/37		4,150,000		875,609
Series A (zero coupon), due 8/1/46		8,000,000		859,040
Series A (zero coupon), due 8/1/49		9,000,000		762,930
Fontana Unified School District, Unlimited General Obligation
Series C (zero coupon), due 8/1/35		14,800,000		4,222,884
Series C (zero coupon), due 8/1/36		15,500,000		4,156,325
Foothill-Eastern Transportation Corridor Agency Toll Road, Revenue Bonds
(zero coupon), due 1/15/24		10,000,000		5,309,800
(zero coupon), due 1/15/34		9,600,000		2,500,512
Foothill-Eastern Transportation Corridor Agency, Revenue Bonds (zero coupon), due 1/15/31		13,000,000		4,218,110
Fresno, California Unified School District Education, Unlimited General Obligation
Series G (zero coupon), due 8/1/32		6,000,000		1,881,660
Series G (zero coupon), due 8/1/33		10,000,000		2,887,500
Series G (zero coupon), due 8/1/41		23,485,000		3,759,948
Golden State Tobacco Securitization Corp., Revenue Bonds
Series A, Insured: AGC, FGIC 5.00%, due 6/1/35		9,000,000		9,005,670

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest issuers held, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Municipal Bonds (continued)
California (continued)
Hayward Unified School District, Unlimited General Obligation
Series A, Insured: AGM (zero coupon), due 8/1/36	$	12,500,000	$	2,882,250
Series A, Insured: AGM (zero coupon), due 8/1/37		7,000,000		1,497,790
Imperial Community College District, Unlimited General Obligation Insured: AGM 5.00%, due 8/1/29		2,865,000		3,061,510
Lompoc Valley Medical Center, Santa Barbara County, Unlimited General Obligation 4.00%, due 8/1/36		4,245,000		3,610,118
Merced Union High School District, Cabs-Election, Unlimited General Obligation
Series C (zero coupon), due 8/1/46		53,000,000		6,156,480
Morongo, California Unified School District Election, Unlimited General Obligation
Series B, Insured: GTY 5.25%, due 8/1/38		2,880,000		2,967,005
National City Community Development Commission, National City Redevelopment Project, Tax Allocation 7.00%, due 8/1/32		3,500,000		4,096,820
Oakland Unified School District, Election 2000, Unlimited General Obligation Insured: NATL-RE 4.50%, due 8/1/30		10,000,000		9,191,300
Oceanside, California Unified School District, Capital Appreciation Election, Unlimited General Obligation
Series B, Insured: AGM (zero coupon), due 8/1/49		11,555,000		1,122,799
Palomar Pomerado Health Election, Unlimited General Obligation
Series A, Insured: AMBAC 5.00%, due 8/1/34		9,075,000		9,231,090
Peralta Community College District, Unlimited General Obligation
Series A, Insured: NATL-RE 5.00%, due 8/1/31		4,655,000		4,905,858
Pomona Unified School District, Election 2008, Unlimited General Obligation
Series E, Insured: AGM 5.00%, due 8/1/30		3,285,000		3,450,991
Riverside County Transportation Commission, Revenue Bonds
Series A 5.25%, due 6/1/30		3,000,000		3,359,370

	Principal Amount		Value
California (continued)
San Bernardino City Unified School District, Election, Unlimited General Obligation
Series A, Insured: AGM 5.00%, due 8/1/30	$	1,000,000	$	1,043,060
San Buenaventura Public Facilities Financing Authority, Revenue Bonds
Series B 5.00%, due 7/1/35		3,000,000		3,104,310
San Diego County Regional Airport Authority, Revenue Bonds
Series B 5.00%, due 7/1/30 (a)		1,000,000		1,030,870
San Joaquin Hills Transportation Corridor Agency, Revenue Bonds
Series A, Insured: NATL-RE (zero coupon), due 1/15/36		10,000,000		2,400,600
San Lorenzo, California Unified School District, Unlimited General Obligation
Series B 6.00%, due 8/1/41		4,535,000		5,041,378
San Ysidro School District, Unlimited General Obligation
Series F, Insured: AGM (zero coupon), due 8/1/48		25,705,000		2,259,470
Stockton, California Unified School District, Election 2005, Unlimited General Obligation Insured: NATL-RE 4.55%, due 9/1/30		11,995,000		12,035,183
Val Verde Unified School District, Election 2012, Unlimited General Obligation
Series A, Insured: BAM 5.00%, due 8/1/38		7,500,000		7,685,625
West Contra Costa California Healthcare District, Certificates of Participation 6.25%, due 7/1/42		3,500,000		3,774,330
				189,071,631
Colorado 0.6%
E-470 Public Highway Authority Colorado, Revenue Bonds
Series B-1, Insured: NATL-RE 5.50%, due 9/1/24		3,000,000		3,181,020
Park Creek Metropolitan District, Revenue Bonds
Series A, Insured: AGM 6.125%, due 12/1/41		1,600,000		1,720,000
				4,901,020

12 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Municipal Bonds (continued)
Connecticut 1.7%
Connecticut, CT, Special Tax Obligation, Transportation Infrastructure, Revenue Bonds
Series A 5.00%, due 10/1/24	$	4,105,000	$	4,803,917
Series A 5.00%, due 10/1/32		4,785,000		5,152,727
Hartford, CT, Unlimited General Obligation
Series A 5.00%, due 4/1/28		2,500,000		2,671,550
Series A 5.00%, due 4/1/29		1,250,000		1,378,134
Series A, Insured: AGM 5.00%, due 4/1/32		275,000		299,825
				14,306,153
District of Columbia 1.6%
District of Columbia, Friendship Public Charter School, Inc., Revenue Bonds
5.00%, due 6/1/32		1,125,000		1,034,190
5.00%, due 6/1/42		3,500,000		3,028,410
District of Columbia, KIPP Charter School, Revenue Bonds
6.00%, due 7/1/33		1,000,000		1,061,740
6.00%, due 7/1/43		1,000,000		1,042,420
6.00%, due 7/1/48		1,575,000		1,629,842
District of Columbia, Tax Allocation
5.00%, due 6/1/27		525,000		553,124
5.00%, due 6/1/28		1,445,000		1,507,915
Metropolitan Washington Airports Authority, Revenue Bonds
Series A 5.00%, due 10/1/32 (a)		3,005,000		3,119,130
				12,976,771
Florida 4.3%
Citizens Property Insurance Corp., Revenue Bonds
Series A-1 5.25%, due 6/1/17		3,500,000		3,978,030
¨City of Orlando, Tourist Development Tax Revenue, 3rd Lien, 6th Cent Contract, Revenue Bonds Insured: GTY 5.50%, due 11/1/38		15,000,000		15,133,800
¨Hillsborough County Industrial Development Authority, Tampa General Hospital Project, Revenue Bonds
Series A 5.00%, due 10/1/31		14,900,000		15,173,564

	Principal Amount		Value
Florida (continued)
Miami-Dade County Florida Solid Waste System, Revenue Bonds Insured: NATL-RE 5.00%, due 10/1/19	$	1,735,000	$	1,876,524
Miami-Dade County Florida, Revenue Bonds Series A, Insured: NATL-RE (zero coupon), due 10/1/38		245,000		60,245
				36,222,163
Georgia 1.7%
Atlanta, Georgia Airport Passenger Facility Charge, Revenue Bonds
Series J, Insured: AGM 5.00%, due 1/1/34		3,500,000		3,607,450
Atlanta, Georgia Water & Wastewater, Revenue Bonds
Series A 6.25%, due 11/1/39		4,125,000		4,678,823
Bulloch County Development Authority, Southern Housing Foundation, Revenue Bonds Insured: AGM 5.00%, due 7/1/37		1,475,000		1,509,279
Fulton County Georgia Development Authority, Piedmont Healthcare, Inc., Revenue Bonds
Series A 5.00%, due 6/15/32		1,700,000		1,780,002
Tift County Hospital Authority, Anticipation Certificates, Revenue Bonds 5.00%, due 12/1/38		3,000,000		3,030,420
				14,605,974
Guam 2.2%
¨Antonio B Won Pat International Airport Authority, Guam Airport, Revenue Bonds
Series C 5.00%, due 10/1/21 (a)		5,500,000		5,578,760
Series C, Insured: AGM 6.125%, due 10/1/43 (a)		7,300,000		7,504,327
Guam Power Authority, Revenue Bonds
Series A, Insured: AGM 5.00%, due 10/1/30		4,935,000		5,020,030
				18,103,117
Hawaii 0.6%
Hawaii State Department of Budget and Finance, Hawaiian Electric Co., Revenue Bonds
Series B, Insured: FGIC 4.60%, due 5/1/26 (a)		1,450,000		1,400,497
6.50%, due 7/1/39		3,000,000		3,268,770
				4,669,267

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Municipal Bonds (continued)
Illinois 7.0%
¨Chicago Board of Education, General Obligation
Series A, Insured: AGM-CR 5.50%, due 12/1/39	$	12,750,000	$	12,965,603
¨Chicago, Illinois O’ Hare International Airport, Revenue Bonds
Series A Insured: NATL-RE 5.00%, due 1/1/31		2,905,000		2,911,478
Series A, Insured: AGM 5.00%, due 1/1/33		7,000,000		7,036,120
Series D 5.25%, due 1/1/29		7,555,000		7,935,772
Series A 5.625%, due 1/1/35		2,000,000		2,079,240
Chicago, Illinois Waterworks, Revenue Bonds 5.00%, due 11/1/42		3,410,000		3,389,335
Chicago, lllinois, Unlimited General Obligation
Series A 5.25%, due 1/1/35		2,000,000		1,930,500
Illinois Finance Authority, Ingalls Health System, Revenue Bonds
5.00%, due 5/15/25		1,120,000		1,159,133
5.00%, due 5/15/26		1,175,000		1,203,188
Illinois Finance Authority, Rehab Institute of Chicago, Revenue Bonds
Series A 6.00%, due 7/1/43		9,600,000		9,908,064
Kendall Kane & Will Counties, Community Unit School District No. 308, Unlimited General Obligation
Series A 5.00%, due 2/1/29		7,000,000		7,373,310
Knox & Warren Counties, Illinois Community Unit School District No. 205 Galesburg, Unlimited General Obligation
Series A 4.25%, due 1/1/19		240,000		263,652
Series A 5.00%, due 1/1/20		205,000		233,235
				58,388,630
Indiana 1.3%
Indiana State Finance Authority, Butler University, Revenue Bonds
Series B 5.00%, due 2/1/24		2,100,000		2,315,565
Series A 5.00%, due 2/1/25		4,425,000		4,807,807

	Principal Amount		Value
Indiana (continued)
Indiana State Finance Authority, Butler University, Revenue Bonds (continued)
Series B 5.00%, due 2/1/26	$	2,320,000	$	2,488,664
Indianapolis, Indiana Public Improvement Bond Bank, Revenue Bonds
Series A, Insured: GTY 5.50%, due 1/1/38		1,100,000		1,161,545
				10,773,581
Kentucky 0.6%
Kentucky Economic Development Finance Authority, Ashland Hospital Corp. Kings, Revenue Bonds
Series C 6.00%, due 2/1/33		1,400,000		1,538,502
Kentucky Economic Development Finance Authority, Baptist Healthcare System, Revenue Bonds
Series B-1 0.07%, due 8/15/38 (b)		3,830,000		3,830,000
				5,368,502
Louisiana 2.7%
Jefferson Parish, Louisiana Hospital Service District No. 1, West Jefferson Medical Center, Revenue Bonds
Series A, Insured: AGM 6.00%, due 1/1/39		3,500,000		3,715,950
Louisiana Local Government Environmental Facilities & Community Development Authority, Parking Facilities Corp., Revenue Bonds Insured: AGM 4.00%, due 10/1/31		1,000,000		931,910
Louisiana Public Facilities Authority, Franciscan Missionaries, Revenue Bonds 6.75%, due 7/1/39		3,000,000		3,303,390
Louisiana Public Facilities Authority, Ochsner Clinic, Revenue Bonds 6.25%, due 5/15/31		5,690,000		6,126,480
Louisiana State Citizens Property Insurance Corp., Revenue Bonds
Series B, Insured: AMBAC 5.00%, due 6/1/20		2,340,000		2,521,490
Series C-3, Insured: GTY 6.125%, due 6/1/25		5,000,000		5,713,350
				22,312,570
Maine 0.9%
Maine Health & Higher Educational Facilities Authority, Eastern Maine Medical Center Obligation Group, Revenue Bonds 5.00%, due 7/1/43		7,500,000		7,459,275

14 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Municipal Bonds (continued)
Maryland 2.4%
¨Maryland Health & Higher Educational Facilities Authority, Medstar Health, Revenue Bonds
Series B 5.00%, due 8/15/38	$	20,000,000	$	20,006,200
Massachusetts 2.0%
Massachusetts Educational Financing Authority, Revenue Bonds
Series B 5.70%, due 1/1/31 (a)		2,140,000		2,182,094
Series I 6.00%, due 1/1/28		2,880,000		3,079,641
Massachusetts State Health & Educational Facilities Authority, Suffolk University, Revenue Bonds
Series A 6.00%, due 7/1/24		2,000,000		2,261,480
Series A 6.25%, due 7/1/30		6,400,000		7,034,752
Metropolitan Boston Transit Parking Corp., Revenue Bonds 5.25%, due 7/1/36		2,000,000		2,133,620
				16,691,587
Michigan 7.9%
Detroit, Michigan City School District, Unlimited General Obligation
Series A, Insured: Q-SBLF 5.00%, due 5/1/27		7,500,000		7,845,150
Series A, Insured: Q-SBLF 5.00%, due 5/1/33		4,535,000		4,563,072
Detroit, Michigan Distribution State Aid, General Obligation Limited 5.25%, due 11/1/35		5,150,000		4,917,374
Detroit, Michigan Sewerage Disposal System, Revenue Bonds
Series A, Insured: NATL-RE 5.25%, due 7/1/20		2,000,000		2,000,640
Series C-1, Insured: AGM 7.00%, due 7/1/27		3,500,000		3,701,215
Detroit, Michigan Water and Sewerage Department, Senior Lien, Revenue Bonds
Series A 5.25%, due 7/1/39		4,150,000		3,831,238
Detroit, Michigan Water Supply System, Revenue Bonds
Series D, Insured: AGM 4.625%, due 7/1/32		1,535,000		1,360,348

	Principal Amount		Value
Michigan (continued)
Detroit, Michigan Water Supply System, Revenue Bonds (continued)
Series A, Insured: AGM 5.00%, due 7/1/34	$	1,600,000	$	1,470,352
Senior Lien—Series A 5.25%, due 7/1/41		3,015,000		2,775,971
Series A 5.75%, due 7/1/37		5,550,000		5,327,944
Detroit, Michigan, City School District, Improvement School Building and Site, Unlimited General Obligation
Series A, Insured: Q-SBLF 5.00%, due 5/1/26		750,000		791,805
Series A, Insured: Q-SBLF 5.00%, due 5/1/29		3,620,000		3,728,636
Michigan Finance Authority Revenue, Local Government Loan Program, Revenue Bonds
Series C 5.00%, due 11/1/28		7,290,000		7,553,461
Michigan Finance Authority, Revenue Bonds
5.00%, due 6/1/18		175,000		192,516
5.00%, due 6/1/19		1,300,000		1,428,154
5.00%, due 6/1/20		950,000		1,036,859
5.50%, due 6/1/21		5,000,000		5,549,850
Michigan Tobacco Settlement Finance Authority, Revenue Bonds
Series A 6.00%, due 6/1/34		250,000		199,915
Wayne County Airport Authority, Detroit Met Wayne County Airport, Revenue Bonds Insured: NATL-RE 5.00%, due 12/1/34 (a)		8,000,000		7,766,320
				66,040,820
Minnesota 0.5%
Minneapolis, St. Paul Housing & Redevelopment Authority, Allina Health Systems, Revenue Bonds
Series B-2 0.08%, due 11/15/35 (b)		4,450,000		4,450,000
Nebraska 1.7%
Central Plains Energy, Project No. 3, Revenue Bonds 5.00%, due 9/1/42		12,500,000		12,247,250
Nebraska Educational Finance Authority, Creighton University Projects, Revenue Bonds 0.08%, due 7/1/35 (b)		1,620,000		1,620,000
				13,867,250

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Municipal Bonds (continued)
New Hampshire 0.2%
Manchester, NH General Airport, Revenue Bonds
Series A, Insured: AGM 5.00%, due 1/1/26	$	1,800,000	$	1,939,860
New Jersey 6.5%
Camden County Improvement Authority, Heath Care Redevelopment, Revenue Bonds
Series A 5.75%, due 2/15/34		3,500,000		3,510,500
New Jersey Economic Development Authority, MSU Student Housing Project, Provident Group-Montclair LLC, Revenue Bonds 5.375%, due 6/1/25		4,500,000		4,884,255
New Jersey Health Care Facilities Financing Authority, Revenue Bonds
Series A 5.25%, due 7/1/26		3,710,000		3,947,885
Insured: GTY 5.25%, due 1/1/31		2,760,000		2,876,527
New Jersey Health Care Facilities Financing Authority, Virtua Health, Revenue Bonds
Series B 0.07%, due 7/1/43 (b)		4,200,000		4,200,000
Series C 0.07%, due 7/1/43 (b)		1,100,000		1,100,000
New Jersey Higher Education Student Assistance Authority, Revenue Bonds
Series 1 5.50%, due 12/1/26 (a)		4,130,000		4,323,945
New Jersey State Higher Education Student Assistance Authority, Student Loan, Revenue Bonds
Series A, Insured: GTY 6.125%, due 6/1/30 (a)		3,870,000		4,080,180
New Jersey State Turnpike Authority, Revenue Bonds
Series A 5.00%, due 1/1/38		10,000,000		10,398,600
Series A 5.00%, due 1/1/43		2,000,000		2,050,780
Newark, New Jersey Housing Authority, South Ward Police Facility, Revenue Bonds
Insured: GTY 5.75%, due 12/1/30		1,135,000		1,241,917
Insured: GTY 6.75%, due 12/1/38		4,000,000		4,585,120

	Principal Amount		Value
New Jersey (continued)
Rutgers State University, Revenue Bonds
Series L 5.00%, due 5/1/43	$	7,000,000	$	7,373,310
				54,573,019
New York 6.0%
Build NYC Resource Corp., Parking Facility, Revenue Bonds
Insured: AGM 5.00%, due 12/15/17		880,000		998,518
Insured: AGM 5.00%, due 12/15/18		930,000		1,067,910
Insured: AGM 5.00%, due 12/15/19		975,000		1,119,076
Insured: AGM 5.00%, due 12/15/20		1,025,000		1,173,174
Insured: AGM 5.00%, due 12/15/21		1,075,000		1,218,136
Insured: AGM 5.00%, due 12/15/22		740,000		834,528
City of New York, Unlimited General Obligation
Series H-5 0.40%, due 3/1/34 (b)		1,000,000		1,000,000
Metropolitan Transportation Authority, Revenue Bonds
Series B 5.00%, due 11/15/38		3,900,000		3,992,040
New York Liberty Development Corp., 4 World Trade Center Project, Revenue Bonds 5.75%, due 11/15/51		11,200,000		11,979,520
New York Liberty Development Corp., Bank of America, Revenue Bonds Class 3 6.375%, due 7/15/49		5,000,000		5,310,450
New York Liberty Development Corp., Goldman Sachs Headquarters, Revenue Bonds 5.50%, due 10/1/37		2,090,000		2,293,524
New York Liberty Development Corp., World Trade Center, Revenue Bonds Class 3 5.00%, due 3/15/44		4,000,000		3,896,120
New York State Dormitory Authority, Revenue Bonds
5.00%, due 7/1/42		1,760,000		1,803,419
5.50%, due 7/1/40		540,000		567,913
New York, General Obligation
Series A-7 0.07%, due 8/1/19 (b)		2,100,000		2,100,000
Series E2 0.07%, due 8/1/20 (b)		3,800,000		3,800,000

16 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Municipal Bonds (continued)
New York (continued)
Port Authority of New York & New Jersey, Consolidated 177th, Revenue Bonds 4.00%, due 7/15/32 (a)	$	5,000,000	$	4,679,800
Triborough Bridge & Tunnel Authority, Revenue Bonds
Series B (zero coupon), due 11/15/32		5,800,000		2,393,196
				50,227,324
North Carolina 0.4%
North Carolina Turnpike Authority, Revenue Bonds
Series A, Insured: GTY 5.75%, due 1/1/39		3,000,000		3,232,530
North Dakota 0.3%
McLean County North Dakota Solid Waste Facilities, Revenue Bonds
Series A 4.875%, due 7/1/26		2,700,000		2,800,116
Ohio 0.8%
Akron Bath Copley Joint Township Hospital District, Childrens Hospital Medical Center of Akron, Revenue Bonds 5.00%, due 11/15/38		1,000,000		1,005,630
Cleveland-Cuyahoga County Port Authority, Revenue Bonds 6.00%, due 11/15/25		1,980,000		2,257,616
Hamilton County Ohio Health Care Facility, Christ Hospital Project, Revenue Bonds 5.50%, due 6/1/42		2,000,000		2,030,640
Toledo-Lucas County Port Authority, Revenue Bonds
Series B 6.25%, due 5/15/24 (a)		1,030,000		1,032,132
University of Cincinnati, Ohio, Revenue Bonds
Series A, Insured: AMBAC 5.00%, due 6/1/31		395,000		402,102
				6,728,120
Pennsylvania 1.7%
Montgomery County Industrial Development Authority, Revenue Bonds 5.25%, due 8/1/33		175,000		184,324
Pennsylvania State Turnpike Commission, Revenue Bonds
Series D 5.50%, due 12/1/41		4,200,000		4,324,320
Series B 5.75%, due 6/1/39		4,000,000		4,206,000

	Principal Amount		Value
Pennsylvania (continued)
Philadelphia, PA, Unlimited General Obligation 6.50%, due 8/1/41	$	5,125,000	$	5,677,834
				14,392,478
Rhode Island 0.7%
Providence, RI, Unlimited General Obligation
Series A 5.00%, due 1/15/26		1,095,000		1,159,200
Series A 5.00%, due 1/15/27		1,100,000		1,151,073
Series A 5.00%, due 1/15/28		1,150,000		1,190,238
Rhode Island Housing & Mortgage Finance Corp., Rental Housing Program, Revenue Bonds
Series B-1A, Insured: AGM 5.40%, due 10/1/37 (a)		2,000,000		2,105,920
				5,606,431
South Carolina 1.6%
Piedmont Municipal Power Agency, Revenue Bonds
Series C, Insured: GTY 5.75%, due 1/1/34		5,320,000		5,826,198
South Carolina Jobs-Economic Development Authority, Palmetto Health, Revenue Bonds
Series A 5.25%, due 8/1/30		7,500,000		7,628,250
				13,454,448
Tennessee 1.3%
Johnson City Health & Educational Facilities Board, Mountain States Health Alliance, Revenue Bonds 6.00%, due 7/1/38		3,605,000		3,820,579
Johnson City Tennessee Health & Educational Facilities Board Hospital, Revenue Bonds
Series A 6.50%, due 7/1/38		6,500,000		7,079,085
				10,899,664
Texas 10.4%
Central Texas Regional Mobility Authority, Revenue Bonds 5.75%, due 1/1/31		2,100,000		2,189,880
Dallas-Fort Worth International Airport, Revenue Bonds
Series G 5.00%, due 11/1/34		2,500,000		2,545,800

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Municipal Bonds (continued)
Texas (continued)
Harris County Cultural Education Facilities Finance Corp., Baylor Medical College, Revenue Bonds 5.00%, due 11/15/37	$	10,000,000	$	10,028,600
Harris County-Houston Sports Authority, Revenue Bonds
Series A, Insured: NATL-RE (zero coupon), due 11/15/40		25,015,000		4,483,438
Series G, Insured: NATL-RE 5.25%, due 11/15/30		580,000		579,965
Houston Higher Education Finance Corp., Revenue Bonds
Series A 5.00%, due 2/15/42		1,000,000		919,210
Series A 6.50%, due 5/15/31		1,050,000		1,153,582
Series A 6.875%, due 5/15/41		6,450,000		7,182,591
Houston, Texas Hotel Occupancy Tax & Special Revenue, Revenue Bonds
Series B 5.00%, due 9/1/31		2,000,000		2,040,060
Lower Colorado River Authority, Revenue Bonds
Series A 5.00%, due 5/15/29		3,300,000		3,485,328
North Texas Tollway Authority, Revenue Bonds
Series F 5.75%, due 1/1/38		1,800,000		1,897,776
San Juan, Texas Higher Education Finance Authority, Idea Public Schools, Revenue Bonds
Series A 6.70%, due 8/15/40		1,275,000		1,384,586
¨Texas Municipal Gas Acquisition & Supply Corp. III, Revenue Bonds 5.00%, due 12/15/30		20,250,000		19,883,880
¨Texas Private Activity Bond Surface Transportation Corp., LBJ Infrastructure, Revenue Bonds
7.00%, due 6/30/40		5,335,000		5,838,251
Series Lien-LBG 7.50%, due 6/30/32		4,095,000		4,636,728
7.50%, due 6/30/33		5,500,000		6,211,040
Texas Private Activity Bond Surface Transportation Corp., NTE Mobility, Revenue Bonds 6.875%, due 12/31/39		8,000,000		8,654,720

	Principal Amount		Value
Texas (continued)
Texas State Public Finance Authority, Charter School Finance Corp., Revenue Bonds
Series A 6.20%, due 2/15/40	$	1,000,000	$	1,054,120
Texas State Turnpike Authority, Central Texas System, Revenue Bonds Insured: AMBAC (zero coupon), due 8/15/36		10,000,000		2,550,700
				86,720,255
U.S. Virgin Islands 4.2%
Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan, Revenue Bonds Insured: AGM 5.00%, due 10/1/32		8,880,000		8,930,438
Virgin Islands Public Finance Authority, Matching Fund Loan Notes, Revenue Bonds
Series A 5.00%, due 10/1/32		10,000,000		9,843,400
¨Virgin Islands Public Finance Authority, Revenue Bonds
Insured: AGM 5.00%, due 10/1/32		10,475,000		10,534,498
Series A 6.75%, due 10/1/37		5,000,000		5,457,000
				34,765,336
Utah 0.1%
Herriman, Utah, Special Assessment
5.00%, due 11/1/24		575,000		605,877
5.00%, due 11/1/29		425,000		434,937
				1,040,814
Vermont 0.1%
Burlington, Vermont Electric System, Revenue Bonds
Series A 5.375%, due 7/1/27		610,000		654,878
Washington 0.8%
King County Washington Public Hospital District No. 1, General Obligation
Series B 5.25%, due 12/1/37		6,500,000		6,771,180
Wisconsin 0.8%
Wisconsin Center District, Junior Dedicated, Revenue Bonds
Series A 5.00%, due 12/15/31		3,665,000		3,834,176

18 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount			Value
Municipal Bonds (continued)
Wisconsin (continued)
Wisconsin Center District, Junior Dedicated, Revenue Bonds (continued)
Series A 5.00%, due 12/15/32	$	2,850,000		$	2,972,864
					6,807,040
Wyoming 0.1%
West Park Hospital District, Revenue Bonds
Series A 6.375%, due 6/1/26		1,000,000			1,103,540
Total Investments (Cost $846,063,991) (e)		100.0	%		835,915,485
Other Assets, Less Liabilities		0.0	‡		395,596
Net Assets		100.0	%	$	836,311,081

	Contracts Short			Unrealized Appreciation (Depreciation) (c)
Futures Contracts (0.5%)
United States Treasury Notes December 2013 (10 Year) (d)		(1,080	)	$	(3,478,950	)
United States Treasury Bond December 2013 (30 Year) (d)		(150	)		(565,219	)
Total Futures Contracts (Settlement Value $157,770,000)				$	(4,044,169	)

‡ Less than one-tenth of a percent.

(a) Interest on these securities is subject to alternative minimum tax.

(b) Variable rate securities that may be tendered back to the issuer at any time prior to maturity at par. Rate shown is the rate in effect as of October 31, 2013.

(c) Represents the difference between the value of the contracts at the time they were opened and the value as of October 31, 2013.

(d) As of October 31, 2013, cash in the amount of $1,968,000 is on deposit with the broker for futures transactions.

(e) As of October 31, 2013, cost is $846,077,996 for federal income tax purposes and net unrealized depreciation is as follows:

Gross unrealized appreciation	$	16,746,352
Gross unrealized depreciation		(26,908,863	)
Net unrealized depreciation	$	(10,162,511	)

The following abbreviations are used in the above portfolio:

AGC—Assured Guaranty Corp.

AGM—Assured Guaranty Municipal Corp.

AMBAC—Ambac Assurance Corp.

BAM—Build America Mutual Assurance Co.

FGIC—Financial Guaranty Insurance Co.

GTY—Assured Guaranty Corp.

NATL-RE—National Public Finance Guarantee Corp.

Q-SBLF—Qualified School Board Loan Fund

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets and liabilities.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Municipal Bonds	$	—	$	835,915,485	$	—	$	835,915,485
Total Investment in Securities	$	—	$	835,915,485	$	—	$	835,915,485

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Portfolio of Investments October 31, 2013 (continued)

Liability Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments
Futures Contracts Short (b)	$	(4,044,169	)	$	—	$	—	$	(4,044,169	)
Total Other Financial Instruments	$	(4,044,169	)	$	—	$	—	$	(4,044,169	)

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The value listed for these securities reflects unrealized appreciation (depreciation) as shown on the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

20 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $846,063,991)	$	835,915,485
Cash collateral on deposit at broker		1,968,000
Cash		361,018
Receivables:
Interest		12,074,677
Investment securities sold		4,674,509
Fund shares sold		2,172,846
Variation margin on futures contracts		192,188
Other assets		48,053
Total assets		857,406,776
Liabilities
Payables:
Investment securities purchased		15,420,086
Fund shares redeemed		3,978,350
Manager (See Note 3)		325,833
NYLIFE Distributors (See Note 3)		163,579
Transfer agent (See Note 3)		80,903
Shareholder communication		26,035
Professional fees		14,471
Custodian		3,545
Trustees		1,933
Accrued expenses		5,889
Dividend payable		1,075,071
Total liabilities		21,095,695
Net assets	$	836,311,081
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	895,816
Additional paid-in capital		871,381,693
		872,277,509
Distributions in excess of net investment income		(590,144	)
Accumulated net realized gain (loss) on investments and futures transactions		(21,183,609	)
Net unrealized appreciation (depreciation) on investments and futures contracts		(14,192,675	)
Net assets	$	836,311,081

Investor Class
Net assets applicable to outstanding shares	$	19,093,648
Shares of beneficial interest outstanding		2,036,054
Net asset value per share outstanding	$	9.38
Maximum sales charge (4.50% of offering price)		0.44
Maximum offering price per share outstanding	$	9.82
Class A
Net assets applicable to outstanding shares	$	417,983,578
Shares of beneficial interest outstanding		44,784,950
Net asset value per share outstanding	$	9.33
Maximum sales charge (4.50% of offering price)		0.44
Maximum offering price per share outstanding	$	9.77
Class B
Net assets applicable to outstanding shares	$	12,459,068
Shares of beneficial interest outstanding		1,335,095
Net asset value and offering price per share outstanding	$	9.33
Class C
Net assets applicable to outstanding shares	$	150,244,080
Shares of beneficial interest outstanding		16,090,654
Net asset value and offering price per share outstanding	$	9.34
Class I
Net assets applicable to outstanding shares	$	236,530,707
Shares of beneficial interest outstanding		25,334,880
Net asset value and offering price per share outstanding	$	9.34

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	40,256,611
Expenses
Manager (See Note 3)		4,479,174
Distribution/Service—Investor Class (See Note 3)		50,588
Distribution/Service—Class A (See Note 3)		1,194,837
Distribution/Service—Class B (See Note 3)		69,048
Distribution/Service—Class C (See Note 3)		828,460
Transfer agent (See Note 3)		460,020
Registration		179,334
Professional fees		77,276
Shareholder communication		63,280
Custodian		23,364
Trustees		18,738
Miscellaneous		27,473
Total expenses before waiver/reimbursement		7,471,592
Expense waiver/reimbursement from Manager (See Note 3)		(446,159	)
Net expenses		7,025,433
Net investment income (loss)		33,231,178
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts
Net realized gain (loss) on:
Security transactions		(18,984,252	)
Futures transactions		4,111,434
Net realized gain (loss) on investments and futures transactions		(14,872,818	)
Net change in unrealized appreciation (depreciation) on:
Investments		(53,988,965	)
Futures contracts		(4,267,669	)
Net change in unrealized appreciation (depreciation) on investments and futures contracts		(58,256,634	)
Net realized and unrealized gain (loss) on investments and futures transactions		(73,129,452	)
Net increase (decrease) in net assets resulting from operations	$	(39,898,274	)

22 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	33,231,178		$	21,331,969
Net realized gain (loss) on investments and futures transactions		(14,872,818	)		10,862,659
Net change in unrealized appreciation (depreciation) on investments and futures contracts		(58,256,634	)		30,289,998
Net increase (decrease) in net assets resulting from operations		(39,898,274	)		62,484,626
Dividends to shareholders:
From net investment income:
Investor Class		(742,323	)		(844,342	)
Class A		(17,779,227	)		(13,126,144	)
Class B		(471,234	)		(391,448	)
Class C		(5,662,029	)		(3,895,004	)
Class I		(8,572,221	)		(3,144,644	)
Total dividends to shareholders		(33,227,034	)		(21,401,582	)
Capital share transactions:
Net proceeds from sale of shares		534,980,472			373,192,486
Net asset value of shares issued to shareholders in reinvestment of dividends		20,388,965			12,240,442
Cost of shares redeemed		(390,206,581	)		(87,911,281	)
Increase (decrease) in net assets derived from capital share transactions		165,162,856			297,521,647
Net increase (decrease) in net assets		92,037,548			338,604,691
Net Assets
Beginning of year		744,273,533			405,668,842
End of year	$	836,311,081		$	744,273,533
Distributions in excess of net investment income at end of year	$	(590,144	)	$	(594,288	)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 23

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.08		$	9.31		$	9.48		$	9.08		$	8.48
Net investment income (loss)		0.36			0.38	(a)		0.42	(a)		0.39	(a)		0.34	(a)
Net realized and unrealized gain (loss) on investments		(0.70	)		0.77			(0.16	)		0.41			0.63
Total from investment operations		(0.34	)		1.15			0.26			0.80			0.97
Less dividends:
From net investment income		(0.36	)		(0.38	)		(0.43	)		(0.40	)		(0.37	)
Net asset value at end of year	$	9.38		$	10.08		$	9.31		$	9.48		$	9.08
Total investment return (b)		(3.45	%)		12.58	%		2.93	%		9.08	%		11.67	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.67	%		3.92	%		4.67	%		4.24	%		3.93	%
Net expenses		0.84	%		0.86	%		0.90	%		0.93	%		1.02	%
Expenses (before waiver/reimbursement)		0.89	%		0.91	%		0.98	%		1.03	%		1.25	%
Portfolio turnover rate		111	%		125	%		138	%		97	%		94	%
Net assets at end of year (in 000’s)	$	19,094		$	21,437		$	21,547		$	22,220		$	21,683

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.04		$	9.26		$	9.44		$	9.04		$	8.45
Net investment income (loss)		0.38			0.38	(a)		0.43	(a)		0.40	(a)		0.35	(a)
Net realized and unrealized gain (loss) on investments		(0.72	)		0.79			(0.18	)		0.42			0.62
Total from investment operations		(0.34	)		1.17			0.25			0.82			0.97
Less dividends:
From net investment income		(0.37	)		(0.39	)		(0.43	)		(0.42	)		(0.38	)
Net asset value at end of year	$	9.33		$	10.04		$	9.26		$	9.44		$	9.04
Total investment return (b)		(3.52	%)		12.81	%		2.93	%		9.25	%		11.72	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.72	%		3.91	%		4.76	%		4.36	%		4.04	%
Net expenses		0.78	%		0.79	%		0.81	%		0.82	%		0.90	%
Expenses (before waiver/reimbursement)		0.83	%		0.84	%		0.89	%		0.92	%		1.08	%
Portfolio turnover rate		111	%		125	%		138	%		97	%		94	%
Net assets at end of year (in 000’s)	$	417,984		$	424,757		$	258,892		$	242,891		$	162,921

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

24 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.03		$	9.26		$	9.44		$	9.04		$	8.44
Net investment income (loss)		0.34			0.35	(a)		0.40	(a)		0.37	(a)		0.32	(a)
Net realized and unrealized gain (loss) on investments		(0.70	)		0.78			(0.18	)		0.41			0.63
Total from investment operations		(0.36	)		1.13			0.22			0.78			0.95
Less dividends:
From net investment income		(0.34	)		(0.36	)		(0.40	)		(0.38	)		(0.35	)
Net asset value at end of year	$	9.33		$	10.03		$	9.26		$	9.44		$	9.04
Total investment return (b)		(3.73	%)		12.34	%		2.58	%		8.85	%		11.32	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.41	%		3.59	%		4.42	%		3.99	%		3.68	%
Net expenses		1.09	%		1.11	%		1.15	%		1.18	%		1.26	%
Expenses (before waiver/reimbursement)		1.14	%		1.16	%		1.23	%		1.28	%		1.50	%
Portfolio turnover rate		111	%		125	%		138	%		97	%		94	%
Net assets at end of year (in 000’s)	$	12,459		$	13,230		$	9,463		$	13,907		$	18,219

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.04		$	9.27		$	9.44		$	9.04		$	8.45
Net investment income (loss)		0.35			0.35	(a)		0.40	(a)		0.37	(a)		0.32	(a)
Net realized and unrealized gain (loss) on investments		(0.71	)		0.78			(0.17	)		0.41			0.61
Total from investment operations		(0.36	)		1.13			0.23			0.78			0.93
Less dividends:
From net investment income		(0.34	)		(0.36	)		(0.40	)		(0.38	)		(0.34	)
Net asset value at end of year	$	9.34		$	10.04		$	9.27		$	9.44		$	9.04
Total investment return (b)		(3.72	%)		12.33	%		2.69	%		8.85	%		11.31	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.42	%		3.58	%		4.42	%		3.99	%		3.68	%
Net expenses		1.09	%		1.11	%		1.15	%		1.18	%		1.28	%
Expenses (before waiver/reimbursement)		1.14	%		1.16	%		1.23	%		1.28	%		1.51	%
Portfolio turnover rate		111	%		125	%		138	%		97	%		94	%
Net assets at end of year (in 000’s)	$	150,244		$	142,246		$	81,880		$	65,695		$	22,544

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 25

Financial Highlights selected per share data and ratios

	Year ended October 31,									December 21, 2009** through October 31,
Class I	2013			2012			2011			2010
Net asset value at beginning of period	$	10.04		$	9.27		$	9.44		$	9.07
Net investment income (loss)		0.40			0.40	(a)		0.45	(a)		0.38	(a)
Net realized and unrealized gain (loss) on investments		(0.71	)		0.78			(0.16	)		0.35
Total from investment operations		(0.31	)		1.18			0.29			0.73
Less dividends:
From net investment income		(0.39	)		(0.41	)		(0.46	)		(0.36	)
Net asset value at end of period	$	9.34		$	10.04		$	9.27		$	9.44
Total investment return (b)		(3.18	%)		12.97	%		3.29	%		8.25	%(c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.00	%		4.06	%		4.99	%		4.64	%††
Net expenses		0.54	%		0.54	%		0.56	%		0.57	%††
Expenses (before waiver/reimbursement)		0.59	%		0.59	%		0.64	%		0.67	%††
Portfolio turnover rate		111	%		125	%		138	%		97	%
Net assets at end of period (in 000’s)	$	236,531		$	142,603		$	33,888		$	17,394

** Commencement of operations.

†† Annualized.

(a) Per share data based on average shares outstanding during the period.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) Total investment return is not annualized.

26 MainStay Tax Free Bond Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Tax Free Bond Fund (the “Fund”), a diversified fund.

The Fund currently offers five classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on May 1, 1986. Class C shares commenced operations on September 1, 1998. Investor Class shares commenced operations on February 28, 2008. Class I shares commenced operations on December 21, 2009. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $500,000 or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek current income exempt from regular federal income tax.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with

questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

mainstayinvestments.com 27

Notes to Financial Statements (continued)

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Benchmark Yields	•    Reported Trades
•    Broker Dealer Quotes	•    Issuer Spreads
•    Two-sided markets	•    Benchmark securities
•    Bids/Offers	•    Reference Data (corporate actions or material event notices)
•    Industry and economic events	•    Comparable bonds
	•    Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Fund’s Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Futures contracts are valued at the last posted settlement price on the market where such futures are primarily traded. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Municipal debt securities are valued at the evaluated mean prices supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities

purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Municipal debt securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare dividends of net investment income, if any, at least daily and intends to pay them at least monthly and declares and pays distributions of net realized capital gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over

28 MainStay Tax Free Bond Fund

the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., interest rate, security, or securities index). The Fund is subject to interest rate risk in the normal course of investing in these transactions. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin.” When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the

counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund’s investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund.

(H)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(I)  Concentration of Risk.  The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(J)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(K)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

mainstayinvestments.com 29

Notes to Financial Statements (continued)

Fair value of derivatives instruments as of October 31, 2013:

Liability Derivatives

	Statement of Assets and Liabilities Location	Interest Rate Contracts Risk			Total
Futures Contracts	Net Assets-Net unrealized appreciation (depreciation) on investments and futures contracts (a)	$	(4,044,169	)	$	(4,044,169	)
Total Fair Value		$	(4,044,169	)	$	(4,044,169	)

(a) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Portfolio of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Interest Rate Contracts Risk		Total
Futures Contracts	Net realized gain (loss) on futures transactions	$	4,111,434	$	4,111,434
Total Realized Gain (Loss)		$	4,111,434	$	4,111,434

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Interest Rate Contracts Risk			Total
Futures Contracts	Net change in unrealized appreciation (depreciation) on futures contracts	$	(4,267,669	)	$	(4,267,669	)
Total Change in Unrealized Appreciation (Depreciation)		$	(4,267,669	)	$	(4,267,669	)

Number of Contracts, Notional Amounts or Shares/Units (1)

	Interest Rate Contracts Risk			Total
Futures Contracts Short		(1,065	)		(1,065	)

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or the “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.50% up to $500 million; 0.475% from $500 million to $1 billion; and 0.45% in excess of $1 billion, plus a fee for fund accounting services, previously provided by New York Life Investments under a separate fund accounting agreement, furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million.

New York Life Investments has contractually agreed to waive a portion of its management fee so that the management fee does not exceed 0.45% up to $500 million; 0.425% from $500 million to $1 billion; and 0.40% in excess of $1 billion. This agreement will remain in effect until February 28, 2014, and shall renew automatically for one-year terms unless New York Life Investments provides written notice of termination prior to the start of the next term or upon approval of the Board. The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.50% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets.

New York Life Investments has contractually agreed to waive fees and/or reimburse expenses so that Total Annual Fund Operating Expenses for Class A shares do not exceed 0.82% of its average daily net assets. New York Life Investments will apply an equivalent waiver or reimbursement, in an equal number of basis points, to the other share classes. This agreement will remain in effect until February 28, 2014, and shall renew automatically for one-year terms unless New York Life Investments provides written notice of termination prior to the start of the next term or upon approval of the Board. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

30 MainStay Tax Free Bond Fund

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $4,479,174 and waived its fees and/or reimbursed expenses in the amount of $446,159.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 0.50%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $9,608 and $155,329, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Class A, Class B and Class C shares of $93,144, $26,959 and $72,080, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	19,538
Class A		182,278
Class B		13,339
Class C		160,687
Class I		84,178

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordi nary Inc ome	Undistri buted Tax Exempt Income		Accum ulated Capital and Other Gain (Loss)			Other Temp orary Differences			Unrealized Appre ciation (Depre ciation)			Total Accum ulated Gain (Loss)
$—	$	484,927	$	(25,213,773	)	$	(1,075,071	)	$	(10,162,511	)	$	(35,966,428	)

The difference between book basis and tax basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments and mark to market of futures contracts. The other temporary differences are primarily due to dividends payable.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $25,213,773 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)
2017 2019 Unlimited	$	3,952 2,136 19,126
Total	$	25,214

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	96,086	$	110,818
Exempt Interest Dividends		33,130,948		21,290,764
Total	$	33,227,034	$	21,401,582

mainstayinvestments.com 31

Notes to Financial Statements (continued)

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $1,150,338 and $973,625, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		231,445		$	2,295,102
Shares issued to shareholders in reinvestment of dividends and distributions		66,265			648,600
Shares redeemed		(296,651	)		(2,898,811	)
Net increase (decrease) in shares outstanding before conversion		1,059			44,891
Shares converted into Investor Class (See Note 1)		124,654			1,203,999
Shares converted from Investor Class (See Note 1)		(215,626	)		(2,151,601	)
Net increase (decrease)		(89,913	)	$	(902,711	)
Year ended October 31, 2012:
Shares sold		302,292		$	2,969,559
Shares issued to shareholders in reinvestment of dividends and distributions		74,537			728,718
Shares redeemed		(232,083	)		(2,264,814	)
Net increase (decrease) in shares outstanding before conversion		144,746			1,433,463
Shares converted into Investor Class (See Note 1)		98,094			958,281
Shares converted from Investor Class (See Note 1)		(431,785	)		(4,210,943	)
Net increase (decrease)		(188,945	)	$	(1,819,199	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		22,182,089		$	221,017,510
Shares issued to shareholders in reinvestment of dividends and distributions		1,204,679			11,711,429
Shares redeemed		(21,109,132	)		(202,514,838	)
Net increase (decrease) in shares outstanding before conversion		2,277,636			30,214,101
Shares converted into Class A (See Note 1)		275,726			2,737,966
Shares converted from Class A (See Note 1)		(95,013	)		(907,196	)
Net increase (decrease)		2,458,349		$	32,044,871
Year ended October 31, 2012:
Shares sold		18,827,755		$	184,035,146
Shares issued to shareholders in reinvestment of dividends and distributions		816,477			7,973,089
Shares redeemed		(5,878,933	)		(57,367,459	)
Net increase (decrease) in shares outstanding before conversion		13,765,299			134,640,776
Shares converted into Class A (See Note 1)		666,672			6,460,233
Shares converted from Class A (See Note 1)		(49,478	)		(486,560	)
Net increase (decrease)		14,382,493		$	140,614,449

32 MainStay Tax Free Bond Fund

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		423,149		$	4,243,780
Shares issued to shareholders in reinvestment of dividends and distributions		40,555			394,630
Shares redeemed		(357,814	)		(3,459,540	)
Net increase (decrease) in shares outstanding before conversion		105,890			1,178,870
Shares converted from Class B (See Note 1)		(89,333	)		(883,168	)
Net increase (decrease)		16,557		$	295,702
Year ended October 31, 2012:
Shares sold		716,260		$	7,012,721
Shares issued to shareholders in reinvestment of dividends and distributions		30,704			299,461
Shares redeemed		(168,094	)		(1,633,570	)
Net increase (decrease) in shares outstanding before conversion		578,870			5,678,612
Shares converted from Class B (See Note 1)		(281,939	)		(2,721,011	)
Net increase (decrease)		296,931		$	2,957,601
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,994,416		$	69,909,300
Shares issued to shareholders in reinvestment of dividends and distributions		375,862			3,653,731
Shares redeemed		(5,447,067	)		(52,029,789	)
Net increase (decrease)		1,923,211		$	21,533,242
Year ended October 31, 2012:
Shares sold		6,245,133		$	61,118,182
Shares issued to shareholders in reinvestment of dividends and distributions		218,599			2,138,827
Shares redeemed		(1,129,894	)		(11,018,783	)
Net increase (decrease)		5,333,838		$	52,238,226

Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		24,212,183		$	237,514,780
Shares issued to shareholders in reinvestment of dividends and distributions		410,682			3,980,575
Shares redeemed		(13,493,041	)		(129,303,603	)
Net increase (decrease)		11,129,824		$	112,191,752
Year ended October 31, 2012 :
Shares sold		12,037,403		$	118,056,878
Shares issued to shareholders in reinvestment of dividends and distributions		111,693			1,100,347
Shares redeemed		(1,600,338	)		(15,626,655	)
Net increase (decrease)		10,548,758		$	103,530,570

Note 9–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

mainstayinvestments.com 33

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Tax Free Bond Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Tax Free Bond Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

34 MainStay Tax Free Bond Fund

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For individual federal income tax purposes, the Fund designated 99.7% of the ordinary income dividends paid during the fiscal year ended October 31, 2013 as attributable to interest income from tax exempt municipal bonds. Such dividends are currently exempt from federal income taxes under Section 103 (a) of the Internal Revenue Code.

In February 2014, shareholders will receive an IRS. Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

mainstayinvestments.com 35

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

36 MainStay Tax Free Bond Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 37

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

38 MainStay Tax Free Bond Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

mainstayinvestments.com 39

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32041 MS322-13 MST11-12/13 NL013

MainStay Convertible Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	16
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	29
Federal Income Tax Information	30
Proxy Voting Policies and Procedures and Proxy Voting Record	30
Shareholder Reports and Quarterly Portfolio Disclosure	30
Board Members and Officers	31

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		17.57 24.42	%		14.54 15.85	%		7.01 7.61	%		1.22 1.22	%
Class A Shares	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		17.91 24.78			14.81 16.11			7.14 7.75			1.00 1.00
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		18.50 23.50			14.77 15.00			6.82 6.82			1.97 1.97
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		22.60 23.60			14.99 14.99			6.82 6.82			1.97 1.97
Class I Shares4	No Sales Charge			25.05			16.39			8.01			0.75

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on November 28, 2008, include the historical performance of Class B shares through November 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Bank of America Merrill Lynch All U.S. Convertibles Index5		23.94	%		17.77	%		7.22	%
Average Lipper Convertible Securities Fund6		20.63			14.86			6.52

5. The Bank of America Merrill Lynch All U.S. Convertibles Index is a market-capitalization weighted index of domestic corporate convertible securities. In order to be included in this Index, bonds and preferred stocks must be convertible only to common stock. The Bank of America Merrill Lynch All U.S. Convertibles Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all income and capital gains. An investment cannot be made directly in an index.

6. The average Lipper convertible securities fund is representative of funds that invest primarily in convertible bonds and/or convertible preferred stock. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Convertible Fund

Cost in Dollars of a $1,000 Investment in MainStay Convertible Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,122.40	$	6.42	$	1,019.20	$	6.11
Class A Shares	$	1,000.00	$	1,123.60	$	5.25	$	1,020.30	$	4.99
Class B Shares	$	1,000.00	$	1,118.00	$	10.41	$	1,015.40	$	9.91
Class C Shares	$	1,000.00	$	1,118.10	$	10.41	$	1,015.40	$	9.91
Class I Shares	$	1,000.00	$	1,124.80	$	3.91	$	1,021.50	$	3.72

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.20% for Investor Class, 0.98% for Class A, 1.95% for Class B and Class C and 0.73% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Holdings or Issuers Held as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. JPMorgan Chase & Co. (Convertible into Schlumberger, Ltd.), (zero coupon), due 5/5/15

2. Gilead Sciences, Inc., 1.00%, due 5/1/14

3. Chart Industries, Inc., 2.00%, due 8/1/18

4. Novellus Systems, Inc., 2.625%, due 5/15/41

5. Danaher Corp., (zero coupon), due 1/22/21

  6. United Technologies Corp., 7.50%

  7. Jarden Corp., 1.875%, due 9/15/18

  8. MetLife, Inc., 5.00%

  9. Stanley Black & Decker, Inc., 4.75%

10. Salix Pharmaceuticals, Ltd., 1.50%, due 3/15/19

8 MainStay Convertible Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio manager Edward Silverstein, CFA, of MacKay Shields LLC, the Fund’s Subadvisor.

How did MainStay Convertible Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Convertible Fund returned 24.42% for Investor Class shares, 24.78% for Class A shares, 23.50% for Class B shares and 23.60% for Class C shares for the 12 months ended October 31, 2013. Over the same period, Class I shares returned 25.05%. During the reporting period, Investor Class, Class A and Class I shares outperformed—and Class B and Class C shares underperformed—the 23.94% return of the Bank of America Merrill Lynch All U.S. Convertibles Index,¹ which is the Fund’s broad-based securities-market index. Over the same period, all share classes outperformed the 20.63% return of the average Lipper² convertible securities fund. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

Convertible bond performance is largely determined by the returns of the underlying equity securities. Our decision-making process is guided by our analysis of the underlying equity and whether the convertible security will participate in the equity’s upside and provide some measure of protection on the downside. Our equity analysis looks at the health and prospects of the underlying business, the strength of management, financial stability and valuation.

The Fund’s performance relative to the Bank of America Merrill Lynch All U.S. Convertibles Index was driven by a number of factors. The Fund’s relative performance was aided by a higher equity sensitivity, or delta, than the average convertible bond in the benchmark. The Fund tends to avoid convertible securities that have low sensitivity to equity prices, known as “busted” convertible bonds. Busted convertibles tend to underperform the market when equities are rising. They also tend to underperform the market when interest rates are rising and bond prices are falling.

An underweight position in the biotechnology sector slightly detracted from the Fund’s performance relative to the Bank of America Merrill Lynch All U.S. Convertibles Index, as the sector was a strong performer in the benchmark.

During the reporting period, which sectors made the strongest contributions to the Fund’s performance and which sectors were particularly weak?

The biotechnology sector was the strongest contributor to the Fund’s performance, followed by industrials. (Contributions take weightings and total returns into account.) The weakest sectors were natural resources, energy exploration & production, and medical devices.

During the reporting period, which individual Fund holdings were the strongest absolute performers and which Fund holdings were particularly weak?

Investors continued to push up biotechnology stocks, as their growth prospects are viewed as relatively attractive in the mature health care sector. Particularly strong biotechnology securities in the Fund were convertible bonds of Gilead Sciences and Biomarin Pharmaceuticals. Gilead Sciences’ share price rose sharply as the company is expected to receive approval by year’s end for a novel treatment for hepatitis C. This therapy, if approved, is expected to achieve annual sales of several billions of dollars. Biomarin Pharmaceuticals was also a strong performer, as the company’s drug franchise for rare diseases remains a profitable niche. In addition, the company has several promising potential therapies in its pipeline. Shares of many industrial companies rose during the reporting period, as the economic recovery enhanced their prospects. The convertible bonds of machinery company Chart Industries and manufacturing company Danaher, in particular, were strong performers for the Fund. Chart Industries sells equipment into the growing natural gas-to-liquids market. Danaher benefited from growth in its industrial and life-sciences end markets. Another strong-performing industry was semiconductors, which benefited from growth in demand and a rationalization of supply. These factors have led to improved pricing. Fund holdings that benefited from this trend were the convertible bonds of Micron Technology, Microchip Technology and Novellus Systems.

Among the Fund’s weakest absolute performers were convertible bonds of natural resources company Peabody Energy and convertible preferred shares of Cliffs Natural Resources. Prices for coal and metal declined as demand from China softened. Within the energy exploration & production industry, convertible bonds of Cobalt International Energy and convertible preferred shares of Energy XXI were weak. Shares of Cobalt International Energy fell after the company announced disappointing results from a drilling project in Africa. Energy XXI’s shares declined after the company announced a shortfall in second-quarter production because of operational inefficiencies. Within the medical device industry, the Fund’s position in China Medical Technologies performed poorly after the integrity of the company’s management was called into question.

Did the Fund make any significant purchases and sales during the reporting period?

We initiated a position in convertible preferred shares of cereal maker Post Holdings. We found the company’s significant free cash flow generation attractive. We also initiated a position in

convertible bonds of marine transportation company SEACOR

1. See footnote on page 6 for more information on the Bank of America Merrill Lynch All U.S. Convertibles Index.

2. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

Holdings. The purchase reflected our belief that day rates for the company’s marine vessels were likely to improve. The position also reflected our confidence in the company’s management.

We sold our position in the convertible bonds of Amarin Corp. as we became increasingly convinced that the company’s drug to treat ultrahigh triglycerides would not receive U.S. Food & Drug Administration (FDA) approval. We also sold the convertible bonds of apparel licenser Iconix Brand Group, as we believed that the company’s shares were fully valued.

Were there any changes in the Fund’s sector weightings during the reporting period?

Sector weightings are a result of our bottom-up security-specific selection process and do not reflect top-down opinions about

the economy or the attractiveness of specific sectors. During the reporting period, we increased the Fund’s weightings in the consumer discretionary, industrial and telecommunication services sectors. Over the same period, we reduced the Fund’s weightings in the energy and health care sectors.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund was overweight relative to the Bank of America Merrill Lynch All U.S. Convertibles Index in the energy, industrials and consumer discretionary sectors. As of the same date, the Fund was underweight relative to the Index in the financials sector.

The opinions expressed are those of the portfolio manager as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Convertible Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Convertible Securities 89.6%† Convertible Bonds 77.5%
Aerospace & Defense 0.9%
GenCorp, Inc. 4.063%, due 12/31/39	$	1,997,000	$	3,785,563
Kaman Corp. 3.25%, due 11/15/17 (a)		3,037,000		3,765,880
				7,551,443
Airlines 1.4%
United Airlines, Inc. 4.50%, due 1/15/15		6,550,000		12,187,094
Auto Manufacturers 2.4%
Ford Motor Co. 4.25%, due 11/15/16		4,606,000		9,304,120
Wabash National Corp. 3.375%, due 5/1/18		8,792,000		11,281,235
				20,585,355
Biotechnology 5.3%
Cubist Pharmaceuticals, Inc.
1.125%, due 9/1/18 (a)		4,885,000		5,294,119
1.875%, due 9/1/20 (a)		8,266,000		8,901,449
¨Gilead Sciences, Inc. 1.00%, due 5/1/14		7,802,000		24,610,433
Medicines Co. (The) 1.375%, due 6/1/17 (a)		4,252,000		5,777,405
				44,583,406
Commercial Services 1.9%
Hertz Global Holdings, Inc. 5.25%, due 6/1/14		2,618,000		7,302,597
ServiceSource International, Inc. 1.50%, due 8/1/18 (a)		8,571,000		8,571,000
				15,873,597
Computers 1.7%
EMC Corp. 1.75%, due 12/1/13		9,557,000		14,449,037
Distribution & Wholesale 0.5%
WESCO International, Inc. 6.00%, due 9/15/29		1,353,000		4,113,120
Energy—Alternate Sources 0.3%
Clean Energy Fuels Corp. 5.25%, due 10/1/18 (a)		2,330,000		2,305,244

	Principal Amount		Value
Entertainment 0.6%
International Game Technology 3.25%, due 5/1/14	$	4,406,000	$	4,874,138
Environmental Controls 1.3%
Covanta Holding Corp. 3.25%, due 6/1/14		9,561,000		10,845,759
Finance—Leasing Companies 1.3%
Air Lease Corp. 3.875%, due 12/1/18		8,569,000		11,075,432
Finance—Mortgage Loan/Banker 0.7%
Walter Investment Management Corp. 4.50%, due 11/1/19		5,708,000		5,961,293
Health Care—Products 4.1%
Hologic, Inc. 2.00%, due 3/1/42 (b)		7,990,000		8,374,519
Insulet Corp. 3.75%, due 6/15/16		4,050,000		6,249,656
Teleflex, Inc. 3.875%, due 8/1/17		8,849,000		13,793,379
Wright Medical Group, Inc. 2.00%, due 8/15/17		5,289,000		6,677,362
				35,094,916
Health Care—Services 1.1%
WellPoint, Inc. 2.75%, due 10/15/42 (a)		7,160,000		9,334,850
Home Builders 1.6%
KB Home 1.375%, due 2/1/19		5,169,000		5,136,694
Lennar Corp. 3.25%, due 11/15/21 (a)		3,785,000		6,337,509
Ryland Group, Inc. (The) 0.25%, due 6/1/19		2,072,000		1,926,960
				13,401,163
Household Products & Wares 2.1%
¨Jarden Corp. 1.875%, due 9/15/18 (a)		13,430,000		17,828,325
Insurance 2.0%
American Equity Investment Life Holding Co. 3.50%, due 9/15/15 (a)		6,287,000		10,849,005
Radian Group, Inc. 2.25%, due 3/1/19		4,321,000		6,508,506
				17,357,511

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings or issuers held, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Convertible Bonds (continued)
Internet 3.2%
At Home Corp. 4.75%, due 12/31/49 (c)(d)(e)(f)	$	9,147,056	$	915
Blucora, Inc. 4.25%, due 4/1/19 (a)		3,003,000		3,853,224
Dealertrack Technologies, Inc. 1.50%, due 3/15/17		1,661,000		1,980,743
Move, Inc. 2.75%, due 9/1/18 (a)		2,670,000		3,120,562
priceline.com, Inc.
0.35%, due 6/15/20 (a)		5,890,000		6,449,550
1.00%, due 3/15/18		2,767,000		3,678,381
Shutterfly, Inc. 0.25%, due 5/15/18 (a)		7,266,000		7,760,996
				26,844,371
Lodging 0.8%
MGM Resorts International 4.25%, due 4/15/15		5,309,000		6,516,798
Machinery—Diversified 2.2%
¨Chart Industries, Inc. 2.00%, due 8/1/18		11,153,000		18,709,157
Media 0.0%‡
Liberty Interactive LLC 3.50%, due 1/15/31		763,000		400,575
Metal Fabricate & Hardware 1.4%
RTI International Metals, Inc. 1.625%, due 10/15/19		10,874,000		11,730,327
Miscellaneous—Manufacturing 2.1%
¨Danaher Corp. (zero coupon), due 1/22/21		8,558,000		17,945,056
Oil & Gas 1.3%
Alon USA Energy, Inc. 3.00%, due 9/15/18 (a)		4,616,000		4,959,315
Cobalt International Energy, Inc. 2.625%, due 12/1/19		6,170,000		6,335,819
				11,295,134
Oil & Gas Services 7.0%
Helix Energy Solutions Group, Inc. 3.25%, due 3/15/32		7,642,000		9,714,893
Hornbeck Offshore Services, Inc. 1.50%, due 9/1/19		3,683,000		4,675,108
¨JPMorgan Chase & Co. (Convertible into Schlumberger, Ltd.) (zero coupon), due 5/5/15 (a)(g)		15,988,000		26,202,733

	Principal Amount		Value
Oil & Gas Services (continued)
Newpark Resources, Inc. 4.00%, due 10/1/17	$	3,673,000	$	5,146,791
SEACOR Holdings, Inc. 2.50%, due 12/15/27 (a)		2,507,000		3,235,597
Subsea 7 S.A.
1.00%, due 10/5/17		3,000,000		3,143,100
3.50%, due 10/13/14		5,100,000		7,078,800
				59,197,022
Pharmaceuticals 8.5%
Akorn, Inc. 3.50%, due 6/1/16		3,322,000		7,918,818
Biomarin Pharmaceutical, Inc. 0.75%, due 10/15/18		8,470,000		8,814,094
Medivation, Inc. 2.625%, due 4/1/17		6,240,000		8,833,500
Mylan, Inc. 3.75%, due 9/15/15		2,825,000		8,128,938
Omnicare, Inc. 3.50%, due 2/15/44		10,135,000		9,786,609
¨Salix Pharmaceuticals, Ltd. 1.50%, due 3/15/19		11,041,000		14,512,014
Teva Pharmaceutical Finance Co. LLC 0.25%, due 2/1/26		13,686,000		14,293,316
				72,287,289
Real Estate Investment Trusts 2.5%
Host Hotels & Resorts, L.P. 2.50%, due 10/15/29 (a)		6,278,000		9,150,185
SL Green Operating Partnership, L.P. 3.00%, due 10/15/17 (a)		9,324,000		11,882,272
				21,032,457
Semiconductors 7.1%
Intel Corp. 3.25%, due 8/1/39		6,629,000		8,684,023
Microchip Technology, Inc. 2.125%, due 12/15/37		8,326,000		13,862,790
Micron Technology, Inc. 1.625%, due 2/15/33 (a)		8,173,000		14,042,236
¨Novellus Systems, Inc. 2.625%, due 5/15/41		11,133,000		18,599,068
Rambus, Inc. 1.125%, due 8/15/18 (a)		3,292,000		3,304,345
Xilinx, Inc. 2.625%, due 6/15/17		997,000		1,590,215
				60,082,677
Software 7.4%
Bottomline Technologies, Inc. 1.50%, due 12/1/17		8,466,000		10,503,131
Cornerstone OnDemand, Inc. 1.50%, due 7/1/18 (a)		9,791,000		11,180,098

12 MainStay Convertible Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Convertible Bonds (continued)
Software (continued)
Medidata Solutions, Inc. 1.00%, due 8/1/18 (a)	$	9,054,000	$	11,017,587
NetSuite, Inc. 0.25%, due 6/1/18 (a)		7,871,000		8,707,294
Nuance Communications, Inc. 2.75%, due 11/1/31		8,349,000		8,192,456
Salesforce.com, Inc. 0.25%, due 4/1/18 (a)		7,731,000		8,455,781
Workday, Inc. 0.75%, due 7/15/18 (a)		3,793,000		4,307,426
				62,363,773
Telecommunications 4.1%
Ciena Corp. 4.00%, due 12/15/20		5,732,000		8,336,478
Ixia 3.00%, due 12/15/15		8,275,000		9,288,687
JDS Uniphase Corp. 0.625%, due 8/15/33 (a)		11,201,000		11,810,054
SBA Communications Corp. 4.00%, due 10/1/14		1,869,000		5,392,065
				34,827,284
Transportation 0.7%
XPO Logistics, Inc. 4.50%, due 10/1/17		4,020,000		5,720,963
Total Convertible Bonds (Cost $545,587,786)				656,374,566
	Shares
Convertible Preferred Stocks 12.1%
Aerospace & Defense 2.1%
¨United Technologies Corp. 7.50%		283,546		17,942,791
Auto Manufacturers 1.6%
General Motors Co. 4.75%		259,468		13,315,898
Auto Parts & Equipment 0.7%
Goodyear Tire & Rubber Co. (The) 5.88%		103,400		6,197,796
Food 0.5%
Post Holdings, Inc. (a) 3.75%		39,161		4,266,004

	Shares		Value
Hand & Machine Tools 2.0%
¨Stanley Black & Decker, Inc. 4.75%		131,122	$	16,744,279
Insurance 2.4%
Maiden Holdings, Ltd. 7.25%		61,807		2,891,950
¨MetLife, Inc. 5.00%		618,659		17,774,073
				20,666,023
Iron & Steel 0.3%
Cliffs Natural Resources, Inc. 7.00%		98,506		2,237,071
Oil & Gas 1.1%
Energy XXI Bermuda, Ltd. 5.63%		14,407		4,470,672
Sanchez Energy Corp. (a) 4.88%		71,500		5,087,668
				9,558,340
Pharmaceuticals 1.1%
Omnicare Capital Trust II 4.00%		133,550		9,102,768
Real Estate Investment Trusts 0.3%
Health Care REIT, Inc. 6.50%		47,800		2,818,288
Total Convertible Preferred Stocks (Cost $88,544,993)				102,849,258
Total Convertible Securities (Cost $634,132,779)				759,223,824
Common Stocks 3.8%
Banks 0.4%
Bank of America Corp.		116,717		1,629,369
Citigroup, Inc.		41,431		2,021,004
				3,650,373
Internet 0.3%
TIBCO Software, Inc. (h)		108,466		2,663,925
Oil & Gas 0.2%
Ensco PLC Class A		28,000		1,614,200
Oil & Gas Services 1.9%
Baker Hughes, Inc.		124,900		7,255,441
Cameron International Corp. (h)		46,635		2,558,396
Halliburton Co.		113,326		6,009,678
				15,823,515

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Shares			Value
Common Stocks (continued)
Transportation 1.0%
Tidewater, Inc.		136,413		$	8,214,791
Total Common Stocks (Cost $30,907,694)					31,966,804
	Number of Warrants
Warrants 0.0%‡
Auto Manufacturers 0.0%‡
General Motors Co. Strike Price $10.00 Expires 7/10/16 (h)		1,016			28,245
Strike Price $18.33 Expires 7/10/19 (h)		1,016			19,893
Total Warrants (Cost $1,062)					48,138
	Principal Amount
Short-Term Investment 6.0%
Repurchase Agreement 6.0%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $50,461,109 (Collateralized by a Federal National Mortgage Association security with a rate of 2.17% and a maturity date of 11/7/22, with a Principal Amount of $54,505,000 and a Market Value of $51,474,958)	$	50,461,109			50,461,109
Total Short-Term Investment (Cost $50,461,109)					50,461,109
Total Investments (Cost $715,502,644) (i)		99.4	%		841,699,875
Other Assets, Less Liabilities		0.6			5,055,113
Net Assets		100.0	%	$	846,754,988

‡ Less than one-tenth of a percent.

(a) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(b) Step coupon—Rate shown is the rate in effect as of October 31, 2013.

(c) Issue in default.

(d) Illiquid security—The total market value of this security as of October 31, 2013 is $915, which represents less than one-tenth of a percent of the Fund’s net assets.

(e) Restricted security.

(f) Fair valued security—The total market value of this security as of October 31, 2013 is $915, which represents less than one-tenth of a percent of the Fund’s net assets.

(g) Synthetic Convertible Bond—Security structured by an investment bank that provides exposure to a specific company’s stock, represents 3.1% of the Fund’s net assets.

(h) Non-income producing security.

(i) As of October 31, 2013, cost is $724,176,087 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	127,121,778
Gross unrealized depreciation		(9,597,990	)
Net unrealized appreciation	$	117,523,788

14 MainStay Convertible Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Convertible Securities
Convertible Bonds (b)	$	—	$	656,373,651	$	915	$	656,374,566
Convertible Preferred Stocks		94,112,582		8,736,676		—		102,849,258
Total Convertible Securities		94,112,582		665,110,327		915		759,223,824
Common Stocks		31,966,804		—		—		31,966,804
Warrants		48,138		—		—		48,138
Short-Term Investment
Repurchase Agreement		—		50,461,109		—		50,461,109
Total Investments in Securities	$	126,127,524	$	715,571,436	$	915	$	841,699,875

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The Level 3 security valued at $915 is held in Internet within the Convertible Bonds section of the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

As of October 31, 2013, convertible preferred stocks with a total value of $10,179,844 were transferred from Level 1 to Level 2 as the prices of these securities were based on evaluated bid pricing compared with the prior year prices which were based on quoted prices. Values as of October 31, 2013, for these securities are based on evaluated bid prices in active markets for identical investments.

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012		Accrued Discounts (Premiums)		Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)		Purchases		Sales			Transfers in to Level 3		Transfers out of Level 3		Balance as of October 31, 2013		Change in Unrealized Appreciation (Depreciation) from Investments Still Held as of October 31, 2013
Convertible Bonds
Internet	$	915	$	—	$	—	$	—	$	—	$	—		$	—	$	—	$	915	$	—
Common Stocks
Auto Manufacturers		57		—		—		—		—		(57	)(a)		—		—		—		—
Total	$	972	$	—	$	—	$	—	$	—	$	(57	)(a)	$	—	$	—	$	915	$	—

(a) Sales include security that was written off during the year.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $715,502,644)	$	841,699,875
Cash		6,220
Receivables:
Investment securities sold		11,418,498
Dividends and interest		3,287,843
Fund shares sold		1,757,087
Other assets		27,931
Total assets		858,197,454
Liabilities
Payables:
Investment securities purchased		9,483,284
Fund shares redeemed		1,074,566
Manager (See Note 3)		424,933
NYLIFE Distributors (See Note 3)		195,578
Transfer agent (See Note 3)		191,593
Shareholder communication		44,709
Professional fees		17,228
Custodian		2,149
Trustees		1,771
Accrued expenses		6,655
Total liabilities		11,442,466
Net assets	$	846,754,988
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	488,349
Additional paid-in capital		695,628,126
		696,116,475
Distributions in excess of net investment income		16,857,207
Accumulated net realized gain (loss) on investments		7,584,075
Net unrealized appreciation (depreciation) on investments		126,197,231
Net assets	$	846,754,988

Investor Class
Net assets applicable to outstanding shares	$	86,136,123
Shares of beneficial interest outstanding		4,972,494
Net asset value per share outstanding	$	17.32
Maximum sales charge (5.50% of offering price)		1.01
Maximum offering price per share outstanding	$	18.33
Class A
Net assets applicable to outstanding shares	$	391,576,597
Shares of beneficial interest outstanding		22,597,624
Net asset value per share outstanding	$	17.33
Maximum sales charge (5.50% of offering price)		1.01
Maximum offering price per share outstanding	$	18.34
Class B
Net assets applicable to outstanding shares	$	32,628,966
Shares of beneficial interest outstanding		1,878,243
Net asset value and offering price per share outstanding	$	17.37
Class C
Net assets applicable to outstanding shares	$	78,134,716
Shares of beneficial interest outstanding		4,501,817
Net asset value and offering price per share outstanding	$	17.36
Class I
Net assets applicable to outstanding shares	$	258,278,586
Shares of beneficial interest outstanding		14,884,764
Net asset value and offering price per share outstanding	$	17.35

16 MainStay Convertible Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	9,021,278
Dividends		6,210,368
Total income		15,231,646
Expenses
Manager (See Note 3)		4,290,428
Distribution/Service—Investor Class (See Note 3)		212,632
Distribution/Service—Class A (See Note 3)		819,850
Distribution/Service—Class B (See Note 3)		322,991
Distribution/Service—Class C (See Note 3)		742,547
Transfer agent (See Note 3)		1,126,838
Shareholder communication		99,153
Registration		87,547
Professional fees		78,736
Trustees		14,765
Custodian		14,008
Miscellaneous		24,789
Total expenses		7,834,284
Net investment income (loss)		7,397,362
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments		35,031,999
Net change in unrealized appreciation (depreciation) on investments		113,193,173
Net realized and unrealized gain (loss) on investments		148,225,172
Net increase (decrease) in net assets resulting from operations	$	155,622,534

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	7,397,362		$	14,090,779
Net realized gain (loss) on investments		35,031,999			33,409,121
Net change in unrealized appreciation (depreciation) on investments		113,193,173			(8,108,273	)
Net increase (decrease) in net assets resulting from operations		155,622,534			39,391,627
Dividends and distributions to shareholders:
From net investment income:
Investor Class		(1,477,771	)		(1,534,966	)
Class A		(6,357,636	)		(7,001,464	)
Class B		(365,178	)		(417,670	)
Class C		(826,807	)		(911,844	)
Class I		(4,265,788	)		(5,091,499	)
		(13,293,180	)		(14,957,443	)
From net realized gain on investments:
Investor Class		(3,334,878	)		(4,312,356	)
Class A		(12,200,801	)		(18,447,914	)
Class B		(1,367,580	)		(2,175,818	)
Class C		(3,062,828	)		(4,456,329	)
Class I		(7,472,559	)		(11,630,815	)
		(27,438,646	)		(41,023,232	)
Total dividends and distributions to shareholders		(40,731,826	)		(55,980,675	)
Capital share transactions:
Net proceeds from sale of shares		266,727,438			163,780,168
Net asset value of shares issued to shareholders in reinvestment of dividends and distributions		35,446,361			39,617,060
Cost of shares redeemed		(256,685,968	)		(329,417,252	)
Increase (decrease) in net assets derived from capital share transactions		45,487,831			(126,020,024	)
Net increase (decrease) in net assets		160,378,539			(142,609,072	)
Net Assets
Beginning of year		686,376,449			828,985,521
End of year	$	846,754,988		$	686,376,449
Undistributed (distributions in excess of) net investment income at end of year	$	16,857,207		$	1,797,462

18 MainStay Convertible Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	14.79		$	15.11		$	15.12		$	13.02		$	10.16
Net investment income (loss) (a)		0.15			0.26			0.30			0.32			0.35
Net realized and unrealized gain (loss) on investments		3.28			0.47			(0.02	)		2.10			2.82
Total from investment operations		3.43			0.73			0.28			2.42			3.17
Less dividends and distributions:
From net investment income		(0.28	)		(0.28	)		(0.29	)		(0.32	)		(0.31	)
From net realized gain on investments		(0.62	)		(0.77	)		—			—			—
Total dividends and distributions		(0.90	)		(1.05	)		(0.29	)		(0.32	)		(0.31	)
Net asset value at end of year	$	17.32		$	14.79		$	15.11		$	15.12		$	13.02
Total investment return (b)		24.42	%		5.07	%		1.98	%		18.78	%		31.77	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.93	%		1.74	%		1.89	%		2.25	%		3.16	%
Net expenses		1.22	%		1.22	%		1.19	%		1.28	%		1.30	%
Expenses (before waiver/reimbursement)		1.22	%		1.22	%		1.19	%		1.28	%		1.43	%
Portfolio turnover rate		77	%		61	%		80	%		80	%		68	%
Net assets at end of year (in 000’s)	$	86,136		$	80,378		$	85,747		$	86,301		$	78,734

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	14.79		$	15.12		$	15.13		$	13.03		$	10.16
Net investment income (loss) (a)		0.18			0.29			0.33			0.35			0.38
Net realized and unrealized gain (loss) on investments		3.29			0.46			(0.02	)		2.10			2.82
Total from investment operations		3.47			0.75			0.31			2.45			3.20
Less dividends and distributions:
From net investment income		(0.31	)		(0.31	)		(0.32	)		(0.35	)		(0.33	)
From net realized gain on investments		(0.62	)		(0.77	)		—			—			—
Total dividends and distributions		(0.93	)		(1.08	)		(0.32	)		(0.35	)		(0.33	)
Net asset value at end of year	$	17.33		$	14.79		$	15.12		$	15.13		$	13.03
Total investment return (b)		24.78	%		5.30	%		2.13	%		19.05	%		32.11	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.13	%		1.96	%		2.08	%		2.48	%		3.34	%
Net expenses		0.99	%		1.00	%		0.99	%		1.05	%		1.10	%
Expenses (before waiver/reimbursement)		0.99	%		1.00	%		0.99	%		1.05	%		1.15	%
Portfolio turnover rate		77	%		61	%		80	%		80	%		68	%
Net assets at end of year (in 000’s)	$	391,577		$	317,267		$	367,398		$	367,972		$	355,311

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	14.84		$	15.15		$	15.16		$	13.05		$	10.18
Net investment income (loss) (a)		0.03			0.15			0.18			0.21			0.27
Net realized and unrealized gain (loss) on investments		3.29			0.47			(0.02	)		2.11			2.83
Total from investment operations		3.32			0.62			0.16			2.32			3.10
Less dividends and distributions:
From net investment income		(0.17	)		(0.16	)		(0.17	)		(0.21	)		(0.23	)
From net realized gain on investments		(0.62	)		(0.77	)		—			—			—
Total dividends and distributions		(0.79	)		(0.93	)		(0.17	)		(0.21	)		(0.23	)
Net asset value at end of year	$	17.37		$	14.84		$	15.15		$	15.16		$	13.05
Total investment return (b)		23.50	%		4.31	%		1.19	%		17.93	%		30.83	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.19	%		0.99	%		1.13	%		1.51	%		2.42	%
Net expenses		1.97	%		1.97	%		1.94	%		2.03	%		2.05	%
Expenses (before waiver/reimbursement)		1.97	%		1.97	%		1.94	%		2.03	%		2.19	%
Portfolio turnover rate		77	%		61	%		80	%		80	%		68	%
Net assets at end of year (in 000’s)	$	32,629		$	33,103		$	43,420		$	54,646		$	59,041

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	14.82		$	15.14		$	15.15		$	13.04		$	10.18
Net investment income (loss) (a)		0.03			0.15			0.18			0.21			0.27
Net realized and unrealized gain (loss) on investments		3.30			0.46			(0.02	)		2.11			2.82
Total from investment operations		3.33			0.61			0.16			2.32			3.09
Less dividends and distributions:
From net investment income		(0.17	)		(0.16	)		(0.17	)		(0.21	)		(0.23	)
From net realized gain on investments		(0.62	)		(0.77	)		—			—			—
Total dividends and distributions		(0.79	)		(0.93	)		(0.17	)		(0.21	)		(0.23	)
Net asset value at end of year	$	17.36		$	14.82		$	15.14		$	15.15		$	13.04
Total investment return (b)		23.60	%		4.24	%		1.20	%		17.94	%		30.73	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.19	%		0.98	%		1.13	%		1.49	%		2.39	%
Net expenses		1.97	%		1.97	%		1.94	%		2.03	%		2.05	%
Expenses (before waiver/reimbursement)		1.97	%		1.97	%		1.94	%		2.03	%		2.18	%
Portfolio turnover rate		77	%		61	%		80	%		80	%		68	%
Net assets at end of year (in 000’s)	$	78,135		$	75,372		$	90,273		$	90,474		$	72,563

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

20 MainStay Convertible Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,												November 28, 2008** through October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of period	$	14.81		$	15.13		$	15.15		$	13.04		$	9.55
Net investment income (loss) (a)		0.22			0.33			0.38			0.38			0.38
Net realized and unrealized gain (loss) on investments		3.29			0.47			(0.04	)		2.12			3.44
Total from investment operations		3.51			0.80			0.34			2.50			3.82
Less dividends and distributions:
From net investment income		(0.35	)		(0.35	)		(0.36	)		(0.39	)		(0.33	)
From net realized gain on investments		(0.62	)		(0.77	)		—			—			—
Total dividends and distributions		(0.97	)		(1.12	)		(0.36	)		(0.39	)		(0.33	)
Net asset value at end of period	$	17.35		$	14.81		$	15.13		$	15.15		$	13.04
Total investment return (b)		25.05	%		5.56	%		2.39	%		19.41	%		40.46	%(c)(d)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.37	%		2.21	%		2.33	%		2.66	%		3.33	%††
Net expenses		0.74	%		0.75	%		0.74	%		0.80	%		0.86	%††
Expenses (before waiver/reimbursement)		0.74	%		0.75	%		0.74	%		0.80	%		0.89	%††
Portfolio turnover rate		77	%		61	%		80	%		80	%		68	%
Net assets at end of period (in 000’s)	$	258,279		$	180,257		$	242,147		$	206,563		$	64,931

** Commencement of operations.

†† Annualized.

(a) Per share data based on average shares outstanding during the period.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) Total investment return is not annualized.

(d) Total investment return may reflect adjustments to conform to generally accepted accounting principles.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Convertible Fund (the “Fund”), a diversified fund.

The Fund currently offers five classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on May 1, 1986. Class C shares commenced operations on September 1, 1998. Investor Class shares commenced operations on February 28, 2008. Class I shares commenced operations on November 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek capital appreciation together with current income.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures.

The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

22 MainStay Convertible Fund

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Benchmark Yields	•    Reported Trades
•    Broker Dealer Quotes	•    Issuer Spreads
•    Two-sided markets	•    Benchmark securities
•    Bids/Offers	•    Reference Data (corporate actions or material event notices)
•    Industry and economic events	•    Comparable bonds
•    Equity and credit default swap curves	•    Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund held securities with a value of $915 that were fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Sub-

advisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund’s Manager or Subadvisor might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund’s liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisor measure the liquidity of the Fund’s investments; in doing so, the Manager or Subadvisor may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax

mainstayinvestments.com 23

Notes to Financial Statements (continued)

liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least quarterly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method. Income from payment-in-kind securities is recorded daily based on the effective interest method of accrual.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(H)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants if such warrants are not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights.

(I)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also

24 MainStay Convertible Fund

record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(J)  Restricted Securities.  A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933, as amended. The Fund may not have the right to demand that such securities be registered. Disposal of these securities may involve time-consuming negotiations and expenses and it may be difficult to obtain a prompt sale at an acceptable price. (See Note 5)

(K)  Concentration of Risk.  The Fund may invest in high-yield securities (sometimes called “junk bonds”), 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 also be subject to greater price volatility.

(L)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(M)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Asset Derivatives

	Statement of Assets and Liabilities Location	Equity Contracts Risk		Total
Warrants	Investments in securities, at value	$	48,138	$	48,138
Total Fair Value		$	48,138	$	48,138

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Equity Contracts Risk		Total
Warrants	Net change in unrealized appreciation (depreciation) on investments	$	20,990	$	20,990
Total Change in Unrealized Appreciation (Depreciation)		$	20,990	$	20,990

Number of Contracts, Notional Amounts or Shares/Units (1)

	Equity Contracts Risk	Total
Warrants	2,032		2,032

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or the “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net

mainstayinvestments.com 25

Notes to Financial Statements (continued)

assets as follows: 0.60% up to $500 million; 0.55% from $500 million to $1 billion; and 0.50% in excess of $1 billion, plus a fee for fund accounting services, previously provided by New York Life Investments under a separate fund accounting agreement, furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate was 0.60% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $4,290,428.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $22,415 and $67,735, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $32, $1,983, $42,462 and $7,910, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf

of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	274,767
Class A		317,309
Class B		104,447
Class C		239,950
Class I		190,365

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income	Accumulated Capital and Other Gain (Loss)		Other Temporary Differences		Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
$33,114,725	$	—	$	—	$	117,523,788	$	150,638,513

The difference between book basis and tax basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments, return of capital distributions received, defaulted bond income accruals, Contingent Payment Debt Instruments (CPDI) and equity to debt tax adjustments.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
$20,955,563	$	(20,955,566	)	$	3

The reclassifications for the Fund are primarily due to return of capital distributions received, defaulted bonds, equity to debt tax adjustments, capital gain distributions from Real Estate Investment Trusts and CPDI.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	15,879,570	$	24,131,923
Long-Term Capital Gain		24,852,256		31,848,752
Total	$	40,731,826	$	55,980,675

26 MainStay Convertible Fund

Note 5–Restricted Security

As of October 31, 2013, the Fund held the following restricted security:

Security	Date of Acquisition		Principal Amount		Cost		10/31/13 Value		Percentage of Net Assets
At Home Corp. Convertible Bond 4.75%, due 12/31/49		5/4/01	$	9,147,056	$	674,023	$	915		0.0	%‡

‡ Less than one-tenth of a percent.

Note 6–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 7–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 8–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $532,288 and $531,297, respectively.

Note 9–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		310,997		$	4,896,641
Shares issued to shareholders in reinvestment of dividends and distributions		331,058			4,786,481
Shares redeemed		(720,235	)		(11,247,710	)
Net increase (decrease) in shares outstanding before conversion		(78,180	)		(1,564,588	)
Shares converted into Investor Class (See Note 1)		278,167			4,382,976
Shares converted from Investor Class (See Note 1)		(663,421	)		(10,875,430	)
Net increase (decrease)		(463,434	)	$	(8,057,042	)
Year ended October 31, 2012:
Shares sold		315,524		$	4,692,773
Shares issued to shareholders in reinvestment of dividends and distributions		415,428			5,815,700
Shares redeemed		(831,278	)		(12,361,399	)
Net increase (decrease) in shares outstanding before conversion		(100,326	)		(1,852,926	)
Shares converted into Investor Class (See Note 1)		430,501			6,352,436
Shares converted from Investor Class (See Note 1)		(569,292	)		(8,576,018	)
Net increase (decrease)		(239,117	)	$	(4,076,508	)

mainstayinvestments.com 27

Notes to Financial Statements (continued)

Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		8,389,260		$	136,242,120
Shares issued to shareholders in reinvestment of dividends and distributions		1,145,934			16,645,522
Shares redeemed		(9,051,031	)		(141,427,604	)
Net increase (decrease) in shares outstanding before conversion		484,163			11,460,038
Shares converted into Class A (See Note 1)		738,350			12,045,134
Shares converted from Class A (See Note 1)		(74,062	)		(1,209,456	)
Net increase (decrease)		1,148,451		$	22,295,716
Year ended October 31, 2012:
Shares sold		4,620,849		$	69,277,054
Shares issued to shareholders in reinvestment of dividends and distributions		1,594,182			22,325,718
Shares redeemed		(9,794,989	)		(145,007,590	)
Net increase (decrease) in shares outstanding before conversion		(3,579,958	)		(53,404,818	)
Shares converted into Class A (See Note 1)		806,991			12,070,125
Shares converted from Class A (See Note 1)		(84,644	)		(1,294,142	)
Net increase (decrease)		(2,857,611	)	$	(42,628,835	)
Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		189,448		$	2,971,146
Shares issued to shareholders in reinvestment of dividends and distributions		100,435			1,446,145
Shares redeemed		(364,062	)		(5,645,010	)
Net increase (decrease) in shares outstanding before conversion		(74,179	)		(1,227,719	)
Shares converted from Class B (See Note 1)		(278,752	)		(4,343,224	)
Net increase (decrease)		(352,931	)	$	(5,570,943	)
Year ended October 31, 2012:
Shares sold		231,752		$	3,443,183
Shares issued to shareholders in reinvestment of dividends and distributions		156,211			2,183,308
Shares redeemed		(439,861	)		(6,546,653	)
Net increase (decrease) in shares outstanding before conversion		(51,898	)		(920,162	)
Shares converted from Class B (See Note 1)		(582,297	)		(8,552,401	)
Net increase (decrease)		(634,195	)	$	(9,472,563	)

Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		636,115		$	10,134,289
Shares issued to shareholders in reinvestment of dividends and distributions		197,260			2,838,498
Shares redeemed		(1,415,929	)		(21,969,809	)
Net increase (decrease)		(582,554	)	$	(8,997,022	)
Year ended October 31, 2012:
Shares sold		622,852		$	9,186,755
Shares issued to shareholders in reinvestments of dividends and distributions		270,074			3,774,904
Shares redeemed		(1,770,212	)		(26,195,413	)
Net increase (decrease)		(877,286	)	$	(13,233,754	)
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,913,957		$	112,483,242
Shares issued to shareholders in reinvestment of dividends and distributions		668,462			9,729,715
Shares redeemed		(4,867,986	)		(76,395,835	)
Net increase (decrease)		2,714,433		$	45,817,122
Year ended October 31, 2012:
Shares sold		5,186,678		$	77,180,403
Shares issued to shareholders in reinvestment of dividends and distributions		392,510			5,517,430
Shares redeemed		(9,409,185	)		(139,306,197	)
Net increase (decrease)		(3,829,997	)	$	(56,608,364	)

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

28 MainStay Convertible Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Convertible Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Convertible Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 29

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years. Accordingly, the Fund paid $24,852,256 as long term capital distribution.

For the fiscal year ended October 31, 2013, the Fund designated approximately $2,486,380 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 18.1% to arrive at the amount eligible for the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

30 MainStay Convertible Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 31

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

32 MainStay Convertible Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 33

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

34 MainStay Convertible Fund

MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31999 MS322-13 MSC11-12/13 NL005

MainStay Income Builder Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	13
Financial Statements	26
Notes to Financial Statements	32
Report of Independent Registered Public Accounting Firm	42
Federal Income Tax Information	43
Proxy Voting Policies and Procedures and Proxy Voting Record	43
Shareholder Reports and Quarterly Portfolio Disclosure	43
Board Members and Officers	44

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		11.15 17.62	%		12.09 13.37	%		5.96 6.56	%		1.37 1.37	%
Class A Shares	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		11.42 17.90			12.42 13.70			6.12 6.72			1.06 1.06
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		11.74 16.74			12.28 12.53			5.77 5.77			2.12 2.12
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		15.70 16.70			12.52 12.52			5.76 5.76			2.12 2.12
Class I Shares4	No Sales Charge			18.25			14.00			7.14			0.81

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on January 2, 2004, include the historical performance of Class B shares through January 1, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
MSCI World Index5		25.77	%		13.34	%		7.38	%
Russell 1000® Index6		28.40			15.84			7.83
Income Builder Composite Index7		11.68			10.10			6.42
Barclays U.S. Aggregate Bond Index8		–1.08			6.09			4.78
Average Lipper Mixed-Asset Target Allocation Growth Fund9		17.93			12.32			6.38

5. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

6. The Russell 1000^® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000^® Index represents approximately 92% of the U.S. market. The Russell 1000^® Index is the Fund’s secondary benchmark. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

7. The Income Builder Composite Index consists of the MSCI World Index and the Barclays U.S. Aggregate Bond Index weighted 50%/50% respectively. The Fund has selected the Income Builder Composite Index as an additional benchmark. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

8. The Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasurys, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable rate mortgage pass-throughs), asset-backed securities, and commercial mortgage-backed securities. The Fund has selected the Barclays U.S. Aggregate Bond Index as an additional benchmark. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

9. The average Lipper mixed-asset target allocation growth fund is representative of funds that, by portfolio practice, maintain a mix of between 60%–80% equity securities, with the remainder invested in bonds, cash, and cash equivalents. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital-gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Income Builder Fund

Cost in Dollars of a $1,000 Investment in MainStay Income Builder Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,050.30	$	6.77	$	1,018.60	$	6.67
Class A Shares	$	1,000.00	$	1,051.80	$	5.43	$	1,019.90	$	5.35
Class B Shares	$	1,000.00	$	1,046.20	$	10.62	$	1,014.80	$	10.46
Class C Shares	$	1,000.00	$	1,046.30	$	10.68	$	1,014.80	$	10.51
Class I Shares	$	1,000.00	$	1,052.70	$	4.09	$	1,021.20	$	4.02

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.31% for Investor Class, 1.05% for Class A, 2.06% for Class B, 2.07% for Class C and 0.79% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Portfolio Composition as of October 31, 2013 (Unaudited)

See Portfolio of Investments beginning on page 13 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Holdings or Issuers Held as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. United States Treasury Bonds, 2.875%–4.375%, due 5/15/40–5/15/43

2. Vodafone Group PLC

3. MGM Resorts International, 6.75%–8.625%, due 2/1/19–10/1/20

4. Total S.A.

5. Lockheed Martin Corp.

  6. Vinci S.A.

  7. Altria Group, Inc.

  8. National Grid PLC

  9. Verizon Communications, Inc.

10. Deutsche Telekom A.G.

8 MainStay Income Builder Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Dan Roberts, PhD, Michael Kimble, CFA, Louis N. Cohen, CFA, and Taylor Wagenseil of MacKay Shields LLC (“MacKay Shields”), the Subadvisor for the fixed-income portion of the Fund, and Eric Sappenfield, William Priest, CFA, and Michael A. Welhoelter, CFA, of Epoch Investment Partners, Inc. (“Epoch”), the Subadvisor for the equity portion of the Fund.

How did MainStay Income Builder Fund perform relative to its benchmarks and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Income Builder Fund returned 17.62% for Investor Class shares, 17.90% for Class A shares, 16.74% for Class B shares and 16.70% for Class C shares for the 12 months ended October 31, 2013. Over the same period, Class I shares returned 18.25%. For the 12 months ended October 31, 2013, all share classes underperformed the 25.77% return of the MSCI World Index,¹ which is the Fund’s broad-based securities-market index, and outperformed the –1.08% return of the Barclays U.S. Aggregate Bond Index,¹ which is an additional benchmark for the Fund. Over the same period, Class I shares outperformed—and Investor Class, Class A, Class B and Class C shares underperformed—the 17.93% return of the average Lipper² mixed-asset target allocation growth fund. See page 5 for Fund returns with sales charges.

During the reporting period, how was the Fund materially affected by investments in derivatives?

During the reporting period, Epoch did not use any derivatives. MacKay Shields, however, used S&P 500^® equity futures to raise the Fund’s overall equity sensitivity and U.S. Treasury note futures to lower the Fund’s interest-rate sensitivity. These positions in derivatives had a positive impact on the Fund’s overall performance during the reporting period.

What factors affected the relative performance of the equity portion of the Fund during the reporting period?

The equity portion of the Fund had strong absolute returns for the reporting period but trailed the MSCI World Index in a fast-rising equity market. The diversified group of companies in the equity portion of the Fund continued to achieve growth in free cash flow and provide shareholders with positive returns from cash dividends, share buybacks and debt reduction. The largest relative contributions came from the materials, information technology and industrials sectors. (Contributions take weightings and total returns into account.) In the equity portion of the Fund, poor stock selection in telecommunication services and consumer discretionary hurt relative performance, as did an overweight position in the utilities sector, which had a lower return than the MSCI World Index. From a country perspective, Germany and France contributed positively to relative results, while the United Kingdom and the United States detracted.

In the equity portion of the Fund, which sectors were the strongest contributors to the Fund’s relative performance and which sectors detracted the most?

Returns in the equity portion of the Fund are primarily the result of finding companies that can grow their free cash flow and are committed to returning a significant portion of that cash to shareholders. The vast majority of stocks in the equity portion of the Fund were able to achieve this and increase their dividends during the reporting period. We believe understanding this “slow and steady” approach is more helpful to understanding returns than parsing returns in terms of sector weights and relative returns within those sectors. That said, commentary may provide additional insight if it is viewed in the proper context for this strategy.

A lower weighting than the MSCI World Index in the poorly performing materials sector was the largest positive contributor to relative performance. An underweight position compared to the MSCI World Index and favorable stock selection in information technology also helped relative results, as did effective stock selection in industrials.

Stock selection in consumer discretionary and telecommunication services was a drag on relative results in the equity portion of the Fund. An overweight position relative to the MSCI World Index in the utilities sector also detracted, as did the cash position in the equity portion of the Fund. Utilities underperformed the market as a whole, and cash hurt results in a fast-rising equity market.

During the reporting period, which individual stocks made the strongest contributions to absolute performance in the equity portion of the Fund and which stocks detracted the most?

Among the stocks with the strongest positive contributions to absolute performance in the equity portion of the Fund were luxury automobile and truck manufacturer Daimler, U.S. prime defense company Lockheed Martin and French road construction and toll operator Vinci. Daimler benefited as investors anticipated increased sales of the new model cycle and associated earnings momentum. Lockheed Martin performed because of the company’s competitive position and high dividend yield compared to its domestic peers. Vinci increased operating cash flow from toll roads and from better-than-expected summer traffic trends.

1. See footnote on page 6 for more information on this index.

2. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

During the reporting period, the most significant detractors from absolute performance in the equity portion of the Fund were U.S.-based global mail-stream technology company Pitney Bowes, U.K. and North America bus and rail operator FirstGroup, and U.S. telecommunications company CenturyLink. Pitney Bowes was hurt by the prolonged sluggish macroeconomic environment. As a result, management laid out a plan to increase the importance of some of the adjacent businesses that offer long-term growth potential—e-commerce and digital mailing solutions. FirstGroup’s management announced a rights offering and a discontinuation of its dividend in May 2013. The dilution from the rights offer and the change in capital allocation substantially reduced the value of the company’s shares. CenturyLink is the third-largest telecommunications company in the United States, providing data, voice and hosted information technology solutions. The company underperformed the MSCI World Index during the reporting period when management lowered the company’s 2013 guidance. The lowering was due to slower-than-anticipated growth in CenturyLink’s strategic services business segment and persistent declines in the company’s legacy business segment.

Did the equity portion of the Fund make any significant purchases or sales during the reporting period?

The equity portion of the Fund made several significant purchases during the reporting period. Among them were positions in consumer electronics and entertainment company Apple, drug company AbbVie, public utility holding company Ameren, and mail delivery and logistic services company Deutsche Post. All of these stocks were added because of their favorable shareholder-yield attributes.

Positions eliminated from the equity portion of the Fund during the reporting period included Pitney Bowes and FirstGroup, both of which were major detractors. We sold the position in Pitney Bowes when the sustainability of its dividend came into question. After the sale, the company significantly reduced its dividend. We sold the position in FirstGroup after the company announced a rights offering and a discontinuation of its dividend.

How did the Fund’s equity sector weightings change during the reporting period?

Sector weightings in the equity portion of the Fund are generally a result of our bottom-up stock-selection process. During the reporting period, the equity portion of the Fund reduced its exposure to consumer staples, consumer discretionary and

information technology. The largest increases in sector weightings in the equity portion of the Fund were in utilities, materials and financials.

How was the equity portion of the Fund positioned at the end of the reporting period?

We continue to seek attractive returns for the equity portion of the Fund through a diversified group of companies focused on generating significant free cash flow and returning it to shareholders through a combination of dividends, share repurchases and debt reduction. This stock-by-stock process often results in the equity portion of the Fund having a different composition than the MSCI World Index. The benchmark index contains many companies that either lack free cash flow or use their free cash flow primarily to reinvest and make acquisitions. The composition of the equity portion of the Fund may also differ in terms of sector weightings.

As of October 31, 2013, we had lowered absolute exposure to consumer staples, consumer discretionary and information technology in the equity portion of the Fund and had increased its exposure in several sectors, most notably utilities, financials and materials.

What factors affected relative performance in the fixed-income portion of the Fund during the reporting period?

The fixed-income portion of the Fund outperformed the Barclays U.S. Aggregate Bond Index during the reporting period, primarily because of an overweight position in spread product,³ specifically high-yield corporate bonds. In light of a continuing low interest-rate environment, investors continued to hunger for yield and return, moving them to invest in riskier asset classes. High-yield corporate bonds and equities benefited from this demand. Stocks generally rose, and companies did not disappoint with their earnings. During the reporting period, the durability of corporate earnings had a positive influence high-yield corporate-bond performance across the ratings spectrum.

Lower-risk assets, such as U.S. Treasury securities and agency mortgages, underperformed spread product during the reporting period. Fortunately, the fixed-income portion of the Fund had underweight positions in these asset classes, which helped performance relative to the Barclays U.S. Aggregate Bond Index. Additionally, we used U.S. Treasury futures to further reduce the duration⁴ of the fixed-income portion of the Fund relative to that of the Index. The shorter duration helped relative performance as interest rates rose during the reporting period.

3. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time. The term “spread product” may refer to securities or asset classes that typically trade at a spread to comparable U.S. Treasury securities.

4. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity.

10 MainStay Income Builder Fund

During the reporting period, what was the duration strategy of the fixed-income portion of the Fund?

The duration of the fixed-income portion of the Fund was shorter than that of the Barclays U.S. Aggregate Bond Index, in large part because of an overweight position in high-yield corporate bonds. These bonds tend to have shorter durations than investment-grade corporate bonds. They also tend to have a low correlation to U.S. Treasury securities, so they have a lower sensitivity to interest rates but are not immune to interest-rate changes. To further insulate the fixed-income portion of the Fund from a potential rise in interest rates, we increased its exposure to a short position in U.S. Treasury futures to reduce a duration that was already shorter than that of the Index. Exposure to lower-duration high-yield corporate bonds had a positive impact on performance in the fixed-income portion of the Fund, while exposure to U.S. Treasury futures had a minimal impact on performance during the reporting period.

What specific factors, risks or market forces prompted significant decisions in the fixed-income portion of the Fund during the reporting period?

There were many macro factors to consider during the reporting period, including the Federal Reserve’s suggestion that it might taper its bond purchases, and the fixed-income portion of the Fund experienced some periods of volatility. Nevertheless, we did not make any material changes to the positioning of the fixed-income portion of the Fund. For some time, we have judged the Federal Reserve’s accommodative monetary policy, along with improving economic data, to be a positive for spread products such as high-yield corporate bonds. In addition, improving profitability signaled that many corporations were doing more with less: less leverage, less short-term debt and smaller funding gaps. In our opinion, improving credit fundamentals would support narrower spreads—or less compensation for assuming credit risk—alongside a favorable balance of supply and demand for corporate debt. For these reasons, we maintained a risk profile that was higher than that of the Barclays U.S. Aggregate Bond Index, specifically through an overweight position relative to the Index in high-yield corporate bonds.

During the reporting period, which market segments were the strongest contributors to performance in the fixed-income portion of the Fund and which market segments were particularly weak?

In the fixed-income portion of the Fund, an overweight position in high-yield corporate bonds was the driving force behind outperformance of the Barclays U.S. Aggregate Bond Index. Within the high-yield corporate bond sector, holdings in industries that are more cyclical—such as financials, gaming, home

builders, building materials and steel—were among strongest performers in the fixed-income portion of the Fund. To a lesser degree, positions in convertible bonds and bank loans were also positive contributors to performance relative to the Barclays U.S. Aggregate Bond Index. Though a position in investment-grade credit performed well relative to the Barclays U.S. Aggregate Bond Index, investment-grade corporate bonds underperformed high-yield corporate bonds during the reporting period.

With an overweight position in high-yield corporate bonds came underweight positions in U.S. Treasury securities and agency mortgages. These underweight sector positions contributed positively to the fixed-income portion of the Fund’s relative performance, as U.S. Treasury securities and agency mortgages posted negative absolute returns during the reporting period.

Did the fixed-income portion of the Fund make any significant purchases or sales during the reporting period?

While there were no significant changes in overall positioning of the fixed-income portion of the Fund during the reporting period, we added some positions and eliminated others. The fixed-income portion of the Fund purchased bonds of U.S. Airways Group, Valeant Pharmaceuticals International and Sprint. We purchased bonds of U.S. Airways Group because we believed the fundamental landscape for airlines had improved. With consolidation and more revenue from ancillary services, airlines have been able to book relatively solid results. The Valeant Pharmaceuticals International bonds were issued to fund the company’s acquisition of Bausch & Lomb. The Sprint bonds were issued to fund a comprehensive capital-expenditure program, as the telecommunications company was being acquired by Softbank, an investment-grade company. We believed that the bonds from Valeant Pharmaceuticals International and Sprint were issued at attractive levels.

During the reporting period, the fixed-income portion of the Fund sold positions in telecommunications equipment company Lucent Technologies and premium office products manufacturer Acco Brands. Lucent was sold when restructuring news sent the price of the bonds higher and it reached our target price. Acco’s products are sold through the big-box office supply channel as well as specialty stores. The demand for office products had been lagging, and we believed that the consolidation of the buyers of Acco’s products (OfficeMax was acquired by Office Depot) will result in Acco’s margins being squeezed, so we sold the bonds.

mainstayinvestments.com 11

How did sector weightings change in the fixed-income portion of the Fund’s during the reporting period?

Aside from the purchases and sales already mentioned, we made no significant changes to sector weightings relative to the Barclays U.S. Aggregate Bond Index in the fixed-income portion of the Fund. Instead, we maintained the positioning of the fixed-income portion of the Fund as we sought to take advantage of a market where we believed credit spreads would continue to tighten. Any modest changes in sector weightings were driven by individual security selection rather than sector rotation.

How was the fixed-income portion of the Fund positioned at the end of the reporting period?

As of October 31, 2013, the fixed-income portion of the Fund maintained its emphasis on spread product, with high-yield corporate bonds remaining the most substantially overweight sector relative to the Barclays U.S. Aggregate Bond Index in the fixed-income portion of the Fund. As of the same date, the fixed-income portion of the Fund held underweight positions relative to the Index in more rate-sensitive sectors, such as U.S. Treasury securities and agency mortgage-backed securities. As of October 31, 2013, the fixed-income portion of the Fund had a shorter duration than the Barclays U.S. Aggregate Bond Index.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

12 MainStay Income Builder Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Long-Term Bonds 41.3%† Asset-Backed Securities 1.3%
Home Equity 1.2%
Ameriquest Mortgage Securities, Inc. Series 2003-8, Class AF5 5.14%, due 10/25/33 (a)(b)	$	97,536	$	96,906
Carrington Mortgage Loan Trust Series 2006-NC4, Class A5 0.23%, due 10/25/36 (b)(c)		430,967		361,456
Chase Funding Mortgage Loan Asset-Backed Certificates Series 2002-2, Class 1A5 6.333%, due 4/25/32 (a)(b)		229,110		234,111
CIT Group Home Equity Loan Trust Series 2003-1, Class A4 3.93%, due 3/20/32 (a)(b)		53,001		53,969
Citifinancial Mortgage Securities, Inc. Series 2003-3, Class AF5 5.053%, due 8/25/33 (a)(b)		184,897		183,517
Citigroup Mortgage Loan Trust Series 2007-AHL2, Class A3A 0.24%, due 5/25/37 (b)(c)		1,138,455		862,628
Countrywide Asset-Backed Certificates Series 2003-5, Class AF5 5.788%, due 2/25/34 (a)(b)		485,496		502,787
Equity One ABS, Inc. Series 2003-4, Class AF6 4.833%, due 10/25/34 (a)(b)		237,294		240,639
Series 2003-3, Class AF4 5.495%, due 12/25/33 (a)(b)		366,712		354,044
GSAA Home Equity Trust Series 2006-14, Class A1 0.22%, due 9/25/36 (b)(c)		6,486,972		3,152,313
HSI Asset Securitization Corp. Trust Series 2007-NC1, Class A1 0.27%, due 4/25/37 (b)(c)		306,602		274,180
JP Morgan Mortgage Acquisition Corp. Series 2007-HE1, Class AF1 0.27%, due 3/25/47 (b)(c)		972,701		690,034
Master Asset Backed Securities Trust Series 2006-HE4, Class A1 0.22%, due 11/25/36 (b)(c)		845,296		351,472
Merrill Lynch Mortgage Investors Trust Series 2007-MLN1, Class A2A 0.28%, due 3/25/37 (b)(c)		3,362,119		2,281,605
RAMP Trust
Series 2003-RZ5, Class A7 4.97%, due 9/25/33 (a)(b)		110,676		114,652

	Principal Amount		Value
Home Equity (continued)
RAMP Trust (continued)
Series 2003-RS7, Class AI6 5.34%, due 8/25/33 (b)(c)	$	59,972	$	60,150
RASC Trust Series 2002-KS2, Class AI6 6.228%, due 4/25/32 (b)(c)		84,176		86,325
Saxon Asset Securities Trust Series 2003-1, Class AF5 5.455%, due 6/25/33 (a)(b)		96,707		101,325
Soundview Home Equity Loan Trust Series 2006-EQ2, Class A2 0.28%, due 1/25/37 (b)(c)		1,385,767		853,578
Specialty Underwriting & Residential Finance Trust Series 2006-BC4, Class A2B 0.28%, due 9/25/37 (b)(c)		966,941		515,088
Terwin Mortgage Trust Series 2005-14HE, Class AF2 4.849%, due 8/25/36 (a)(b)		111,148		115,054
				11,485,833
Student Loans 0.1%
Keycorp Student Loan Trust Series 2000-A, Class A2 0.582%, due 5/25/29 (c)		986,966		906,820
Total Asset-Backed Securities (Cost $13,871,453)				12,392,653
Corporate Bonds 35.1%
Aerospace & Defense 0.4%
B/E Aerospace, Inc.
5.25%, due 4/1/22		540,000		554,850
6.875%, due 10/1/20		1,805,000		1,990,012
TransDigm, Inc. 7.50%, due 7/15/21		1,600,000		1,744,000
				4,288,862
Agriculture 0.0%‡
Lorillard Tobacco Co. 8.125%, due 6/23/19		255,000		314,648
Airlines 0.9%
Continental Airlines, Inc.
Series A 7.25%, due 5/10/21		1,898,529		2,164,322
7.875%, due 1/2/20		1,304,839		1,389,654
U.S. Airways Group, Inc. Series A 6.25%, due 10/22/24		1,257,906		1,333,380

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings or issuers held, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Airlines (continued)
U.S. Airways, Inc. Class A Series 2012-1 Pass Through Trust 5.90%, due 4/1/26	$	2,357,941	$	2,475,838
UAL 2009-1 Pass-Through Trust 10.40%, due 5/1/18		912,145		1,030,724
				8,393,918
Auto Manufacturers 0.7%
Chrysler Group LLC / CG Co-Issuer, Inc. 8.25%, due 6/15/21		2,100,000		2,375,625
Ford Motor Co.
6.625%, due 10/1/28		1,500,000		1,720,848
7.45%, due 7/16/31		450,000		561,581
8.90%, due 1/15/32		215,000		277,872
Navistar International Corp. 8.25%, due 11/1/21		1,525,000		1,557,406
				6,493,332
Auto Parts & Equipment 0.5%
Continental Rubber of America Corp. 4.50%, due 9/15/19 (d)		2,200,000		2,307,140
Goodyear Tire & Rubber Co. (The)
6.50%, due 3/1/21		625,000		660,937
8.25%, due 8/15/20		1,200,000		1,356,000
				4,324,077
Banks 3.2%
AgriBank FCB 9.125%, due 7/15/19		300,000		391,456
Banco Santander Mexico S.A. 4.125%, due 11/9/22 (d)		2,260,000		2,161,125
Bank of America Corp.
5.625%, due 7/1/20		1,200,000		1,375,211
6.50%, due 8/1/16		135,000		153,370
7.625%, due 6/1/19		1,015,000		1,265,365
8.00%, due 12/29/49 (c)		1,500,000		1,661,250
Bank of America NA 6.00%, due 10/15/36		990,000		1,141,080
BBVA Bancomer S.A. 6.75%, due 9/30/22 (d)		1,985,000		2,153,725
CIT Group, Inc.
4.25%, due 8/15/17		100,000		104,875
5.00%, due 5/15/17		1,745,000		1,875,875
Citigroup, Inc.
6.875%, due 6/1/25		1,715,000		2,032,573
8.50%, due 5/22/19		85,000		109,980
Discover Bank 8.70%, due 11/18/19		1,064,000		1,357,953
Goldman Sachs Group, Inc. (The) 3.625%, due 1/22/23		3,045,000		2,970,595

	Principal Amount		Value
Banks (continued)
HSBC Holdings PLC 5.10%, due 4/5/21	$	115,000	$	128,090
JPMorgan Chase & Co. 7.90%, due 4/29/49 (c)		3,300,000		3,638,250
LBG Capital No.1 PLC 8.00%, due 12/29/49 (c)(d)		1,550,000		1,646,875
Mellon Capital III 6.369%, due 9/5/66 (c)	£	1,950,000		3,117,249
Morgan Stanley 4.875%, due 11/1/22	$	1,125,000		1,158,141
Royal Bank of Scotland Group PLC 6.40%, due 10/21/19		800,000		928,457
Wells Fargo & Co. 7.98%, due 3/29/49 (c)		1,200,000		1,353,000
				30,724,495
Beverages 0.1%
Embotelladora Andina S.A. 5.00%, due 10/1/23 (d)		1,350,000		1,387,831
Building Materials 0.7%
USG Corp.
6.30%, due 11/15/16		4,695,000		5,023,650
9.75%, due 1/15/18		1,330,000		1,562,750
				6,586,400
Chemicals 0.9%
Dow Chemical Co. (The)
4.125%, due 11/15/21		1,605,000		1,659,194
8.55%, due 5/15/19		225,000		291,216
Hexion U.S. Finance Corp. 6.625%, due 4/15/20		1,735,000		1,761,025
Huntsman International LLC 8.625%, due 3/15/21		2,900,000		3,255,250
Rockwood Specialties Group, Inc. 4.625%, due 10/15/20		1,525,000		1,566,938
				8,533,623
Coal 0.1%
Alpha Natural Resources, Inc.
6.00%, due 6/1/19		1,100,000		946,000
6.25%, due 6/1/21		110,000		93,225
				1,039,225
Commercial Services 0.9%
Avis Budget Car Rental LLC / Avis Budget Finance, Inc. 8.25%, due 1/15/19		2,640,000		2,877,600
Hertz Corp. (The)
5.875%, due 10/15/20		450,000		473,625
7.375%, due 1/15/21		2,700,000		2,997,000

14 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Commercial Services (continued)
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares) 9.75%, (e)(f)(g)(k)	$	110,000	$	1,617
United Rentals North America, Inc. 8.375%, due 9/15/20		1,625,000		1,815,937
				8,165,779
Computers 0.5%
NCR Corp. 5.00%, due 7/15/22		2,730,000		2,689,050
SunGard Data Systems, Inc.
6.625%, due 11/1/19		1,100,000		1,149,500
7.375%, due 11/15/18		700,000		742,000
7.625%, due 11/15/20		200,000		217,750
				4,798,300
Cosmetics & Personal Care 0.2%
Albea Beauty Holdings S.A. 8.375%, due 11/1/19 (d)		1,850,000		1,947,125
Diversified Financial Services 0.5%
Alterra Finance LLC 6.25%, due 9/30/20		200,000		227,129
GE Capital Trust II 5.50%, due 9/15/67 (c)	€	2,240,000		3,197,137
General Electric Capital Corp. Series Reg S 6.50%, due 9/15/67 (c)	£	760,000		1,302,666
				4,726,932
Electric 0.6%
Abu Dhabi National Energy Co. 3.625%, due 1/12/23 (d)	$	2,200,000		2,068,000
Great Plains Energy, Inc. 5.292%, due 6/15/22 (a)		1,130,000		1,233,416
Puget Energy, Inc. 5.625%, due 7/15/22		815,000		879,207
Wisconsin Energy Corp. 6.25%, due 5/15/67 (c)		1,554,717		1,593,585
				5,774,208
Engineering & Construction 0.2%
MasTec, Inc. 4.875%, due 3/15/23		1,760,000		1,678,600
Entertainment 0.2%
Mohegan Tribal Gaming Authority 9.75%, due 9/1/21 (d)		1,935,000		2,084,963

	Principal Amount		Value
Finance—Auto Loans 0.3%
Banque PSA Finance S.A. 5.75%, due 4/4/21 (d)	$	1,800,000	$	1,827,540
Ford Motor Credit Co. LLC 5.875%, due 8/2/21		350,000		400,986
General Motors Financial Co., Inc. 3.25%, due 5/15/18 (d)		325,000		323,781
				2,552,307
Finance—Consumer Loans 0.7%
HSBC Finance Capital Trust IX 5.911%, due 11/30/35 (c)		2,400,000		2,476,512
SLM Corp. 6.25%, due 1/25/16		1,700,000		1,850,875
Springleaf Finance Corp. 7.75%, due 10/1/21 (d)		1,765,000		1,897,375
				6,224,762
Finance—Credit Card 0.3%
American Express Co. 6.80%, due 9/1/66 (c)		1,600,000		1,708,000
Discover Financial Services 3.85%, due 11/21/22		1,491,000		1,446,218
				3,154,218
Finance—Investment Banker/Broker 0.2%
Jefferies Group LLC
5.125%, due 1/20/23		722,000		731,928
6.45%, due 6/8/27		1,000,000		1,042,670
				1,774,598
Finance—Mortgage Loan/Banker 0.1%
Countrywide Financial Corp. 6.25%, due 5/15/16		1,200,000		1,329,289
Finance—Other Services 0.2%
Icahn Enterprises, L.P. / Icahn Enterprises Finance Corp. 8.00%, due 1/15/18		2,085,000		2,186,644
Food 1.4%
Grupo Bimbo S.A.B. de C.V. 4.50%, due 1/25/22 (d)		1,640,000		1,674,583
JBS Finance II, Ltd. 8.25%, due 1/29/18 (d)		675,000		707,063
JBS USA LLC / JBS USA Finance, Inc. 8.25%, due 2/1/20 (d)		480,000		514,800
Kerry Group Financial Services 3.20%, due 4/9/23 (d)		2,899,000		2,708,875
Minerva Luxembourg S.A. 7.75%, due 1/31/23 (d)		2,500,000		2,425,000

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Food (continued)
Post Holdings, Inc. 7.375%, due 2/15/22 (d)	$	2,110,000	$	2,249,787
Smithfield Foods, Inc.
6.625%, due 8/15/22		575,000		605,188
7.75%, due 7/1/17		925,000		1,075,312
Virgolino de Oliveira Finance, Ltd. 11.75%, due 2/9/22 (d)		1,700,000		1,360,000
				13,320,608
Forest Products & Paper 0.2%
Boise Paper Holdings LLC / Boise Co-Issuer Co. 8.00%, due 4/1/20		1,400,000		1,586,200
Health Care—Products 0.4%
Alere, Inc. 7.25%, due 7/1/18		1,850,000		2,030,375
Kinetic Concepts, Inc. / KCI U.S.A., Inc. 10.50%, due 11/1/18		1,300,000		1,465,750
				3,496,125
Health Care—Services 0.7%
CHS / Community Health Systems, Inc. 5.125%, due 8/15/18		1,775,000		1,846,000
CIGNA Corp. 4.375%, due 12/15/20		270,000		287,492
Fresenius Medical Care U.S. Finance II, Inc. 5.875%, due 1/31/22 (d)		1,985,000		2,104,100
HCA, Inc. 8.00%, due 10/1/18		1,825,000		2,144,375
				6,381,967
Holding Company—Diversified 0.0%‡
Hutchison Whampoa International, Ltd. 7.625%, due 4/9/19 (d)		215,000		261,800
Home Builders 1.5%
Beazer Homes USA, Inc. 7.25%, due 2/1/23		1,875,000		1,809,375
K Hovnanian Enterprises, Inc. 7.25%, due 10/15/20 (d)		5,435,000		5,788,275
MDC Holdings, Inc. 5.625%, due 2/1/20		2,750,000		2,866,372
Shea Homes, L.P. / Shea Homes Funding Corp. 8.625%, due 5/15/19		1,575,000		1,744,312
Standard Pacific Corp. 8.375%, due 5/15/18		2,000,000		2,320,000
				14,528,334

	Principal Amount		Value
Household Products & Wares 0.0%‡
Reynolds Group Issuer, Inc. 9.875%, due 8/15/19	$	260,000	$	287,625
Insurance 3.1%
Allstate Corp. (The) 6.50%, due 5/15/67 (c)		3,790,000		3,989,354
American International Group, Inc.
4.875%, due 3/15/67 (c)	€	1,300,000		1,730,214
Series A2 5.75%, due 3/15/67 (c)	£	1,100,000		1,723,173
Chubb Corp. (The) 6.375%, due 3/29/67 (c)	$	1,660,000		1,809,400
Hartford Financial Services Group, Inc. 6.10%, due 10/1/41		4,100,000		4,874,605
Hartford Life, Inc. 7.65%, due 6/15/27		355,000		435,403
Liberty Mutual Group, Inc.
4.25%, due 6/15/23		250,000		250,015
7.80%, due 3/7/87 (d)		1,760,000		1,918,400
10.75%, due 6/15/88 (c)(d)		750,000		1,140,000
Oil Insurance, Ltd. 3.23%, due 12/29/49 (c)(d)		1,320,000		1,201,683
Pacific Life Insurance Co. 7.90%, due 12/30/23 (d)		2,575,000		3,332,583
Progressive Corp. (The) 6.70%, due 6/15/67 (c)		3,700,000		3,996,000
Swiss Re Capital I, L.P. 6.854%, due 5/29/49 (c)(d)		1,350,000		1,437,750
XL Group PLC 6.50%, due 12/29/49 (c)		2,120,000		2,079,720
				29,918,300
Investment Company 0.3%
CDP Financial, Inc. 4.40%, due 11/25/19 (d)		2,300,000		2,576,994
Iron & Steel 0.6%
AK Steel Corp. 8.75%, due 12/1/18		1,900,000		2,090,000
Cliffs Natural Resources, Inc.
3.95%, due 1/15/18		745,000		754,429
5.90%, due 3/15/20		1,085,000		1,133,768
Vale S.A. 5.625%, due 9/11/42		1,545,000		1,394,466
				5,372,663
Lodging 1.7%
Caesars Entertainment Operating Co., Inc. 9.00%, due 2/15/20		2,705,000		2,535,937
¨MGM Resorts International
6.75%, due 10/1/20		8,531,000		9,298,790
8.625%, due 2/1/19		80,000		93,900

16 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Corporate Bonds (continued)
Lodging (continued)
Starwood Hotels & Resorts Worldwide, Inc.
6.75%, due 5/15/18	$	265,000	$	313,665
7.15%, due 12/1/19		1,900,000		2,318,061
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp. 7.75%, due 8/15/20		1,500,000		1,691,250
				16,251,603
Media 0.7%
CCO Holdings LLC / CCO Holdings Capital Corp. 5.75%, due 1/15/24		1,555,000		1,473,362
Clear Channel Communications, Inc.
5.50%, due 12/15/16		335,000		287,263
6.875%, due 6/15/18		2,070,000		1,749,150
DISH DBS Corp. 7.125%, due 2/1/16		1,400,000		1,547,000
NBC Universal Media LLC 5.15%, due 4/30/20		160,000		182,942
Time Warner Cable, Inc.
8.25%, due 2/14/14		340,000		346,871
8.75%, due 2/14/19		800,000		953,392
Time Warner, Inc. 7.70%, due 5/1/32		300,000		383,525
				6,923,505
Mining 0.8%
Aleris International, Inc. 7.875%, due 11/1/20		1,900,000		2,014,000
Anglo American Capital PLC 9.375%, due 4/8/19 (d)		250,000		315,899
FMG Resources August 2006 Pty., Ltd. 8.25%, due 11/1/19 (d)		2,000,000		2,220,000
Rio Tinto Finance USA, Ltd. 9.00%, due 5/1/19		1,300,000		1,702,729
Vedanta Resources PLC 8.25%, due 6/7/21 (d)		1,690,000		1,740,700
				7,993,328
Miscellaneous—Manufacturing 0.4%
Amsted Industries, Inc. 8.125%, due 3/15/18 (d)		3,500,000		3,705,625
Siemens Financieringsmaatschappij N.V. 6.125%, due 8/17/26 (d)		300,000		358,368
				4,063,993
Office & Business Equipment 0.0%‡
Xerox Corp. 4.25%, due 2/15/15		300,000		312,512

	Principal Amount		Value
Oil & Gas 3.2%
Berry Petroleum Co. 6.375%, due 9/15/22	$	1,490,000	$	1,534,700
Chesapeake Energy Corp. 6.625%, due 8/15/20		2,350,000		2,649,625
Denbury Resources, Inc. 6.375%, due 8/15/21		485,000		517,738
ENI S.p.A. 4.15%, due 10/1/20 (d)		1,825,000		1,883,582
EP Energy LLC / EP Energy Finance, Inc. 9.375%, due 5/1/20		1,850,000		2,136,750
Gazprom OAO Via Gaz Capital S.A. 4.95%, due 7/19/22 (d)		1,460,000		1,447,225
Linn Energy LLC / Linn Energy Finance Corp. 8.625%, due 4/15/20		6,190,000		6,592,350
Petrobras Global Finance B.V. 4.375%, due 5/20/23		2,610,000		2,411,885
Plains Exploration & Production Co. 6.125%, due 6/15/19		1,700,000		1,858,324
Precision Drilling Corp.
6.50%, due 12/15/21		1,495,000		1,592,175
6.625%, due 11/15/20		635,000		676,275
Rosneft Finance S.A. 7.25%, due 2/2/20 (d)		1,270,000		1,450,975
Samson Investment Co. 10.25%, due 2/15/20 (d)		1,820,000		1,965,600
SM Energy Co. 5.00%, due 1/15/24 (d)		1,970,000		1,925,675
Swift Energy Co. 7.875%, due 3/1/22		1,875,000		1,879,688
				30,522,567
Oil & Gas Services 0.6%
Basic Energy Services, Inc. 7.75%, due 2/15/19		2,520,000		2,614,500
Hornbeck Offshore Services, Inc.
5.00%, due 3/1/21		1,300,000		1,277,250
5.875%, due 4/1/20		1,700,000		1,746,750
				5,638,500
Pharmaceuticals 0.4%
Perrigo Co. 2.95%, due 5/15/23		2,505,000		2,449,204
Valeant Pharmaceuticals International 7.50%, due 7/15/21 (d)		1,500,000		1,665,000
				4,114,204
Pipelines 2.4%
Access Midstream Partners, L.P. / ACMP Finance Corp. 4.875%, due 5/15/23		2,745,000		2,731,275
Atlas Pipeline Partners, L.P. / Atlas Pipeline Finance Corp. 6.625%, due 10/1/20		1,850,000		1,942,500

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Pipelines (continued)
Energy Transfer Partners, L.P.
4.65%, due 6/1/21	$	1,455,000	$	1,523,650
7.60%, due 2/1/24 (d)		650,000		802,196
Kinder Morgan, Inc. 5.00%, due 2/15/21		2,465,000		2,476,117
MarkWest Energy Partners, L.P. / MarkWest Energy Finance Corp.
5.50%, due 2/15/23		1,975,000		2,044,125
6.25%, due 6/15/22		91,000		98,735
ONEOK, Inc. 6.00%, due 6/15/35		350,000		324,600
Regency Energy Partners, L.P. / Regency Energy Finance Corp. 6.875%, due 12/1/18		1,265,000		1,366,200
Spectra Energy Partners, L.P. 4.75%, due 3/15/24		1,740,000		1,829,440
Targa Resources Partners, L.P. / Targa Resources Partners Finance Corp.
4.25%, due 11/15/23 (d)		2,165,000		2,024,275
5.25%, due 5/1/23		4,240,000		4,240,000
Williams Cos., Inc. (The) 3.70%, due 1/15/23		1,900,000		1,746,890
				23,150,003
Real Estate Investment Trusts 0.0%‡
Health Care REIT, Inc. 4.70%, due 9/15/17		290,000		317,354
Retail 0.7%
AmeriGas Finance LLC / AmeriGas Finance Corp.
6.75%, due 5/20/20		740,000		806,600
7.00%, due 5/20/22		1,400,000		1,512,000
Brinker International, Inc. 2.60%, due 5/15/18		1,885,000		1,885,714
CVS Caremark Corp. 5.789%, due 1/10/26 (d)(f)		240,342		264,033
Macy’s Retail Holdings, Inc. 3.875%, due 1/15/22		1,750,000		1,747,694
Wal-Mart Stores, Inc. 6.75%, due 10/15/23		314,000		400,189
				6,616,230
Semiconductors 0.3%
Freescale Semiconductor, Inc.
5.00%, due 5/15/21 (d)		400,000		389,000
6.00%, due 1/15/22 (d)		1,000,000		1,011,250
9.25%, due 4/15/18 (d)		1,025,000		1,108,281
				2,508,531

	Principal Amount		Value
Software 0.6%
Fidelity National Information Services, Inc. 7.875%, due 7/15/20	$	1,485,000	$	1,635,754
First Data Corp.
7.375%, due 6/15/19 (d)		2,535,000		2,728,294
8.875%, due 8/15/20 (d)		1,635,000		1,823,025
				6,187,073
Telecommunications 2.1%
CC Holdings GS V LLC / Crown Castle GS III Corp. 2.381%, due 12/15/17		2,140,000		2,118,433
CommScope, Inc. 8.25%, due 1/15/19 (d)		3,485,000		3,824,787
GTP Towers Issuer LLC 8.112%, due 2/15/15 (d)		1,500,000		1,546,639
Hughes Satellite Systems Corp. 7.625%, due 6/15/21		1,200,000		1,314,000
SBA Tower Trust 4.254%, due 4/15/40 (d)		2,650,000		2,698,302
Sprint Communications, Inc. 6.00%, due 11/15/22		1,900,000		1,871,500
Sprint Corp. 7.25%, due 9/15/21 (d)		1,300,000		1,400,750
Telefonica Emisiones SAU
4.57%, due 4/27/23		2,552,000		2,543,566
5.462%, due 2/16/21		395,000		418,508
¨Verizon Communications, Inc. 5.15%, due 9/15/23		2,325,000		2,522,597
				20,259,082
Transportation 0.6%
CHC Helicopter S.A. 9.25%, due 10/15/20		2,130,000		2,300,400
Hapag-Lloyd A.G. 9.75%, due 10/15/17 (d)		375,000		392,813
PHI, Inc. 8.625%, due 10/15/18		1,475,000		1,574,562
Ukraine Railways via Shortline PLC 9.50%, due 5/21/18 (d)		1,750,000		1,487,500
				5,755,275
Total Corporate Bonds (Cost $322,035,157)				336,828,512
Foreign Bonds 0.9%
Banks 0.4%
Barclays Bank PLC Series Reg S 10.00%, due 5/21/21	£	1,186,000		2,527,572
Canada Square Operations Ltd. 7.50%, due 12/31/49 (c)		1,035,000		1,642,923
				4,170,495

18 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Foreign Bonds (continued)
Diversified Financial Services 0.3%
Ageas Hybrid Financing S.A. 5.125%, due 6/29/49 (c)	€	1,700,000	$	2,348,567
Packaging & Containers 0.2%
Rexam PLC 6.75%, due 6/29/67 (c)		1,250,000		1,790,532
Total Foreign Bonds (Cost $7,336,321)				8,309,594
Foreign Government Bond 0.1%
Portugal 0.1%
Portugal Obrigacoes do Tesouro OT Series Reg S 4.95%, due 10/25/23		1,000,000		1,233,882
Total Foreign Government Bond (Cost $1,152,578)				1,233,882
Loan Assignments & Participations 1.4% (h)
Airlines 0.2%
U.S. Airways Group, Inc. Term Loan B1 4.25%, due 5/23/19	$	2,000,000		2,000,714
Auto Parts & Equipment 0.3%
Allison Transmission, Inc. Term Loan B2 3.18%, due 8/7/17		2,669,156		2,675,828
Entertainment 0.3%
Scientific Games International, Inc. New Term Loan B 4.25%, due 10/18/20		2,500,000		2,500,893
Media 0.3%
Clear Channel Communications, Inc. Term Loan B 3.818%, due 1/29/16		497,303		482,295
Term Loan D 6.918%, due 1/30/19		1,466,831		1,401,924
Virgin Media Investment Holdings, Ltd. USD Term Loan B 3.50%, due 6/8/20		1,500,000		1,498,542
				3,382,761
Mining 0.1%
FMG Resources August 2006 Pty., Ltd. Term Loan 5.25%, due 10/18/17		1,089,000		1,090,733

	Principal Amount		Value
Pharmaceuticals 0.2%
Valeant Pharmaceuticals International, Inc. Term Loan E 4.50%, due 8/5/20	$	1,736,875	$	1,758,152
Total Loan Assignments & Participations (Cost $13,272,233)				13,409,081
Mortgage-Backed Securities 1.0%
Commercial Mortgage Loans (Collateralized Mortgage Obligations) 1.0%
Banc of America Commercial Mortgage Trust Series 2007-2, Class A4 5.623%, due 4/10/49 (i)		400,000		448,104
Bayview Commercial Asset Trust Series 2006-4A, Class A1 0.40%, due 12/25/36 (c)(d)(e)		259,783		219,573
Bear Stearns Commercial Mortgage Securities Trust
Series 2006-PW12, Class AAB 5.686%, due 9/11/38 (i)		90,463		91,182
Series 2007-PW16, Class A4 5.708%, due 6/11/40 (i)		400,000		451,748
Citigroup Commercial Mortgage Trust Series 2008-C7, Class A4 6.132%, due 12/10/49 (i)		200,000		228,817
Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2005-CD1, Class AM 5.219%, due 7/15/44 (i)		1,000,000		1,074,530
Commercial Mortgage Pass-Through Certificates Series 2006-C8, Class AAB 5.291%, due 12/10/46		165,729		168,090
Four Times Square Trust Series 2006-4TS, Class A 5.401%, due 12/13/28 (d)		860,000		970,517
JP Morgan Chase Commercial Mortgage Securities Trust
Series 2004-C3, Class A5 4.878%, due 1/15/42		510,000		526,587
Series 2007-CB20, Class A3 5.819%, due 2/12/51		500,000		503,489
Series 2007-LD12, Class A3 5.925%, due 2/15/51 (i)		500,000		512,621
LB-UBS Commercial Mortgage Trust
Series 2006-C7, Class A3 5.347%, due 11/15/38		500,000		552,820
Series 2007-C6, Class AAB 5.855%, due 7/15/40		364,171		372,010

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Mortgage-Backed Securities (continued)
Commercial Mortgage Loans (Collateralized Mortgage Obligations) (continued)
LB-UBS Commercial Mortgage Trust (continued)
Series 2007-C6, Class A3 5.933%, due 7/15/40	$	235,666	$	239,172
Merrill Lynch / Countrywide Commercial Mortgage Trust Series 2007-8, Class A2 5.856%, due 8/12/49 (i)		368,890		375,913
Morgan Stanley Capital I Trust
Series 2007-IQ14, Class AAB 5.654%, due 4/15/49 (c)		366,258		380,396
Series 2006-HQ9, Class AM 5.773%, due 7/12/44 (c)		500,000		548,777
Timberstar Trust Series 2006-1, Class A 5.668%, due 10/15/36 (d)		280,000		307,941
Wachovia Bank Commercial Mortgage Trust Series 2006-C29, Class AM 5.339%, due 11/15/48		500,000		552,648
WaMu Mortgage Pass-Through Certificates Series 2006-AR14, Class 1A1 2.254%, due 11/25/36 (i)		688,556		573,386
				9,098,321
Residential Mortgage (Collateralized Mortgage Obligation) 0.0%‡
Mortgage Equity Conversion Asset Trust Series 2007-FF2, Class A 0.60%, due 2/25/42 (c)(d)(e)(f)		638,063		465,776
Total Mortgage-Backed Securities (Cost $8,981,732)				9,564,097
U.S. Government & Federal Agencies 1.3%
Federal Home Loan Mortgage Corporation (Mortgage Pass-Through Securities) 0.0%‡
6.50%, due 11/1/16		11,229		11,778
6.50%, due 2/1/27		120		132
6.50%, due 5/1/29		35,594		39,300
6.50%, due 6/1/29		13,170		14,646
6.50%, due 7/1/29		60,847		67,323
6.50%, due 8/1/29		13,513		14,955
6.50%, due 9/1/29		1,748		1,971
6.50%, due 6/1/32		6,998		7,723
6.50%, due 1/1/37		6,534		7,391
7.00%, due 3/1/26		193		200
7.00%, due 9/1/26		9,286		10,851
7.00%, due 7/1/32		24,529		28,136
7.50%, due 1/1/16		1,110		1,154
7.50%, due 5/1/32		8,905		10,215
				215,775

	Principal Amount		Value
Federal National Mortgage Association (Mortgage Pass-Through Securities) 0.0%‡
4.50%, due 7/1/20	$	5,034	$	5,355
4.50%, due 3/1/21		14,267		15,181
6.00%, due 4/1/19		1,813		1,983
7.00%, due 10/1/37		1,775		1,976
7.00%, due 11/1/37		26,821		31,244
7.50%, due 10/1/15		9,459		9,831
				65,570
Government National Mortgage Association (Mortgage Pass-Through Securities) 0.0%‡
5.00%, due 12/15/37		7,745		8,444
5.50%, due 9/15/35		30,589		33,448
6.50%, due 4/15/29		42		46
6.50%, due 5/15/29		175		196
6.50%, due 8/15/29		27		30
6.50%, due 10/15/31		5,037		5,649
7.00%, due 9/15/23		922		948
7.00%, due 7/15/25		1,696		1,702
7.00%, due 12/15/25		4,226		4,319
7.00%, due 11/15/27		13,513		15,242
7.00%, due 12/15/27		59,596		67,410
7.00%, due 6/15/28		4,523		4,691
7.50%, due 6/15/26		476		541
7.50%, due 10/15/30		27,654		31,639
8.00%, due 9/15/26		145		147
8.00%, due 10/15/26		8,711		9,960
8.50%, due 11/15/26		22,282		22,898
				207,310
¨United States Treasury Bonds 1.1%
2.875%, due 5/15/43		10,885,000		9,338,993
4.375%, due 5/15/40		475,000		543,504
				9,882,497
United States Treasury Notes 0.2%
0.25%, due 12/15/15		1,435,000		1,432,309
1.25%, due 3/15/14		235,000		235,992
1.375%, due 6/30/18		95,000		95,690
				1,763,991
Total U.S. Government & Federal Agencies (Cost $12,063,695)				12,135,143
Yankee Bond 0.2% (j)
Banks 0.2%
Royal Bank of Scotland Group PLC 6.125%, due 12/15/22		1,530,000		1,581,829
Total Yankee Bond (Cost $1,545,712)				1,581,829
Total Long-Term Bonds (Cost $380,258,881)				395,454,791

20 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Shares		Value
Common Stocks 50.1%
Aerospace & Defense 1.8%
BAE Systems PLC		1,100,660	$	8,024,534
¨Lockheed Martin Corp.		67,210		8,961,781
				16,986,315
Agriculture 4.3%
¨Altria Group, Inc.		231,598		8,622,394
British American Tobacco PLC		66,477		3,662,404
Imperial Tobacco Group PLC		203,290		7,591,492
Lorillard, Inc.		161,350		8,230,463
Philip Morris International, Inc.		63,463		5,655,823
Reynolds American, Inc.		146,400		7,520,568
				41,283,144
Auto Manufacturers 0.9%
Daimler A.G.		81,720		6,706,137
Ford Motor Co.		125,000		2,138,750
				8,844,887
Banks 1.6%
Citigroup, Inc.		41,000		1,999,980
Commonwealth Bank of Australia		39,370		2,830,979
Svenska Handelsbanken AB Class A		58,520		2,651,441
Wells Fargo & Co.		85,230		3,638,469
Westpac Banking Corp.		117,326		3,802,442
				14,923,311
Beverages 1.1%
Anheuser-Busch InBev N.V.		28,097		2,922,189
Coca-Cola Co. (The)		57,830		2,288,333
Diageo PLC, Sponsored ADR		18,970		2,420,383
PepsiCo., Inc.		31,190		2,622,767
				10,253,672
Building Materials 0.2%
U.S. Concrete, Inc. (e)(g)		69,091		1,509,638
Chemicals 1.9%
BASF S.E.		66,754		6,945,375
Dow Chemical Co. (The)		101,410		4,002,653
E.I. du Pont de Nemours & Co.		46,826		2,865,751
Yara International ASA		104,240		4,500,160
				18,313,939
Commercial Services 0.7%
Automatic Data Processing, Inc.		39,820		2,985,306
R.R. Donnelley & Sons Co.		226,690		4,209,633
				7,194,939
Computers 0.4%
Apple, Inc.		7,730		4,037,765

	Shares		Value
Electric 5.9%
Ameren Corp.		161,340	$	5,837,281
Dominion Resources, Inc.		41,460		2,643,075
Duke Energy Corp.		114,763		8,231,950
Electricite de France S.A.		173,300		6,080,099
Integrys Energy Group, Inc.		53,630		3,147,008
PPL Corp.		241,690		7,402,965
Southern Co.		91,810		3,755,947
SSE PLC		326,470		7,412,218
TECO Energy, Inc.		235,100		4,036,667
Terna S.p.A.		1,663,940		8,246,129
				56,793,339
Electrical Components & Equipment 0.4%
Emerson Electric Co.		56,193		3,763,245
Electronics 0.3%
Honeywell International, Inc.		34,230		2,968,768
Engineering & Construction 0.9%
¨Vinci S.A.		138,865		8,907,754
Entertainment 0.4%
Regal Entertainment Group Class A		194,410		3,695,734
Environmental Controls 0.5%
Waste Management, Inc.		117,550		5,118,127
Finance—Other Services 0.3%
CME Group, Inc.		36,790		2,730,186
Food 0.6%
Nestle S.A. Registered		41,215		2,975,239
WM Morrison Supermarkets PLC		592,750		2,676,368
				5,651,607
Food Services 0.3%
Compass Group PLC		184,760		2,657,309
Gas 1.4%
Centrica PLC		931,810		5,280,020
¨National Grid PLC		681,730		8,575,255
				13,855,275
Household Products & Wares 0.7%
Kimberly-Clark Corp.		59,715		6,449,220
Insurance 1.7%
Arthur J. Gallagher & Co.		63,240		3,000,738
Muenchener Rueckversicherungs-Gesellschaft A.G. Registered		32,320		6,753,510

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
Insurance (continued)
SCOR SE		172,250	$	6,088,866
				15,843,114
Investment Company 0.0%‡
BGP Holdings PLC (e)(f)(g)		20,068		3
Machinery—Diversified 0.3%
Deere & Co.		29,540		2,417,554
Media 1.6%
Comcast Corp. Class A		66,050		3,058,115
Dex Media, Inc. (g)		464		3,131
Pearson PLC		238,160		4,979,527
Shaw Communications, Inc.		187,370		4,481,857
Time Warner, Inc.		44,040		3,027,309
				15,549,939
Mining 0.4%
BHP Billiton, Ltd.		108,670		3,868,038
Miscellaneous—Manufacturing 0.3%
Orkla ASA		353,390		2,864,257
Oil & Gas 3.0%
ConocoPhillips		96,010		7,037,533
Diamond Offshore Drilling, Inc.		85,000		5,264,050
Royal Dutch Shell PLC, ADR		107,950		7,195,947
¨Total S.A.		150,128		9,226,645
				28,724,175
Pharmaceuticals 4.6%
AbbVie, Inc.		74,560		3,612,432
AstraZeneca PLC, Sponsored ADR		157,630		8,332,322
Bristol-Myers Squibb Co.		49,365		2,592,650
GlaxoSmithKline PLC		282,660		7,448,618
Johnson & Johnson		42,377		3,924,534
Merck & Co., Inc.		70,499		3,178,800
Novartis A.G.		63,920		4,962,984
Roche Holding A.G., Genusscheine		22,230		6,154,379
Sanofi		38,180		4,071,425
				44,278,144
Pipelines 1.5%
Enterprise Products Partners, L.P.		59,490		3,764,527
Kinder Morgan Energy Partners, L.P.		83,600		6,746,520
MarkWest Energy Partners, L.P.		49,670		3,689,488
				14,200,535
Real Estate Investment Trusts 1.1%
Corrections Corporation of America		100,940		3,734,780

	Shares		Value
Real Estate Investment Trusts (continued)
Health Care REIT, Inc.		112,170	$	7,274,224
				11,009,004
Retail 0.3%
McDonald’s Corp.		33,292		3,213,344
Semiconductors 0.8%
KLA-Tencor Corp.		63,010		4,133,456
Microchip Technology, Inc.		83,360		3,581,146
				7,714,602
Software 0.3%
Microsoft Corp.		81,473		2,880,071
Telecommunications 7.4%
AT&T, Inc.		166,497		6,027,191
BCE, Inc.		177,600		7,728,108
CenturyLink, Inc.		205,161		6,946,751
¨Deutsche Telekom A.G.		532,030		8,379,415
Philippine Long Distance Telephone Co., Sponsored ADR		35,170		2,326,496
Rogers Communications, Inc. Class B		82,940		3,764,179
Swisscom A.G.		16,360		8,349,938
Telstra Corp., Ltd.		1,485,440		7,272,532
¨Verizon Communications, Inc.		117,804		5,950,280
Vivendi S.A.		201,173		5,106,399
¨Vodafone Group PLC		2,659,657		9,573,784
				71,425,073
Toys, Games & Hobbies 0.6%
Mattel, Inc.		120,110		5,329,281
Transportation 0.6%
Deutsche Post A.G. Registered		175,850		5,951,098
Water 1.0%
Severn Trent PLC		120,390		3,584,627
United Utilities Group PLC		522,920		5,906,877
				9,491,504
Total Common Stocks (Cost $379,281,163)				480,697,910

22 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Number of Warrants			Value
Warrants 0.0%‡
Media 0.0%‡
ION Media Networks, Inc.
Second Lien Expires 12/18/16 (e)(f)(g)(k)		6		$	0	(l)
Unsecured Debt Expires 12/18/16 (e)(f)(g)(k)		6			0	(l)
Total Warrants (Cost $21)					0	(l)
	Principal Amount
Short-Term Investment 7.6%
Repurchase Agreement 7.6%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $73,212,038 (Collateralized by a Federal National Mortgage Association security with rates between 2.12% and 2.17% and a maturity date of 11/7/22, with a Principal Amount of $79,165,000 and a Market Value of $74,681,843)	$	73,212,038			73,212,038
Total Short-Term Investment (Cost $73,212,038)					73,212,038
Total Investments (Cost $832,752,103) (o)		99.0	%		949,364,739
Other Assets, Less Liabilities		1.0			9,285,428
Net Assets		100.0	%	$	958,650,167

	Contracts Long			Unrealized Appreciation (Depreciation) (m)
Futures Contracts 0.8%
Standard & Poor’s 500 Index Mini December 2013 (n)		2,065		$	9,068,750
Total Futures Contracts Long (Settlement Value $180,790,750)					9,068,750
	Contracts Short
United States Treasury Notes December 2013 (5 Year) (n)		(457	)		(1,007,971	)
Total Futures Contracts Short (Settlement Value $55,611,187)					(1,007,971	)
Total Futures Contracts (Settlement Value $125,179,563)				$	8,060,779

‡ Less than one-tenth of a percent.

(a) Step coupon—Rate shown is the rate in effect as of October 31, 2013.

(b) Subprime mortgage investment or other asset-backed security. The total market value of these securities as of October 31, 2013 is $11,485,833, which represents 1.2% of the Fund’s net assets.

(c) Floating rate—Rate shown is the rate in effect as of October 31, 2013.

(d) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(e) Illiquid security—The total market value of these securities as of October 31, 2013 is $2,196,607, which represents 0.2% of the Fund’s net assets.

(f) Fair valued security—The total market value of these securities as of October 31, 2013, is $731,429, which represents 0.1% of the Fund’s net assets.

(g) Non-income producing security.

(h) Floating Rate Loan—generally pays interest at rates which are periodically re-determined at a margin above the London InterBank Offered Rate or other short-term rates. The rate shown is the weighted average interest rate of all contracts within the floating rate loan facility as of October 31, 2013.

(i) Collateral strip rate—A bond whose interest is based on the weighted net interest rate of the collateral. The coupon rate adjusts periodically based on a predetermined schedule. Rate shown is the rate in effect as of October 31, 2013.

(j) Yankee Bond—Dollar-denominated bond issued in the United States by a foreign bank or corporation.

(k) Restricted security.

(l) Less than one dollar.

(m) Represents the difference between the value of the contracts at the time they were opened and the value as of October 31, 2013.

(n) As of October 31, 2013, cash in the amount of $8,877,800 is on deposit with the broker for futures transactions.

(o) As of October 31, 2013, cost is $832,995,023 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	124,558,728
Gross unrealized depreciation		(8,189,012	)
Net unrealized appreciation	$	116,369,716

The following abbreviations are used in the above portfolio:

ADR—American Depositary Receipt

£—British Pound Sterling

€—Euro

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 23

Portfolio of Investments October 31, 2013 (continued)

As of October 31, 2013, the Fund held the following foreign currency forward contracts:

Foreign Currency Sale Contracts

Expiration Date

Counterparty

Contract Amount Sold

Contract Amount Purchased

Unrealized Appreciation (Depreciation)

Euro vs. U.S. Dollar

12/17/13

JPMorgan Chase Bank

EUR

42,955,000

USD

57,175,762

USD

(1,150,732

)

Pound Sterling vs. U.S.Dollar

12/17/13

JPMorgan Chase Bank

GBP

26,616,000

42,090,017

(572,280

)

Net unrealized appreciation (depreciation) on foreign currency forward contracts

USD

(1,723,012

)

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets and liabilities.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total
Investments in Securities (a)
Long-Term Bonds
Asset-Backed Securities	$	—	$	12,392,653	$	—		$	12,392,653
Corporate Bonds (b)		—		336,562,862		265,650			336,828,512
Foreign Bonds		—		8,309,594		—			8,309,594
Foreign Government Bond		—		1,233,882		—			1,233,882
Loan Assignments & Participations (c)		—		10,733,253		2,675,828			13,409,081
Mortgage-Backed Securities (d)		—		9,098,321		465,776			9,564,097
U.S. Government & Federal Agencies		—		12,135,143		—			12,135,143
Yankee Bond		—		1,581,829		—			1,581,829
Total Long-Term Bonds		—		392,047,537		3,407,254			395,454,791
Common Stocks (e)		480,697,907		—		3			480,697,910
Warrants (f)		—		—		0	(e)		0	(e)
Short-Term Investment
Repurchase Agreement		—		73,212,038		—			73,212,038
Total Investments in Securities		480,697,907		465,259,575		3,407,257			949,364,739
Other Financial Instruments
Futures Contracts Long (g)		9,068,750		—		—			9,068,750
Total Investments in Securities and Other Financial Instruments	$	489,766,657	$	465,259,575	$	3,407,257		$	958,433,489

Liability Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments
Foreign Currency Forward Contracts (g)	$	—		$	(1,723,012	)	$	—	$	(1,723,012	)
Futures Contracts Short (g)		(1,007,971	)		—			—		(1,007,971	)
Total Other Financial Instruments	$	(1,007,971	)	$	(1,723,012	)	$	—	$	(2,730,983	)

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The Level 3 securities valued at $1,617 and $264,033 are held in Commercial Services and Retail, respectively, within the Corporate Bonds section of the Portfolio of Investments.

(c) The Level 3 security valued at $2,675,828 represents Loan Assignments & Participations whose value was obtained from an independent pricing service which used a single broker quote to measure such value as referenced in the Portfolio of Investments.

24 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

(d) The Level 3 security valued at $465,776 is held in Residential Mortgage (Collateralized Mortgage Obligation) within the Mortgage-Backed Securities section of the Portfolio of Investments.

(e) The Level 3 security valued at $3 is held in Investment Company within the Common Stocks section of the Portfolio of Investments.

(f) The Level 3 securities valued less than one dollar are held in Media within the Warrants section of the Portfolio of Investments.

(g) The value listed for these securities reflects unrealized appreciation (depreciation) as shown on the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

During the year ended October 31, 2013, a security with a total value of $2,870,668 transferred from Level 2 to Level 3. The transfer occurred as a result of the value for certain Loan Assignments & Participations obtained from the independent pricing service which were derived based on single broker quote.

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012			Accrued Discounts (Premiums)			Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)			Purchases		Sales (a)			Transfers into Level 3		Transfers out of Level 3		Balance as of October 31, 2013			Change in Unrealized Appreciation (Depreciation) from Investments Still Held at October 31, 2013 (b)
Long-Term Bonds
Corporate Bonds
Commercial Services	$	1,760		$	—		$	—		$	(143	)	$	—	$	—		$	—	$	—	$	1,617		$	(143	)
Retail		284,193			(260	)		(260	)		(5,992	)		—		(13,648	)		—		—		264,033			(4,628	)
Loan Assignments & Participations
Auto Parts & Equipment		—			10,909			3,076			(9,105	)		—		(199,720	)		2,870,668		—		2,675,828			(9,105	)
Mortgage-Backed Securities
Commercial Mortgage Loans (Collateralized Mortgage Obligations)		544,253			—			—			(37,674	)		—		(40,803	)		—		—		465,776			(45,765	)
Common Stocks
Investment Company		3			—			—			—			—		—			—		—		3			—
Warrants
Media		0	(c)		—			—			—			—		—			—		—		0	(c)		—
Total	$	830,209		$	10,649		$	2,816		$	(52,914	)	$	—	$	(254,171	)	$	2,870,668	$	—	$	3,407,257		$	(59,641	)

(a) Sales include principal reductions.

(b) Included in “Net change in unrealized appreciation (depreciation) on investments” in the Statement of Operations.

(c) Less than one dollar.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 25

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $832,752,103)	$	949,364,739
Cash collateral on deposit at broker		8,877,800
Cash denominated in foreign currencies (identified cost $94,684)		93,730
Receivables:
Dividends and interest		7,107,270
Fund shares sold		2,086,223
Investment securities sold		432,950
Other assets		34,283
Total assets		967,996,995
Liabilities
Payables:
Investment securities purchased		4,942,319
Variation margin on futures contracts		994,770
Fund shares redeemed		596,856
Manager (See Note 3)		502,385
Transfer agent (See Note 3)		264,338
NYLIFE Distributors (See Note 3)		203,937
Shareholder communication		65,964
Professional fees		19,328
Custodian		14,313
Trustees		2,045
Accrued expenses		17,561
Unrealized depreciation on foreign currency forward contracts		1,723,012
Total liabilities		9,346,828
Net assets	$	958,650,167
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	482,116
Additional paid-in capital		818,575,704
		819,057,820
Undistributed net investment income		825,001
Accumulated net realized gain (loss) on investments, futures transactions and foreign currency transactions		15,806,653
Net unrealized appreciation (depreciation) on investments and futures contracts		124,673,415
Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(1,712,722	)
Net assets	$	958,650,167

Investor Class
Net assets applicable to outstanding shares	$	168,097,265
Shares of beneficial interest outstanding		8,472,315
Net asset value per share outstanding	$	19.84
Maximum sales charge (5.50% of offering price)		1.15
Maximum offering price per share outstanding	$	20.99
Class A
Net assets applicable to outstanding shares	$	397,101,319
Shares of beneficial interest outstanding		20,023,013
Net asset value per share outstanding	$	19.83
Maximum sales charge (5.50% of offering price)		1.15
Maximum offering price per share outstanding	$	20.98
Class B
Net assets applicable to outstanding shares	$	51,137,746
Shares of beneficial interest outstanding		2,565,726
Net asset value and offering price per share outstanding	$	19.93
Class C
Net assets applicable to outstanding shares	$	55,888,835
Shares of beneficial interest outstanding		2,808,385
Net asset value and offering price per share outstanding	$	19.90
Class I
Net assets applicable to outstanding shares	$	286,425,002
Shares of beneficial interest outstanding		14,342,171
Net asset value and offering price per share outstanding	$	19.97

26 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	21,333,969
Dividends (a)		18,270,867
Total income		39,604,836
Expenses
Manager (See Note 3)		5,299,726
Distribution/Service—Investor Class (See Note 3)		413,956
Distribution/Service—Class A (See Note 3)		837,025
Distribution/Service—Class B (See Note 3)		503,789
Distribution/Service—Class C (See Note 3)		354,478
Transfer agent (See Note 3)		1,502,621
Shareholder communication		152,374
Professional fees		92,371
Registration		91,184
Custodian		87,383
Trustees		17,279
Miscellaneous		50,360
Total expenses		9,402,546
Net investment income (loss)		30,202,290
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency Transactions
Net realized gain (loss) on:
Security transactions		27,235,409
Futures transactions		22,620,364
Foreign currency transactions		(1,279,970	)
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		48,575,803
Net change in unrealized appreciation (depreciation) on:
Investments		47,793,507
Futures contracts		11,282,976
Translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(1,320,228	)
Net change in unrealized appreciation (depreciation) on investments, futures contracts and foreign currency transactions		57,756,255
Net realized and unrealized gain (loss) on investments, futures transactions and foreign currency transactions		106,332,058
Net increase (decrease) in net assets resulting from operations	$	136,534,348

(a) Dividends recorded net of foreign withholding taxes in the amount of $800,562.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 27

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	30,202,290		$	26,383,487
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		48,575,803			25,766,728
Net change in unrealized appreciation (depreciation) on investments, futures contracts and foreign currency transactions		57,756,255			35,642,292
Net increase (decrease) in net assets resulting from operations		136,534,348			87,792,507
Dividends to shareholders:
From net investment income:
Investor Class		(5,611,090	)		(5,900,968	)
Class A		(12,582,135	)		(10,557,156	)
Class B		(1,326,383	)		(1,558,486	)
Class C		(972,526	)		(417,633	)
Class I		(9,677,969	)		(7,601,444	)
Total dividends to shareholders		(30,170,103	)		(26,035,687	)
Capital share transactions:
Net proceeds from sale of shares		224,065,417			102,526,815
Net asset value of shares issued to shareholders in reinvestment of dividends		28,400,593			25,166,825
Cost of shares redeemed		(131,828,751	)		(98,350,492	)
Increase (decrease) in net assets derived from capital share transactions		120,637,259			29,343,148
Net increase (decrease) in net assets		227,001,504			91,099,968
Net Assets
Beginning of year		731,648,663			640,548,695
End of year	$	958,650,167		$	731,648,663
Undistributed net investment income at end of year	$	825,001		$	135,567

28 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	17.46		$	15.93		$	15.58		$	13.89		$	12.58
Net investment income (loss) (a)		0.64			0.62			0.60			0.59			0.30
Net realized and unrealized gain (loss) on investments		2.44			1.39			0.37			1.81			1.36
Net realized and unrealized gain (loss) on foreign currency transactions		(0.06	)		0.14			(0.05	)		(0.16	)		0.00	‡
Total from investment operations		3.02			2.15			0.92			2.24			1.66
Less dividends:
From net investment income		(0.64	)		(0.62	)		(0.57	)		(0.55	)		(0.35	)
Net asset value at end of year	$	19.84		$	17.46		$	15.93		$	15.58		$	13.89
Total investment return (b)		17.62	%		13.72	%		5.92	%		16.39	%		13.57	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.46	%		3.73	%		3.73	%		4.02	%		2.40	%
Net expenses		1.32	%		1.37	%		1.40	%		1.50	%		1.40	%
Expenses (before waiver/reimbursement)		1.32	%		1.37	%		1.40	%		1.50	%		1.72	%
Portfolio turnover rate		31	%		25	%		33	%		76	%		182	%(c)
Net assets at end of year (in 000’s)	$	168,097		$	160,758		$	163,168		$	170,852		$	161,824

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rate not including mortgage dollar rolls was 151% for the year ended October 31, 2009.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	17.46		$	15.92		$	15.58		$	13.88		$	12.57
Net investment income (loss) (a)		0.69			0.67			0.66			0.64			0.33
Net realized and unrealized gain (loss) on investments		2.43			1.40			0.35			1.82			1.36
Net realized and unrealized gain (loss) on foreign currency transactions		(0.06	)		0.14			(0.05	)		(0.16	)		0.00	‡
Total from investment operations		3.06			2.21			0.96			2.30			1.69
Less dividends:
From net investment income		(0.69	)		(0.67	)		(0.62	)		(0.60	)		(0.38	)
Net asset value at end of year	$	19.83		$	17.46		$	15.92		$	15.58		$	13.88
Total investment return (b)		17.90	%		14.16	%		6.21	%		16.80	%		13.82	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.71	%		4.03	%		4.05	%		4.37	%		2.60	%
Net expenses		1.04	%		1.06	%		1.08	%		1.15	%		1.20	%
Expenses (before waiver/reimbursement)		1.04	%		1.06	%		1.08	%		1.15	%		1.23	%
Portfolio turnover rate		31	%		25	%		33	%		76	%		182	%(c)
Net assets at end of year (in 000’s)	$	397,101		$	292,603		$	242,939		$	239,564		$	222,648

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rate not including mortgage dollar rolls was 151% for the year ended October 31, 2009.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 29

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	17.54		$	15.99		$	15.64		$	13.93		$	12.61
Net investment income (loss) (a)		0.51			0.50			0.49			0.48			0.21
Net realized and unrealized gain (loss) on investments		2.44			1.40			0.35			1.84			1.35
Net realized and unrealized gain (loss) on foreign currency transactions		(0.06	)		0.14			(0.05	)		(0.17	)		0.00	‡
Total from investment operations		2.89			2.04			0.79			2.15			1.56
Less dividends:
From net investment income		(0.50	)		(0.49	)		(0.44	)		(0.44	)		(0.24	)
Net asset value at end of year	$	19.93		$	17.54		$	15.99		$	15.64		$	13.93
Total investment return (b)		16.74	%		12.87	%		5.14	%		15.53	%		12.77	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		2.73	%		2.99	%		2.98	%		3.25	%		1.65	%
Net expenses		2.07	%		2.12	%		2.15	%		2.24	%		2.14	%
Expenses (before waiver/reimbursement)		2.07	%		2.12	%		2.15	%		2.24	%		2.47	%
Portfolio turnover rate		31	%		25	%		33	%		76	%		182	%(c)
Net assets at end of year (in 000’s)	$	51,138		$	51,233		$	59,225		$	71,239		$	79,742

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rate not including mortgage dollar rolls was 151% for the year ended October 31, 2009.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	17.52		$	15.97		$	15.62		$	13.92		$	12.59
Net investment income (loss) (a)		0.49			0.49			0.48			0.48			0.22
Net realized and unrealized gain (loss) on investments		2.45			1.41			0.36			1.82			1.35
Net realized and unrealized gain (loss) on foreign currency transactions		(0.06	)		0.14			(0.05	)		(0.16	)		0.00	‡
Total from investment operations		2.88			2.04			0.79			2.14			1.57
Less dividends:
From net investment income		(0.50	)		(0.49	)		(0.44	)		(0.44	)		(0.24	)
Net asset value at end of year	$	19.90		$	17.52		$	15.97		$	15.62		$	13.92
Total investment return (b)		16.70	%		12.96	%		5.08	%		15.55	%		12.69	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		2.61	%		2.88	%		2.98	%		3.27	%		1.67	%
Net expenses		2.07	%		2.12	%		2.15	%		2.24	%		2.17	%
Expenses (before waiver/reimbursement)		2.07	%		2.12	%		2.15	%		2.24	%		2.47	%
Portfolio turnover rate		31	%		25	%		33	%		76	%		182	%(c)
Net assets at end of year (in 000’s)	$	55,889		$	22,444		$	10,899		$	10,312		$	9,622

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) The portfolio turnover rate not including mortgage dollar rolls was 151% for the year ended October 31, 2009.

30 MainStay Income Builder Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	17.57		$	16.02		$	15.67		$	13.97		$	12.65
Net investment income (loss) (a)		0.74			0.72			0.70			0.68			0.77
Net realized and unrealized gain (loss) on investments		2.46			1.40			0.36			1.82			0.97
Net realized and unrealized gain (loss) on foreign currency transactions		(0.06	)		0.14			(0.05	)		(0.16	)		0.00	‡
Total from investment operations		3.14			2.26			1.01			2.34			1.74
Less dividends:
From net investment income		(0.74	)		(0.71	)		(0.66	)		(0.64	)		(0.42	)
Net asset value at end of year	$	19.97		$	17.57		$	16.02		$	15.67		$	13.97
Total investment return (b)		18.25	%		14.41	%		6.50	%		17.07	%		14.14	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		3.97	%		4.28	%		4.30	%		4.60	%		3.74	%
Net expenses		0.79	%		0.81	%		0.83	%		0.89	%		0.97	%
Expenses (before waiver/reimbursement)		0.79	%		0.81	%		0.83	%		0.89	%		0.97	%
Portfolio turnover rate		31	%		25	%		33	%		76	%		182	%(c)
Net assets at end of year (in 000’s)	$	286,425		$	204,611		$	164,317		$	164,393		$	189,333

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) The portfolio turnover rate not including mortgage dollar rolls was 151% for the year ended October 31, 2009.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 31

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the ‘‘Trust’’) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the ‘‘1940 Act’’), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the ‘‘Funds’’). These financial statements and notes relate only to the MainStay Income Builder Fund (the “Fund”), a diversified fund.

The Fund currently offers five classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on December 29, 1987. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on January 2, 2004. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek current income consistent with reasonable opportunity for future growth of capital and income.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The

Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisors (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of

32 MainStay Income Builder Fund

unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•   Benchmark Yields	•   Reported Trades
•   Broker Dealer Quotes	•   Issuer Spreads
•   Two-sided markets	•   Benchmark securities
•   Bids/Offers	•   Reference Data (corporate actions or material event notices)
•   Industry and economic events	•   Comparable bonds
•   Equity and credit default swap curves	•   Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisors reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund held securities with a value of $731,429 that were fair valued in such a manner.

Certain events may occur between the time that foreign markets close, on which securities held by the Fund principally trade, and the time at which the Fund’s NAV is calculated. These events may include, but are not limited to, situations relating to a single issuer in a market sector, significant fluctuations in U.S. or foreign markets, natural disasters, armed conflicts, governmental actions or other developments not tied directly to the securities markets. Should the Manager or Subadvisors conclude that such events may have affected the accuracy of the last price of such securities reported on the local foreign market, the Sub-Committee may, pursuant to procedures adopted by the Board, adjust the value of the local price to reflect the estimated impact on the price of such securities as a result of such events. In this instance, securities are generally categorized as Level 3 in the hierarchy. Additionally, certain foreign equity securities are also fair valued whenever the

movement of a particular index exceeds an established threshold. In such cases, the securities are fair valued by applying factors provided by a third party vendor in accordance with the Fund’s policies and procedures and are generally categorized as Level 2 in the hierarchy. As of October 31, 2013, foreign equity securities held by the Fund were not fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Futures contracts are valued at the last posted settlement price on the market where such futures are primarily traded. Options contracts are valued at the last posted settlement price on the market where such options are principally traded. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisors, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisors, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Foreign currency forward contracts are valued at their fair market values measured on the basis of the mean between the last current bid and ask prices based on dealer or exchange quotations and are generally categorized as Level 2 in the hierarchy.

Loan assignments, participations and commitments are valued at the average of bid quotations obtained from the engaged independent pricing agent and are generally categorized as Level 2 in the hierarchy. Certain loan assignments, participations and commitments may be valued by single broker quotes obtained from the pricing agent with

mainstayinvestments.com 33

Notes to Financial Statements (continued)

significant unobservable inputs and are generally categorized as Level 3 in the hierarchy. For these loan assignments, participations and commitments the Manager may consider additional factors such as liquidity of the Fund’s investments. As of October 31, 2013, the Fund held a security with a value of $2,675,828 that was valued by a single broker quote and/or deemed to be illiquid.

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund’s Manager or Subadvisors might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund’s liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisors measure the liquidity of the Fund’s investments; in doing so, the Manager or Subadvisors may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Foreign Taxes.  Investment income received by the Fund from foreign sources may be subject to foreign income taxes. These foreign income taxes are generally withheld at the source, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

The Fund may be subject to taxation on realized capital gains, repatriation proceeds and other transaction-based taxes imposed by certain countries in which it invests. The Fund will accrue such taxes as applicable based upon its current interpretation of tax rules and regulations that exist in the market in which it invests. Capital gains taxes relating to positions still held are reflected as a liability on the Statement of Assets and Liabilities, as well as an adjustment to the Fund’s net unrealized appreciation (depreciation). Taxes related to capital gains realized during the year ended October 31, 2013, if any, are reflected as part of net realized gain (loss) in the Statement of Operations. Changes in tax liabilities related to capital gains taxes on unrealized investment gains, if any, are reflected as part of the change in net unrealized appreciation (depreciation) on investments in the Statement of Operations. Transaction-based charges are generally assessed as a percentage of the transaction amount.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least quarterly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method and include gains and losses from repayments of principal on mortgage-backed securities. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the

34 MainStay Income Builder Fund

expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisors to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisors will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Loan Assignments, Participations and Commitments.  The Fund may invest in loan assignments and loan participations (“loans”). Loans are agreements to make money available (a “commitment”) to a borrower in a specified amount, at a specified rate and within a specified time. Such loans are typically senior, secured and collateralized in nature. The Fund records an investment when the borrower withdraws money and records interest as earned. These loans pay interest at rates that are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate.

The loans in which the Fund invests are generally readily marketable, but may be subject to some restrictions on resale. For example, the Fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments. The Fund assumes the credit risk of the borrower, the selling participant and any other persons interpositioned between the Fund and the borrower (“intermediate participants”). In the event that the borrower, selling participant or intermediate participants become insolvent or enters into bankruptcy, the Fund may incur certain costs and delays in realizing payment, or may suffer a loss of principal and/or interest.

Unfunded commitments represent the remaining obligation of the Fund to the borrower. At any point in time, up to the maturity date of the issue, the borrower may demand the unfunded portion. These unfunded amounts are marked to market and any unrealized gains and losses are recorded in the Statement of Assets and Liabilities. As of October 31, 2013, the Fund did not hold any unfunded commitments.

(J)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., foreign currency, interest rate, security, or securities index). The Fund is subject to equity price risk and/or interest rate risk in the normal course of investing in these transactions. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by ‘‘marking-to-market’’ such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as ‘‘variation margin.’’ When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund may invest in futures contracts to help manage the duration and yield curve of the portfolio while minimizing the exposure to wider bid/ask spreads in traditional bonds. The Fund’s investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund.

(K)  Foreign Currency Forward Contracts.  The Fund may enter into foreign currency forward contracts, which are agreements to buy or sell currencies of different countries on a specified future date at a specified rate. The Fund is subject to foreign currency exchange rate risk in the normal course of investing in these transactions. During the period the forward contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by ‘‘marking-to-market’’ such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. Cash movement occurs on settlement date. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract. The Fund may enter into foreign currency forward contracts to reduce currency risk versus the benchmark or for trade settlement.

The use of foreign currency forward contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract amount reflects the extent of the Fund’s involvement in these financial instruments. Risks arise from the possible movements in the foreign exchange rates underlying these instruments. While the Fund may enter into forward

mainstayinvestments.com 35

Notes to Financial Statements (continued)

contracts to reduce currency exchange risks, changes in currency exchange rates may result in poorer overall performance for the Fund than if it had not engaged in such transactions. Exchange rate movements can be large, depending on the currency, and can last for extended periods of time, affecting the value of the Fund’s assets. Moreover, there may be an imperfect correlation between the Fund’s holdings of securities denominated in a particular currency and the forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to the risk of currency exchange loss. The unrealized appreciation (depreciation) on forward contracts reflects the Fund’s exposure at valuation date to credit loss in the event of a counterparty’s failure to perform its obligations.

(L)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities—at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses—at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund’s books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(M)  Dollar Rolls.  The Fund may enter into dollar roll transactions in which it sells mortgage-backed securities (“MBS”) from its portfolio to a counterparty from whom it simultaneously agrees to buy a similar security on a delayed delivery basis. The dollar roll transactions of the Fund are classified as purchase and sale transactions. The securities sold in connection with the dollar rolls are removed from the portfolio and a realized gain or loss is recognized. The securities the Fund has agreed to acquire are included at market value in the Portfolio of Investments and liabilities for such purchase commitments are included as payables for investments purchased. During the roll period, the Fund foregoes principal and interest paid on the securities. The Fund is compensated by the difference between the current sales price and the forward price for the future as well as by the earnings on the cash proceeds of the initial sale. Dollar rolls may be renewed without physical delivery of the securities subject to the contract. The Fund maintains liquid assets from its portfolio having a value not less than the repurchase price, including accrued interest. Dollar roll transactions involve certain risks, including the risk that the MBS returned to the Fund at the end of the roll period,

while substantially similar, could be inferior to what was initially sold to the counterparty.

(N)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants, if such warrants are not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights.

(O)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(P)  Restricted Securities.  A restricted security is a security which has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933, as amended. The Fund may not have the right to demand that such securities be registered. Disposal of these securities may involve time-consuming negotiations and expenses and it may be difficult to obtain a prompt sale at an acceptable price. (See Note 5)

(Q)  Concentration of Risk.  The Fund may invest in high-yield securities (sometimes called ‘‘junk bonds’’), which are generally

36 MainStay Income Builder Fund

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 also be subject to greater price volatility.

The Fund may invest in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

The Fund may invest in floating rate loans which are usually rated below investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. Moreover, such securities may, under certain circumstances, be less liquid than higher quality debt securities. 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 investments in floating rate loans are more likely to decline.

(R)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(S)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Asset Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk		Equity Contracts Risk			Interest Rate Contracts Risk		Total
Warrants	Investments in securities, at value	$	—	$	0	(a)	$	—	$	0	(a)
Futures Contracts	Net Assets—Net unrealized appreciation (depreciation) on investments and futures contracts (b)		—		9,068,750			—		9,068,750
Total Fair Value		$	—	$	9,068,750		$	—	$	9,068,750

Liability Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Futures Contracts	Net Assets—Net unrealized appreciation (depreciation) on investments and futures contracts (b)	$	—		$	—	$	(1,007,971	)	$	(1,007,971	)
Forward Contracts	Unrealized depreciation on foreign currency forward contracts		(1,723,012	)		—		—			(1,723,012	)
Total Fair Value		$	(1,723,012	)	$	—	$	(1,007,971	)	$	(2,730,983	)

(a) Less than one dollar.

(b) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Portfolio of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

mainstayinvestments.com 37

Notes to Financial Statements (continued)

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk		Total
Futures Contracts	Net realized gain (loss) on futures transactions	$	—		$	21,408,457	$	1,211,907	$	22,620,364
Forward Contracts	Net realized gain (loss) on foreign currency transactions		(1,222,705	)		—		—		(1,222,705	)
Total Realized Gain (Loss)		$	(1,222,705	)	$	21,408,457	$	1,211,907	$	21,397,659

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Futures Contracts	Net change in unrealized appreciation (depreciation) on futures contracts	$	—		$	12,236,250	$	(953,274	)	$	11,282,976
Forward Contracts	Net change in unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		(1,333,875	)		—		—			(1,333,875	)
Total Change in Unrealized Appreciation (Depreciation)		$	(1,333,875	)	$	12,236,250	$	(953,274	)	$	9,949,101

Number of Contracts, Notional Amounts or Shares/Units

	Foreign Exchange Contracts Risk			Equity Contracts Risk		Interest Rate Contracts Risk			Total
Warrants		—			12		—			12
Futures Contracts Long (1)		—			1,848		—			1,848
Futures Contracts Short		—			—		(457	)		(457	)
Forward Contracts Long (1)	$	86,576,905			—		—		$	86,576,905
Forward Contracts Short (1)	$	(92,198,433	)		—		—		$	(92,198,433	)

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisors.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as a Subadvisor, pursuant to

the terms of an Amended and Restated Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, is responsible for the overall asset allocation decisions of the Fund and is responsible for the day-to-day portfolio management of the fixed-income portion of the Fund. Epoch Investment Partners, Inc. (“Epoch” or “Subadvisor”), a registered investment advisor, also serves as a Subadvisor pursuant to the terms of a Subadvisory Agreement between New York Life Investments and Epoch and is responsible for the day-to-day portfolio management of the equity portion of the Fund. New York Life Investments pays for the services of the Subadvisors.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.64% up to $500 million; 0.60% from $500 million to $1 billion; and 0.575% in excess of $1 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual

38 MainStay Income Builder Fund

rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate was 0.63% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $5,299,726.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $32,414 and $156,717, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $134, $1,542, $51,394 and $11,022, respectively, for the year ended October 31, 2013.

(D) Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses

incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	622,058
Class A		322,152
Class B		189,264
Class C		133,075
Class I		236,072

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class A	$	4,100	0.0	%‡
Class I		92,999,113	32.5

‡ Less than one-tenth of a percent.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income	Accumulated Capital and Other Gain (Loss)		Capital Loss Carryforward			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
$3,108,903	$	25,396,525	$	(5,293,086	)	$	116,380,005	$	139,592,347

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments, mark to market of foreign forward contracts, mark to market of future contracts, return of capital distributions received, partnerships and straddle deferrals.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
	$657,247	$	(825,361	)	$	168,114

The reclassifications for the Fund are primarily due to foreign currency gain (loss), defaulted bonds, return of capital distributions received, Contingent Payment Debt Instruments, consent fees and preferred stocks treated as debt.

mainstayinvestments.com 39

Notes to Financial Statements (continued)

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $5,293,086 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to share-

holders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)	Long-Term Capital Loss Amounts (000’s)
2016	$5,293	$—

The Fund utilized $31,744,429 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	30,170,103	$	26,035,687

Note 5–Restricted Securities

As of October 31, 2013, the Fund held the following restricted securities:

Security	Date(s) of Acquisition		Number of Warrants/Shares		Cost		10/31/2013 Value			Percent of Net Assets
ION Media Networks, Inc.
Warrant, Second Lien, Expires 12/18/16		12/20/10		6		$—	$	0	(a)		0.0	%‡
Warrant, Unsecured Debt, Expires 12/18/16		3/12/10		6		21		0	(a)		0.0	‡
Quebecor World, Inc. (Litigation Recovery Trust—Escrow Shares)
Corporate Bond 9.75%		9/4/09		110,000		—		1,617			0.0	‡
Total						$21	$	1,617			0.0	%‡

‡ Less than one-tenth of a percent.

(a) Less than one dollar.

Note 6–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 7–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or

the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 8–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of U.S. government securities were $24,397 and $22,073, respectively. Purchases and sales of securities, other than U.S. government securities and short-term securities, were $340,878 and $217,000, respectively.

40 MainStay Income Builder Fund

Note 9–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		414,341		$	7,722,680
Shares issued to shareholders in reinvestment of dividends and distributions		302,990			5,575,201
Shares redeemed		(983,435	)		(18,263,550	)
Net increase (decrease) in shares outstanding before conversion		(266,104	)		(4,965,669	)
Shares converted into Investor Class (See Note 1)		453,977			8,438,282
Shares converted from Investor Class (See Note 1)		(921,488	)		(17,385,123	)
Net increase (decrease)		(733,615	)	$	(13,912,510	)
Year ended October 31, 2012:
Shares sold		300,478		$	5,034,969
Shares issued to shareholders in reinvestment of dividends and distributions		352,875			5,859,051
Shares redeemed		(1,157,017	)		(19,304,664	)
Net increase (decrease) in shares outstanding before conversion		(503,664	)		(8,410,644	)
Shares converted into Investor Class (See Note 1)		561,420			9,379,360
Shares converted from Investor Class (See Note 1)		(1,097,592	)		(18,805,363	)
Net increase (decrease)		(1,039,836	)	$	(17,836,647	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		4,307,421		$	80,858,708
Shares issued to shareholders in reinvestment of dividends and distributions		652,593			12,027,693
Shares redeemed		(2,729,186	)		(50,631,121	)
Net increase (decrease) in shares outstanding before conversion		2,230,828			42,255,280
Shares converted into Class A (See Note 1)		1,109,917			20,900,874
Shares converted from Class A (See Note 1)		(79,797	)		(1,520,144	)
Net increase (decrease)		3,260,948		$	61,636,010
Year ended October 31, 2012:
Shares sold		2,112,879		$	35,891,107
Shares issued to shareholders in reinvestment of dividends and distributions		601,558			10,007,149
Shares redeemed		(2,524,241	)		(42,299,856	)
Net increase (decrease) in shares outstanding before conversion		190,196			3,598,400
Shares converted into Class A (See Note 1)		1,371,450			23,393,132
Shares converted from Class A (See Note 1)		(59,140	)		(1,036,401	)
Net increase (decrease)		1,502,506		$	25,955,131

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		472,626		$	8,892,388
Shares issued to shareholders in reinvestment of dividends and distributions		69,643			1,287,353
Shares redeemed		(336,964	)		(6,279,449	)
Net increase (decrease) in shares outstanding before conversion		205,305			3,900,292
Shares converted from Class B (See Note 1)		(560,188	)		(10,433,889	)
Net increase (decrease)		(354,883	)	$	(6,533,597	)
Year ended October 31, 2012:
Shares sold		362,058		$	6,096,769
Shares issued to shareholders in reinvestment of dividends and distributions		91,121			1,517,631
Shares redeemed		(462,521	)		(7,756,057	)
Net increase (decrease) in shares outstanding before conversion		(9,342	)		(141,657	)
Shares converted from Class B (See Note 1)		(773,238	)		(12,930,728	)
Net increase (decrease)		(782,580	)	$	(13,072,385	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,786,852		$	33,760,286
Shares issued to shareholders in reinvestment of dividends and distributions		37,970			706,537
Shares redeemed		(297,840	)		(5,648,670	)
Net increase (decrease)		1,526,982		$	28,818,153
Year ended October 31, 2012:
Shares sold		697,896		$	11,977,966
Shares issued to shareholders in reinvestment of dividends and distributions		17,535			294,626
Shares redeemed		(116,451	)		(1,931,390	)
Net increase (decrease)		598,980		$	10,341,202
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		4,940,656		$	92,831,355
Shares issued to shareholders in reinvestment of dividends and distributions		474,713			8,803,809
Shares redeemed		(2,716,749	)		(51,005,961	)
Net increase (decrease)		2,698,620		$	50,629,203
Year ended October 31, 2012:
Shares sold		2,546,530		$	43,526,004
Shares issued to shareholders in reinvestment of dividends and distributions		447,441			7,488,368
Shares redeemed		(1,605,981	)		(27,058,525	)
Net increase (decrease)		1,387,990		$	23,955,847

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

mainstayinvestments.com 41

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Income Builder Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Income Builder Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

42 MainStay Income Builder Fund

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $17,193,366 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 25.4% to arrive at the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling (1-800-SEC-0330).

mainstayinvestments.com 43

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

44 MainStay Income Builder Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 45

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

46 MainStay Income Builder Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

mainstayinvestments.com 47

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32125 MS322-13 MSIB11-12/13 NL014

MainStay Global High Income Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	16
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	31
Federal Income Tax Information	32
Proxy Voting Policies and Procedures and Proxy Voting Record	32
Shareholder Reports and Quarterly Portfolio Disclosure	32
Board Members and Officers	33

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year-Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–6.58 –2.18	%		14.23 15.28	%		8.21 8.71	%		1.29 1.29	%
Class A Shares	Maximum 4.5% Initial Sales Charge	With sales charges Excluding sales charges		–6.39 –1.98			14.40 15.46			8.30 8.80			1.17 1.17
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		–7.44 –2.89			14.21 14.44			7.90 7.90			2.04 2.04
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		–3.71 –2.80			14.45 14.45			7.92 7.92			2.04 2.04
Class I Shares4	No Sales Charge			–1.73			15.75			9.08			0.92

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on August 31, 2007, include the historical performance of Class A shares through August 30, 2007 adjusted for certain fees and expenses. Unadjusted, the performance shown for Class I shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
JPMorgan EMBI Global Diversified Index5		–2.27	%		14.28	%		8.73	%
Average Lipper Emerging Markets Hard Currency Debt Fund6		–1.69			14.96			8.74

5. The JPMorgan EMBI Global Diversified Index is a market-capitalization weighted, total return index tracking the traded market for U.S. dollar-denominated Brady Bonds, Eurobonds, traded loans and local market debt instruments issued by sovereign and quasi-sovereign entities. The JPMorgan EMBI Global Diversified Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an Index.

6. The average Lipper emerging markets hard currency debt fund is representative of funds that seek either current income or total return by investing at least 65% of total assets in emerging market debt securities, where “emerging market” is defined by a country’s GNP per capita or other economic measures. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Global High Income Fund

Cost in Dollars of a $1,000 Investment in MainStay Global High Income Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	945.20	$	6.52	$	1,018.50	$	6.77
Class A Shares	$	1,000.00	$	946.30	$	5.79	$	1,019.30	$	6.01
Class B Shares	$	1,000.00	$	942.00	$	10.18	$	1,014.70	$	10.56
Class C Shares	$	1,000.00	$	942.90	$	10.19	$	1,014.70	$	10.56
Class I Shares	$	1,000.00	$	947.60	$	4.57	$	1,020.50	$	4.74

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.33% for Investor Class, 1.18% for Class A, 2.08% for Class B and Class C and 0.93% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Country Composition as of October 31, 2013 (Unaudited)

Brazil	9.9	%
Mexico	8.5
Russia	7.6
Turkey	6.6
Venezuela	6.1
Indonesia	5.3
Poland	5.2
Ukraine	4.6
Colombia	4.0
Peru	3.4
El Salvador	2.5
Sri Lanka	2.1
Belarus	1.9
Georgia	1.9
Nigeria	1.9
Republic of Korea	1.8
Argentina	1.7
Portugal	1.7
Uruguay	1.6
United States	1.4
Dominican Republic	1.3

Thailand	1.3	%
India	1.2
Ireland	1.2
Panama	1.2
Paraguay	1.2
Slovenia	1.2
Bahrain	1.1
United Arab Emirates	1.1
United Kingdom	1.1
Luxembourg	1.0
Ghana	0.9
Gabon	0.8
Croatia	0.7
Guatemala	0.7
Vietnam	0.7
Chile	0.5
Senegal	0.5
Kazakhstan	0.4
Jamaica	0.2
Other Assets, Less Liabilities	2.0
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

Top Ten Issuers Held as of October 31, 2013 (excluding short-term investments) (Unaudited)

1. Republic of Turkey, 6.00%–9.00%, due 3/8/17–1/14/41

2. Ukraine Government, 7.75%–7.80%, due 9/23/20–11/28/22

3. Petroleos de Venezuela S.A., 12.75%, due 2/17/22

4. Majapahit Holding B.V., 8.00%, due 8/7/19

5. United Mexican States, 7.25%, due 12/15/16

  6. Republic of Venezuela, 9.25%, due 5/7/28

  7. Republic of El Salvador, 7.375%–8.25%, due 12/1/19–6/15/35

  8. Gaz Capital S.A. for Gazprom, 9.25%, due 4/23/19

  9. Republic of Peru, 7.35%, due 7/21/25

10. Poland Government Bond, 5.75%, due 10/25/21

8 MainStay Global High Income Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Dan Roberts, PhD, Michael Kimble, CFA, and Jakob Bak, PhD, CFA, of MacKay Shields LLC, the Fund’s Subadvisor

How did MainStay Global High Income Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Global High Income Fund returned –2.18% for Investor Class shares, –1.98% for Class A shares, –2.89% for Class B shares and –2.80% for Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund’s Class I shares returned –1.73%. For the 12 months ended October 31, 2013, Investor Class, Class A and Class I shares outperformed—and Class B and Class C shares underperformed—the –2.27% return of the JPMorgan EMBI Global Diversified Index,¹ which is the Fund’s broad-based securities-market index. Over the same period, all share classes underperformed the –1.69% return of the average Lipper² emerging markets hard currency debt fund. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

In the first half of the reporting period, exposure to higher-yielding corporate bonds strengthened the Fund’s absolute and relative performance. In the second half of the reporting period, however, credit spreads³ uncharacteristically widened as U.S. Treasury yields increased. The Fund benefited from having a duration⁴ that was shorter than that of the JPMorgan EMBI Global Diversified Index. But for the entire reporting period, relative performance was hurt by the Fund’s exposure to higher-yielding corporate bonds. Corporate credits in Brazil were particularly hard hit because of slowing growth, rising inflation and the resulting mass demonstrations against the government.

What was the Fund’s duration strategy during the reporting period?

The Fund’s duration was shorter than that of the JPMorgan EMBI Global Diversified Index, in large part because of the Fund’s corporate-bond exposure. Since corporate bonds generally tend to have shorter maturities than sovereign debt, corporate exposure would tend to lower the Fund’s duration. Corporate debt also tends to have a lower sensitivity to interest rates than sovereign debt. As a result, the Fund lowered its exposure to a higher interest-rate environment on two fronts: by shortening duration and by increasing credit exposure.

What specific factors, risks or market forces prompted significant decisions for the Fund during the reporting period?

Despite the general improvement in global macroeconomic data throughout the reporting period, the emerging-market debt asset class sold off substantially during the summer on the suggestion that the U.S. Federal Reserve might begin to taper its direct security purchases. We saw this as a buying opportunity and increased the Fund’s exposure to local emerging-market currencies and high-beta⁵ bonds while keeping duration below that of the JPMorgan EMBI Global Diversified Index.

During the reporting period, which market segments were the strongest contributors to the Fund’s performance and which market segments were particularly weak?

Over the medium term, two of the biggest drivers of performance in a credit portfolio can be changes in U.S. Treasury yields and changes in spreads. Usually these two factors are negatively correlated, which dampens return volatility. During the reporting period, however, two factors detracted from the Fund’s absolute performance. U.S. Treasury yields rose on talk of the Federal Reserve tapering its purchases of U.S. Treasury and mortgage-backed securities, and spreads followed suit as fears spread that reduced liquidity would cause disproportionate difficulties for emerging markets. Relative to the JPMorgan EMBI Global Diversified Index, the move in U.S. Treasury yields contributed positively to the Fund’s performance, but performance was slightly hurt by the change in spreads. (Contributions take weightings and total returns into account.) The Fund’s significant excess yield, however, helped mitigate most of the damage from widening spreads.

The Fund’s Portuguese debt was a positive contributor to the Fund’s performance, as the overall crisis in Europe subsided and the financial outlook in Portugal improved dramatically. The Fund’s exposure to Mexican homebuilders was a significant detractor from performance, as changes in government policies put the entire sector under extreme pressure. The Fund’s exposure to OGX Petroleo, a Brazilian oil producer, detracted from performance as the company’s production levels disappointed investors.

1. See footnote on page 6 for more information on the JPMorgan EMBI Global Diversified Index.

2. See footnote on page 6 for more information on Lipper Inc.

3. The terms “spread” and “yield spread” may refer to the difference in yield between a security or type of security and comparable U.S. Treasury issues. The terms may also refer to the difference in yield between two specific securities or types of securities at a given time.

4. Duration is a measure of the price sensitivity of a fixed-income investment to changes in interest rates. Duration is expressed as a number of years and is considered a more accurate sensitivity gauge than average maturity.

5. Beta is a measure of volatility in relation to the market as a whole. A beta higher than 1 indicates that a security or portfolio will tend to exhibit higher volatility than the market. A beta lower than 1 indicates that a security or portfolio will tend to exhibit lower volatility than the market.

mainstayinvestments.com 9

Did the Fund make any significant purchases or sales during the reporting period?

We increased the Fund’s exposure to Sri Lankan sovereign debt, as the end of the country’s long civil war could provide a “peace dividend” to the economy. We also opportunistically added Slovenian debt as the crisis in Cyprus temporarily put Slovenian bonds under pressure. The high yield offered by Nigerian Treasury bills was also attractive, given that the nation’s currency appeared not to be facing downward pressure. Because of the increased political volatility in Venezuela following a contested election, we lowered the Fund’s exposure to the country. Rapidly deteriorating financials for Mexican homebuilders led us to exit the Fund’s positions ahead of their default. We also exited the Fund’s position in OGX Petroleo, as it became clear that the company would not survive in its current form. We increased the Fund’s exposure to Ukraine, as we believed that the high yield of the nation’s debt more than compensated for the political and economic risks involved. We also increased the Fund’s exposure to Belarus for much the same reason.

How did the Fund’s sector and country weightings change during the reporting period?

Other than the position changes mentioned earlier, there were no major changes to the Fund’s sector weightings during the reporting period. From a regional perspective, we slightly decreased the Fund’s exposure to Asia and modestly increased exposure to Europe.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund was overweight relative to the JPMorgan EMBI Global Diversified Index in corporate and local currency bonds and underweight in sovereign bonds. As of the same date, the Fund held overweight positions relative to the JPMorgan EMBI Global Diversified Index in Latin America and held underweight positions relative to the Index in Asia and Africa. We anticipate further spread compression, and we therefore expect to maintain our current risk profile and positioning going into the new reporting period.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Global High Income Fund

Portfolio of Investments October 31, 2013

	Principal Amount		Value
Long-Term Bonds 95.4%† Corporate Bonds 49.2%
Argentina 0.4%
WPE International Cooperatief UA 10.375%, due 9/30/20 (a)	$	2,000,000	$	1,400,000
Brazil 8.4%
Banco Bradesco S.A. 5.90%, due 1/16/21 (a)		3,000,000		3,082,500
Braskem Finance, Ltd. 7.00%, due 5/7/20 (a)		3,000,000		3,277,500
Fibria Overseas Finance, Ltd. 6.75%, due 3/3/21 (a)		3,000,000		3,285,000
Itau Unibanco Holding S.A. 6.20%, due 4/15/20 (a)		2,000,000		2,140,000
JBS Finance II, Ltd. 8.25%, due 1/29/18 (a)		3,000,000		3,142,500
Minerva Luxembourg S.A. 7.75%, due 1/31/23 (a)		3,750,000		3,637,500
Petrobras International Finance Co. 5.375%, due 1/27/21		3,000,000		3,050,319
USJ Acucar e Alcool S.A. 9.875%, due 11/9/19 (a)		2,000,000		1,970,000
Virgolino de Oliveira Finance, Ltd. 11.75%, due 2/9/22 (a)		3,000,000		2,400,000
				25,985,319
Chile 0.5%
GeoPark Latin America, Ltd. Agencia en Chile 7.50%, due 2/11/20 (a)		1,500,000		1,526,250
Colombia 2.1%
Colombia Telecomunicaciones S.A. ESP 5.375%, due 9/27/22 (a)		5,000,000		4,687,500
Pacific Rubiales Energy Corp. 5.125%, due 3/28/23 (a)		2,000,000		1,915,000
				6,602,500
Georgia 1.2%
Georgian Oil and Gas Corp. 6.875%, due 5/16/17 (a)		3,500,000		3,648,750
Guatemala 0.7%
Industrial Senior Trust 5.50%, due 11/1/22 (a)		2,200,000		2,035,000
India 1.2%
Vedanta Resources PLC 8.25%, due 6/7/21 (a)		3,500,000		3,605,000

	Principal Amount		Value
Indonesia 5.3%
¨ Majapahit Holding B.V. 8.00%, due 8/7/19 (a)	$	8,300,000	$	9,617,625
Pertamina Persero PT 5.625%, due 5/20/43 (a)		6,700,000		5,628,000
Perusahaan Listrik Negara PT Series Reg S 5.25%, due 10/24/42		1,500,000		1,207,500
				16,453,125
Ireland 1.2%
UT2 Funding PLC 5.321%, due 6/30/16	€	2,700,000		3,574,275
Kazakhstan 0.4%
Kazakhstan Temir Zholy Finance B.V. 6.375%, due 10/6/20 (a)	$	1,000,000		1,110,000
Luxembourg 1.0%
ArcelorMittal 7.50%, due 10/15/39		3,000,000		2,962,500
Mexico 5.5%
Cemex Espana Luxembourg 9.25%, due 5/12/20 (a)		3,000,000		3,270,000
Controladora Mabe S.A. de C.V.
7.875%, due 10/28/19		1,160,000		1,264,400
7.875%, due 10/28/19 (a)		1,600,000		1,744,000
Grupo Bimbo S.A.B. de C.V. 4.50%, due 1/25/22 (a)		3,000,000		3,063,261
Petroleos Mexicanos 6.50%, due 6/2/41		4,000,000		4,260,000
Satelites Mexicanos S.A. de C.V. 9.50%, due 5/15/17		3,000,000		3,247,500
				16,849,161
Paraguay 1.2%
Banco Continental S.A.E. 8.875%, due 10/15/17 (a)		3,500,000		3,727,500
Peru 1.0%
BBVA Bancomer S.A. 5.00%, due 8/26/22 (a)		3,000,000		3,067,500
Poland 2.8%
Eileme 2 AB Series Reg S 11.75%, due 1/31/20	€	4,000,000		6,416,723

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest issuers held, as of October 31, 2013, excluding short-term investments. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount		Value
Corporate Bonds (continued)
Poland (continued)
TVN Finance Corp. III AB 7.375%, due 12/15/20 (a)	€	1,500,000	$	2,148,638
				8,565,361
Republic of Korea 1.8%
Korea Finance Corp. 4.625%, due 11/16/21	$	3,000,000		3,235,926
Korea Gas Corp. 6.25%, due 1/20/42 (a)		2,000,000		2,349,814
				5,585,740
Russia 6.6%
ALROSA Finance S.A. 7.75%, due 11/3/20 (a)		3,500,000		3,955,000
¨Gaz Capital S.A. for Gazprom Series Reg S 9.25%, due 4/23/19		6,000,000		7,485,000
Lukoil International Finance B.V.
6.656%, due 6/7/22 (a)		1,000,000		1,123,750
7.25%, due 11/5/19 (a)		2,000,000		2,333,400
Novatek Finance, Ltd. 6.604%, due 2/3/21 (a)		2,000,000		2,242,500
Vimpelcom Holdings B.V. 7.504%, due 3/1/22 (a)		3,000,000		3,217,500
				20,357,150
Thailand 1.3%
Bangkok Bank PCL 4.80%, due 10/18/20 (a)		3,750,000		3,967,005
Ukraine 1.2%
Ukraine Railways via Shortline PLC 9.50%, due 5/21/18 (a)		4,500,000		3,825,000
United Arab Emirates 1.1%
Abu Dhabi National Energy Co. 3.625%, due 1/12/23 (a)		3,750,000		3,525,000
United Kingdom 1.1%
Lloyds TSB Bank PLC 13.00%, due 12/19/21 (b)	A$	3,000,000		3,398,296
Venezuela 3.2%
¨Petroleos de Venezuela S.A. Series Reg S 12.75%, due 2/17/22	$	9,900,000		9,801,000
Total Corporate Bonds (Cost $148,832,531)				151,571,432

	Principal Amount		Value
Government & Federal Agencies 46.2%
Argentina 1.3%
Republic of Argentina 2.50%, due 12/31/38 (c)	$	11,360,000	$	4,146,400
Bahrain 1.1%
Bahrain Government International Bond 6.125%, due 8/1/23 (a)		3,200,000		3,320,000
Belarus 1.9%
Republic of Belarus Series Reg S 8.95%, due 1/26/18		6,000,000		5,970,000
Brazil 1.5%
Brazil Notas Do Tesouro Nacional Serie F 10.00%, due 1/1/23	B$	11,000,000		4,635,890
Colombia 1.9%
Republic of Colombia 7.75%, due 4/14/21	C$	9,600,000,000		5,802,056
Croatia 0.7%
Republic of Croatia 6.375%, due 3/24/21 (a)	$	2,000,000		2,122,500
Dominican Republic 1.3%
Dominican Republic Series Reg S 7.50%, due 5/6/21		3,500,000		3,872,750
El Salvador 2.5%
¨ Republic of El Salvador
Series Reg S 7.375%, due 12/1/19 (a)		3,000,000		3,375,000
7.65%, due 6/15/35		2,450,000		2,590,875
8.25%, due 4/10/32 (a)		1,550,000		1,767,000
				7,732,875
Gabon 0.8%
Gabonese Republic 8.20%, due 12/12/17 (a)		2,200,000		2,557,500
Georgia 0.7%
Republic of Georgia Series Reg S 6.875%, due 4/12/21		2,000,000		2,177,500

12 MainStay Global High Income Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Government & Federal Agencies (continued)
Ghana 0.9%
Republic of Ghana
7.875%, due 8/7/23 (a)	$	2,010,344	$	1,995,266
Series Reg S 8.50%, due 10/4/17		735,000		802,988
				2,798,254
Jamaica 0.2%
Jamaica Government 8.00%, due 6/24/19		650,000		635,375
Mexico 3.0%
¨United Mexican States 7.25%, due 12/15/16	M$	111,250,000		9,213,544
Nigeria 0.7%
Nigeria Government International Bond Series Reg S 6.75%, due 1/28/21	$	2,000,000		2,205,000
Panama 1.2%
Republic of Panama 6.70%, due 1/26/36		3,058,000		3,616,085
Peru 2.4%
¨Republic of Peru 7.35%, due 7/21/25		5,800,000		7,476,200
Poland 2.4%
¨Poland Government Bond 5.75%, due 10/25/21	PLN	20,300,000		7,331,553
Portugal 1.7%
Portugal Obrigacoes do Tesouro OT Series Reg S 4.95%, due 10/25/23	€	4,200,000		5,182,304
Russia 1.0%
Russian Federal Bond-OFZ 7.00%, due 1/25/23	RUB	100,000,000		3,102,515
Senegal 0.5%
Republic of Senegal 8.75%, due 5/13/21 (a)	$	1,250,000		1,371,875
Slovenia 1.2%
Republic of Slovenia 5.50%, due 10/26/22 (a)		4,000,000		3,825,000

	Principal Amount		Value
Sri Lanka 2.1%
Republic of Sri Lanka 6.25%, due 10/4/20 (a)	$	6,500,000	$	6,589,375
Turkey 6.6%
¨Republic of Turkey
6.00%, due 1/14/41		5,000,000		5,025,000
7.375%, due 2/5/25		6,225,000		7,283,250
9.00%, due 3/8/17	TRY	9,400,000		4,840,676
Turkey Government Bond 7.10%, due 3/8/23		6,750,000		3,059,268
				20,208,194
Ukraine 3.4%
¨Ukraine Government
7.75%, due 9/23/20 (a)	$	6,000,000		5,430,000
7.80%, due 11/28/22 (a)		5,800,000		5,046,000
				10,476,000
Uruguay 1.6%
Republica Orient Uruguay 4.375%, due 12/15/28	$U	99,602,310		5,020,698
Venezuela 2.9%
¨Republic of Venezuela Series Reg S 9.25%, due 5/7/28	$	11,095,000		8,820,525
Vietnam 0.7%
Socialist Republic of Vietnam 6.75%, due 1/29/20 (a)		2,000,000		2,187,500
Total Government & Federal Agencies (Cost $134,817,609)				142,397,468
Total Long-Term Bonds (Cost $283,650,140)				293,968,900
Short-Term Investments 2.6%
Nigeria Government 1.2%
Nigeria Treasury Bill 0.00%, due 11/21/13 (d)	NGN	600,000,000		3,754,133

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Principal Amount			Value
Short-Term Investments (continued)
Repurchase Agreement 1.4%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $4,480,053 (Collateralized by a Federal National Mortgage Association security with a rate of 2.17% and a maturity date of 11/7/22, with a Principal Amount of $4,840,000 and a Market Value of $4,570,935)	$	4,480,053		$	4,480,053
Total Short-Term Investments (Cost $8,256,567)					8,234,186
Total Investments (Cost $291,906,707) (g)		98.0	%		302,203,086
Other Assets, Less Liabilities		2.0			6,143,900
Net Assets		100.0	%	$	308,346,986

	Contracts Short			Unrealized Appreciation (Depreciation) (e)
Futures Contracts (0.1%)
United States Treasury Notes December 2013 (2 Year) (f)		(547	)	$	(403,071	)
Total Futures Contracts (Settlement Value $120,570,766)				$	(403,071	)

(a) May be sold to institutional investors only under Rule 144A or securities offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

(b) Floating rate—Rate shown is the rate in effect as of October 31, 2013.

(c) Step coupon—Rate shown is the rate in effect as of October 31, 2013.

(d) Interest rate presented is yield to maturity.

(e) Represents the difference between the value of the contracts at the time they were opened and the value as of October 31, 2013.

(f) At October 31, 2013, cash in the amount of $136,750 is on deposit with broker for futures transactions.

(g) As of October 31, 2013, cost is $291,906,707 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	16,866,021
Gross unrealized depreciation		(6,569,642	)
Net unrealized appreciation	$	10,296,379

The following abbreviations are used in the above portfolio:

$U—Uruguayan Peso

€—Euro

A$—Australian Dollar

B$—Brazilian Real

C$—Colombian Peso

M$—Mexican Peso

NGN—Nigerian Naira

PLN—Polish Zloty

RUB—New Russian Ruble

TRY—Turkish Lira

As of October 31, 2013, the Fund held the following foreign currency forward contracts:

Foreign Currency Buy Contracts

Expiration Date

Counterparty

Contract Amount Purchased

Contract Amount Sold

Unrealized Appreciation (Depreciation)

New Russian Ruble vs. U.S. Dollar

2/3/14

HSBC Bank USA

RUB

196,300,000

USD

6,088,238

USD

(60,880

)

Polish Zloty vs. U.S. Dollar

2/3/14

Barclays Bank PLC

PLN

10,700,000

3,510,176

(55,426

)

South Korean Won vs. U.S. Dollar

2/3/14

HSBC Bank USA

KRW

7,300,000,000

6,833,287

6,502

Foreign Currency Sales Contracts

Contract Amount Sold

Contract Amount Purchased

Australian Dollar vs. U.S. Dollar

2/3/14

HSBC Bank USA

AUD

3,150,000

USD

3,010,455

USD

51,023

Brazilian Real vs. U.S. Dollar

2/3/14

Barclays Bank PLC

BRL

10,609,255

USD

4,570,000

(66,674

)

Euro vs. Polish Zloty

2/3/14

HSBC Bank USA

EUR

2,662,293

PLN

11,200,000

962

Euro vs. U.S. Dollar

2/3/14

HSBC Bank USA

EUR

10,500,000

USD

14,496,720

238,383

Pound Sterling vs. U.S. Dollar

2/3/14

HSBC Bank USA

GBP

2,000,000

USD

3,237,586

33,022

Swiss Franc vs. Euro

2/3/14

JPMorgan Chase Bank

CHF

9,300,000

EUR

7,557,842

5,507

Net unrealized appreciation (depreciation) on foreign currency forward contracts

USD

152,419

14 MainStay Global High Income Fund

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets and liabilities.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Long-Term Bonds
Corporate Bonds	$	—	$	151,571,432	$	—	$	151,571,432
U.S. Government & Federal Agencies		—		142,397,468		—		142,397,468
Total Long-Term Bonds		—		293,968,900		—		293,968,900
Short-Term Investments
Nigeria Government		—		3,754,133		—		3,754,133
Repurchase Agreement		—		4,480,053		—		4,480,053
Total Short-Term Investments		—		8,234,186		—		8,234,186
Total Investments in Securities				302,203,086				302,203,086
Other Financial Instruments
Foreign Currency Forward Contracts (b)		—		335,399		—		335,399
Total Investments in Securities and Other Financial Instruments	$	—	$	302,538,485	$	—	$	302,538,485

Liability Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments
Foreign Currency Forward Contracts (b)	$	—		$	(182,980	)	$	—	$	(182,980	)
Futures Contracts Short (b)		(403,071	)		—			—		(403,071	)
Total Other Financial Instruments	$	(403,071	)	$	(182,980	)	$	—	$	(586,051	)

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

(b) The value listed for these securities reflects unrealized appreciation (depreciation) as shown on the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:

Investments in Securities	Balance as of October 31, 2012		Accrued Discounts (Premiums)		Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)		Purchases		Sales			Transfers into Level 3		Transfers out of Level 3		Balance as of October 31, 2013		Change in Unrealized Appreciation (Depreciation) from Investments Still Held as of October 31, 2013 (a)
Long-Term Bonds
Government & Federal Agencies Supranational	$	2,999,902	$	—	$	(25,566	)	$	2,643	$	—	$	(2,976,979	)	$	—	$	—	$	—	$	—
Total	$	2,999,902	$	—	$	(25,566	)	$	2,643	$	—	$	(2,976,979	)	$	—	$	—	$	—	$	—

(a) Included in “Net change in unrealized appreciation (depreciation) on investments” in the Statement of Operations.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $291,906,707)	$	302,203,086
Cash denominated in foreign currencies (identified cost $1,186,764)		1,202,194
Cash collateral on deposit at broker		136,750
Receivables:
Interest		5,505,213
Fund shares sold		746,645
Other assets		33,169
Unrealized appreciation on foreign currency forward contracts		335,399
Total assets		310,162,456
Liabilities
Payables:
Fund shares redeemed		860,059
Manager (See Note 3)		186,239
NYLIFE Distributors (See Note 3)		108,983
Transfer agent (See Note 3)		90,798
Shareholder communication		32,495
Variation margin on futures contracts		17,094
Professional fees		15,317
Custodian		7,078
Trustees		714
Accrued expenses		4,425
Dividend payable		309,288
Unrealized depreciation on foreign currency forward contracts		182,980
Total liabilities		1,815,470
Net assets	$	308,346,986
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	268,482
Additional paid-in capital		297,288,381
		297,556,863
Distributions in excess of net investment income		(309,288	)
Accumulated net realized gain (loss) on investments, futures transactions and foreign currency transactions		1,035,247
Net unrealized appreciation (depreciation) on investments and futures contracts		9,893,308
Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		170,856
Net assets	$	308,346,986

Investor Class
Net assets applicable to outstanding shares	$	27,917,610
Shares of beneficial interest outstanding		2,406,105
Net asset value per share outstanding	$	11.60
Maximum sales charge (4.50% of offering price)		0.55
Maximum offering price per share outstanding	$	12.15
Class A
Net assets applicable to outstanding shares	$	152,831,718
Shares of beneficial interest outstanding		13,268,486
Net asset value per share outstanding	$	11.52
Maximum sales charge (4.50% of offering price)		0.54
Maximum offering price per share outstanding	$	12.06
Class B
Net assets applicable to outstanding shares	$	15,290,456
Shares of beneficial interest outstanding		1,346,692
Net asset value and offering price per share outstanding	$	11.35
Class C
Net assets applicable to outstanding shares	$	68,629,383
Shares of beneficial interest outstanding		6,038,413
Net asset value and offering price per share outstanding	$	11.37
Class I
Net assets applicable to outstanding shares	$	43,677,819
Shares of beneficial interest outstanding		3,788,527
Net asset value and offering price per share outstanding	$	11.53

16 MainStay Global High Income Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Interest	$	23,955,748
Expenses
Manager (See Note 3)		2,546,348
Distribution/Service—Investor Class (See Note 3)		70,092
Distribution/Service—Class A (See Note 3)		425,540
Distribution/Service—Class B (See Note 3)		185,841
Distribution/Service—Class C (See Note 3)		840,270
Transfer agent (See Note 3)		564,752
Registration		94,622
Professional fees		69,300
Shareholder communication		66,792
Custodian		48,101
Trustees		7,292
Miscellaneous		14,560
Total expenses		4,933,510
Net investment income (loss)		19,022,238
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency Transactions
Net realized gain (loss) on:
Security transactions		1,089,513
Futures transactions		(24,306	)
Foreign currency transactions		115,403
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		1,180,610
Net change in unrealized appreciation (depreciation) on:
Investments		(29,017,043	)
Futures contracts		(403,071	)
Translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		140,653
Net change in unrealized appreciation (depreciation) on investments, futures contracts and foreign currency transactions		(29,279,461	)
Net realized and unrealized gain (loss) on investments, futures transactions and foreign currency transactions		(28,098,851	)
Net increase (decrease) in net assets resulting from operations	$	(9,076,613	)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	19,022,238		$	16,394,428
Net realized gain (loss) on investments, futures transactions, swap transactions and foreign currency transactions		1,180,610			5,453,749
Net change in unrealized appreciation (depreciation) on investments, futures contracts, swap contracts and foreign currency transactions		(29,279,461	)		25,889,771
Net increase (decrease) in net assets resulting from operations		(9,076,613	)		47,737,948
Dividends and distributions to shareholders:
From net investment income:
Investor Class		(1,921,312	)		(1,279,141	)
Class A		(12,129,709	)		(8,448,828	)
Class B		(1,174,107	)		(920,192	)
Class C		(5,282,302	)		(3,803,138	)
Class I		(3,851,086	)		(2,392,977	)
		(24,358,516	)		(16,844,276	)
From net realized gain on investments:
Investor Class		—			(630,762	)
Class A		—			(3,912,908	)
Class B		—			(595,783	)
Class C		—			(2,218,133	)
Class I		—			(1,033,355	)
		—			(8,390,941	)
Total dividends and distributions to shareholders		(24,358,516	)		(25,235,217	)
Capital share transactions:
Net proceeds from sale of shares		113,501,610			116,559,348
Net asset value of shares issued to shareholders in reinvestment of dividends and distributions		17,184,103			17,050,329
Cost of shares redeemed		(155,453,579	)		(95,612,363	)
Increase (decrease) in net assets derived from capital share transactions		(24,767,866	)		37,997,314
Net increase (decrease) in net assets		(58,202,995	)		60,500,045
Net Assets
Beginning of year		366,549,981			306,049,936
End of year	$	308,346,986		$	366,549,981
Undistributed (distributions in excess of) net investment income at end of year	$	(309,288	)	$	4,942,861

18 MainStay Global High Income Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.71		$	11.90		$	12.49		$	11.16		$	8.07
Net investment income (loss) (a)		0.67			0.61			0.59			0.66			0.65
Net realized and unrealized gain (loss) on investments		(0.94	)		1.12			(0.41	)		1.33			3.00
Net realized and unrealized gain (loss) on foreign currency transactions		0.01			0.02			0.03			0.05			0.13
Total from investment operations		(0.26	)		1.75			0.21			2.04			3.78
Less dividends and distributions:
From net investment income		(0.85	)		(0.62	)		(0.64	)		(0.71	)		(0.69	)
From net realized gain on investments		—			(0.32	)		(0.16	)		—			—
Total dividends and distributions		(0.85	)		(0.94	)		(0.80	)		(0.71	)		(0.69	)
Net asset value at end of year	$	11.60		$	12.71		$	11.90		$	12.49		$	11.16
Total investment return (b)		(2.18	%)		15.52	%		1.94	%		18.95	%		48.62	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.49	%		5.10	%		4.93	%		5.65	%		6.69	%
Net expenses		1.30	%		1.29	%		1.32	%		1.37	%		1.49	%
Expenses (before waiver/reimbursement)		1.30	%		1.29	%		1.32	%		1.37	%		1.57	%
Portfolio turnover rate		36	%		31	%		65	%		92	%		133	%
Net assets at end of year (in 000’s)	$	27,918		$	27,165		$	23,439		$	21,834		$	17,581

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.62		$	11.83		$	12.42		$	11.09		$	8.02
Net investment income (loss) (a)		0.68			0.62			0.60			0.67			0.66
Net realized and unrealized gain (loss) on investments		(0.93	)		1.11			(0.41	)		1.33			2.99
Net realized and unrealized gain (loss) on foreign currency transactions		0.01			0.02			0.03			0.05			0.12
Total from investment operations		(0.24	)		1.75			0.22			2.05			3.77
Less dividends and distributions:
From net investment income		(0.86	)		(0.64	)		(0.65	)		(0.72	)		(0.70	)
From net realized gain on investments		—			(0.32	)		(0.16	)		—			—
Total dividends and distributions		(0.86	)		(0.96	)		(0.81	)		(0.72	)		(0.70	)
Net asset value at end of year	$	11.52		$	12.62		$	11.83		$	12.42		$	11.09
Total investment return (b)		(1.98	%)		15.68	%		1.96	%		19.09	%		49.04	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.58	%		5.22	%		5.03	%		5.77	%		6.77	%
Net expenses		1.16	%		1.17	%		1.22	%		1.25	%		1.32	%
Expenses (before waiver/reimbursement)		1.16	%		1.17	%		1.22	%		1.25	%		1.40	%
Portfolio turnover rate		36	%		31	%		65	%		92	%		133	%
Net assets at end of year (in 000’s)	$	152,832		$	179,430		$	144,272		$	159,834		$	119,132

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.45		$	11.68		$	12.28		$	10.97		$	7.94
Net investment income (loss) (a)		0.56			0.51			0.49			0.56			0.57
Net realized and unrealized gain (loss) on investments		(0.91	)		1.09			(0.41	)		1.32			2.96
Net realized and unrealized gain (loss) on foreign currency transactions		0.01			0.02			0.03			0.05			0.12
Total from investment operations		(0.34	)		1.62			0.11			1.93			3.65
Less dividends and distributions:
From net investment income		(0.76	)		(0.53	)		(0.55	)		(0.62	)		(0.62	)
From net realized gain on investments		—			(0.32	)		(0.16	)		—			—
Total dividends and distributions		(0.76	)		(0.85	)		(0.71	)		(0.62	)		(0.62	)
Net asset value at end of year	$	11.35		$	12.45		$	11.68		$	12.28		$	10.97
Total investment return (b)		(2.89	%)		14.60	%		1.13	%		18.11	%		47.69	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.70	%		4.35	%		4.18	%		4.90	%		5.98	%
Net expenses		2.05	%		2.04	%		2.07	%		2.12	%		2.24	%
Expenses (before waiver/reimbursement)		2.05	%		2.04	%		2.07	%		2.12	%		2.32	%
Portfolio turnover rate		36	%		31	%		65	%		92	%		133	%
Net assets at end of year (in 000’s)	$	15,290		$	20,101		$	21,961		$	27,314		$	25,651

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.46		$	11.69		$	12.29		$	10.98		$	7.95
Net investment income (loss) (a)		0.56			0.51			0.49			0.56			0.56
Net realized and unrealized gain (loss) on investments		(0.90	)		1.09			(0.41	)		1.32			2.97
Net realized and unrealized gain (loss) on foreign currency transactions		0.01			0.02			0.03			0.05			0.12
Total from investment operations		(0.33	)		1.62			0.11			1.93			3.65
Less dividends and distributions:
From net investment income		(0.76	)		(0.53	)		(0.55	)		(0.62	)		(0.62	)
From net realized gain on investments		—			(0.32	)		(0.16	)		—			—
Total dividends and distributions		(0.76	)		(0.85	)		(0.71	)		(0.62	)		(0.62	)
Net asset value at end of year	$	11.37		$	12.46		$	11.69		$	12.29		$	10.98
Total investment return (b)		(2.80	%)		14.59	%		1.13	%		18.20	%		47.50	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		4.69	%		4.35	%		4.18	%		4.89	%		5.85	%
Net expenses		2.05	%		2.04	%		2.07	%		2.12	%		2.23	%
Expenses (before waiver/reimbursement)		2.05	%		2.04	%		2.07	%		2.12	%		2.31	%
Portfolio turnover rate		36	%		31	%		65	%		92	%		133	%
Net assets at end of year (in 000’s)	$	68,629		$	91,002		$	80,351		$	87,597		$	57,731

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

20 MainStay Global High Income Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.63		$	11.84		$	12.43		$	11.10		$	8.02
Net investment income (loss) (a)		0.71			0.66			0.63			0.69			0.66
Net realized and unrealized gain (loss) on investments		(0.93	)		1.10			(0.41	)		1.34			3.01
Net realized and unrealized gain (loss) on foreign currency transactions		0.01			0.02			0.03			0.05			0.13
Total from investment operations		(0.21	)		1.78			0.25			2.08			3.80
Less dividends and distributions:
From net investment income		(0.89	)		(0.67	)		(0.68	)		(0.75	)		(0.72	)
From net realized gain on investments		—			(0.32	)		(0.16	)		—			—
Total dividends and distributions		(0.89	)		(0.99	)		(0.84	)		(0.75	)		(0.72	)
Net asset value at end of year	$	11.53		$	12.63		$	11.84		$	12.43		$	11.10
Total investment return (b)		(1.73	%)		15.95	%		2.22	%		19.48	%		49.31	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		5.86	%		5.47	%		5.31	%		5.89	%		6.32	%
Net expenses		0.91	%		0.92	%		0.97	%		1.00	%		1.12	%
Expenses (before waiver/reimbursement)		0.91	%		0.92	%		0.97	%		1.00	%		1.12	%
Portfolio turnover rate		36	%		31	%		65	%		92	%		133	%
Net assets at end of year (in 000’s)	$	43,678		$	48,852		$	36,027		$	52,188		$	3,972

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Global High Income Fund (the “Fund”), a non-diversified fund.

The Fund currently offers five classes of shares. Class A and Class B shares commenced operations on June 1, 1998. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on August 31, 2007. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The five classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class and Class A shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee.

The Fund’s investment objective is to seek maximum current income by investing in high-yield debt securities of non-U.S. issuers. Capital appreciation is a secondary objective.

The Fund is “non-diversified,” which means that it may invest a greater percentage of its assets than diversified funds in a particular issuer. This may make it more susceptible than diversified funds to risks associated with an individual issuer, and to single economic, political or regulatory occurrences.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility

for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

22 MainStay Global High Income Fund

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•   Benchmark Yields	•   Reported Trades
•   Broker Dealer Quotes	•   Issuer Spreads
•   Two-sided markets	•   Benchmark securities
•   Bids/Offers	•   Reference Data (corporate actions or material event notices)
•   Industry and economic events	•   Comparable bonds
•   Equity and credit default swap curves	•   Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Futures contracts are valued at the last posted settlement price on the market where such futures are primarily traded. Options contracts are valued at the last posted settlement price on the market where such options are principally traded. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of con-

vertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Foreign currency forward contracts are valued at their fair market values measured on the basis of the mean between the last current bid and ask prices based on dealer or exchange quotations and are generally categorized as Level 2 in the hierarchy.

Credit default swaps are valued at prices supplied by a pricing agent or brokers selected by the Fund’s Manager in consultation with the Fund’s Subadvisor whose prices reflect broker/dealer supplied valuations and electronic data processing techniques. Swaps are marked-to-market daily and the change in value, if any, is recorded as unrealized appreciation or depreciation. These securities are generally categorized as Level 2 in the hierarchy.

Generally, a security is considered illiquid if it cannot be sold or disposed of in the ordinary course of business at approximately the price at which it is valued within seven days. Its illiquidity might prevent the sale of such security at a time when the Fund’s Manager or Subadvisor might wish to sell, and these securities could have the effect of decreasing the overall level of a Fund’s liquidity. Further, the lack of an established secondary market may make it more difficult to value illiquid securities, requiring the Fund to rely on judgments that may be somewhat subjective in measuring value, which could vary from the amount that the Fund could realize upon disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to the Fund. Under the supervision of the Board, the Manager or Subadvisor measure the liquidity of the Fund’s investments; in doing so, the Manager or Subadvisor may consider various factors, including (i) the frequency of trades and quotations, (ii) the number of dealers and prospective purchasers, (iii) dealer undertakings to make a market, and (iv) the nature of the security and the market in which it trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the

mainstayinvestments.com 23

Notes to Financial Statements (continued)

mechanics of transfer). Illiquid securities generally will be valued in good faith in such a manner as the Board deems appropriate to reflect their fair value.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Foreign Taxes.  Investment income received by the Fund from foreign sources may be subject to foreign income taxes. These foreign income taxes are generally withheld at the source, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income, if any, at least monthly and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

The Fund may place a debt obligation on non-accrual status and reduce related interest income by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., foreign currency, interest rate, security, or securities index). The Fund is subject to equity price risk and/or interest rate risk in the normal course of investing in these transactions. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by ‘‘marking-to-market’’ such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as ‘‘variation margin.’’ When the futures contract is closed, the Fund records a realized gain or loss equal to the

24 MainStay Global High Income Fund

difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund may invest in futures contracts to help manage the duration and yield curve of the portfolio while minimizing the exposure to wider bid/ask spreads in traditional bonds. The Fund’s investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund.

(J)  Foreign Currency Forward Contracts.  The Fund may enter into foreign currency forward contracts, which are agreements to buy or sell currencies of different countries on a specified future date at a specified rate. The Fund is subject to foreign currency exchange rate risk in the normal course of investing in these transactions. During the period the forward contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. Cash movement occurs on settlement date. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract. The Fund may enter into foreign currency forward contracts to reduce currency risk versus the benchmark or for trade settlement.

The use of foreign currency forward contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract amount reflects the extent of the Fund’s involvement in these financial instruments. Risks arise from the possible movements in the foreign exchange rates underlying these instruments. While the Fund may enter into forward contracts to reduce currency exchange risks, changes in currency exchange rates may result in poorer overall performance for the Fund than if it had not engaged in such transactions. Exchange rate movements can be large, depending on the currency, and can last for extended periods of time, affecting the value of the Fund’s assets. Moreover, there may be an imperfect correlation between the Fund’s holdings of securities denominated in a particular currency and the forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to the risk of currency exchange loss. The unrealized appreciation (depreciation) on forward contracts reflects the Fund’s exposure at valuation date to credit loss in the event of a counterparty’s failure to perform its obligations.

(K)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in

foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities—at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses—at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund’s books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(L)  Swap Contracts.  The Fund may enter into credit default, interest rate, index and currency exchange rate contracts (“swaps”) for the purpose of attempting to obtain a desired return at a lower cost to the Fund, rather than directly investing in an instrument yielding that desired return or to hedge against credit and interest rate risk. In a typical swap transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on a particular investment or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount. The payments may be adjusted for transaction costs, interest payments, the amount of interest paid on the investment or instrument or other factors. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the custodian bank or broker in accordance with the swap.

Credit default swaps, in particular, are contracts whereby one party makes periodic payments to a counterparty in exchange for the right to receive a specified return in the event of a default by a third party on its obligation. Such periodic payments are accrued daily and recorded as a realized gain or loss. Credit default swaps may be used to provide a measure of protection against defaults of sovereign or corporate issuers.

Swaps are “marked-to-market” daily based upon quotations from pricing agents, brokers, or market makers and the change in value, if any, is recorded as unrealized appreciation or depreciation. Any payments made or received upon entering a swap would be amortized or accreted over the life of the swap and recorded as a realized gain or loss. Early termination of a swap is recorded as a realized gain or loss.

The Fund bears the risk of loss of the amount expected to be received under a swap in the event of the default or bankruptcy of the swap counterparty. The Fund may be able to eliminate its exposure under a swap either by assignment or other disposition, or by entering into an offsetting swap with the same party or a similar creditworthy party.

mainstayinvestments.com 25

Notes to Financial Statements (continued)

Swaps are not actively traded on financial markets. Entering into swaps involves elements of credit, market, and documentation risk in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibilities that there will be no liquid market for these swaps, that the counterparty to the swaps may default on its obligation to perform or disagree as to the meaning of the contractual terms in the swaps and that there may be unfavorable changes in interest rates, the price of the index or the security underlying these transactions. As of October 31, 2013, the Fund did not hold any swap contracts.

(M)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. Government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(N)  Concentration of Risk.  The Fund’s principal investments include high yield securities (sometimes called ‘‘junk bonds’’), 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 also be subject to greater price volatility.

The Fund may invest in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(O)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in

the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(P)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

Fair value of derivatives instruments as of October 31, 2013:

Asset Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk		Interest Rate Contracts Risk		Total
Forward Contracts	Unrealized appreciation on foreign currency forward contracts	$	335,399	$	—	$	335,399
Total Fair Value		$	335,399	$	—	$	335,399

Liability Derivatives

	Statement of Assets and Liabilities Location	Foreign Exchange Contracts Risk			Interest Rate Contracts Risk			Total
Futures Contracts	Net Assets-Net unrealized appreciation (depreciation) on investments and futures contracts (a)	$			$	(403,071	)	$	(403,071	)
Forward Contracts	Unrealized depreciation on foreign currency forward contracts		(182,980	)		—			(182,980	)
Total Fair Value		$	(182,980	)	$	(403,071	)	$	(586,051	)

(a) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Portfolio of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

26 MainStay Global High Income Fund

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Foreign Exchange Contracts Risk		Interest Rate Contracts Risk			Total
Futures Contracts	Net realized gain (loss) on futures transactions	$	—	$	(24,306	)	$	(24,306	)
Forward Contracts	Net realized gain (loss) on foreign currency transactions		242,800		—			242,800
Total Realized Gain (Loss)		$	242,800	$	(24,306	)	$	218,494

Change in Unrealized Appreciation (Depreciation)

	Statement of Operations Location	Foreign Exchange Contracts Risk		Interest Rate Contracts Risk			Total
Futures Contracts	Net change in unrealized appreciation (depreciation) on futures contracts	$	—	$	(403,071	)	$	(403,071	)
Forward Contracts	Net change in unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies and foreign currency forward contracts		122,866		—			122,866
Total Change in Unrealized Appreciation (Depreciation)		$	122,866	$	(403,071	)	$	(280,205	)

Number of Contracts, Notional Amounts or Shares/Units (1)

	Foreign Exchange Contracts Risk	Interest Rate Contracts Risk			Total
Futures Contracts Short	—		(461	)		(461	)
Forward Contracts Long	$37,243,706		—		$	37,243,706
Forward Contracts Short	$(40,974,686)		—		$	(40,974,686	)

(1) Amount disclosed represents the average held during the year ended October 31, 2013.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of

New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. MacKay Shields LLC (“MacKay Shields” or the “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and MacKay Shields, New York Life Investments pays for the services of the Subadvisor.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.70% to $500 million and 0.65% in excess of $500 million, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate was 0.72% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.02% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $2,546,348.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution and Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class and Class A Plans, the Distributor receives a monthly distribution fee from the Investor Class and Class A shares at an annual rate of 0.25% of the average daily net assets of the Investor Class and Class A shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

mainstayinvestments.com 27

Notes to Financial Statements (continued)

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $19,193 and $80,626, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Class A, Class B and Class C shares of $4,498, $38,893 and $11,653, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	69,593
Class A		183,487
Class B		45,916
Class C		207,363
Class I		58,393

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class A $ 6,870,689 4.5 % 

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary   Income		Accumulated Capital and Other Gain (Loss)		Other Temporary Differences			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
	$316,119	$	468,475	$	(309,288	)	$	10,314,817	$	10,790,123

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to mark to market of foreign forward contracts and mark to market of future contracts.

The other temporary differences are primarily due to dividends payable.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
	$84,129	$	(84,129	)	$	—

The reclassifications for the Fund are primarily due to foreign currency gain (loss), defaulted bond income accruals, consent fees and distribution redesignations.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

The Fund utilized $31,681 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013, and October 31, 2012, shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	24,358,516	$	18,673,611
Long-Term Capital Gain		—		6,561,606
Total	$	24,358,516	$	25,235,217

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds

28 MainStay Global High Income Fund

Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of U.S. government securities were $18,144 and $18,053, respectively. Purchases and sales of securities, other than U.S. government securities and short-term securities, were $103,423 and $135,926, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		435,085		$	5,404,971
Shares issued to shareholders in reinvestment of dividends and distributions		155,201			1,882,967
Shares redeemed		(431,784	)		(5,224,159	)
Net increase (decrease) in shares outstanding before conversion		158,502			2,063,779
Shares converted into Investor Class (See Note 1)		241,359			2,891,415
Shares converted from Investor Class (See Note 1)		(131,697	)		(1,611,994	)
Net increase (decrease)		268,164		$	3,343,200
Year ended October 31, 2012:
Shares sold		372,134		$	4,460,524
Shares issued to shareholders in reinvestment of dividends and distributions		159,077			1,875,394
Shares redeemed		(317,774	)		(3,793,141	)
Net increase (decrease) in shares outstanding before conversion		213,437			2,542,777
Shares converted into Investor Class (See Note 1)		172,480			2,062,845
Shares converted from Investor Class (See Note 1)		(216,830	)		(2,612,364	)
Net increase (decrease)		169,087		$	1,993,258

Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		5,213,370		$	63,530,381
Shares issued to shareholders in reinvestment of dividends and distributions		773,876			9,312,782
Shares redeemed		(7,020,385	)		(84,782,472	)
Net increase (decrease) in shares outstanding before conversion		(1,033,139	)		(11,939,309	)
Shares converted into Class A (See Note 1)		206,962			2,502,031
Shares converted from Class A (See Note 1)		(124,073	)		(1,455,358	)
Net increase (decrease)		(950,250	)	$	(10,892,636	)
Year ended October 31, 2012:
Shares sold		5,119,258		$	61,476,229
Shares issued to shareholders in reinvestment of dividends and distributions		742,513			8,700,600
Shares redeemed		(4,180,155	)		(49,963,776	)
Net increase (decrease) in shares outstanding before conversion		1,681,616			20,213,053
Shares converted into Class A (See Note 1)		369,189			4,390,805
Shares converted from Class A (See Note 1)		(27,285	)		(339,062	)
Net increase (decrease)		2,023,520		$	24,264,796

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		253,576		$	3,084,566
Shares issued to shareholders in reinvestment of dividends and distributions		79,687			951,451
Shares redeemed		(404,914	)		(4,752,162	)
Net increase (decrease) in shares outstanding before conversion		(71,651	)		(716,145	)
Shares converted from Class B (See Note 1)		(196,099	)		(2,326,094	)
Net increase (decrease)		(267,750	)	$	(3,042,239	)
Year ended October 31, 2012:
Shares sold		260,630		$	3,060,681
Shares issued to shareholders in reinvestment of dividends and distributions		109,051			1,255,122
Shares redeemed		(333,617	)		(3,919,815	)
Net increase (decrease) in shares outstanding before conversion		36,064			395,988
Shares converted from Class B (See Note 1)		(301,184	)		(3,502,224	)
Net increase (decrease)		(265,120	)	$	(3,106,236	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,116,473		$	13,606,499
Shares issued to shareholders in reinvestment of dividends and distributions		307,948			3,679,563
Shares redeemed		(2,688,175	)		(31,722,330	)
Net increase (decrease)		(1,263,754	)	$	(14,436,268	)
Year ended October 31, 2012:
Shares sold		1,550,892		$	18,281,318
Shares issued to shareholders in reinvestments of dividends and distributions		333,307			3,849,049
Shares redeemed		(1,453,119	)		(17,017,512	)
Net increase (decrease)		431,080		$	5,112,855

mainstayinvestments.com 29

Notes to Financial Statements (continued)

Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		2,253,019		$	27,875,193
Shares issued to shareholders in reinvestment of dividends and distributions		111,908			1,357,340
Shares redeemed		(2,444,405	)		(28,972,456	)
Net increase (decrease)		(79,478	)	$	260,077
Year ended October 31, 2012:
Shares sold		2,465,677		$	29,280,596
Shares issued to shareholders in reinvestment of dividends and distributions		116,597			1,370,164
Shares redeemed		(1,757,404	)		(20,918,119	)
Net increase (decrease)		824,870		$	9,732,641

Note 9–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

30 MainStay Global High Income Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Global High Income Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Global High Income Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 31

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

32 MainStay Global High Income Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 33

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

34 MainStay Global High Income Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 35

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

36 MainStay Global High Income Fund

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32112 MS322-13 MSGH11-12/13 NL020

MainStay International Equity Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	14
Notes to Financial Statements	21
Report of Independent Registered Public Accounting Firm	29
Federal Income Tax Information	30
Proxy Voting Policies and Procedures and Proxy Voting Record	30
Shareholder Reports and Quarterly Portfolio Disclosure	30
Board Members and Officers	31

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years	Ten Years		Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		8.74 15.07	%	6.35% 7.56		6.01% 6.61		1.74% 1.74
Class A Shares	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		9.08 15.43		6.67 7.89		6.19 6.79		1.40 1.40
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		9.15 14.15		6.44 6.75		5.79 5.79		2.49 2.49
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		13.15 14.15		6.74 6.74		5.79 5.79		2.49 2.49
Class I Shares4	No Sales Charge			15.72		8.17		7.21		1.15
Class R1 Shares4	No Sales Charge			15.68		8.09		7.07		1.25
Class R2 Shares4	No Sales Charge			15.34		7.80		6.85		1.50
Class R3 Shares5	No Sales Charge			15.02		7.53		6.48		1.75

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the periods of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements. Performance figures shown reflect non-recurring reimbursements from affiliates for professional fees and losses attributable to shareholder trading arrangements. If these non-recurring reimbursements had not been made the total return (excluding sales charges) would have been 6.77% for Class A, 5.77% for Class B, 5.77% for Class C, 7.19% for Class I, 7.05% for Class R1, and 6.82% for Class R2 for the ten-year period ended October 31, 2013. Investor Class and Class R3 shares were not affected, because the reimbursement occurred prior to the launch of these share classes.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class I, R1 and R2 shares, each of which was first offered on January 2, 2004, include the historical performance of Class B shares through January 1, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class I, R1 and R2 shares would likely have been different.

5. Performance figures for Class R3 shares, which were first offered on April 28, 2006, include the historical performance of Class B shares through April 27, 2006, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class R3 shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year		Five Years		Ten Years
MSCI ACWI® Ex U.S.6		20.29%		12.48%		8.48	%
MSCI EAFE® Index7		26.88		11.99		7.71
Average Lipper International Multi-Cap Growth Fund8		21.94		12.43		7.47

6. The MSCI ACWI^® Ex U.S. is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the United States. Results assume reinvestment of all income and capital gains. An investment cannot be made directly in an index. Effective July 1, 2013, the Fund has selected the MSCI ACWI^® Ex U.S. as its broad-based securities market index.

7. The MSCI EAFE^® Index consists of international stocks representing the developed world outside of North America. The MSCI EAFE^® Index is the Fund’s secondary benchmark. Results assume reinvestment of all income and capital gains. An investment cannot be made directly in an index.

8. The average Lipper international multi-cap growth fund is representative of funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. International multi-cap growth funds typically have above-average characteristics compared to the MSCI EAFE^® Index. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay International Equity Fund

Cost in Dollars of a $1,000 Investment in MainStay International Equity Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,063.70	$	8.84	$	1,016.60	$	8.64
Class A Shares	$	1,000.00	$	1,065.30	$	7.13	$	1,018.30	$	6.97
Class B Shares	$	1,000.00	$	1,059.60	$	12.72	$	1,012.90	$	12.43
Class C Shares	$	1,000.00	$	1,058.70	$	12.71	$	1,012.90	$	12.43
Class I Shares	$	1,000.00	$	1,066.60	$	5.83	$	1,019.60	$	5.70
Class R1 Shares	$	1,000.00	$	1,066.20	$	6.35	$	1,019.10	$	6.21
Class R2 Shares	$	1,000.00	$	1,064.30	$	7.65	$	1,017.80	$	7.48
Class R3 Shares	$	1,000.00	$	1,062.90	$	8.94	$	1,016.50	$	8.74

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.70% for Investor Class, 1.37% for Class A, 2.45% for Class B and Class C, 1.12% for Class I, 1.22% for Class R1, 1.47% for Class R2 and 1.72% for Class R3) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Country Composition as of October 31, 2013 (Unaudited)

United Kingdom	25.2	%
Germany	15.2
France	7.2
United States	5.4
Japan	4.9
Ireland	4.4
Sweden	4.2
Denmark	4.0
Israel	3.8
Spain	3.6
Switzerland	3.4

China	2.8	%
India	2.4
Canada	2.2
Italy	2.1
Brazil	2.0
Thailand	2.0
Czech Republic	1.8
Hong Kong	1.7
Indonesia	0.7
Other Assets, Less Liabilities	1.0
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

Top Ten Holdings as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Svenska Handelsbanken AB Class A

2. Experian PLC

3. Grifols S.A.

4. Adidas A.G.

5. SABMiller PLC

  6. Intertek Group PLC

  7. Linde A.G.

  8. Johnson Matthey PLC

  9. Petrofac, Ltd.

10. Shire PLC

8 MainStay International Equity Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Edward Ramos, CFA, Carlos Garcia-Tunon, CFA, and Eve Glatt of Cornerstone Capital Management Holdings LLC, the Fund’s Subadvisor.

How did MainStay International Equity Fund perform relative to its benchmarks and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay International Equity Fund returned 15.07% for Investor Class shares, 15.43% for Class A shares, 14.15% for Class B shares and 14.15% for Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund’s Class I shares returned 15.72%, Class R1 shares returned 15.68%, Class R2 shares returned 15.34% and Class R3 shares returned 15.02%. For the 12 months ended October 31, 2013, all share classes underperformed the 20.29% return of the MSCI ACWI^® Ex U.S.,¹ which is the Fund’s broad-based securities-market index; the 26.88% return of the MSCI EAFE^® Index,¹ which is the Fund’s secondary benchmark; and the 21.94% return of the average Lipper² international multi-cap growth fund. See page 5 for Fund returns with sales charges.

Were there any changes to the Fund in addition to those discussed in the semiannual report?

Effective July 1, 2013, the Fund selected the MSCI ACWI^® (All Country World Index) Ex. U.S., which was previously the Fund’s secondary benchmark, as its primary benchmark in replace-ment of the MSCI EAFE^® Index. The MSCI EAFE^® Index has been retained as the Fund’s secondary benchmark. The Fund selected the MSCI ACWI^® Ex U.S. as its primary benchmark because it believes that this Index is more reflective of its current investment style.

What factors affected the Fund’s relative performance during the reporting period?

Country allocation and stock selection adversely affected the Fund’s performance relative to the MSCI ACWI^® Ex U.S. during the reporting period. The impact of country allocation came primarily from an underweight position in Japan, which was among the strongest-performing markets in the Index. Sector allocation contributed positively to the Fund’s relative performance, driven by an overweight allocation to the health care sector, which performed well, and underweight allocations to the materials and energy sectors, which performed poorly. (Contributions take weightings and total returns into account.)

During the reporting period, which sectors were the strongest positive contributors to the Fund’s relative performance and which sectors were particularly weak?

The strongest-contributing sectors to the Fund’s relative performance were information technology, materials and health care. The Fund’s relative performance in all three sectors benefited from favorable allocation effects, as the Fund was over-

weight relative to the MSCI ACWI^® Ex U.S. in health care and information technology, which performed well, and was underweight relative to the Index in materials sector, which under-performed. Relative performance in each of these sectors benefited from favorable stock selection.

The sectors that detracted the most from the Fund’s relative performance were consumer discretionary, industrials and financials. While the Fund benefited from its overweight posi-tion relative to the MSCI ACWI^® Ex U.S. in the industrials sector, the Fund was hurt by underweight positions relative to the Index in the financials and consumer discretionary sectors. Stock selection was unfavorable in each of these sectors. The Fund’s quality bias left it underexposed to economically-sensitive companies, which tend to experience greater benefit as the economy improves.

During the reporting period, which individual stocks made the strongest positive contributions to the Fund’s absolute performance and which stocks detracted the most?

The stocks that made the strongest positive contributions to the Fund’s absolute performance were Scandinavian banking group Svenska Handelsbanken, German sportswear maker Adidas and Chinese Internet search engine Baidu. Svenska Handelsbanken benefited from ongoing growth in its core markets as well as in the U.K. Adidas increased sales and profits in light of strength in its retail division and ongoing sales growth in China. Baidu benefited from increased investor confidence in the company’s mobile search strategy. The company’s recent acquisitions may help extend the company’s high market share in personal-computer search to the mobile market.

The stocks that detracted the most from the Fund’s absolute performance were U.K. power solutions company Aggreko, Brazilian retailer Cia Hering and Hong Kong–based consumer goods sourcing company Li & Fung. Aggreko’s stock suffered from the expiration of high-margin contracts in Japan and from weaker-than-expected emerging-market demand. Cia Hering felt the effects of a sluggish consumer-spending environment in Brazil. Li & Fung’s stock was negatively affected by weaker-than-expected results for the company’s U.S. distribution business. We sold the Fund’s positions in Cia Hering and Li & Fung by the end of the reporting period.

Did the Fund make any significant purchases or sales during the reporting period?

Noteworthy purchases during the reporting period included new positions in Swiss crop-protection chemical company Syngenta, U.K. hospitality company Whitbread and Chinese Internet search engine Baidu.

1. See footnote on page 6 for more information on this index.

2. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

During the reporting period, the Fund sold its positions in Hong Kong consumer goods sourcing company Li & Fung, Brazilian retailer Cia Hering and Australian share registry manager Computershare Limited.

How did the Fund’s sector weightings change during the reporting period?

During the 12 months ended October 31, 2013, the Fund increased its weightings in the materials, information technology and energy sectors. Over the same period, the Fund reduced its weightings in the consumer staples, consumer discretionary and financials sectors.

How was the Fund positioned at the end of the reporting period?

As of October 2013, the Fund held overweight positions relative to the MSCI ACWI^® Ex U.S. in the health care, information technology and industrials sectors. As of the same date, the Fund held underweight positions relative to the MSCI ACWI^® Ex U.S. in the financials, consumer staples and telecommunication services sectors.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay International Equity Fund

Portfolio of Investments October 31, 2013

	Shares		Value
Common Stocks 97.0%†
Brazil 2.0%
Cielo S.A. (IT Services)		219,380	$	6,659,155
Canada 2.2%
Open Text Corp. (Software)		99,559		7,301,657
China 2.8%
Baidu, Inc., Sponsored ADR (Internet Software & Services) (a)		31,944		5,139,790
China Shenhua Energy Co., Ltd. Class H (Oil, Gas & Consumable Fuels)		1,378,200		4,186,329
				9,326,119
Czech Republic 1.8%
Komercni Banka A.S. (Commercial Banks)		24,880		6,176,959
Denmark 4.0%
Coloplast A/S Class B (Health Care Equipment & Supplies)		101,728		6,633,408
FLSmidth & Co. A/S (Construction & Engineering)		139,112		6,951,485
				13,584,893
France 7.2%
Bureau Veritas S.A. (Professional Services)		244,920		7,395,689
Essilor International S.A. (Health Care Equipment & Supplies)		82,425		8,852,277
Technip S.A. (Energy Equipment & Services)		75,827		7,942,905
				24,190,871
Germany 15.2%
¨Adidas A.G. (Textiles, Apparel & Luxury Goods)		104,883		11,973,397
Brenntag A.G. (Trading Companies & Distributors)		41,576		7,044,933
Fresenius Medical Care A.G. & Co. KGaA (Health Care Providers & Services)		125,314		8,296,270
¨Linde A.G. (Chemicals)		59,230		11,254,708
United Internet A.G. (Internet Software & Services)		193,677		7,652,276
Wirecard A.G. (IT Services)		129,615		4,726,068
				50,947,652
Hong Kong 1.7%
Samsonite International S.A. (Textiles, Apparel & Luxury Goods)		2,109,600		5,754,939

	Shares		Value
India 2.4%
Genpact, Ltd. (IT Services) (a)		202,995	$	4,025,391
Housing Development Finance Corp. (Thrifts & Mortgage Finance)		283,825		3,957,986
				7,983,377
Indonesia 0.7%
Media Nusantara Citra Tbk PT (Media)		10,124,000		2,245,287
Ireland 4.4%
ICON PLC (Life Sciences Tools & Services) (a)		105,404		4,262,538
¨Shire PLC (Pharmaceuticals)		235,516		10,388,496
				14,651,034
Israel 3.8%
Check Point Software Technologies, Ltd. (Software) (a)		144,832		8,403,153
Teva Pharmaceutical Industries, Ltd., Sponsored ADR (Pharmaceuticals)		116,158		4,308,300
				12,711,453
Italy 2.1%
DiaSorin S.p.A. (Health Care Equipment & Supplies)		146,492		6,933,633
Japan 4.9%
Avex Group Holdings, Inc. (Media)		190,000		4,803,621
Daito Trust Construction Co., Ltd. (Real Estate Management & Development)		56,000		5,700,803
Sysmex Corp. (Health Care Equipment & Supplies)		92,300		6,073,233
				16,577,657
Spain 3.6%
¨Grifols S.A. (Biotechnology)		297,497		12,200,595
Sweden 4.2%
¨Svenska Handelsbanken AB Class A (Commercial Banks)		307,473		13,931,076
Switzerland 3.4%
DKSH Holding A.G. (Professional Services)		40,912		3,420,042
Syngenta A.G. (Chemicals)		19,480		7,868,430
				11,288,472
Thailand 2.0%
Kasikornbank PCL (Commercial Banks)		1,088,300		6,783,300

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
United Kingdom 25.2%
Aggreko PLC (Commercial Services & Supplies)		387,634	$	10,006,666
¨Experian PLC (Professional Services)		614,462		12,512,394
¨Intertek Group PLC (Professional Services)		221,245		11,820,072
¨Johnson Matthey PLC (Chemicals)		229,536		11,055,857
¨Petrofac, Ltd. (Energy Equipment & Services)		449,584		10,546,220
¨SABMiller PLC (Beverages)		227,524		11,870,976
Standard Chartered PLC (Commercial Banks)		320,912		7,715,678
Telecity Group PLC (Internet Software & Services)		315,240		3,854,099
Whitbread PLC (Hotels, Restaurants & Leisure)		95,451		5,254,071
				84,636,033
United States 3.4%
Accenture PLC Class A (IT Services)		45,193		3,321,686
ResMed, Inc. (Health Care Equipment & Supplies)		159,395		8,247,097
				11,568,783
Total Common Stocks (Cost $258,205,476)				325,452,945

	Principal Amount			Value
Short-Term Investment 2.0%
Repurchase Agreement 2.0%
United States 2.0%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $6,861,080 (Collateralized by a Federal National Mortgage Association security with a rate of 2.14% and a maturity date of 11/7/22, with a Principal Amount of $7,435,000 and a Market Value of $7,002,528) (Capital Markets)	$	6,861,080		$	6,861,080
Total Short-Term Investment (Cost $6,861,080)					6,861,080
Total Investments (Cost $265,066,556) (b)		99.0	%		332,314,025
Other Assets, Less Liabilities		1.0			3,303,699
Net Assets		100.0	%	$	335,617,724

(a) Non-income producing security.

(b) As of October 31, 2013, cost is $265,590,682 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	74,133,451
Gross unrealized depreciation		(7,410,108	)
Net unrealized appreciation	$	66,723,343

The following abbreviation is used in the above portfolio:

ADR—American Depositary Receipt

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Common Stocks	$	325,452,945	$	—	$	—	$	325,452,945
Short-Term Investment
Repurchase Agreement		—		6,861,080		—		6,861,080
Total Investments in Securities	$	325,452,945	$	6,861,080	$	—	$	332,314,025

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

12 MainStay International Equity Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The table below sets forth the diversification of MainStay International Equity Fund investments by industry.

Industry Diversification (Unaudited)

	Value		Percent †
Beverages	$	11,870,976		3.5	%
Biotechnology		12,200,595		3.6
Capital Markets		6,861,080		2.0
Chemicals		30,178,995		9.0
Commercial Banks		34,607,013		10.3
Commercial Services & Supplies		10,006,666		3.0
Construction & Engineering		6,951,485		2.1
Energy Equipment & Services		18,489,125		5.5
Health Care Equipment & Supplies		36,739,648		10.9
Health Care Providers & Services		8,296,270		2.5
Hotels, Restaurants & Leisure		5,254,071		1.6
Internet Software & Services		16,646,165		4.9
IT Services		18,732,300		5.6
Life Sciences Tools & Services		4,262,538		1.3
Media		7,048,908		2.1
Oil, Gas & Consumable Fuels		4,186,329		1.2
Pharmaceuticals		14,696,796		4.4
Professional Services		35,148,197		10.5
Real Estate Management & Development		5,700,803		1.7
Software		15,704,810		4.7
Textiles, Apparel & Luxury Goods		17,728,336		5.3
Thrifts & Mortgage Finance		3,957,986		1.2
Trading Companies & Distributors		7,044,933		2.1
		332,314,025		99.0
Other Assets, Less Liabilities		3,303,699		1.0
Net Assets	$	335,617,724		100.0	%

† Percentages indicated are based on Fund net assets.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $265,066,556)	$	332,314,025
Cash denominated in foreign currencies (identified cost $3,011,385)		3,000,500
Receivables:
Investment securities sold		1,600,661
Dividends and interest		301,882
Fund shares sold		100,651
Other assets		23,602
Total assets		337,341,321
Liabilities
Payables:
Investment securities purchased		704,673
Foreign capital gains tax (See Note 2(C))		295,245
Fund shares redeemed		252,917
Manager (See Note 3)		252,329
Transfer agent (See Note 3)		101,950
NYLIFE Distributors (See Note 3)		42,925
Shareholder communication		39,996
Professional fees		16,394
Custodian		11,629
Trustees		733
Accrued expenses		4,806
Total liabilities		1,723,597
Net assets	$	335,617,724
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	251,722
Additional paid-in capital		382,465,530
		382,717,252
Undistributed net investment income		1,002,562
Accumulated net realized gain (loss) on investments, futures transactions and foreign currency transactions (a)		(115,046,361	)
Net unrealized appreciation (depreciation) on investments (b)		66,952,224
Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies		(7,953	)
Net assets	$	335,617,724

Investor Class
Net assets applicable to outstanding shares	$	37,456,693
Shares of beneficial interest outstanding		2,805,968
Net asset value per share outstanding	$	13.35
Maximum sales charge (5.50% of offering price)		0.78
Maximum offering price per share outstanding	$	14.13
Class A
Net assets applicable to outstanding shares	$	57,947,524
Shares of beneficial interest outstanding		4,333,888
Net asset value per share outstanding	$	13.37
Maximum sales charge (5.50% of offering price)		0.78
Maximum offering price per share outstanding	$	14.15
Class B
Net assets applicable to outstanding shares	$	13,980,841
Shares of beneficial interest outstanding		1,140,246
Net asset value and offering price per share outstanding	$	12.26
Class C
Net assets applicable to outstanding shares	$	10,088,403
Shares of beneficial interest outstanding		822,550
Net asset value and offering price per share outstanding	$	12.26
Class I
Net assets applicable to outstanding shares	$	202,289,308
Shares of beneficial interest outstanding		15,034,565
Net asset value and offering price per share outstanding	$	13.45
Class R1
Net assets applicable to outstanding shares	$	4,002,724
Shares of beneficial interest outstanding		299,426
Net asset value and offering price per share outstanding	$	13.37
Class R2
Net assets applicable to outstanding shares	$	8,487,189
Shares of beneficial interest outstanding		633,374
Net asset value and offering price per share outstanding	$	13.40
Class R3
Net assets applicable to outstanding shares	$	1,365,042
Shares of beneficial interest outstanding		102,219
Net asset value and offering price per share outstanding	$	13.35

(a) Realized gain (loss) on security transactions net of foreign capital gains tax in the amount of $153,708.

(b) Unrealized appreciation (depreciation) on investments net of foreign capital gains tax in the amount of $295,245.

14 MainStay International Equity Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Dividends (a)	$	5,626,679
Interest (b)		2,459
Total income		5,629,138
Expenses
Manager (See Note 3)		2,868,486
Transfer agent (See Note 3)		628,806
Distribution/Service—Investor Class (See Note 3)		90,014
Distribution/Service—Class A (See Note 3)		146,559
Distribution/Service—Class B (See Note 3)		147,366
Distribution/Service—Class C (See Note 3)		105,258
Distribution/Service—Class R2 (See Note 3)		20,891
Distribution/Service—Class R3 (See Note 3)		6,162
Registration		98,373
Shareholder communication		82,153
Custodian		77,012
Professional fees		64,646
Shareholder service (See Note 3)		13,771
Trustees		6,567
Miscellaneous		23,522
Total expenses		4,379,586
Net investment income (loss)		1,249,552
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency Transactions
Net realized gain (loss) on:
Security transactions (c)		12,748,525
Futures transactions		81,842
Foreign currency transactions		(93,189	)
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		12,737,178
Net change in unrealized appreciation (depreciation) on:
Investments (d)		32,220,379
Translation of other assets and liabilities in foreign currencies		(108,340	)
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions		32,112,039
Net realized and unrealized gain (loss) on investments, futures transactions and foreign currency transactions		44,849,217
Net increase (decrease) in net assets resulting from operations	$	46,098,769

(a) Dividends recorded net of foreign withholding taxes in the amount of $550,918.

(b) Interest recorded net of foreign withholding taxes in the amount of $95.

(c) Realized gain (loss) on security transactions net of foreign capital gains tax in the amount of $153,708.

(d) Change in unrealized appreciation (depreciation) on investments net of foreign capital gains tax in the amount of $295,245.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	1,249,552		$	2,783,960
Net realized gain (loss) on investments, futures transactions and foreign currency transactions		12,737,178			(8,735,093	)
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions		32,112,039			37,442,478
Net increase (decrease) in net assets resulting from operations		46,098,769			31,491,345
Dividends to shareholders:
From net investment income:
Investor Class		(176,467	)		(893,973	)
Class A		(498,406	)		(1,933,319	)
Class B		—			(379,000	)
Class C		—			(232,501	)
Class I		(1,910,002	)		(5,180,205	)
Class R1		(43,128	)		(142,357	)
Class R2		(57,790	)		(330,290	)
Class R3		(3,211	)		(39,158	)
Total dividends to shareholders		(2,689,004	)		(9,130,803	)
Capital share transactions:
Net proceeds from sale of shares		52,425,896			71,221,509
Net asset value of shares issued to shareholders in reinvestment of dividends		2,623,458			8,641,477
Cost of shares redeemed		(80,429,479	)		(128,600,287	)
Increase (decrease) in net assets derived from capital share transactions		(25,380,125	)		(48,737,301	)
Net increase (decrease) in net assets		18,029,640			(26,376,759	)
Net Assets
Beginning of year		317,588,084			343,964,843
End of year	$	335,617,724		$	317,588,084
Undistributed net investment income at end of year	$	1,002,562		$	2,688,911

16 MainStay International Equity Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.66		$	10.81		$	12.66		$	12.24		$	10.96
Net investment income (loss) (a)		0.01			0.06			0.21			0.22	(b)		0.23
Net realized and unrealized gain (loss) on investments		1.75			1.07			(1.62	)		0.44			1.73
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.08			0.18
Total from investment operations		1.75			1.13			(1.50	)		0.74			2.14
Less dividends:
From net investment income		(0.06	)		(0.28	)		(0.35	)		(0.32	)		(0.86	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.35		$	11.66		$	10.81		$	12.66		$	12.24
Total investment return (d)		15.07	%		10.81	%		(12.19	%)		6.11	%		21.20	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.05	%		0.54	%		1.77	%		1.82	%(b)		2.19	%
Net expenses		1.72	%		1.77	%		1.71	%		1.75	%		1.71	%
Expenses (before waiver/reimbursement)		1.72	%		1.77	%		1.71	%		1.75	%		1.86	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	37,457		$	34,822		$	34,895		$	39,843		$	39,969

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.68		$	10.82		$	12.66		$	12.24		$	10.97
Net investment income (loss) (a)		0.05			0.10			0.26			0.25	(b)		0.26
Net realized and unrealized gain (loss) on investments		1.75			1.07			(1.63	)		0.44			1.73
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.08			0.18
Total from investment operations		1.79			1.17			(1.46	)		0.77			2.17
Less dividends:
From net investment income		(0.10	)		(0.31	)		(0.38	)		(0.35	)		(0.90	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.37		$	11.68		$	10.82		$	12.66		$	12.24
Total investment return (d)		15.43	%		11.27	%		(11.96	%)		6.31	%		21.57	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.38	%		0.87	%		2.11	%		2.11	%(b)		2.40	%
Net expenses		1.40	%		1.43	%		1.46	%		1.44	%		1.39	%
Expenses (before waiver/reimbursement)		1.40	%		1.43	%		1.46	%		1.44	%		1.42	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	57,948		$	60,303		$	72,699		$	104,169		$	117,023

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.73		$	9.95		$	11.67		$	11.33		$	10.17
Net investment income (loss) (a)		(0.08	)		(0.02	)		0.11			0.12	(b)		0.14
Net realized and unrealized gain (loss) on investments		1.62			0.99			(1.49	)		0.39			1.61
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.08	)		0.07			0.16
Total from investment operations		1.53			0.97			(1.46	)		0.58			1.91
Less dividends:
From net investment income		—			(0.19	)		(0.26	)		(0.24	)		(0.75	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	12.26		$	10.73		$	9.95		$	11.67		$	11.33
Total investment return (d)		14.26	% (e)		10.05	%		(12.81	%)		5.17	%		20.31	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.73	%)		(0.22	%)		1.02	%		1.04	%(b)		1.41	%
Net expenses		2.47	%		2.52	%		2.46	%		2.50	%		2.46	%
Expenses (before waiver/reimbursement)		2.47	%		2.52	%		2.46	%		2.50	%		2.62	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	13,981		$	16,186		$	20,509		$	31,314		$	36,397

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(e) Total investment return may reflect adjustments to conform to generally accepted accounting principles.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	10.74		$	9.96		$	11.68		$	11.32		$	10.17
Net investment income (loss) (a)		(0.08	)		(0.02	)		0.12			0.12	(b)		0.13
Net realized and unrealized gain (loss) on investments		1.61			0.99			(1.50	)		0.41			1.61
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.08	)		0.07			0.16
Total from investment operations		1.52			0.97			(1.46	)		0.60			1.90
Less dividends:
From net investment income		—			(0.19	)		(0.26	)		(0.24	)		(0.75	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	12.26		$	10.74		$	9.96		$	11.68		$	11.32
Total investment return (d)		14.15	%		10.05	%		(12.88	%)		5.23	%		20.32	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.71	%)		(0.21	%)		1.07	%		1.09	%(b)		1.34	%
Net expenses		2.47	%		2.52	%		2.46	%		2.50	%		2.46	%
Expenses (before waiver/reimbursement)		2.47	%		2.52	%		2.46	%		2.50	%		2.60	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	10,088		$	11,111		$	12,960		$	19,242		$	19,079

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

18 MainStay International Equity Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.75		$	10.89		$	12.75		$	12.33		$	11.05
Net investment income (loss) (a)		0.08			0.13			0.26			0.29	(b)		0.29
Net realized and unrealized gain (loss) on investments		1.76			1.07			(1.62	)		0.43			1.75
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.08			0.18
Total from investment operations		1.83			1.20			(1.45	)		0.80			2.22
Less dividends:
From net investment income		(0.13	)		(0.34	)		(0.41	)		(0.38	)		(0.94	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.45		$	11.75		$	10.89		$	12.75		$	12.33
Total investment return (d)		15.72	%		11.45	%		(11.73	%)		6.61	%		22.01	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.62	%		1.15	%		2.16	%		2.40	%(b)		2.70	%
Net expenses		1.14	%		1.18	%		1.21	%		1.18	%		1.08	%
Expenses (before waiver/reimbursement)		1.14	%		1.18	%		1.21	%		1.18	%		1.17	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	202,289		$	177,726		$	184,373		$	373,332		$	387,245

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

	Year ended October 31,
Class R1	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.67		$	10.82		$	12.67		$	12.25		$	10.98
Net investment income (loss) (a)		0.06			0.11			0.26			0.27	(b)		0.28
Net realized and unrealized gain (loss) on investments		1.76			1.07			(1.62	)		0.44			1.74
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.08			0.18
Total from investment operations		1.81			1.18			(1.45	)		0.79			2.20
Less dividends:
From net investment income		(0.11	)		(0.33	)		(0.40	)		(0.37	)		(0.93	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.37		$	11.67		$	10.82		$	12.67		$	12.25
Total investment return (d)		15.68	%		11.41	%		(11.89	%)		6.58	%		21.89	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.49	%		1.04	%		2.12	%		2.30	%(b)		2.58	%
Net expenses		1.25	%		1.28	%		1.31	%		1.29	%		1.19	%
Expenses (before reimbursement/waiver)		1.25	%		1.28	%		1.31	%		1.29	%		1.27	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	4,003		$	4,677		$	4,760		$	6,225		$	5,348

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R1 shares are not subject to sales charges.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class R2	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.70		$	10.84		$	12.69		$	12.27		$	10.99
Net investment income (loss) (a)		0.03			0.09			0.24			0.25	(b)		0.16
Net realized and unrealized gain (loss) on investments		1.76			1.06			(1.63	)		0.43			1.82
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.08			0.19
Total from investment operations		1.78			1.15			(1.48	)		0.76			2.17
Less dividends:
From net investment income		(0.08	)		(0.29	)		(0.37	)		(0.34	)		(0.89	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.40		$	11.70		$	10.84		$	12.69		$	12.27
Total investment return (d)		15.34	%		11.12	%		(12.09	%)		6.32	%		21.53	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.26	%		0.82	%		2.02	%		2.09	%(b)		1.39	%
Net expenses		1.49	%		1.53	%		1.55	%		1.54	%		1.50	%
Expenses (before waiver/reimbursement)		1.49	%		1.53	%		1.55	%		1.54	%		1.54	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	8,487		$	10,545		$	12,176		$	10,942		$	7,826

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R2 shares are not subject to sales charges.

	Year ended October 31,
Class R3	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.64		$	10.79		$	12.64		$	12.24		$	10.95
Net investment income (loss) (a)		(0.01	)		0.06			0.24			0.24	(b)		0.26
Net realized and unrealized gain (loss) on investments		1.76			1.06			(1.65	)		0.41			1.72
Net realized and unrealized gain (loss) on foreign currency transactions		(0.01	)		0.00	‡		(0.09	)		0.07			0.17
Total from investment operations		1.74			1.12			(1.50	)		0.72			2.15
Less dividends:
From net investment income		(0.03	)		(0.27	)		(0.35	)		(0.32	)		(0.86	)
Redemption fee (a)(c)		—			—			—			0.00	‡		0.00	‡
Net asset value at end of year	$	13.35		$	11.64		$	10.79		$	12.64		$	12.24
Total investment return (d)		15.02	%		10.82	%		(12.28	%)		5.99	%		21.31	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.05	%)		0.56	%		1.98	%		2.00	%(b)		2.45	%
Net expenses		1.74	%		1.78	%		1.80	%		1.79	%		1.69	%
Expenses (before waiver/reimbursement)		1.74	%		1.78	%		1.80	%		1.79	%		1.77	%
Portfolio turnover rate		29	%		43	%		80	%		54	%		88	%
Net assets at end of year (in 000’s)	$	1,365		$	2,218		$	1,592		$	737		$	322

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Included in net investment income per share and the ratio of net investment income to average net assets are $0.03 per share and 0.29%, respectively, resulting from a special one-time dividend from Ryanair Holdings PLC that paid $0.30 per share.

(c) The redemption fee was discontinued as of April 1, 2010.

(d) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R3 shares are not subject to sales charges.

20 MainStay International Equity Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay International Equity Fund (the “Fund”), a diversified fund.

The Fund currently offers eight classes of shares. Class A shares commenced operations on January 3, 1995. Class B shares commenced operations on September 13, 1994. Class C shares commenced operations on September 1, 1998. Class I, Class R1 and Class R2 shares commenced operations on January 2, 2004. Class R3 shares commenced operations on April 28, 2006. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I, Class R1, Class R2 and Class R3 shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The eight classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class, Class A, Class R2 and Class R3 shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I and Class R1 shares are not subject to a distribution and/or service fee. Class R1, Class R2 and Class R3 shares are subject to a shareholder service fee. This is in addition to any fees paid under a distribution plan, where applicable.

The Fund’s investment objective is to seek long-term growth of capital.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation

Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

mainstayinvestments.com 21

Notes to Financial Statements (continued)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Broker Dealer Quotes	•    Reported Trades
•    Two-sided markets	•    Issuer Spreads
•    Bids / Offers	•    Benchmark securities
•    Industry and economic events	•    Reference Data (corporate actions or material event notices)
•    Equity and credit default swap curves	•    Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Certain events may occur between the time that foreign markets close, on which securities held by the Fund principally trade, and the time at which the Fund’s NAV is calculated. These events may include, but are not limited to, situations relating to a single issuer in a market sector, significant fluctuations in U.S. or foreign markets, natural disasters, armed conflicts, governmental actions or other developments not tied directly to the securities markets. Should the Manager or Subadvisor conclude that such events may have affected the accuracy of the last price of such securities reported on the local foreign market, the Sub-Committee may, pursuant to procedures adopted by the Board, adjust the value of the local price to reflect the estimated impact on the price

of such securities as a result of such events. In this instance, securities are generally categorized as Level 3 in the hierarchy. Additionally, certain foreign equity securities are also fair valued whenever the movement of a particular index exceeds an established threshold. In such cases, the securities are fair valued by applying factors provided by a third party vendor in accordance with the Fund’s policies and procedures and are generally categorized as Level 2 in the hierarchy. As of October 31, 2013, foreign equity securities held by the Fund were not fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Futures contracts are valued at the last posted settlement price on the market where such futures are primarily traded. Options contracts are valued at the last posted settlement price on the market where such options are principally traded. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Foreign currency forward contracts are valued at their fair market values measured on the basis of the mean between the last current bid and ask prices based on dealer or exchange quotations and are generally categorized as Level 2 in the hierarchy.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The

22 MainStay International Equity Fund

Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Foreign Taxes.  Investment income received by the Fund from foreign sources may be subject to foreign income taxes. These foreign income taxes are generally withheld at the source, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

The Fund may be subject to taxation on realized capital gains, repatriation proceeds and other transaction-based taxes imposed by certain countries in which it invests. The Fund will accrue such taxes as applicable based upon its current interpretation of tax rules and regulations that exist in the market in which it invests. Capital gains taxes relating to positions still held are reflected as a liability on the Statement of Assets and Liabilities, as well as an adjustment to the Fund’s net unrealized appreciation (depreciation). Taxes related to capital gains realized during the year ended October 31, 2013, if any, are reflected as part of net realized gain (loss) in the Statement of Operations. Changes in tax liabilities related to capital gains taxes on unrealized investment gains, if any, are reflected as part of the change in net unrealized appreciation (depreciation) on investments in the Statement of Operations. Transaction-based charges are generally assessed as a percentage of the transaction amount.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees

incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants if such warrants are not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights or warrants.

(J)  Futures Contracts.  A futures contract is an agreement to purchase or sell a specified quantity of an underlying instrument at a specified future date and price, or to make or receive a cash payment based on the value of a financial instrument (e.g., foreign currency, interest rate, security, or securities index). During the period the futures contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at

mainstayinvestments.com 23

Notes to Financial Statements (continued)

the end of each day’s trading. The Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin.” When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract. The Fund enters into futures contracts for hedging purposes and market exposure.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin reflect the extent of the Fund’s involvement in open futures positions. Risks arise from the possible imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the possible inability of counterparties to meet the terms of their contracts. However, the Fund’s activities in futures contracts have minimal counterparty risk as they are conducted through regulated exchanges that guarantee the futures against default by the counterparty. In the event of a bankruptcy or insolvency of a futures commission merchant that holds margin on behalf of the Fund, the Fund may not be entitled to the return of all of the margin owed to the Fund, potentially resulting in a loss. The Fund may also enter into futures contracts traded on foreign futures exchanges such as those located in Frankfurt, Tokyo, London or Paris as long as trading on foreign exchanges does not subject a Fund to risks that are materially greater than the risks associated with trading on U.S. exchanges. The Fund’s investment in futures contracts and other derivatives may increase the volatility of the Fund’s NAV and may result in a loss to the Fund. The Fund invests in futures contracts to reduce the Fund’s return volatility. As of October 31, 2013, the Fund did not hold any futures contracts.

(K)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities — at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses — at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund’s books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(L)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(M)  Concentration of Risk.  The Fund invests in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of securities held by the Fund to meet their obligations may be affected by economic and political developments in a specific country, industry or region.

(N)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(O)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

24 MainStay International Equity Fund

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Equity Contracts Risk		Total
Rights	Net realized gain (loss) on security transactions	$	194,759	$	194,759
Futures Contracts	Net realized gain (loss) on futures transactions		81,842		81,842
Total Realized Gain (Loss)		$	276,601	$	276,601

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. Cornerstone Capital Management Holdings LLC (“Cornerstone Holdings” or “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and Cornerstone Capital Holdings, New York Life Investments pays for the services of the Subadvisor.

Effective February 28, 2013, the Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.89% up to $500 million and 0.85% in excess of $500 million.

Prior to February 28, 2013, the Fund paid the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.90% up to $500 million and 0.85% in excess of $500 million, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.90% for the year ended October 31, 2013, inclusive of the effective fund accounting services rate of 0.01% of the Fund’s average daily net assets. The fund accounting fee was discontinued February 28, 2013.

New York Life Investments has voluntarily agreed to waive fees and/or reimburse expenses so that Total Annual Fund Operating Expenses of a class do not exceed the following percentages of average daily net assets: Investor Class, 1.85%; Class B, 2.60%; and Class C, 2.60%. These voluntary waivers or reimbursements may be discontinued at any time. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $2,868,486.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution, Service and Shareholder Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the ‘‘Distributor’’), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the ‘‘Plans’’) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class, Class A and Class R2 Plans, the Distributor receives a monthly distribution fee from the Investor Class, Class A and Class R2 shares, at an annual rate of 0.25% of the average daily net assets of the Investor Class, Class A and Class R2 shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares, along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Pursuant to the Class R3 Plan, the Distributor receives a monthly distribution and/or service fee from the Class R3 shares at an annual rate of 0.50% of the average daily net assets of the Class R3 shares. Class I and Class R1 shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

In accordance with the Shareholder Services Plans for the Class R1, Class R2 and Class R3 shares, the Manager has agreed to provide, through its affiliates or independent third parties, various shareholder and administrative support services to shareholders of the Class R1, Class R2 and Class R3 shares. For its services, the Manager, its affiliates, or independent third party service provider are entitled to a Shareholder Service Fee accrued daily and paid monthly at an annual rate of 0.10% of the average daily net assets of the Class R1, Class R2 and Class R3 shares. This is in addition to any fees paid under a distribution plan, where applicable.

mainstayinvestments.com 25

Notes to Financial Statements (continued)

Shareholder Service Fees incurred by the Fund for the year ended October 31, 2013, were as follows:

Class R1	$	4,182
Class R2		8,357
Class R3		1,232

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $9,704 and $5,044, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $2, $182, $16,802 and $584, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	166,540
Class A		79,132
Class B		68,290
Class C		48,763
Class I		247,507
Class R1		5,673
Class R2		11,251
Class R3		1,650

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class I $ 67,152,534 33.2 % 

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income		Accumulated Capital and Other Gain (Loss)			Other Temporary Differences		Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
	$1,008,170	$	(114,527,843	)	$	—	$	66,420,145	$	(47,099,528	)

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments and Passive Foreign Investment Companies (PFICs).

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss) on Investments		Additional Paid-In Capital
	$(246,897)	$	246,897	$	—

The reclassifications for the Fund are primarily due to foreign currency gain (loss) and foreign capital gains taxes.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $114,527,843 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)		Long-Term Capital Loss Amounts (000’s)
2016	$	25,242	$	—
2017		53,693		—
2019		35,593		—
Unlimited		—		—
Total	$	114,528	$	—

26 MainStay International Equity Fund

The Fund utilized $12,745,038 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from: Ordinary Income	$	2,689,004	$	9,130,803

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $90,821 and $119,685, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		165,565		$	2,036,162
Shares issued to shareholders in reinvestment of dividends and distributions		14,879			175,577
Shares redeemed		(437,361	)		(5,378,249	)
Net increase (decrease) in shares outstanding before conversion		(256,917	)		(3,166,510	)
Shares converted into Investor Class (See Note 1)		197,637			2,431,945
Shares converted from Investor Class (See Note 1)		(121,214	)		(1,549,878	)
Net increase (decrease)		(180,494	)	$	(2,284,443	)
Year ended October 31, 2012:
Shares sold		196,224		$	2,141,258
Shares issued to shareholders in reinvestment of dividends and distributions		86,352			887,712
Shares redeemed		(575,649	)		(6,302,435	)
Net increase (decrease) in shares outstanding before conversion		(293,073	)		(3,273,465	)
Shares converted into Investor Class (See Note 1)		228,238			2,472,290
Shares converted from Investor Class (See Note 1)		(176,452	)		(1,974,946	)
Net increase (decrease)		(241,287	)	$	(2,776,121	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		743,092		$	9,123,621
Shares issued to shareholders in reinvestment of dividends and distributions		39,354			463,599
Shares redeemed		(1,759,515	)		(21,661,366	)
Net increase (decrease) in shares outstanding before conversion		(977,069	)		(12,074,146	)
Shares converted into Class A (See Note 1)		172,336			2,184,729
Shares converted from Class A (See Note 1)		(24,864	)		(313,613	)
Net increase (decrease)		(829,597	)	$	(10,203,030	)
Year ended October 31, 2012:
Shares sold		690,751		$	7,565,303
Shares issued to shareholders in reinvestment of dividends and distributions		167,449			1,719,726
Shares redeemed		(2,707,184	)		(29,445,459	)
Net increase (decrease) in shares outstanding before conversion		(1,848,984	)		(20,160,430	)
Shares converted into Class A (See Note 1)		301,754			3,320,325
Shares converted from Class A (See Note 1)		(10,161	)		(118,949	)
Net increase (decrease)		(1,557,391	)	$	(16,959,054	)

mainstayinvestments.com 27

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		132,529		$	1,513,644
Shares redeemed		(257,167	)		(2,908,992	)
Net increase (decrease) in shares outstanding before conversion		(124,638	)		(1,395,348	)
Shares converted from Class B (See Note 1)		(242,881	)		(2,753,183	)
Net increase (decrease)		(367,519	)	$	(4,148,531	)
Year ended October 31, 2012:
Shares sold		145,998		$	1,465,620
Shares issued to shareholders in reinvestment of dividends and distributions		37,762			359,869
Shares redeemed		(365,412	)		(3,685,754	)
Net increase (decrease) in shares outstanding before conversion		(181,652	)		(1,860,265	)
Shares converted from Class B (See Note 1)		(371,315	)		(3,698,720	)
Net increase (decrease)		(552,967	)	$	(5,558,985	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		99,339		$	1,129,142
Shares redeemed		(311,511	)		(3,544,061	)
Net increase (decrease)		(212,172	)	$	(2,414,919	)
Year ended October 31, 2012:
Shares sold		67,205		$	672,940
Shares issued to shareholders in reinvestment of dividends and distributions		17,749			169,161
Shares redeemed		(351,969	)		(3,528,369	)
Net increase (decrease)		(267,015	)	$	(2,686,268	)
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		2,952,872		$	36,520,371
Shares issued to shareholders in reinvestment of dividends and distributions		159,232			1,883,717
Shares redeemed		(3,199,613	)		(39,391,612	)
Net increase (decrease)		(87,509	)	$	(987,524	)
Year ended October 31, 2012:
Shares sold		5,017,234		$	55,099,791
Shares issued to shareholders in reinvestment of dividends and distributions		488,524			5,036,688
Shares redeemed		(7,310,229	)		(78,460,736	)
Net increase (decrease)		(1,804,471	)	$	(18,324,257	)
Class R1	Shares			Amount
Year ended October 31, 2013:
Shares sold		23,171		$	280,443
Shares issued to shareholders in reinvestment of dividends and distributions		3,668			43,128
Shares redeemed		(128,028	)		(1,545,151	)
Net increase (decrease)		(101,189	)	$	(1,221,580	)
Year ended October 31, 2012:
Shares sold		31,458		$	334,344
Shares issued to shareholders in reinvestment of dividends and distributions		13,609			139,492
Shares redeemed		(84,394	)		(922,049	)
Net increase (decrease)		(39,327	)	$	(448,213	)

Class R2	Shares			Amount
Year ended October 31, 2013:
Shares sold		107,198		$	1,317,409
Shares issued to shareholders in reinvestment of dividends and distributions		4,588			54,225
Shares redeemed		(379,608	)		(4,499,409	)
Net increase (decrease)		(267,822	)	$	(3,127,775	)
Year ended October 31, 2012:
Shares sold		249,216		$	2,727,325
Shares issued to shareholders in reinvestment of dividends and distributions		28,124			289,671
Shares redeemed		(499,811	)		(5,462,254	)
Net increase (decrease)		(222,471	)	$	(2,445,258	)
Class R3	Shares			Amount
Year ended October 31, 2013:
Shares sold		40,971		$	505,104
Shares issued to shareholders in reinvestment of dividends and distributions		272			3,212
Shares redeemed		(129,541	)		(1,500,639	)
Net increase (decrease)		(88,298	)	$	(992,323	)
Year ended October 31, 2012:
Shares sold		111,377		$	1,214,928
Shares issued to shareholders in reinvestment of dividends and distributions		3,813			39,158
Shares redeemed		(72,312	)		(793,231	)
Net increase (decrease)		42,878		$	460,855

Note 9–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

28 MainStay International Equity Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay International Equity Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay International Equity Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 29

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $3,393,725 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 2.7% to arrive at the amount eligible for the corporate dividends received deduction.

In accordance with federal tax law, the Fund elects to provide each shareholder with their portion of the Fund’s foreign taxes paid and the income sourced from foreign countries. Accordingly, the Fund made the following designations regarding its fiscal year ended October 31, 2013:

—  the total amount of taxes paid to foreign countries was $704,721

—  the total amount of income sourced from foreign countries was $6,031,034

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

30 MainStay International Equity Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 31

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

32 MainStay International Equity Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 33

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

34 MainStay International Equity Fund

MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31967 MS322-13 MSIE11-12/13 NL010

MainStay Common Stock Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	15
Notes to Financial Statements	21
Report of Independent Registered Public Accounting Firm	27
Federal Income Tax Information	28
Proxy Voting Policies and Procedures and Proxy Voting Record	28
Shareholder Reports and Quarterly Portfolio Disclosure	28
Board Members and Officers	29

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison^1(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class B shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		22.61 29.75	%		11.88 13.15	%		5.43 6.02	%		1.56 1.56	%
Class A Shares	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		23.18 30.35			12.49 13.77			5.72 6.32			1.06 1.06
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		23.87 28.87			12.07 12.32			5.24 5.24			2.31 2.31
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		27.78 28.78			12.33 12.33			5.24 5.24			2.31 2.31
Class I Shares4	No Sales Charge			30.65			14.06			6.73			0.81
Class R2 Shares5	No Sales Charge			30.22			13.66			6.21			1.16

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Investor Class shares were first offered on February 28, 2008. Performance figures for Investor Class shares include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for the Investor Class shares would likely have been different.

4. Performance figures for Class I shares, first offered on December 28, 2004, include the historical performance of Class A shares through December 27, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class I shares would likely have been different.

5. Performance figures for Class R2 shares, first offered on December 14, 2007, include the historical performance of Class A shares through October 31, 2013, adjusted for differences in certain fees and expenses. Unadjusted, the performance shown for Class R2 shares would likely have been different. As of October 31, 2013, Class R2 shares had yet to commence investment operations.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year	Five Years			Ten Years
S&P 500® Index6	27.18%		15.17	%		7.46	%
Russell 1000® Index7	28.40		15.84			7.83
Average Lipper Multi-Cap Core Fund8	29.40		15.20			7.46

6. “S&P 500^®” is a trademark of the McGraw-Hill Companies, Inc. The S&P 500^® Index is widely regarded as the standard index for measuring large-cap U.S. stock market performance. The S&P 500^® Index is the Fund’s broad-based securities market index for comparison purposes. Results assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

7. The Russell 1000^® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000^® represents approximately 92% of the U.S. market. The

Russell 1000^® Index is the Fund’s secondary benchmark. Results assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

8. The average Lipper multi-cap core fund is representative of funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. These funds typically have average characteristics compared to the S&P Super Composite 1500 Index. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Common Stock Fund

Cost in Dollars of a $1,000 Investment in MainStay Common Stock Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,127.90	$	7.62	$	1,018.00	$	7.22
Class A Shares	$	1,000.00	$	1,130.10	$	5.58	$	1,020.00	$	5.30
Class B Shares	$	1,000.00	$	1,123.60	$	11.62	$	1,014.30	$	11.02
Class C Shares	$	1,000.00	$	1,123.70	$	11.67	$	1,014.20	$	11.07
Class I Shares	$	1,000.00	$	1,131.20	$	4.24	$	1,021.20	$	4.02

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.42% for Investor Class, 1.04% for Class A, 2.17% for Class B, 2.18% for Class C and 0.79% for Class I) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. See page 5 for more information on Class R2 shares.

mainstayinvestments.com 7

Industry Composition as of October 31, 2013 (Unaudited)

Oil, Gas & Consumable Fuels	8.5	%
Computers & Peripherals	6.7
Pharmaceuticals	5.8
Insurance	5.3
Diversified Financial Services	4.9
Media	4.8
Specialty Retail	4.5
Biotechnology	4.3
Health Care Providers & Services	4.3
Food & Staples Retailing	4.1
Software	4.1
Diversified Telecommunication Services	3.3
IT Services	3.3
Semiconductors & Semiconductor Equipment	2.6
Food Products	2.2
Aerospace & Defense	2.1
Airlines	1.8
Beverages	1.8
Internet Software & Services	1.8
Machinery	1.8
Chemicals	1.7
Exchange Traded Fund	1.6
Energy Equipment & Services	1.2
Commercial Banks	1.1
Consumer Finance	1.1
Health Care Equipment & Supplies	1.1

Household Products	1.1	%
Industrial Conglomerates	1.1
Auto Components	1.0
Internet & Catalog Retail	1.0
Professional Services	1.0
Textiles, Apparel & Luxury Goods	1.0
Commercial Services & Supplies	0.9
Communications Equipment	0.9
Hotels, Restaurants & Leisure	0.9
Tobacco	0.9
Multiline Retail	0.7
Office Electronics	0.7
Capital Markets	0.5
Containers & Packaging	0.5
Electronic Equipment & Instruments	0.5
Household Durables	0.4
Leisure Equipment & Products	0.3
Independent Power Producers & Energy Traders	0.2
Road & Rail	0.2
Air Freight & Logistics	0.1
Automobiles	0.1
Trading Companies & Distributors	0.1
Life Sciences Tools & Services	0.0	‡
Short-Term Investment	0.0	‡
Other Assets, Less Liabilities	0.1
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Holdings as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Apple, Inc.

2. Exxon Mobil Corp.

3. Microsoft Corp.

4. Chevron Corp.

5. Pfizer, Inc.

  6. Johnson & Johnson

  7. JPMorgan Chase & Co.

  8. International Business Machines Corp.

  9. AT&T, Inc.

10. Berkshire Hathaway, Inc. Class B

8 MainStay Common Stock Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by Migene Kim, CFA, and Andrew Ver Planck, CFA, of Cornerstone Capital Management Holdings LLC, the Fund’s Subadvisor.

How did MainStay Common Stock Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Common Stock Fund returned 29.75% for Investor Class shares, 30.35% for Class A shares, 28.87% for Class B shares and 28.78% for Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund’s Class I shares returned 30.65% and Class R2 shares¹ returned 30.22%. For the 12 months ended October 31, 2013, all share classes outperformed the 27.18% return of the S&P 500^® Index,² which is the Fund’s broad-based securities-market index. Investor Class, Class A, Class I and Class R2 shares outperformed, and Class B and Class C shares underperformed, the 29.40% return of the average Lipper³ multi-cap core fund for the same period. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund’s stock-selection model performed well during the reporting period. Valuation factors based on cash flow and on revenue contributed positively to the Fund’s performance relative to the S&P 500^® Index. While the Fund’s model was successful in identifying both winner and losers, it was especially effective in predicting stocks that would outperform the Index. The Fund’s high-conviction buy recommendations were important for the Fund’s relative performance.

During the reporting period, which sectors were the strongest positive contributors to the Fund’s relative performance and which sectors were particularly weak?

The sectors that made the strongest positive contributions to the Fund’s performance relative to the S&P 500^® Index were health care, information technology and consumer staples. (Contributions take weightings and total returns into account.) In health care, the Fund benefited from our model’s stock selection. The Fund held several strong-performing biotechnology companies, health care equipment companies and drug distributors. The Fund also made several profitable stock picks in information technology, where turnaround stocks such Seagate Technology, Western Digital and Micron Technology were rewarded. In the consumer staples sector, the Fund benefited from overweight positions relative to the S&P 500^® Index in food retailers, such as Walgreen, Safeway and Kroger.

The weakest sector contributions to the Fund’s relative performance came from consumer discretionary, energy and telecommunication services. In consumer discretionary, stock selection was hurt by earnings shortfalls from specialty retailers Abercrombie & Fitch and American Eagle Outfitters.

Disappointing financial results from Internet retailer Expedia also detracted. In energy, our model preferred oil & gas refiners, as they generate cash flows that tend to be more stable than those of oil & gas exploration & production companies. The latter group, however, benefited from higher drilling activity and rising crude oil prices. As a result, the Fund’s energy stock selection detracted from performance. Unfavorable stock selection in telecommunication services was primarily driven by an overweight position relative to the S&P 500^® Index in diversified telecommunication services companies AT&T and Verizon Communications, which performed relatively poorly during the reporting period.

During the reporting period, which individual stocks made the strongest positive contributions to the Fund’s absolute performance and which stocks detracted the most?

The individual stocks that made the strongest positive contributions to the Fund’s absolute performance included biotechnology company Gilead Sciences, computer game retailer GameStop and diversified health care company Johnson & Johnson. The Fund held overweight positions in all three stocks. Gilead Sciences, which focuses on the treatment of AIDS, liver diseases and other life-threatening conditions, continued to impress investors with quarterly earnings and sales that beat analysts’ expectations. Analysts seem to be especially positive on the potential revenues from the company’s hepatitis C drug. GameStop, the world’s largest specialty retailer of video games, also delivered strong financial results on market-share gains and strong preorders for PS4 and Xbox. Johnson & Johnson shares climbed during the reporting period, with both pharmaceutical and nonpharmaceutical revenues holding up well.

The individual stocks that detracted the most from the Fund’s absolute performance included computers & peripherals company Apple, IT services company International Business Machines (IBM) and energy drilling company Patterson-UTI Energy. Apple’s share price performance, which peaked in September 2012, has been lackluster until the second half of 2013. During the reporting period, the stock made a negative absolute contribution to the Fund’s performance. IBM, the world’s largest computer services provider, has struggled to increase revenues. The company’s efforts in higher-margin software and services have not made up for the slump in the company’s servers and other hardware businesses. Patterson-UTI Energy provides land-based contract-drilling and pressure-pumping services to oil & gas exploration & production companies. The company’s share price was negatively affected by margin pressure, particularly during the first half of 2013.

1. See footnote on page 5 for more information on Class R2 shares.

2. See footnote on page 6 for more information on the S&P 500^® Index.

3. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

Did the Fund make any significant purchases or sales during the reporting period?

The Fund’s largest weighting increase during the reporting period was in its position in Boeing. The company makes commercial jet aircraft as well as military aircraft and missile systems. The Fund initially purchased shares in December 2012, on the basis of attractive valuation. We steadily increased the Fund’s position throughout the reporting period, as the stock’s momentum scores improved. The Fund also began to a build position in Berkshire Hathaway—a holding company operating in a variety of business sectors, including insurance, railway and chemical businesses—in the second quarter of 2013. The primary reason was the strength of the company’s momentum scores. The Fund went from a significantly underweight to a significantly overweight position, as Berkshire Hathaway’s valuation metrics also started to improve.

The Fund started trimming its position in Apple at the end of 2012, because of poor revenue, sentiment and momentum readings. As the company’s momentum and sentiment scores further deteriorated, the Fund sold more shares, until the shareprice decline made the stock attractive again in terms of cash-flow- and revenue-based multiples in May 2013. At that time, the Fund purchased additional shares of Apple. The Fund also sold a large number of Bank of America shares during the first half of 2013, moving from an overweight position to a position that was fully underweight according to the quantitative filters used in our investment process. The stock’s model score turned negative, as the stock’s valuation became expensive as measured by earnings and by revenues.

How did the Fund’s sector weightings change during the reporting period?

The Fund saw its largest sector-weighting increase in the industrials sector. The Fund was significantly underweight

stocks in industrials relative to the S&P 500^® Index, but narrowed the underexposure through purchases of airlines and professional services companies. The Fund began the reporting period modestly overweight relative to the S&P 500^® Index in health care. By accumulating positions in health care distributors and select pharmaceutical stocks the Fund became increasingly overweight in the sector.

During the reporting period, the Fund’s most substantial weighting decrease relative to the S&P 500^® Index was in the telecommunication services sector. The Fund moved from an overweight to a modestly overweight position. The Fund was overweight wireless telecommunication companies, such as MetroPCS and Sprint, whose positions were respectively closed when MetroPCS merged with T-mobile USA and when Softbank acquired Sprint. An underweight position relative to the S&P 500^® Index in energy became more substantially underweight when the model trimmed some overweight positions in refiners during the second half of the reporting period.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund’s most substantially overweight sector positions relative to the S&P 500^® Index were in information technology, health care and consumer discretionary. As of the same date, the Fund held underweight positions relative to the Index in the financials, utilities and industrials sectors.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Common Stock Fund

Portfolio of Investments October 31, 2013

	Shares		Value
Common Stocks 98.3%†
Aerospace & Defense 2.1%
Alliant Techsystems, Inc.		3,756	$	408,915
Boeing Co. (The)		12,002		1,566,261
General Dynamics Corp.		2,476		214,496
Northrop Grumman Corp.		2,737		294,255
United Technologies Corp.		771		81,919
				2,565,846
Air Freight & Logistics 0.1%
FedEx Corp.		147		19,257
United Parcel Service, Inc. Class B		1,236		121,425
				140,682
Airlines 1.8%
Alaska Air Group, Inc.		12,048		851,312
Delta Air Lines, Inc.		17,294		456,216
Southwest Airlines Co.		56,279		969,124
				2,276,652
Auto Components 1.0%
Delphi Automotive PLC		2,407		137,680
Gentex Corp.		8,611		253,508
Goodyear Tire & Rubber Co. (The)		38,178		800,975
				1,192,163
Automobiles 0.1%
General Motors Co. (a)		2,644		97,696
Beverages 1.8%
Coca-Cola Co. (The)		11,405		451,296
PepsiCo., Inc.		21,384		1,798,180
				2,249,476
Biotechnology 4.3%
Amgen, Inc.		12,775		1,481,900
Biogen Idec, Inc. (a)		1,299		317,203
Celgene Corp. (a)		7,631		1,133,127
Cubist Pharmaceuticals, Inc. (a)		5,791		359,042
Gilead Sciences, Inc. (a)		17,914		1,271,715
United Therapeutics Corp. (a)		9,712		859,706
Vertex Pharmaceuticals, Inc. (a)		93		6,635
				5,429,328
Capital Markets 0.5%
Franklin Resources, Inc.		9,179		494,381
State Street Corp.		1,330		93,193
				587,574
Chemicals 1.7%
Dow Chemical Co. (The)		29,194		1,152,287
LyondellBasell Industries, N.V. Class A		13,544		1,010,383
				2,162,670

	Shares		Value
Commercial Banks 1.1%
Fifth Third Bancorp		17,996	$	342,464
First Niagara Financial Group, Inc.		16,934		186,782
Wells Fargo & Co.		19,927		850,684
				1,379,930
Commercial Services & Supplies 0.9%
Pitney Bowes, Inc.		43,265		923,275
Tyco International, Ltd.		3,624		132,457
				1,055,732
Communications Equipment 0.9%
Cisco Systems, Inc.		8,412		189,270
Harris Corp.		13,822		856,411
QUALCOMM, Inc.		1,877		130,395
				1,176,076
Computers & Peripherals 6.7%
¨Apple, Inc.		8,325		4,348,564
Hewlett-Packard Co.		47,693		1,162,278
SanDisk Corp.		14,311		994,615
Seagate Technology PLC		19,843		965,957
Western Digital Corp.		13,100		912,153
				8,383,567
Consumer Finance 1.1%
American Express Co.		17,428		1,425,610
Containers & Packaging 0.5%
Packaging Corporation of America		6,713		418,085
Sealed Air Corp.		6,921		208,876
				626,961
Diversified Financial Services 4.9%
Bank of America Corp.		29,547		412,476
¨Berkshire Hathaway, Inc. Class B (a)		17,802		2,048,654
Citigroup, Inc.		8,415		410,484
¨JPMorgan Chase & Co.		44,520		2,294,561
McGraw Hill Financial, Inc.		1,069		74,488
Moody’s Corp.		1,155		81,612
NASDAQ OMX Group, Inc. (The)		24,092		853,580
				6,175,855
Diversified Telecommunication Services 3.3%
¨AT&T, Inc.		58,951		2,134,027
Frontier Communications Corp.		19,154		84,469
Verizon Communications, Inc.		37,820		1,910,288
				4,128,784
Electronic Equipment & Instruments 0.5%
Jabil Circuit, Inc.		8,809		183,756
TE Connectivity, Ltd.		8,397		432,361
				616,117

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings, as of October 31, 2013. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
Energy Equipment & Services 1.2%
Baker Hughes, Inc.		8,984	$	521,881
Halliburton Co.		798		42,318
Oil States International, Inc. (a)		7,646		830,585
Schlumberger, Ltd.		1,716		160,823
				1,555,607
Food & Staples Retailing 4.1%
CVS Caremark Corp.		4,216		262,488
Kroger Co. (The)		22,973		984,163
Safeway, Inc.		26,430		922,407
Wal-Mart Stores, Inc.		22,931		1,759,954
Walgreen Co.		21,102		1,250,083
				5,179,095
Food Products 2.2%
Archer-Daniels-Midland Co.		25,534		1,044,341
General Mills, Inc.		4,787		241,361
Green Mountain Coffee Roasters, Inc. (a)		4,398		276,238
Kraft Foods Group, Inc.		4,701		255,640
Mondelez International, Inc. Class A		13,951		469,312
Tyson Foods, Inc. Class A		18,173		502,847
				2,789,739
Health Care Equipment & Supplies 1.1%
Abbott Laboratories		12,229		446,970
Boston Scientific Corp. (a)		78,597		918,799
				1,365,769
Health Care Providers & Services 4.3%
AmerisourceBergen Corp.		14,313		935,068
Cardinal Health, Inc.		13,657		801,120
Express Scripts Holding Co. (a)		6,034		377,246
McKesson Corp.		7,341		1,147,692
Omnicare, Inc.		8,214		453,002
UnitedHealth Group, Inc.		10,189		695,501
WellPoint, Inc.		11,346		962,141
				5,371,770
Hotels, Restaurants & Leisure 0.9%
International Game Technology		43,404		815,995
Wyndham Worldwide Corp.		3,280		217,792
Wynn Resorts, Ltd.		576		95,760
				1,129,547
Household Durables 0.4%
Whirlpool Corp.		3,108		453,799
Household Products 1.1%
Energizer Holdings, Inc.		1,350		132,448
Procter & Gamble Co. (The)		15,933		1,286,590
				1,419,038

	Shares		Value
Independent Power Producers & Energy Traders 0.2%
AES Corp. (The)		16,093	$	226,750
Industrial Conglomerates 1.1%
3M Co.		424		53,361
General Electric Co.		49,158		1,284,990
				1,338,351
Insurance 5.3%
Aflac, Inc.		15,931		1,035,197
Allstate Corp. (The)		336		17,828
American International Group, Inc.		27,128		1,401,161
Assurant, Inc.		6,011		351,523
Genworth Financial, Inc. Class A (a)		62,226		904,144
Lincoln National Corp.		19,613		890,626
Protective Life Corp.		13,921		641,480
Travelers Companies, Inc. (The)		6,232		537,822
Unum Group		27,003		857,075
				6,636,856
Internet & Catalog Retail 1.0%
Amazon.com, Inc. (a)		1,394		507,458
Expedia, Inc.		12,930		761,318
				1,268,776
Internet Software & Services 1.8%
Akamai Technologies, Inc. (a)		2,699		120,753
eBay, Inc. (a)		3,497		184,327
Google, Inc. Class A (a)		1,893		1,950,888
				2,255,968
IT Services 3.3%
Computer Sciences Corp.		16,193		797,667
¨International Business Machines Corp.		12,308		2,205,717
Total System Services, Inc.		12,436		370,966
Visa, Inc. Class A		68		13,374
Western Union Co. (The)		39,520		672,630
				4,060,354
Leisure Equipment & Products 0.3%
Hasbro, Inc.		8,244		425,803
Life Sciences Tools & Services 0.0%‡
Agilent Technologies, Inc.		353		17,918
Machinery 1.8%
AGCO Corp.		10,644		621,396
Dover Corp.		9,310		854,565
Oshkosh Corp. (a)		15,647		744,641
				2,220,602
Media 4.8%
Cablevision Systems Corp. Class A		9,347		145,346
Comcast Corp. Class A		33,273		1,583,129

12 MainStay Common Stock Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Shares		Value
Common Stocks (continued)
Media (continued)
DIRECTV (a)		14,014	$	875,735
Gannett Co., Inc.		31,030		858,600
Time Warner Cable, Inc.		8,856		1,064,048
Twenty-First Century Fox, Inc. Class A		15,543		529,705
Walt Disney Co. (The)		2,118		145,274
Washington Post Co. (The) Class B		1,283		825,380
				6,027,217
Multiline Retail 0.7%
Target Corp.		14,155		917,102
Office Electronics 0.7%
Xerox Corp.		86,903		863,816
Oil, Gas & Consumable Fuels 8.5%
Anadarko Petroleum Corp.		11,886		1,132,617
Apache Corp.		4,336		385,037
Chesapeake Energy Corp.		16,515		461,759
¨Chevron Corp.		21,427		2,570,383
ConocoPhillips		17,506		1,283,190
¨Exxon Mobil Corp.		42,956		3,849,717
Marathon Petroleum Corp.		13,196		945,625
				10,628,328
Pharmaceuticals 5.8%
AbbVie, Inc.		12,599		610,422
Bristol-Myers Squibb Co.		14,606		767,107
Eli Lilly & Co.		1,982		98,743
Endo Health Solutions, Inc. (a)		17,672		772,797
¨Johnson & Johnson		24,840		2,300,432
Merck & Co., Inc.		7,193		324,332
¨Pfizer, Inc.		77,472		2,376,841
				7,250,674
Professional Services 1.0%
ManpowerGroup, Inc.		5,214		407,213
Towers Watson & Co. Class A		7,428		852,809
				1,260,022
Road & Rail 0.2%
Union Pacific Corp.		1,567		237,244
Semiconductors & Semiconductor Equipment 2.6%
First Solar, Inc. (a)		17,331		871,230
Intel Corp.		72,807		1,778,675
Lam Research Corp. (a)		3,552		192,625
Micron Technology, Inc. (a)		20,168		356,570
				3,199,100

	Shares			Value
Software 4.1%
¨Microsoft Corp.		80,262		$	2,837,262
Oracle Corp.		51,585			1,728,097
Symantec Corp.		23,611			536,914
					5,102,273
Specialty Retail 4.5%
Best Buy Co., Inc.		21,413			916,476
GameStop Corp. Class A		15,344			841,158
Gap, Inc. (The)		3,799			140,525
Home Depot, Inc. (The)		20,868			1,625,409
Lowe’s Companies, Inc.		23,964			1,192,928
Staples, Inc.		55,862			900,495
					5,616,991
Textiles, Apparel & Luxury Goods 1.0%
Fossil Group, Inc. (a)		3,186			404,431
Hanesbrands, Inc.		12,452			848,230
					1,252,661
Tobacco 0.9%
Philip Morris International, Inc.		12,885			1,148,311
Trading Companies & Distributors 0.1%
United Rentals, Inc. (a)		873			56,387
Total Common Stocks (Cost $105,011,276)					122,946,587
Exchange Traded Fund 1.6% (b)
S&P 500 Index—SPDR Trust Series 1		11,390			2,001,565
Total Exchange Traded Fund (Cost $1,999,059)					2,001,565
	Principal Amount
Short-Term Investment 0.0%‡
Repurchase Agreement 0.0%‡
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $43,922 (Collateralized by a Federal National Mortgage Association security with a rate of 2.17% and a maturity date of 11/7/22, with a Principal Amount of $50,000 and a Market Value of $47,220)	$	43,922			43,922
Total Short-Term Investment (Cost $43,922)					43,922
Total Investments (Cost $107,054,257) (c)		99.9	%		124,992,074
Other Assets, Less Liabilities		0.1			132,053
Net Assets		100.0	%	$	125,124,127

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

‡ Less than one-tenth of a percent.

(a) Non-income producing security.

(b) Exchange Traded Fund—An investment vehicle that represents a basket of securities that is traded on an exchange.

(c) As of October 31, 2013, cost is $107,572,098 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	17,839,970
Gross unrealized depreciation		(419,994	)
Net unrealized appreciation	$	17,419,976

The following abbreviation is used in the above portfolio:

SPDR—Standard & Poor’s Depositary Receipt

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Common Stocks	$	122,946,587	$	—	$	—	$	122,946,587
Exchange Traded Fund		2,001,565		—		—		2,001,565
Short-Term Investment
Repurchase Agreement		—		43,922		—		43,922
Total Investments in Securities	$	124,948,152	$	43,922	$	—	$	124,992,074

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

14 MainStay Common Stock Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $107,054,257)	$	124,992,074
Cash		856
Receivables:
Fund shares sold		181,522
Dividends and interest		124,672
Other assets		22,215
Total assets		125,321,339
Liabilities
Payables:
Manager (See Note 3)		57,379
Fund shares redeemed		51,051
Transfer agent (See Note 3)		32,466
Shareholder communication		21,152
NYLIFE Distributors (See Note 3)		16,145
Professional fees		11,999
Custodian		3,087
Trustees		274
Accrued expenses		3,659
Total liabilities		197,212
Net assets	$	125,124,127
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	75,810
Additional paid-in capital		171,953,599
		172,029,409
Undistributed net investment income		1,192,740
Accumulated net realized gain (loss) on investments		(66,035,839	)
Net unrealized appreciation (depreciation) on investments		17,937,817
Net assets	$	125,124,127

Investor Class
Net assets applicable to outstanding shares	$	18,436,315
Shares of beneficial interest outstanding		1,111,791
Net asset value per share outstanding	$	16.58
Maximum sales charge (5.50% of offering price)		0.96
Maximum offering price per share outstanding	$	17.54
Class A
Net assets applicable to outstanding shares	$	19,011,089
Shares of beneficial interest outstanding		1,145,741
Net asset value per share outstanding	$	16.59
Maximum sales charge (5.50% of offering price)		0.97
Maximum offering price per share outstanding	$	17.56
Class B
Net assets applicable to outstanding shares	$	6,759,804
Shares of beneficial interest outstanding		442,802
Net asset value and offering price per share outstanding	$	15.27
Class C
Net assets applicable to outstanding shares	$	3,441,349
Shares of beneficial interest outstanding		225,490
Net asset value and offering price per share outstanding	$	15.26
Class I
Net assets applicable to outstanding shares	$	77,475,570
Shares of beneficial interest outstanding		4,655,151
Net asset value and offering price per share outstanding	$	16.64

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Dividends (a)	$	2,544,577
Interest		11
Total income		2,544,588
Expenses
Manager (See Note 3)		652,886
Transfer agent (See Note 3)		182,468
Distribution/Service—Investor Class (See Note 3)		41,166
Distribution/Service—Class A (See Note 3)		37,383
Distribution/Service—Class B (See Note 3)		62,935
Distribution/Service—Class C (See Note 3)		24,129
Registration		80,513
Professional fees		47,756
Shareholder communication		39,558
Custodian		18,374
Trustees		2,417
Miscellaneous		8,730
Total expenses		1,198,315
Net investment income (loss)		1,346,273
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments		19,932,214
Net change in unrealized appreciation (depreciation) on investments		9,631,770
Net realized and unrealized gain (loss) on investments		29,563,984
Net increase (decrease) in net assets resulting from operations	$	30,910,257

(a) Dividends recorded net of foreign withholding taxes in the amount of $9,900.

16 MainStay Common Stock Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	1,346,273		$	1,478,930
Net realized gain (loss) on investments		19,932,214			10,898,706
Net change in unrealized appreciation (depreciation) on investments		9,631,770			3,860,672
Net increase (decrease) in net assets resulting from operations		30,910,257			16,238,308
Dividends to shareholders:
From net investment income:
Investor Class		(130,443	)		(154,586	)
Class A		(166,969	)		(173,110	)
Class B		(10,313	)		(25,337	)
Class C		(2,697	)		(4,598	)
Class I		(1,174,580	)		(1,961,353	)
Total dividends to shareholders		(1,485,002	)		(2,318,984	)
Capital share transactions:
Net proceeds from sale of shares		29,255,750			48,665,925
Net asset value of shares issued to shareholders in reinvestment of dividends		1,465,253			1,993,945
Cost of shares redeemed		(45,912,553	)		(98,399,615	)
Increase (decrease) in net assets derived from capital share transactions		(15,191,550	)		(47,739,745	)
Net increase (decrease) in net assets		14,233,705			(33,820,421	)
Net Assets
Beginning of year		110,890,422			144,710,843
End of year	$	125,124,127		$	110,890,422
Undistributed net investment income at end of year	$	1,192,740		$	1,360,464

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.89		$	11.32		$	10.77		$	9.69		$	9.27
Net investment income (loss) (a)		0.10			0.09			0.06			0.03			0.07
Net realized and unrealized gain (loss) on investments		3.70			1.61			0.53			1.13			0.40
Total from investment operations		3.80			1.70			0.59			1.16			0.47
Less dividends:
From net investment income		(0.11	)		(0.13	)		(0.04	)		(0.08	)		(0.05	)
Net asset value at end of year	$	16.58		$	12.89		$	11.32		$	10.77		$	9.69
Total investment return (b)		29.75	%		15.15	%		5.47	%		11.99	%		5.12	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.72	%		0.72	%		0.56	%		0.25	%		0.81	%
Net expenses		1.46	%		1.56	%		1.52	%		1.61	%		1.46	%
Expenses (before waiver/reimbursement)		1.46	%		1.56	%		1.52	%		1.61	%		1.73	%
Portfolio turnover rate		150	%		182	%		139	%		152	%		138	%
Net assets at end of year (in 000’s)	$	18,436		$	15,093		$	13,917		$	13,661		$	12,752

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.90		$	11.34		$	10.79		$	9.70		$	9.28
Net investment income (loss) (a)		0.16			0.15			0.13			0.09			0.12
Net realized and unrealized gain (loss) on investments		3.71			1.60			0.53			1.13			0.40
Total from investment operations		3.87			1.75			0.66			1.22			0.52
Less dividends:
From net investment income		(0.18	)		(0.19	)		(0.11	)		(0.13	)		(0.10	)
Net asset value at end of year	$	16.59		$	12.90		$	11.34		$	10.79		$	9.70
Total investment return (b)		30.35	%		15.64	%		6.10	%		12.64	%		5.80	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.11	%		1.22	%		1.12	%		0.90	%		1.38	%
Net expenses		1.05	%		1.06	%		0.97	%		0.96	%		0.94	%
Expenses (before waiver/reimbursement)		1.05	%		1.06	%		0.97	%		0.96	%		0.98	%
Portfolio turnover rate		150	%		182	%		139	%		152	%		138	%
Net assets at end of year (in 000’s)	$	19,011		$	12,402		$	10,662		$	12,140		$	11,579

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

18 MainStay Common Stock Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.87		$	10.43		$	9.96		$	8.97		$	8.60
Net investment income (loss) (a)		(0.00	)‡		(0.00	)‡		(0.02	)		(0.05	)		0.01
Net realized and unrealized gain (loss) on investments		3.42			1.48			0.49			1.05			0.36
Total from investment operations		3.42			1.48			0.47			1.00			0.37
Less dividends:
From net investment income		(0.02	)		(0.04	)		(0.00	)‡		(0.01	)		—
Net asset value at end of year	$	15.27		$	11.87		$	10.43		$	9.96		$	8.97
Total investment return (b)		28.87	%		14.23	%		4.75	%		11.14	%		4.30	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.03	%)		(0.02	%)		(0.17	%)		(0.49	%)		0.14	%
Net expenses		2.21	%		2.31	%		2.27	%		2.36	%		2.20	%
Expenses (before waiver/reimbursement)		2.21	%		2.31	%		2.27	%		2.36	%		2.49	%
Portfolio turnover rate		150	%		182	%		139	%		152	%		138	%
Net assets at end of year (in 000’s)	$	6,760		$	5,836		$	6,762		$	8,466		$	10,371

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	11.87		$	10.43		$	9.96		$	8.97		$	8.59
Net investment income (loss) (a)		(0.01	)		(0.00	)‡		(0.02	)		(0.05	)		0.01
Net realized and unrealized gain (loss) on investments		3.42			1.48			0.49			1.05			0.37
Total from investment operations		3.41			1.48			0.47			1.00			0.38
Less dividends:
From net investment income		(0.02	)		(0.04	)		(0.00	)‡		(0.01	)		—
Net asset value at end of year	$	15.26		$	11.87		$	10.43		$	9.96		$	8.97
Total investment return (b)		28.78	%		14.23	%		4.75	%		11.12	%		4.42	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.10	%)		(0.02	%)		(0.18	%)		(0.49	%)		0.12	%
Net expenses		2.21	%		2.31	%		2.27	%		2.36	%		2.21	%
Expenses (before waiver/reimbursement)		2.21	%		2.31	%		2.27	%		2.36	%		2.49	%
Portfolio turnover rate		150	%		182	%		139	%		152	%		138	%
Net assets at end of year (in 000’s)	$	3,441		$	1,575		$	1,221		$	1,352		$	1,357

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	12.94		$	11.38		$	10.82		$	9.72		$	9.32
Net investment income (loss) (a)		0.20			0.18			0.16			0.12			0.15
Net realized and unrealized gain (loss) on investments		3.71			1.60			0.53			1.14			0.39
Total from investment operations		3.91			1.78			0.69			1.26			0.54
Less dividends:
From net investment income		(0.21	)		(0.22	)		(0.13	)		(0.16	)		(0.14	)
Net asset value at end of year	$	16.64		$	12.94		$	11.38		$	10.82		$	9.72
Total investment return (b)		30.65	%		15.89	%		6.43	%		13.00	%		5.99	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.40	%		1.48	%		1.39	%		1.16	%		1.69	%
Net expenses		0.80	%		0.81	%		0.72	%		0.71	%		0.65	%
Expenses (before waiver/reimbursement)		0.80	%		0.81	%		0.72	%		0.71	%		0.73	%
Portfolio turnover rate		150	%		182	%		139	%		152	%		138	%
Net assets at end of year (in 000’s)	$	77,476		$	75,985		$	112,148		$	230,246		$	260,081

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

20 MainStay Common Stock Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Common Stock Fund (the “Fund”), a diversified fund.

The Fund currently offers six classes of shares. Class A and Class B shares commenced operations on June 1, 1998. Class C shares commenced operations on September 1, 1998. Class I shares commenced operations on December 28, 2004. Class R2 shares were first offered on December 14, 2007. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I and Class R2 shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The six classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class, Class A and Class R2 shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I shares are not subject to a distribution and/or service fee. Class R2 shares are subject to a shareholder service fee. This is in addition to any fees paid under a distribution plan, where applicable. There were no investment operations for Class R2 during the year ended October 31, 2013.

The Fund’s investment objective is to seek long-term growth of capital.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has

authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

mainstayinvestments.com 21

Notes to Financial Statements (continued)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•   Broker Dealer Quotes	•   Reported Trades
•   Two-sided markets	•   Issuer Spreads
•   Bids / Offers	•   Benchmark securities
•   Industry and economic events	•   Reference Data (corporate actions or material event notices)
•   Equity and credit default swap curves	•   Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a

matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the

22 MainStay Common Stock Fund

expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(H)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(I)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. Cornerstone Capital Management Holdings LLC (“Cornerstone Holdings” or “Subadvisor”), a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of a Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and Cornerstone Capital Holdings, New York Life Investments pays for the services of the Subadvisor.

Effective February 28, 2013, the Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.55% up to $500 million; 0.525% from $500 million to $1 billion; and 0.50% on assets in excess of $1 billion.

Prior to February 28, 2013, the Fund paid the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.55% up to $500 million; 0.525% from $500 million to $1 billion; and 0.50% in excess of $1 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.56% for the year ended

mainstayinvestments.com 23

Notes to Financial Statements (continued)

October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets. The fund accounting fee was discontinued February 28, 2013.

New York Life Investments has voluntarily agreed to waive fees and/or reimburse expenses so that Total Annual Fund Operating Expenses of a class do not exceed the following percentages of average daily net assets: Investor Class, 1.85%; Class B, 2.60%; and Class C, 2.60%. These voluntary waivers or reimbursements may be discontinued at any time. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $652,886.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution, Service and Shareholder Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class, Class A and Class R2 Plans, the Distributor receives a monthly distribution fee from the Investor Class, Class A and Class R2 shares at an annual rate of 0.25% of the average daily net assets of the Investor Class, Class A and Class R2 shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares, along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Class I shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

In accordance with the Shareholder Services Plan for the Class R2 shares, the Manager has agreed to provide, through its affiliates or independent third parties, various shareholder and administrative support services to shareholders of the Class R2 shares. For its services, the Manager, its affiliates, or independent third party service providers are entitled to a Shareholder Service Fee accrued daily and paid monthly at an annual rate of 0.10% of the average daily net assets of the Class R2 shares. This is in addition to any fees paid under a distribution plan, where applicable.

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and

Class A shares were $5,158 and $6,442, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $61, $125, $6,302 and $1,117, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	79,389
Class A		10,023
Class B		30,348
Class C		11,617
Class I		51,091

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income		Accumulated Capital and Other Gain (Loss)			Other Temporary Differences		Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
	$1,192,740	$	(65,517,998	)	$	—	$	17,419,976	$	(46,905,282	)

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments and return of capital distributions received.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments		Additional Paid-In Capital
$(28,995)	$	28,995	$	—

The reclassifications for the Fund are primarily due to partnerships, Real Estate Investment Trusts (REITs), and return of capital distributions received.

24 MainStay Common Stock Fund

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $65,517,998 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)		Long-Term Capital Loss Amounts (000’s)
2017	$	65,518	$	—

The Fund utilized $18,824,473 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from: Ordinary Income	$	1,485,002	$	2,318,984

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to

August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $174,467 and $189,643, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		113,078		$	1,670,004
Shares issued to shareholders in reinvestment of dividends and distibutions		9,965			129,649
Shares redeemed		(189,270	)		(2,684,115	)
Net increase (decrease) in shares outstanding before conversion		(66,227	)		(884,462	)
Shares converted into Investor Class (See Note 1)		66,768			963,577
Shares converted from Investor Class (See Note 1)		(59,954	)		(897,653	)
Net increase (decrease)		(59,413	)	$	(818,538	)
Year ended October 31, 2012:
Shares sold		85,370		$	1,044,806
Shares issued to shareholders in reinvestment of dividends and distributions		13,604			153,721
Shares redeemed		(180,434	)		(2,192,388	)
Net increase (decrease) in shares outstanding before conversion		(81,460	)		(993,861	)
Shares converted into Investor Class (See Note 1)		104,206			1,253,282
Shares converted from Investor Class (See Note 1)		(80,491	)		(1,000,500	)
Net increase (decrease)		(57,745	)	$	(741,079	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		316,113		$	4,705,861
Shares issued to shareholders in reinvestment of dividends and distributions		11,848			153,672
Shares redeemed		(205,898	)		(3,006,406	)
Net increase (decrease) in shares outstanding before conversion		122,063			1,853,127
Shares converted into Class A (See Note 1)		69,340			1,034,189
Shares converted from Class A (See Note 1)		(6,805	)		(99,894	)
Net increase (decrease)		184,598		$	2,787,422
Year ended October 31, 2012:
Shares sold		102,868		$	1,265,546
Shares issued to shareholders in reinvestment of dividends and distributions		14,309			161,110
Shares redeemed		(190,780	)		(2,337,511	)
Net increase (decrease) in shares outstanding before conversion		(73,603	)		(910,855	)
Shares converted into Class A (See Note 1)		98,947			1,223,586
Shares converted from Class A (See Note 1)		(4,355	)		(56,206	)
Net increase (decrease)		20,989		$	256,525

mainstayinvestments.com 25

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		119,711		$	1,621,134
Shares issued to shareholders in reinvestment of dividends and distributions		850			10,244
Shares redeemed		(94,423	)		(1,290,666	)
Net increase (decrease) in shares outstanding before conversion		26,138			340,712
Shares converted from Class B (See Note 1)		(74,978	)		(1,000,219	)
Net increase (decrease)		(48,840	)	$	(659,507	)
Year ended October 31, 2012:
Shares sold		73,944		$	824,547
Shares issued to shareholders in reinvestment of dividends and distributions		2,395			25,079
Shares redeemed		(105,218	)		(1,180,427	)
Net increase (decrease) in shares outstanding before conversion		(28,879	)		(330,801	)
Shares converted from Class B (See Note 1)		(127,785	)		(1,420,162	)
Net increase (decrease)		(156,664	)	$	(1,750,963	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		124,092		$	1,684,178
Shares issued to shareholders in reinvestment of dividends and distributions		192			2,318
Shares redeemed		(31,481	)		(413,610	)
Net increase (decrease)		92,803		$	1,272,886
Year ended October 31, 2012:
Shares sold		29,459		$	337,801
Shares issued to shareholders in reinvestment of dividends and distributions		329			3,443
Shares redeemed		(14,200	)		(162,581	)
Net increase (decrease)		15,588		$	178,663
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,363,501		$	19,574,573
Shares issued to shareholders in reinvestment of dividends and distributions		90,090			1,169,370
Shares redeemed		(2,669,598	)		(38,517,756	)
Net increase (decrease)		(1,216,007	)	$	(17,773,813	)
Year ended October 31, 2012:
Shares sold		3,579,954		$	45,193,225
Shares issued to shareholders in reinvestment of dividends and distributions		146,459			1,650,592
Shares redeemed		(7,712,875	)		(92,526,708	)
Net increase (decrease)		(3,986,462	)	$	(45,682,891	)

Note 9–Litigation

The Fund has been named as a defendant and a putative member of the proposed defendant group of shareholders in the case now entitled Kirschner v. FitzSimons, No. 12-2652 (S.D.N.Y.) (the “FitzSimons action”) as a result of its ownership of shares in the Tribune Company (“Tribune”) in 2007 when Tribune effected a leveraged buyout transaction (“LBO”) by which Tribune converted to a privately-held company. In its complaint, which was served on the Fund in October 2012, the

plaintiff asserts claims against certain insiders, shareholders, professional advisers, and others involved in the LBO. Separately, the complaint also seeks to recover proceeds received by shareholders through the LBO from a putative defendant class comprised of former Tribune shareholders other than the insiders, major shareholders and certain other defendants. The sole claim and cause of action brought against the Fund either as a named defendant or as a member of the putative defendant class is for fraudulent conveyance pursuant to United States Bankruptcy Code Section 548(a)(1)(A).

In June 2011, certain Tribune creditors filed numerous additional actions asserting state law constructive fraudulent conveyance claims (the “SLCFC actions”) against specifically-named former Tribune shareholders and, in some cases, putative defendant classes comprised of former Tribune shareholders. One of the SLCFC actions, entitled Deutsche Bank Trust Co. Americas v. Blackrock Institutional Trust Co., No. 11-9319 (S.D.N.Y.) (the “Deutsche Bank action”), named the Fund as a defendant.

The FitzSimons action and Deutsche Bank action have been consolidated with the majority of the other Tribune LBO-related lawsuits in a multidistrict litigation proceeding entitled In re Tribune Co. Fraudulent Conveyance Litig., No. 11-md-2296 (S.D.N.Y.) (the “MDL Proceeding”). 

On August 2, 2013, the plaintiff in the FitzSimons action filed a Fifth Amended Complaint. On October 21, 2013, the District Court granted the plaintiff’s motion to enlarge the time for service of summonses and complaints in the FitzSimons action through and including January 14, 2014.

On September 23, 2013, the District Court granted the defendants’ motion to dismiss the state law constructive fraudulent conveyance actions (“SLCFC actions”), including the Deutsche Bank action, on the basis that the plaintiffs did not have standing to pursue their claims. On September 30, 2013, the plaintiffs in the SLCFC actions filed a notice of appeal to the United States Court of Appeals for the Second Circuit. On October 28, 2013, the defendants filed a joint notice of cross-appeal of that same order.

On November 20, 2013, the District Court issued Master Case Order No. 4 governing the next steps in the FitzSimons action, including the protocol for filing of any motions to dismiss the lawsuit

The value of the proceeds received by the Fund in connection with the LBO and the Fund’s cost basis in shares of Tribune was as follows:

Fund	Proceeds		Cost Basis
MainStay Common Stock Fund	$	751,774	$	729,369

At this stage of the proceedings, it would be difficult to assess with any reasonable certainty the probable outcome of the pending litigation or the effect, if any, on the Fund’s net asset values.

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

26 MainStay Common Stock Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Common Stock Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Common Stock Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 27

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $1,485,002 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 100.0% to arrive at the amount eligible for the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

28 MainStay Common Stock Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 29

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

30 MainStay Common Stock Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 31

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

32 MainStay Common Stock Fund

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31925 MS322-13 MSCS11-12/13 NL021

MainStay Large Cap Growth Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	11
Financial Statements	14
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	30
Federal Income Tax Information	31
Proxy Voting Policies and Procedures and Proxy Voting Record	31
Shareholder Reports and Quarterly Portfolio Disclosure	31
Board Members and Officers	32

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class A shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

(With sales charges)

Average Annual Total Returns for the Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		24.86 32.13	%		15.36 16.68	%		8.30 8.91	%		1.10 1.10	%
Class A Shares4	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		24.83 32.09			15.53 16.84			8.35 8.97			1.04 1.04
Class B Shares5	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		25.93 30.93			15.58 15.81			8.09 8.09			1.85 1.85
Class C Shares5	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		30.12 31.12			15.81 15.81			8.09 8.09			1.85 1.85
Class I Shares5	No Sales Charge			32.41			17.15			9.38			0.79
Class R1 Shares5	No Sales Charge			32.27			17.01			9.23			0.89
Class R2 Shares5	No Sales Charge			31.88			16.71			8.96			1.14
Class R3 Shares6	No Sales Charge			31.63			16.42			8.68			1.39
Class R6 Shares7	No Sales Charge			32.41			17.15			9.38			0.63

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class A shares include the historical performance of the FMI Winslow Growth Fund (a predecessor to the Fund) through March 31, 2005, adjusted to reflect the current maximum sales charge applicable to Class A shares. Unadjusted, the performance shown for Class A shares would likely have been different.

5. Performance figures for Class B, Class C, Class I, Class R1 and Class R2 shares, each of which was first offered on April 1, 2005, include the historical performance of Class A shares through March 31, 2005, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class B, C, I, R1 and R2 shares would likely have been different.

6. Performance figures for Class R3 shares, first offered on April 28, 2006, include the historical performance of Class A shares through April 27, 2006, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class R3 shares would likely have been different.

7. Performance figures for Class R6 shares, first offered on June 17, 2013, include the historical performance of Class I shares. Performance for Class R6 shares would also likely have been different because of differences in expenses attributable to each share class.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Russell 1000® Growth Index8		28.30	%		17.51	%		7.70	%
S&P 500® Index9		27.18			15.17			7.46
Average Lipper Large-Cap Growth Fund10		29.24			15.72			7.06

8. The Russell 1000^® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000^® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000^® Growth Index is the Fund’s broad-based securities market index for comparison purposes. Results assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

9. “S&P 500^®” is a trademark of The McGraw-Hill Companies, Inc. The S&P 500^® Index is widely regarded as the standard for measuring large-cap U.S. stock-market performance. The S&P 500^® Index is the Fund’s secondary benchmark. Results assume reinvestment of all income and capital gains. An investment cannot be made directly in an index.

10. The average Lipper large-cap growth fund is representative of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s U.S. Diversified Equity large-cap floor. Large-cap growth funds typically have above-average characteristics compared to the S&P 500^® Index. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay Large Cap Growth Fund

Cost in Dollars of a $1,000 Investment in MainStay Large Cap Growth Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund's ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,168.20	$	5.85	$	1,019.80	$	5.45
Class A Shares	$	1,000.00	$	1,167.30	$	5.52	$	1,020.10	$	5.14
Class B Shares	$	1,000.00	$	1,162.70	$	9.92	$	1,016.00	$	9.25
Class C Shares	$	1,000.00	$	1,164.20	$	9.93	$	1,016.00	$	9.25
Class I Shares	$	1,000.00	$	1,168.90	$	4.15	$	1,021.40	$	3.87
Class R1 Shares	$	1,000.00	$	1,168.60	$	4.70	$	1,020.90	$	4.38
Class R2 Shares	$	1,000.00	$	1,167.10	$	6.06	$	1,019.60	$	5.65
Class R3 Shares	$	1,000.00	$	1,165.30	$	7.42	$	1,018.30	$	6.92
Class R6 Shares2,3	$	1,000.00	$	1,143.00	$	2.48	$	1,016.30	$	2.33

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.07% for Investor Class, 1.01% for Class A, 1.82% for Class B and C, 0.76% for Class I, 0.86% for Class R1, 1.11% for Class R2, 1.36% for Class R3 and 0.62% for Class R6) multiplied by the average account value over the period, divided by 365 and multiplied by 184 days for Investor Class, Class A, Class B, Class C, Class I, Class R1, Class R2 and Class R3 (to reflect the one-half year period) and 136 days for Class R6 (to reflect the since-inception period). The table above represents actual expenses incurred during the one-half year period.

2. Expenses paid during the period reflect ongoing costs for the period from inception through October 31, 2013. Had these shares been offered for the full six-month period ended October 31, 2013, and had the Fund provided a hypothetical 5% annualized return, expenses paid during the period would have been $3.16 for Class R6 and the ending account value would have been $1,022.10 for Class R6.

3. The inception date for Class R6 shares was June 17, 2013.

mainstayinvestments.com 7

Industry Composition as of October 31, 2013 (Unaudited)

Internet Software & Services	9.4	%
Biotechnology	9.2
Internet & Catalog Retail	6.9
IT Services	6.4
Media	5.0
Specialty Retail	4.4
Chemicals	4.1
Oil, Gas & Consumable Fuels	4.1
Road & Rail	4.1
Hotels, Restaurants & Leisure	3.8
Capital Markets	3.6
Software	3.4
Aerospace & Defense	3.2
Textiles, Apparel & Luxury Goods	3.2
Computers & Peripherals	3.0
Semiconductors & Semiconductor Equipment	3.0
Industrial Conglomerates	2.7

Food & Staples Retailing	2.4	%
Pharmaceuticals	2.1
Health Care Technology	1.7
Communications Equipment	1.5
Energy Equipment & Services	1.5
Multiline Retail	1.5
Real Estate Investment Trusts	1.5
Wireless Telecommunication Services	1.4
Auto Components	1.2
Consumer Finance	1.2
Personal Products	1.1
Trading Companies & Distributors	1.0
Health Care Providers & Services	0.9
Airlines	0.7
Short-Term Investment	0.8
Other Assets, Less Liabilities	0.0	‡
	100.0	%

See Portfolio of Investments beginning on page 11 for specific holdings within these categories.

‡ Less than one-tenth of a percent.

Top Ten Holdings as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. Google, Inc. Class A

2. Union Pacific Corp.

3. Visa, Inc. Class A

4. Priceline.com, Inc.

5. Amazon.com, Inc.

  6. Apple, Inc.

  7. Monsanto Co.

  8. Salesforce.com, Inc.

  9. Danaher Corp.

10. Celgene Corp.

8 MainStay Large Cap Growth Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Clark J. Winslow, Justin H. Kelly, CFA, and Patrick M. Burton, CFA, of Winslow Capital Management, LLC, the Fund’s Subadvisor.

How did MainStay Large Cap Growth Fund perform relative to its benchmark and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay Large Cap Growth Fund returned 32.13% for Investor Class shares, 32.09% for Class A shares, 30.93% for Class B shares and 31.12% for Class C shares for the 12 months ended October 31, 2013. Over the same period, the Fund returned 32.41% for Class I shares, 32.27% for Class R1 shares, 31.88% for Class R2 shares, 31.63% for Class R3 shares and 32.41% for Class R6 shares. For the 12 months ended October 31, 2013, all share classes outperformed the 28.30% return of the Russell 1000^® Growth Index,¹ which is the Fund’s broad-based securities-market index, and the 29.24% return of the average Lipper² large-cap growth fund. See page 5 for Fund returns with applicable sales charges.

What factors affected the Fund’s relative performance during the reporting period?

The Fund’s relative performance was primarily driven by stock selection, which contributed positively in six sectors and detracted in three sectors. (Contributions take weightings and total returns into account.) Sector allocation contributed positively in all but two sectors during the reporting period. Our investment team anticipated a decline in systematic risk and believed this decline would lead equity performance to be driven by factors such as company fundamentals. (Systematic risk includes risk factors—such as European debt-market conditions, emerging-market behavior, and U.S. government and fiscal issues—that systematically affect stocks and cannot be easily avoided through diversification.) The market demonstrated lower correlations and higher price dispersion across stocks during the last third of the reporting period. Stable, high-dividend-yielding companies that were not held in the Fund dominated market performance during the first eight months of the reporting period and reached valuations that we viewed as extreme. For the entire reporting period, however, these stocks were significant underperformers. Instead, companies with strong relative growth outperformed. Our team’s focus on research and fundamental stock picking was rewarded with strong absolute and relative performance.

During the reporting period, which sectors were the strongest positive contributors to the Fund’s relative performance and which sectors were particularly weak?

Strong stock selection in the consumer discretionary and information technology sectors contributed positively to the Fund’s performance relative to the Russell 1000^® Growth Index.

An underweight position in the consumer staples sector also contributed positively. Stock selection and an overweight position in financials detracted from the Fund’s performance during the reporting period. Stock selection in industrials and an overweight position in energy also detracted.

During the reporting period, which individual stocks made the strongest positive contributions to the Fund’s absolute performance and which stocks detracted the most?

The strongest positive contributor to absolute performance during the reporting period was online travel company priceline.com. The company reported solid revenue and earnings increases that exceeded Wall Street consensus expectations. The advances were driven by new product rollouts and a continuing market share shift to online bookings. Biotechnology company Celgene, which develops therapies for cancer and other diseases, was also a strong contributor. The company’s performance was led by strong growth of existing drugs—such as Revlimid, which advanced in the United States and is expected to launch in Europe in 2014—and an outstanding pipeline of new drugs, including Apremilast for skin cancer. Global credit and debit card company Visa was another strong contributor. The company enjoyed robust revenue growth as people around the world shifted from using cash and checks to relying on credit and debit cards.

Personal computing company Apple was the most substantial detractor from the Fund’s absolute performance. The company was no longer achieving the high growth it had experienced during the previous decade, and the stock languished during the reporting period, in spite of Apple’s cash balances and modest valuation. The Fund maintained an underweight position in the underperforming stock. Robotic technology maker Intuitive Surgical also detracted, as hospitals faced budget constraints and remained reluctant to commit the meaningful capital needed for new Da Vinci robotic systems, which resulted in lower-than-anticipated sales. We sold the Fund’s position in Intuitive Surgical. Chinese Internet search company Baidu was another weak contributor, prompting us to sell the position at a depressed level. We were concerned about Baidu’s plans to increase expenditures in 2013 and 2014.

Did the Fund make any significant purchases or sales during the reporting period?

We initiated a Fund position in airline company Delta Air Lines on the basis of structural improvement in the airline industry’s competitive intensity. The Fund also purchased a position in social network company Facebook because we believe that the

1. See footnote on page 6 for more information on the Russell 1000^® Growth Index.

2. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

company may exceed consensus earnings expectations. In our view, advances may be driven by increased advertising spending on mobile devices and the possibility of enhanced advertising opportunities through the use of video.

We sold the Fund’s position in home improvement retailer Home Depot because the stock had reached our near-term valuation target. We also sold the Fund’s position in France-based therapeutic solution developer Sanofi because of slower growth in emerging markets.

How did the Fund’s sector weightings change during the reporting period?

We increased the Fund’s already overweight positions relative to the Russell 1000^® Growth Index in the consumer discretionary and financials sectors. We increased the Fund’s weighting in the information technology sector, moving from an underweight

position relative to the Russell 1000^® Growth Index to an overweight position. We reduced the Fund’s position in the materials sector, moving from a moderately overweight position relative to the Russell 1000^® Growth Index to a moderately underweight position.

How was the Fund positioned at the end of the reporting period?

As of October 31, 2013, the Fund held overweight positions relative to the Russell 1000^® Growth Index in the consumer discretionary and health care sectors. As of the same date, the Fund maintained its long-standing significantly underweight position relative to the Russell 1000^® Growth Index in the consumer staples sector. As of October 31, 2013, the Fund also held an underweight position relative to the Index in the telecommunication services sector.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

10 MainStay Large Cap Growth Fund

Portfolio of Investments October 31, 2013

	Shares		Value
Common Stocks 99.2%†
Aerospace & Defense 3.2%
Precision Castparts Corp.		1,397,300	$	354,145,685
United Technologies Corp.		2,443,800		259,653,750
				613,799,435
Airlines 0.7%
Delta Air Lines, Inc.		4,995,900		131,791,842
Auto Components 1.2%
BorgWarner, Inc.		2,181,000		224,926,530
Biotechnology 9.2%
Alexion Pharmaceuticals, Inc. (a)		1,595,600		196,179,020
Amgen, Inc.		2,984,300		346,178,800
Biogen Idec, Inc. (a)		1,515,800		370,143,202
¨Celgene Corp. (a)		3,052,700		453,295,423
Gilead Sciences, Inc. (a)		5,600,700		397,593,693
				1,763,390,138
Capital Markets 3.6%
BlackRock, Inc.		1,131,300		340,306,353
Charles Schwab Corp. (The)		2,964,300		67,141,395
Morgan Stanley		10,012,600		287,661,998
				695,109,746
Chemicals 4.1%
Ecolab, Inc.		2,081,100		220,596,600
¨Monsanto Co.		5,426,500		569,131,320
				789,727,920
Communications Equipment 1.5%
F5 Networks, Inc. (a)		1,298,200		105,816,282
QUALCOMM, Inc.		2,685,900		186,589,473
				292,405,755
Computers & Peripherals 3.0%
¨Apple, Inc.		1,114,265		582,036,323
Consumer Finance 1.2%
American Express Co.		2,850,200		233,146,360
Energy Equipment & Services 1.5%
Schlumberger, Ltd.		3,023,300		283,343,676
Food & Staples Retailing 2.4%
Costco Wholesale Corp.		1,515,000		178,770,000
CVS Caremark Corp.		3,349,700		208,552,322
Whole Foods Market, Inc.		1,182,000		74,619,660
				461,941,982

	Shares		Value
Health Care Providers & Services 0.9%
Catamaran Corp. (a)		3,544,400	$	166,445,024
Health Care Technology 1.7%
athenahealth, Inc. (a)		792,400		105,793,324
Cerner Corp. (a)		3,848,600		215,637,058
				321,430,382
Hotels, Restaurants & Leisure 3.8%
Chipotle Mexican Grill, Inc. (a)		250,500		132,005,985
Starbucks Corp.		5,021,700		407,008,785
Wynn Resorts, Ltd.		1,119,200		186,067,000
				725,081,770
Industrial Conglomerates 2.7%
¨Danaher Corp.		7,182,700		517,800,843
Internet & Catalog Retail 6.9%
¨Amazon.com, Inc. (a)		1,804,600		656,928,538
¨Priceline.com, Inc. (a)		632,600		666,652,858
				1,323,581,396
Internet Software & Services 9.4%
Baidu, Inc., Sponsored ADR (a)		950,600		152,951,540
eBay, Inc. (a)		6,583,000		346,989,930
Facebook, Inc. Class A (a)		7,318,000		367,802,680
¨Google, Inc. Class A (a)		778,200		801,997,356
LinkedIn Corp. Class A (a)		611,900		136,863,673
				1,806,605,179
IT Services 6.4%
Cognizant Technology Solutions Corp. Class A (a)		2,637,500		229,277,875
MasterCard, Inc. Class A		440,000		315,524,000
¨Visa, Inc. Class A		3,512,900		690,882,043
				1,235,683,918
Media 5.0%
CBS Corp. Class B		4,282,100		253,243,394
Liberty Global PLC Class A (a)		2,541,700		199,193,029
Twenty-First Century Fox, Inc. Class A		8,674,000		295,609,920
Walt Disney Co. (The)		3,136,600		215,139,394
				963,185,737
Multiline Retail 1.5%
Dollar General Corp. (a)		4,871,500		281,475,270
Oil, Gas & Consumable Fuels 4.1%
EOG Resources, Inc.		933,700		166,572,080
Noble Energy, Inc.		3,056,700		229,038,531
Pioneer Natural Resources Co.		1,020,100		208,896,078

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 11

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
Oil, Gas & Consumable Fuels (continued)
Range Resources Corp.		2,464,600	$	186,594,866
				791,101,555
Personal Products 1.1%
Estee Lauder Cos., Inc. (The) Class A		2,863,700		203,208,152
Pharmaceuticals 2.1%
Bristol-Myers Squibb Co.		3,333,900		175,096,428
Zoetis, Inc.		7,392,400		234,043,384
				409,139,812
Real Estate Investment Trusts 1.5%
American Tower Corp.		3,624,700		287,619,945
Road & Rail 4.1%
Kansas City Southern		775,200		94,202,304
¨Union Pacific Corp.		4,615,100		698,726,140
				792,928,444
Semiconductors & Semiconductor Equipment 3.0%
Applied Materials, Inc.		10,362,900		184,977,765
Arm Holdings PLC, Sponsored ADR		4,374,500		206,432,655
NXP Semiconductors N.V. (a)		4,634,500		195,205,140
				586,615,560
Software 3.4%
¨Salesforce.com, Inc. (a)		10,285,700		548,844,952
ServiceNow, Inc. (a)		1,893,100		103,382,191
				652,227,143
Specialty Retail 4.4%
Best Buy Co., Inc.		1,571,800		67,273,040
Lowe’s Companies, Inc.		4,817,700		239,825,106
Ross Stores, Inc.		2,753,700		212,998,695
Ulta Salon Cosmetics & Fragrance, Inc. (a)		2,550,600		328,644,810
				848,741,651
Textiles, Apparel & Luxury Goods 3.2%
Lululemon Athletica, Inc. (a)		1,937,900		133,811,995
NIKE, Inc. Class B		3,951,600		299,373,216
Ralph Lauren Corp.		1,047,035		173,430,877
				606,616,088
Trading Companies & Distributors 1.0%
W.W. Grainger, Inc.		721,370		194,026,889
Wireless Telecommunication Services 1.4%
SBA Communications Corp. Class A (a)		3,083,400		269,704,998
Total Common Stocks (Cost $12,896,528,022)				19,054,839,463

	Principal Amount			Value
Short-Term Investment 0.8%
Repurchase Agreement 0.8%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $156,390,965 (Collateralized by Government Agency securities with rates between 1.96% and 2.17% and a maturity date of 11/7/22, with a Principal Amount of $172,840,000 and a Market Value of $159,522,463)	$	156,390,965		$	156,390,965
Total Short-Term Investment (Cost $156,390,965)					156,390,965
Total Investments (Cost $13,052,918,987) (b)		100.0	%		19,211,230,428
Other Assets, Less Liabilities		0.0	‡		2,426,124
Net Assets		100.0	%	$	19,213,656,552

‡ Less than one-tenth of a percent.

(a) Non-income producing security.

(b) As of October 31, 2013, cost is $13,071,023,262 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	6,182,138,975
Gross unrealized depreciation		(41,931,809	)
Net unrealized appreciation	$	6,140,207,166

The following abbreviation is used in the above portfolio:

ADR—American Depositary Receipt

12 MainStay Large Cap Growth Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Common Stocks	$	19,054,839,463	$	—	$	—	$	19,054,839,463
Short-Term Investment
Repurchase Agreement		—		156,390,965		—		156,390,965
Total Investments in Securities	$	19,054,839,463	$	156,390,965	$	—	$	19,211,230,428

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

For the year ended October 31, 2013, the Fund did not have any transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $13,052,918,987)	$	19,211,230,428
Receivables:
Investment securities sold		330,409,974
Fund shares sold		31,770,628
Dividends and interest		4,275,310
Other assets		94,498
Total assets		19,577,780,838
Liabilities
Payables:
Investment securities purchased		249,385,780
Fund shares redeemed		98,698,641
Manager (See Note 3)		9,988,019
Transfer agent (See Note 3)		4,237,236
NYLIFE Distributors (See Note 3)		1,074,026
Shareholder communication		472,691
Professional fees		74,777
Custodian		69,816
Trustees		41,307
Accrued expenses		81,993
Total liabilities		364,124,286
Net assets	$	19,213,656,552
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	18,814,563
Additional paid-in capital		12,123,456,447
		12,142,271,010
Accumulated net realized gain (loss) on investments		913,074,101
Net unrealized appreciation (depreciation) on investments		6,158,311,441
Net assets	$	19,213,656,552

Investor Class
Net assets applicable to outstanding shares	$	211,110,766
Shares of beneficial interest outstanding		21,268,384
Net asset value per share outstanding	$	9.93
Maximum sales charge (5.50% of offering price)		0.58
Maximum offering price per share outstanding	$	10.51
Class A
Net assets applicable to outstanding shares	$	1,615,767,827
Shares of beneficial interest outstanding		161,916,314
Net asset value per share outstanding	$	9.98
Maximum sales charge (5.50% of offering price)		0.58
Maximum offering price per share outstanding	$	10.56
Class B
Net assets applicable to outstanding shares	$	59,671,432
Shares of beneficial interest outstanding		6,420,484
Net asset value and offering price per share outstanding	$	9.29
Class C
Net assets applicable to outstanding shares	$	403,968,129
Shares of beneficial interest outstanding		43,506,962
Net asset value and offering price per share outstanding	$	9.29
Class I
Net assets applicable to outstanding shares	$	13,254,459,410
Shares of beneficial interest outstanding		1,285,774,342
Net asset value and offering price per share outstanding	$	10.31
Class R1
Net assets applicable to outstanding shares	$	2,287,241,660
Shares of beneficial interest outstanding		224,363,084
Net asset value and offering price per share outstanding	$	10.19
Class R2
Net assets applicable to outstanding shares	$	1,014,654,647
Shares of beneficial interest outstanding		101,529,015
Net asset value and offering price per share outstanding	$	9.99
Class R3
Net assets applicable to outstanding shares	$	219,158,101
Shares of beneficial interest outstanding		22,360,276
Net asset value and offering price per share outstanding	$	9.80
Class R6
Net assets applicable to outstanding shares	$	147,624,580
Shares of beneficial interest outstanding		14,317,437
Net asset value and offering price per share outstanding	$	10.31

14 MainStay Large Cap Growth Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Dividends (a)	$	204,513,161
Interest		18,465
Total income		204,531,626
Expenses
Manager (See Note 3)		107,601,634
Transfer agent (See Note 3)		25,613,215
Distribution/Service—Investor Class (See Note 3)		520,376
Distribution/Service—Class A (See Note 3)		3,888,940
Distribution/Service—Class B (See Note 3)		580,149
Distribution/Service—Class C (See Note 3)		3,794,492
Distribution/Service—Class R2 (See Note 3)		2,307,228
Distribution/Service—Class R3 (See Note 3)		1,056,705
Shareholder service (See Note 3)		3,237,108
Shareholder communication		1,230,224
Professional fees		659,437
Registration		572,205
Trustees		361,256
Custodian		164,424
Miscellaneous		474,496
Total expenses before waiver/reimbursement		152,061,889
Expense waiver/reimbursement from Manager (See Note 3)		(110,035	)
Net expenses		151,951,854
Net investment income (loss)		52,579,772
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments (b)		1,477,017,481
Net change in unrealized appreciation (depreciation) on investments		3,488,600,418
Net realized and unrealized gain (loss) on investments		4,965,617,899
Net increase (decrease) in net assets resulting from operations	$	5,018,197,671

(a) Dividends recorded net of foreign withholding taxes in the amount of $888,382.

(b) Includes realized gain of $14,432,792 due to an in-kind redemption during the year ended October 31, 2013. (See Note 9)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	52,579,772		$	(11,181,745	)
Net realized gain (loss) on investments (a)		1,477,017,481			(512,103,447	)
Net change in unrealized appreciation (depreciation) on investments		3,488,600,418			1,549,658,941
Net increase (decrease) in net assets resulting from operations		5,018,197,671			1,026,373,749
Dividends and distributions to shareholders:
From net investment income:
Investor Class		(123,455	)		—
Class A		(977,498	)		—
Class B		(36,860	)		—
Class C		(240,447	)		—
Class I		(34,238,118	)		—
Class R1		(4,030,892	)		—
Class R2		(515,922	)		—
Class R3		(125,932	)		—
		(40,289,124	)		—
From net realized gain on investments:
Investor Class		—			(3,134,315	)
Class A		—			(42,302,237	)
Class B		—			(1,683,517	)
Class C		—			(9,016,819	)
Class I		—			(193,020,340	)
Class R1		—			(29,736,149	)
Class R2		—			(16,672,198	)
Class R3		—			(3,756,927	)
Total dividends and distributions to shareholders		(40,289,124	)		(299,322,502	)
Capital share transactions:
Net proceeds from sale of shares		3,626,295,650			7,252,755,190
Net asset value of shares issued to shareholders in reinvestment of dividends and distributions		30,730,710			218,164,571
Cost of shares redeemed (b)		(5,890,648,167	)		(4,644,732,279	)
Increase (decrease) in net assets derived from capital share transactions		(2,233,621,807	)		2,826,187,482
Net increase (decrease) in net assets		2,744,286,740			3,553,238,729

	2013		2012
Net Assets
Beginning of year	$	16,469,369,812	$	12,916,131,083
End of year	$	19,213,656,552	$	16,469,369,812
Undistributed (distributions in excess of) net investment income at end of year	$	—	$	(11,181,745	)

(a) Includes realized gain of $14,432,792 due to an in-kind redemption during the year ended October 31, 2013. (See Note 9)

(b) Includes an in-kind redemption in the amount of $119,677,233 during the year ended October 31, 2013. (See Note 9)

16 MainStay Large Cap Growth Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.52		$	7.21		$	6.55		$	5.53		$	4.70
Net investment income (loss) (a)		0.01			(0.02	)		(0.03	)		(0.04	)		(0.03	)
Net realized and unrealized gain (loss) on investments		2.40			0.49			0.69			1.06			0.86
Total from investment operations		2.41			0.47			0.66			1.02			0.83
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.93		$	7.52		$	7.21		$	6.55		$	5.53
Total investment return (b)		32.13	%		6.68	%		10.08	%		18.44	%		17.66	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.09	%		(0.28	%)		(0.43	%)		(0.64	%)		(0.62	%)
Net expenses		1.08	%		1.10	%		1.15	%		1.27	%		1.45	%
Expenses (before waiver/reimbursement)		1.08	%		1.10	%		1.15	%		1.28	%		1.45	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	211,111		$	199,156		$	130,140		$	93,733		$	59,499

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.55		$	7.24		$	6.58		$	5.54		$	4.70
Net investment income (loss) (a)		0.01			(0.02	)		(0.02	)		(0.03	)		(0.02	)
Net realized and unrealized gain (loss) on investments		2.42			0.49			0.68			1.07			0.86
Total from investment operations		2.43			0.47			0.66			1.04			0.84
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.98		$	7.55		$	7.24		$	6.58		$	5.54
Total investment return (b)		32.09	%		6.79	%		10.03	%		18.77	%		17.87	% (c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.17	%		(0.20	%)		(0.35	%)		(0.52	%)		(0.43	%)
Net expenses		1.02	%		1.04	%		1.06	%		1.17	%		1.21	%
Expenses (before waiver/reimbursement)		1.02	%		1.04	%		1.07	%		1.18	%		1.24	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	1,615,768		$	1,611,374		$	1,887,326		$	1,131,968		$	1,662,622

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) Total investment return may reflect adjustments to conform to generally accepted accounting principles.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.09		$	6.86		$	6.28		$	5.34		$	4.57
Net investment income (loss) (a)		(0.05	)		(0.07	)		(0.08	)		(0.08	)		(0.06	)
Net realized and unrealized gain (loss) on investments		2.25			0.46			0.66			1.02			0.83
Total from investment operations		2.20			0.39			0.58			0.94			0.77
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.29		$	7.09		$	6.86		$	6.28		$	5.34
Total investment return (b)		30.93	%		5.98	%		9.24	% (c)		17.60	% (c)		16.85	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.65	%)		(1.01	%)		(1.18	%)		(1.38	%)		(1.35	%)
Net expenses		1.83	%		1.84	%		1.90	%		2.02	%		2.20	%
Expenses (before waiver/reimbursement)		1.83	%		1.85	%		1.90	%		2.03	%		2.21	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	59,671		$	58,392		$	72,591		$	82,590		$	63,327

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.09		$	6.85		$	6.28		$	5.33		$	4.57
Net investment income (loss) (a)		(0.05	)		(0.07	)		(0.08	)		(0.08	)		(0.07	)
Net realized and unrealized gain (loss) on investments		2.25			0.47			0.65			1.03			0.83
Total from investment operations		2.20			0.40			0.57			0.95			0.76
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.29		$	7.09		$	6.85		$	6.28		$	5.33
Total investment return (b)		31.12	%		5.99	%		9.08	%		17.82	% (c)		16.63	% (c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.66	%)		(1.02	%)		(1.18	%)		(1.39	%)		(1.38	%)
Net expenses		1.83	%		1.85	%		1.89	%		2.02	%		2.19	%
Expenses (before waiver/reimbursement)		1.83	%		1.85	%		1.90	%		2.03	%		2.20	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	403,968		$	375,521		$	380,186		$	262,799		$	174,955

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

(c) Total investment returns may reflect adjustments to conform to generally accepted accounting principles.

18 MainStay Large Cap Growth Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.80		$	7.45		$	6.75		$	5.67		$	4.79
Net investment income (loss) (a)		0.03			0.00	‡		(0.01	)		(0.01	)		0.00	‡
Net realized and unrealized gain (loss) on investments		2.50			0.51			0.71			1.09			0.88
Total from investment operations		2.53			0.51			0.70			1.08			0.88
Less dividends and distributions:
From net investment income		(0.02	)		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.02	)		(0.16	)		—			—			—
Net asset value at end of year	$	10.31		$	7.80		$	7.45		$	6.75		$	5.67
Total investment return (b)		32.41	%		7.15	%		10.37	% (c)		19.05	% (c)		18.37	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.38	%		0.03	%		(0.09	%)		(0.23	%)		0.00	%(d)
Net expenses		0.77	%		0.79	%		0.81	%		0.85	%		0.82	%
Expenses (before waiver/reimbursement)		0.77	%		0.79	%		0.82	%		0.94	%		0.99	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	13,254,459		$	11,215,464		$	8,465,658		$	3,497,859		$	1,341,715

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

(c) Total investment return may reflect adjustments to conform to generally accepted accounting principles.

(d) Less than one-hundredth of a percent.

	Year ended October 31,
Class R1	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.72		$	7.38		$	6.70		$	5.63		$	4.76
Net investment income (loss) (a)		0.02			(0.01	)		(0.02	)		(0.02	)		(0.01	)
Net realized and unrealized gain (loss) on investments		2.47			0.51			0.70			1.09			0.88
Total from investment operations		2.49			0.50			0.68			1.07			0.87
Less dividends and distributions:
From net investment income		(0.02	)		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.02	)		(0.16	)		—			—			—
Net asset value at end of year	$	10.19		$	7.72		$	7.38		$	6.70		$	5.63
Total investment return (b)		32.27	%		6.94	%		10.15	%		19.01	%		18.28	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.28	%		(0.08	%)		(0.21	%)		(0.35	%)		(0.19	%)
Net expenses		0.87	%		0.89	%		0.91	%		0.97	%		0.98	%
Expenses (before reimbursement/waiver)		0.87	%		0.89	%		0.92	%		1.04	%		1.09	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	2,287,242		$	1,950,015		$	1,140,164		$	418,253		$	161,642

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R1 shares are not subject to sales charges.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class R2	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.57		$	7.26		$	6.61		$	5.57		$	4.72
Net investment income (loss) (a)		0.00	‡		(0.02	)		(0.03	)		(0.04	)		(0.02	)
Net realized and unrealized gain (loss) on investments		2.42			0.49			0.68			1.08			0.87
Total from investment operations		2.42			0.47			0.65			1.04			0.85
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.99		$	7.57		$	7.26		$	6.61		$	5.57
Total investment return (b)		31.88	%		6.77	%		9.83	%		18.67	%		18.01	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.03	%		(0.32	%)		(0.46	%)		(0.66	%)		(0.45	%)
Net expenses		1.12	%		1.14	%		1.16	%		1.28	%		1.24	%
Expenses (before waiver/reimbursement)		1.12	%		1.14	%		1.17	%		1.29	%		1.35	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	1,014,655		$	854,119		$	701,183		$	217,002		$	113,942

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R2 shares are not subject to sales charges.

	Year ended October 31,
Class R3	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	7.45		$	7.16		$	6.53		$	5.52		$	4.69
Net investment income (loss) (a)		(0.02	)		(0.04	)		(0.05	)		(0.06	)		(0.03	)
Net realized and unrealized gain (loss) on investments		2.37			0.49			0.68			1.07			0.86
Total from investment operations		2.35			0.45			0.63			1.01			0.83
Less dividends and distributions:
From net investment income		(0.00	)‡		—			—			—			—
From net realized gain on investments		—			(0.16	)		—			—			—
Total dividends and distributions		(0.00	)‡		(0.16	)		—			—			—
Net asset value at end of year	$	9.80		$	7.45		$	7.16		$	6.53		$	5.52
Total investment return (b)		31.63	%		6.44	%		9.65	%		18.30	%		17.70	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		(0.20	%)		(0.57	%)		(0.70	%)		(0.92	%)		(0.70	%)
Net expenses		1.37	%		1.39	%		1.41	%		1.53	%		1.49	%
Expenses (before waiver/reimbursement)		1.37	%		1.39	%		1.42	%		1.54	%		1.59	%
Portfolio turnover rate		74	%		60	%		52	%		91	%		62	%
Net assets at end of year (in 000’s)	$	219,158		$	205,329		$	138,883		$	49,395		$	13,436

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R3 shares are not subject to sales charges.

20 MainStay Large Cap Growth Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	June 17, 2013** through October 31,
Class R6	2013
Net asset value at beginning of period	$	9.02
Net investment income (loss) (a)		0.00	‡
Net realized and unrealized gain (loss) on investments		1.29
Total from investment operations		1.29
Net asset value at end of period	$	10.31
Total investment return (b)		14.30	%(c)
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.04	%††
Net expenses		0.62	%††
Portfolio turnover rate		74	%
Net assets at end of period (in 000’s)	$	147,625

** Inception date.

†† Annualized.

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the period.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R6 shares are not subject to sales charges.

(c) Total investment return is not annualized.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay Large Cap Growth Fund (the “Fund”), a diversified fund.

The Fund currently offers nine classes of shares. Class A shares commenced operations on July 1, 1995. Class B, Class C, Class I, Class R1 and Class R2 shares commenced operations on April 1, 2005. Class R3 shares commenced operations on April 28, 2006. Investor Class shares commenced operations on February 28, 2008. Class R6 shares commenced operations on June 17, 2013. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I, Class R1, Class R2, Class R3 and Class R6 shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The nine classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class, Class A, Class R2 and Class R3 shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I, Class R1 and Class R6 shares are not subject to a distribution and/or service fee. Class R1, Class R2 and Class R3 shares are subject to a shareholder service fee. This is in addition to any fees paid under a distribution plan, where applicable.

The Fund’s investment objective is to seek long-term growth of capital.

As of January 13, 2012, the Fund was closed to new investors with certain exceptions. See Note 10 for more information.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisor (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund's third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

22 MainStay Large Cap Growth Fund

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund's Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•    Broker Dealer Quotes	•    Reported Trades
•    Two-sided markets	•    Issuer Spreads
•    Bids/Offers	•    Benchmark securities
•    Industry and economic events	•    Reference Data (corporate actions or material event notices)
•    Equity and credit default swap curves	•    Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund's Manager or Subadvisor reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Investments in other mutual funds are valued at their

respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(D)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro

mainstayinvestments.com 23

Notes to Financial Statements (continued)

rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(E)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(F)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(G)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisor to be creditworthy, pursuant to guidelines established by the Fund's Board. During the term of any repurchase agreement, the Manager or Subadvisor will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund's custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(H)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund's cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund's portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower's inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as

collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(I)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisor.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. Winslow Capital Management, LLC. (“Winslow” or “Subadvisor”), a registered investment adviser, serves as Subadvisor to the Fund and is responsible for the day-to-day portfolio management of the Fund. Pursuant to the terms of an Amended and Restated Subadvisory Agreement (“Subadvisory Agreement”) between New York Life Investments and Winslow, New York Life Investments pays for the services of the Subadvisor.

Effective February 28, 2013, the Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.75% up to $500 million; 0.725% from $500 million to $750 million; 0.71% from $750 million to $1 billion; 0.70% from $1 billion to $2 billion; 0.66% from $2 billion to $3 billion; 0.61% from $3 billion to $7 billion; 0.585% from $7 billion to $9 billion; and 0.575% in excess of $9 billion.

New York Life Investments has contractually agreed to waive fees and/or reimburse expenses of Class I shares so that Total Annual Fund Operating Expenses of Class I Shares do not exceed 0.88% of the Fund's average daily net assets. This agreement will remain in effect

24 MainStay Large Cap Growth Fund

until February 28, 2014, and shall renew automatically for one-year terms unless New York Life Investments provides written notice of termination prior to the start of the next term or upon approval of the Board.

Additionally, New York Life Investments has agreed to further voluntarily waive fees and/or reimburse the expenses of Class R1 shares so that Total Annual Fund Operating Expenses do not exceed 0.95% of its average daily net assets. This voluntary waiver or reimbursement may be discontinued at any time. Total Annual Fund Operating Expenses excludes taxes, interest, litigation, extraordinary expenses, brokerage and other transaction expenses relating to the purchase or sale of portfolio investments, and acquired (underlying) fund fees and expenses.

Prior to February 28, 2013, the Fund paid the Manager a monthly fee for services performed and facilities furnished at an annual percentage of the Fund’s average daily net assets, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to $20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million. New York Life Investments had contractually agreed to waive a portion of its management fee, so that the management fee would not exceed 0.75% up to $500 million. All other management fee breakpoints remained the same. Without that fee waiver, the actual fee would have been 0.80% up to $250 million; 0.75% from $250 million to $500 million; 0.725% from $500 million to $750 million; 0.70% from $750 million to $2 billion; 0.65% from $2 billion to $3 billion; 0.60% from $3 billion to $7 billion; 0.575% from $7 billion to $9 billion; and 0.565% in excess of $9 billion.

The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.60% for the year ended October 31, 2013, inclusive of a fee for fund accounting services that was less than 0.01% of the Fund's average daily net assets. The fund accounting fee was discontinued February 28, 2013.

Prior to February 28, 2013, New York Life Investments had voluntarily agreed to waive a portion of its management fee so that it would not exceed the following percentages of the Fund's average daily net assets: 0.72% up to $500 million; 0.70% from $500 million to $2 billion. All other management fee breakpoints were the same. This voluntary waiver was discontinued February 28, 2013.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $107,601,634 and waived its fees and/or reimbursed expenses in the amount of $110,035.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution, Service and Shareholder Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement

with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class, Class A and Class R2 Plans, the Distributor receives a monthly distribution fee from the Investor Class, Class A and Class R2 shares, at an annual rate of 0.25% of the average daily net assets of the Investor Class, Class A and Class R2 shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares, along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Pursuant to the Class R3 Plan, the Distributor receives a monthly distribution and/or service fee from the Class R3 shares at an annual rate of 0.50% of the average daily net assets of the Class R3 shares. Class I, Class R1 and Class R6 shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund's shares and service activities.

In accordance with the Shareholder Services Plans for the Class R1, Class R2 and Class R3 shares, the Manager has agreed to provide, through its affiliates or independent third parties, various shareholder and administrative support services to shareholders of the Class R1, Class R2 and Class R3 shares. For its services, the Manager, its affiliates or independent third party service providers are entitled to a Shareholder Service Fee accrued daily and paid monthly at an annual rate of 0.10% of the average daily net assets of the Class R1, Class R2 and Class R3 shares. This is in addition to any fees paid under a distribution plan, where applicable.

Shareholder Service Fees incurred by the Fund for the year ended October 31, 2013, were as follows:

Class R1	$	2,102,848
Class R2		922,916
Class R3		211,344

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $19,288 and $17,283, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $135, $8,112, $67,661 and $20,344, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund's transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf

mainstayinvestments.com 25

Notes to Financial Statements (continued)

of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	426,090
Class A		2,216,596
Class B		118,768
Class C		776,249
Class I		17,475,828
Class R1		2,988,120
Class R2		1,310,751
Class R3		300,813

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class C	$	4,308	0.0	%‡
Class I		8,016	0.0	‡
Class R6		28,575	0.0	‡

‡ Less than one-tenth of a percent.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary Income	Accumulated Capital and Other Gain (Loss)		Capital Loss Carryforward			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
$—	$	933,873,503	$	(2,695,127	)	$	6,140,207,166	$	7,071,385,542

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments and return of capital distributions received.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments			Additional Paid-In Capital
$(1,108,903)	$	(13,251,603	)	$	14,360,506

The reclassifications for the Fund are primarily due to return of capital distributions received, redemptions in-kind and distribution re-designations.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable

years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $2,695,127 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)		Long-Term Capital Loss Amounts (000’s)
2016	$	2,695	$	—
Total	$	2,695	$	—

The Fund utilized $514,427,448 of capital loss carryforwards during the year ended October 31, 2013.

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	39,790,967	$	—
Long-Term Capital Gain		498,157		299,322,502
Total	$	40,289,124	$	299,322,502

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit

26 MainStay Large Cap Growth Fund

Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $12,904,520 and $14,753,528, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		3,142,512		$	26,326,926
Shares issued to shareholders in reinvestment of dividends and distributions		16,252			122,864
Shares redeemed		(8,353,409	)		(70,578,834	)
Net increase (decrease) in shares outstanding before conversion		(5,194,645	)		(44,129,044	)
Shares converted into Investor Class (See Note 1)		842,562			7,153,984
Shares converted from Investor Class (See Note 1)		(864,152	)		(7,830,927	)
Net increase (decrease)		(5,216,235	)	$	(44,805,987	)
Year ended October 31, 2012:
Shares sold		12,391,068		$	90,243,593
Shares issued to shareholders in reinvestment of dividends and distributions		446,324			3,124,635
Shares redeemed		(4,719,951	)		(35,519,415	)
Net increase (decrease) in shares outstanding before conversion		8,117,441			57,848,813
Shares converted into Investor Class (See Note 1)		1,269,652			9,384,061
Shares converted from Investor Class (See Note 1)		(958,935	)		(7,360,703	)
Net increase (decrease)		8,428,158		$	59,872,171

Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		27,157,127		$	229,281,701
Shares issued to shareholders in reinvestment of dividends and distributions		111,483			847,266
Shares redeemed (a)		(79,605,137	)		(669,478,037	)
Net increase (decrease) in shares outstanding before conversion		(52,336,527	)		(439,349,070	)
Shares converted into Class A (See Note 1)		1,048,418			9,432,282
Shares converted from Class A (See Note 1)		(82,213	)		(735,432	)
Net increase (decrease)		(51,370,322	)	$	(430,652,220	)
Year ended October 31, 2012:
Shares sold		67,808,598		$	498,104,060
Shares issued to shareholders in reinvestment of dividends and distributions		5,344,897			37,575,729
Shares redeemed		(121,882,365	)		(888,467,676	)
Net increase (decrease) in shares outstanding before conversion		(48,728,870	)		(352,787,887	)
Shares converted into Class A (See Note 1)		1,370,838			10,461,371
Shares converted from Class A (See Note 1)		(62,777	)		(500,454	)
Net increase (decrease)		(47,420,809	)	$	(342,826,970	)
Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		423,755		$	3,362,108
Shares issued to shareholders in reinvestment of dividends and distributions		4,464			31,781
Shares redeemed		(1,229,027	)		(9,768,345	)
Net increase (decrease) in shares outstanding before conversion		(800,808	)		(6,374,456	)
Shares converted from Class B (See Note 1)		(1,010,043	)		(8,019,907	)
Net increase (decrease)		(1,810,851	)	$	(14,394,363	)
Year ended October 31, 2012:
Shares sold		713,830		$	4,976,197
Shares issued to shareholders in reinvestment of dividends and distributions		219,228			1,457,422
Shares redeemed		(1,567,164	)		(11,124,541	)
Net increase (decrease) in shares outstanding before conversion		(634,106	)		(4,690,922	)
Shares converted from Class B (See Note 1)		(1,715,464	)		(11,984,275	)
Net increase (decrease)		(2,349,570	)	$	(16,675,197	)

mainstayinvestments.com 27

Notes to Financial Statements (continued)

Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,483,845		$	11,782,137
Shares issued to shareholders in reinvestment of dividends and distributions		13,230			94,197
Shares redeemed		(10,974,217	)		(86,409,238	)
Net increase (decrease)		(9,477,142	)	$	(74,532,904	)
Year ended October 31, 2012:
Shares sold		7,495,431		$	50,953,860
Shares issued to shareholders in reinvestment of dividends and distributions		464,352			3,082,334
Shares redeemed		(10,440,443	)		(73,636,254	)
Net increase (decrease)		(2,480,660	)	$	(19,600,060	)
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		313,490,989		$	2,748,057,160
Shares issued to shareholders in reinvestment of dividends and distributions		3,176,714			25,128,072
Shares redeemed		(468,071,347	)		(4,177,971,444	)
Net increase (decrease)		(151,403,644	)	$	(1,404,786,212	)
Year ended October 31, 2012:
Shares sold		654,647,732		$	4,998,865,969
Shares issued to shareholders in reinvestment of dividends and distributions		17,729,231			128,359,572
Shares redeemed		(370,957,702	)		(2,894,036,604	)
Net increase (decrease)		301,419,261		$	2,233,188,937
Class R1	Shares			Amount
Year ended October 31, 2013:
Shares sold		31,465,717		$	271,012,078
Shares issued to shareholders in reinvestment of dividends and distributions		515,173			4,028,844
Shares redeemed		(60,288,692	)		(527,239,581	)
Net increase (decrease)		(28,307,802	)	$	(252,198,659	)
Year ended October 31, 2012:
Shares sold		137,395,385		$	1,040,318,139
Shares issued to shareholders in reinvestment of dividends and distributions		4,141,499			29,694,545
Shares redeemed		(43,352,568	)		(331,070,740	)
Net increase (decrease)		98,184,316		$	738,941,944

Class R2	Shares			Amount
Year ended October 31, 2013:
Shares sold		19,388,922		$	165,797,767
Shares issued to shareholders in reinvestment of dividends and distributions		48,548			369,449
Shares redeemed		(30,681,175	)		(264,189,502	)
Net increase (decrease)		(11,243,705	)	$	(98,022,286	)
Year ended October 31, 2012:
Shares sold		61,660,981		$	458,857,617
Shares issued to shareholders in reinvestment of dividends and distributions		1,649,907			11,631,846
Shares redeemed		(47,072,369	)		(355,480,673	)
Net increase (decrease)		16,238,519		$	115,008,790
Class R3	Shares			Amount
Year ended October 31, 2013:
Shares sold		4,088,588		$	34,338,709
Shares issued to shareholders in reinvestment of dividends and distributions		14,470			108,237
Shares redeemed		(9,316,136	)		(78,169,459	)
Net increase (decrease)		(5,213,078	)	$	(43,722,513	)
Year ended October 31, 2012:
Shares sold		15,178,283		$	110,435,755
Shares issued to shareholders in reinvestment of dividends and distributions		465,969			3,238,488
Shares redeemed		(7,463,724	)		(55,396,376	)
Net increase (decrease)		8,180,528		$	58,277,867
Class R6 (b)	Shares			Amount
Period ended October 31, 2013:
Shares sold		15,024,124		$	136,337,064
Shares redeemed		(706,687	)		(6,843,727	)
Net increase (decrease)		14,317,437		$	129,493,337

(a) Includes the redemption of 13,731,382 shares through an in-kind transfer of securities in the amount of $119,677,233. (See Note 9)

(b) Class R6 shares were first offered on June 17, 2013.

Note 9–In-Kind Transfer of Securities

During the year ended October 31, 2013, the Fund redeemed shares of beneficial interest in exchange for securities. The securities were transferred at their current value on the date of the transaction.

Transaction Date	Shares		Redeemed Value		Gain (Loss)
4/23/13		13,731,382	$	119,677,233	$	14,432,792

28 MainStay Large Cap Growth Fund

Note 10–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund's management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure other than the following:

Pursuant to supplements dated December 17, 2013 and December 18, 2013, effective January 15, 2014, the Fund will be available for purchase by new investors subject to applicable investment minimums and eligibility requirements.

mainstayinvestments.com 29

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay Large Cap Growth Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay Large Cap Growth Fund of The MainStay Funds as of October 31, 2013, and the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

30 MainStay Large Cap Growth Fund

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise share-holders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years. Accordingly, the Fund paid $498,157 as long term capital distribution. For the fiscal year ended October 31, 2013, the Fund designated approximately $39,790,967 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 100.0% to arrive at the amount eligible for the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge, on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

mainstayinvestments.com 31

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

32 MainStay Large Cap Growth Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

mainstayinvestments.com 33

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

34 MainStay Large Cap Growth Fund

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-31970 MS322-13 MSLG11-12/13 NL031

MainStay MAP Fund

Message from the President and Annual Report

October 31, 2013

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Message from the President

With a few notable exceptions, major stock markets around the world tended to advance strongly during the 12 months ended October 31, 2013. According to Russell data, many U.S. stock indexes rose more than 25%, and some exceeded 30%. In the United States, growth stocks tended to outperform value stocks, but the differences were slight among large-capitalization issues.

European stocks were generally strong, with some regional variations. The market seemed convinced that the European Union would remain intact and that economic recovery would be possible, even in troubled peripheral nations. Japanese stocks advanced as the yen weakened and monetary and fiscal stimulus plans went into effect. Slowing growth prospects for China, however, led to weaker stock-market performance for that nation and its major suppliers, including Peru, Chile and Indonesia.

In the United States, stocks were buoyed by steady progress in corporate earnings and general improvements in profits. Stock prices occasionally faltered as politicians debated the so-called fiscal cliff, imposed a government shutdown and wrangled over debt limits. But stocks quickly recovered when agreements were reached and the government shutdown ended.

The Federal Reserve maintained the federal funds target rate in a range near zero, which drew money into stocks. When the Federal Reserve suggested that it might begin to gradually taper its security purchases, however, U.S. Treasury yields rose sharply. Stocks that tend to serve as a proxy for yield, including real estate investment trusts (REITs) and utilities, sold off. In September, the Federal Reserve noted that economic conditions did not yet warrant the anticipated tapering, and the announcement helped calm investor concerns.

Rising interest rates left many bond investors in negative territory for the 12 months ended October 31, 2013. (Bond prices tend to fall as interest rates rise and tend to rise as interest rates fall.) As an asset class, U.S. Treasury securities generally

provided negative total returns, as did many high-grade bonds. Searching for additional yield, many fixed-income investors took on the higher risk of high-yield bonds, which advanced during the reporting period. Others moved into convertible bonds, which generally benefited from the rising stock market.

Through all of these market changes, the portfolio managers of MainStay Funds focused on the investment objectives of their respective Funds and on the available investment strategies. Our portfolio managers used disciplined investment techniques, seeking to achieve long-term results consistent with their mandate.

Whether the markets go up or down, we believe that shareholders do well to maintain a long-term, wide-range perspective. With appropriate diversification, negative results in one asset class may be balanced by positive results in others. While some investors find volatility troublesome, experienced investors know that without it, market opportunities would be limited.

The following annual report contains more detailed information about the specific markets, securities and decisions that affected your MainStay Fund during the 12 months ended October 31, 2013. While past performance is no guarantee of future results, we encourage you to get invested, stay invested and add to your investments whenever you can.

We thank you for choosing MainStay Funds, and we look forward to strengthening our relationship over time.

Sincerely,

Stephen P. Fisher

President

Not part of the Annual Report

Table of Contents

Annual Report
Investment and Performance Comparison	5
Portfolio Management Discussion and Analysis	9
Portfolio of Investments	12
Financial Statements	16
Notes to Financial Statements	23
Report of Independent Registered Public Accounting Firm	31
Federal Income Tax Information	32
Proxy Voting Policies and Procedures and Proxy Voting Record	32
Shareholder Reports and Quarterly Portfolio Disclosure	32
Board Members and Officers	33

Investors should refer to the Fund’s Summary Prospectus and/or Prospectus and consider the Fund’s investment objectives, strategies, risks, charges and expenses carefully before investing. The Summary Prospectus and/or Prospectus contain this and other information about the Fund. You may obtain copies of the Fund’s Summary Prospectus, Prospectus and Statement of Additional Information free of charge, upon request, by calling toll-free 800-MAINSTAY (624-6782), by writing to NYLIFE Distributors LLC, Attn: MainStay Marketing Department, 169 Lackawanna Avenue, Parsippany, New Jersey 07054 or by sending an e-mail to MainStayShareholderServices@nylim.com. These documents are also available via the MainStay Funds’ website at mainstayinvestments.com/documents. Please read the Summary Prospectus and/or Prospectus carefully before investing.

Investment and Performance Comparison¹(Unaudited)

Performance data quoted represents past performance. Past performance is no guarantee of future results. Because of market volatility, current performance may be lower or higher than the figures shown. Investment return and principal value will fluctuate, and as a result, when shares are redeemed, they may be worth more or less than their original cost. The graph below depicts the historical performance of Class I shares of the Fund. Performance will vary from class to class based on differences in class-specific expenses and sales charges. For performance information current to the most recent month-end, please call 800-MAINSTAY (624-6782) or visit mainstayinvestments.com.

Average Annual Total Returns for Year Ended October 31, 2013

Class	Sales Charge		One Year			Five Years			Ten Years			Gross Expense Ratio2
Investor Class Shares3	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		21.20 28.26	%		13.16 14.45	%		7.57 8.18	%		1.34 1.34	%
Class A Shares	Maximum 5.5% Initial Sales Charge	With sales charges Excluding sales charges		21.41 28.47			13.41 14.70			7.68 8.30			1.14 1.14
Class B Shares	Maximum 5% CDSC if Redeemed Within the First Six Years of Purchase	With sales charges Excluding sales charges		22.30 27.30			13.36 13.60			7.37 7.37			2.09 2.09
Class C Shares	Maximum 1% CDSC if Redeemed Within One Year of Purchase	With sales charges Excluding sales charges		26.26 27.26			13.59 13.59			7.37 7.37			2.09 2.09
Class I Shares	No Sales Charge			28.79			14.97			8.62			0.89
Class R1 Shares4	No Sales Charge			28.63			14.83			8.49			0.99
Class R2 Shares4	No Sales Charge			28.36			14.57			8.24			1.24
Class R3 Shares5	No Sales Charge			28.03			14.27			7.93			1.49

1. The performance table and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or Fund share redemptions. Total returns reflect maximum applicable sales charges as indicated in the table above, changes in share price, and reinvestment of dividend and capital gain distributions. The graph assumes the initial investment amount shown above and reflects the deduction of all sales charges that would have applied for the period of investment. Performance figures reflect certain fee waivers and/or expense limitations, without which total returns may have been lower. For more information on share classes and current fee waivers and/or expense limitations, please refer to the notes to the financial statements.

2. The gross expense ratios presented reflect the Fund’s “Total Annual Fund Operating Expenses” from the most recent Prospectus and may differ from other expense ratios disclosed in this report.

3. Performance figures for Investor Class shares, first offered on February 28, 2008, include the historical performance of Class A shares through February 27, 2008, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Investor Class shares would likely have been different.

4. Performance figures for Class R1 and R2 shares, each of which was first offered on January 2, 2004, include the historical performance of Class A shares through January 1, 2004, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class R1 and R2 shares would likely have been different.

5. Performance figures for Class R3 shares, which were first offered on April 28, 2006, include the historical performance of Class A shares through April 27, 2006, adjusted for differences in certain expenses and fees. Unadjusted, the performance shown for Class R3 shares would likely have been different.

The footnotes on the next page are an integral part of the table and graph and should be carefully read in conjunction with them.

mainstayinvestments.com 5

Benchmark Performance	One Year			Five Years			Ten Years
Russell 3000® Index6		28.99	%		15.94	%		7.92	%
S&P 500® Index7		27.18			15.17			7.46
Average Lipper Large-Cap Core Fund8		26.63			14.22			7.02

6. The Russell 3000^® Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000^® Index is the Fund’s broad-based securities market index for comparison purposes. Total returns assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index.

7. “S&P 500^®” is a trademark of The McGraw-Hill Companies, Inc. The S&P 500^® Index is widely regarded as the standard index for measuring large-cap U.S. stock market performance. The S&P 500^® Index is the Fund’s secondary benchmark. Results assume reinvestment of all income and capital gains. An investment cannot be made directly in an index.

8. The average Lipper large-cap core fund is representative of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s U.S. Diversified Equity large-cap floor. Large-cap core funds have more latitude in the companies in which they invest. These funds typically have average characteristics compared to the S&P 500^® Index. This benchmark is a product of Lipper Inc. Lipper Inc. is an independent monitor of fund performance. Results are based on average total returns of similar funds with all dividend and capital gain distributions reinvested.

The footnotes on the preceding page are an integral part of the table and graph and should be carefully read in conjunction with them.

6 MainStay MAP Fund

Cost in Dollars of a $1,000 Investment in MainStay MAP Fund (Unaudited)

The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from May 1, 2013, to October 31, 2013, and the impact of those costs on your investment.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including exchange fees and sales charges (loads) on purchases (as applicable), and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from May 1, 2013, to October 31, 2013.

This example illustrates your Fund’s ongoing costs in two ways:

Actual Expenses

The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the six months ended October 31, 2013. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then

multiply the result by the number under the heading entitled ‘‘Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in the Fund with the ongoing costs of investing in other Funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other Funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as exchange fees or sales charges (loads). Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Share Class	Beginning Account Value 5/1/13		Ending Account Value (Based on Actual Returns and Expenses) 10/31/13		Expenses Paid During Period1		Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 10/31/13		Expenses Paid During Period1
Investor Class Shares	$	1,000.00	$	1,107.30	$	6.85	$	1,018.70	$	6.56
Class A Shares	$	1,000.00	$	1,108.30	$	5.90	$	1,019.60	$	5.65
Class B Shares	$	1,000.00	$	1,103.20	$	10.81	$	1,014.90	$	10.36
Class C Shares	$	1,000.00	$	1,102.90	$	10.81	$	1,014.90	$	10.36
Class I Shares	$	1,000.00	$	1,109.50	$	4.57	$	1,020.90	$	4.38
Class R1 Shares	$	1,000.00	$	1,109.20	$	5.10	$	1,020.40	$	4.89
Class R2 Shares	$	1,000.00	$	1,107.80	$	6.43	$	1,019.10	$	6.16
Class R3 Shares	$	1,000.00	$	1,106.10	$	7.75	$	1,017.80	$	7.43

1. Expenses are equal to the Fund’s annualized expense ratio of each class (1.29% for Investor Class, 1.11% for Class A, 2.04% for Class B and Class C, 0.86% for Class I, 0.96% for Class R1, 1.21% for Class R2 and 1.46% for Class R3) multiplied by the average account value over the period, divided by 365 and multiplied by 184 (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period.

mainstayinvestments.com 7

Industry Composition as of October 31, 2013 (Unaudited)

Oil, Gas & Consumable Fuels	10.8	%
Media	7.7
Pharmaceuticals	5.2
Aerospace & Defense	4.9
Diversified Financial Services	4.5
Chemicals	4.2
Commercial Banks	4.0
Health Care Equipment & Supplies	3.9
Industrial Conglomerates	3.8
Insurance	3.4
Consumer Finance	3.3
Food & Staples Retailing	2.8
Internet Software & Services	2.8
Software	2.3
Hotels, Restaurants & Leisure	2.2
Capital Markets	2.1
Wireless Telecommunication Services	2.1
Computers & Peripherals	2.0
Auto Components	1.7
Energy Equipment & Services	1.7
Semiconductors & Semiconductor Equipment	1.7
Beverages	1.6
Electric Utilities	1.6
Health Care Providers & Services	1.6
Automobiles	1.4
Diversified Telecommunication Services	1.4

IT Services	1.2	%
Real Estate Investment Trusts	1.2
Specialty Retail	1.2
Communications Equipment	0.9
Electrical Equipment	0.9
Road & Rail	0.9
Commercial Services & Supplies	0.8
Electronic Equipment & Instruments	0.8
Internet & Catalog Retail	0.8
Biotechnology	0.7
Household Products	0.5
Real Estate Management & Development	0.5
Diversified Consumer Services	0.4
Machinery	0.4
Construction & Engineering	0.3
Food Products	0.3
Gas Utilities	0.3
Trading Companies & Distributors	0.3
Metals & Mining	0.2
Multiline Retail	0.2
Containers & Packaging	0.1
Multi-Utilities	0.1
Tobacco	0.1
Short-Term Investment	1.4
Other Assets, Less Liabilities	0.8
	100.0	%

See Portfolio of Investments beginning on page 12 for specific holdings within these categories.

Top Ten Holdings as of October 31, 2013 (excluding short-term investment) (Unaudited)

1. General Electric Co.

2. Boeing Co. (The)

3. Pfizer, Inc.

4. Liberty Media Corp. Class A

5. Monsanto Co.

  6. Vodafone Group PLC, Sponsored ADR

  7. Time Warner, Inc.

  8. Exxon Mobil Corp.

  9. CVS Caremark Corp.

10. McDonald’s Corp.

8 MainStay MAP Fund

Portfolio Management Discussion and Analysis (Unaudited)

Questions answered by portfolio managers Roger Lob, Christopher Mullarkey and James Mulvey of the Fund’s Subadvisor Markston International LLC (Markston International) and by portfolio managers Thomas R. Wenzel, CFA, Jerrold K. Senser, CFA, and Thomas M. Cole, CFA, of the Fund’s Subadvisor Institutional Capital LLC (ICAP).

How did MainStay MAP Fund perform relative to its benchmarks and peers during the 12 months ended October 31, 2013?

Excluding all sales charges, MainStay MAP Fund returned 28.26% for Investor Class shares, 28.47% for Class A shares, 27.30% for Class B shares and 27.26% for Class C shares for the 12 months ended October 31, 2013. Over the same period, Class I shares returned 28.79%, Class R1 shares returned 28.63%, Class R2 shares returned 28.36% and Class R3 shares returned 28.03%. For the 12 months ended October 31, 2013, all share classes underperformed the 28.99% return of the Russell 3000^® Index,¹ which is the Fund’s broad-based securities-market index. Over the same period, all share classes outperformed the 27.18% return of the S&P 500^® Index,¹ which is the Fund’s secondary benchmark, and the 26.63% return of the average Lipper² large-cap core fund. See page 5 for Fund returns with sales charges.

What factors affected the Fund’s performance during the reporting period?

Markston International

The performance of our portion of the Fund relative to the Russell 3000^® Index resulted primarily from our decision to be almost fully invested as we entered 2013. After that, positive relative performance was driven by specific stock selections in subindustries that led to overweight positions relative to the Russell 3000^® Index in the energy, financials and consumer discretionary sectors.

ICAP

In our portion of the Fund that invests in U.S. equities, a number of key drivers affected performance relative to the S&P 500^® Index. Positive stock selection in the consumer discretionary and information technology sectors added to relative performance. Stock selection in the materials and energy sectors, however, detracted from relative performance. Our portion of the Fund that invests in U.S. equities benefited from an overweight position relative to the S&P 500^® Index in the health care sector, but an underweight position relative to the Index in energy detracted from relative performance.

In our portion of the Fund that invests in global equities, consumer discretionary, financials and industrials were the best-performing sectors on an absolute basis. The weakest-performing sectors on an absolute basis were utilities, materials and energy.

Which sectors made the strongest contributions to the Fund’s performance and which sectors were particularly weak?

Markston International

In our portion of the Fund, energy, financials and consumer discretionary made the strongest sector contributions to performance relative to the Russell 3000^® Index. (Contributions take weightings and total returns into account.) Favorable stock selection and overweight positions in these sectors contributed positively to relative performance.

The weakest sector contributions to the Fund’s relative performance came from health care, information technology and consumer staples. Underweight positions in each of these sectors detracted from performance relative to the Russell 3000^® Index.

ICAP

In our portion of the Fund that invests in U.S. equities, the sectors that contributed most positively to performance relative to the S&P 500^® Index were consumer discretionary, information technology and telecommunication services. Favorable stock selection was the primary driver in each of these sectors. The sectors that detracted the most from performance relative to the S&P 500^® Index were materials, energy and financials. Stock selection was the primary driver in each case.

In our portion of the Fund that invests in global equities, the top-contributing sectors on an absolute basis were consumer discretionary, financials and health care. The weakest sector contributions on an absolute basis came from utilities, materials and consumer staples.

During the reporting period, which individual stocks made the strongest contributions to the Fund’s absolute performance and which stocks detracted the most?

Markston International

The strongest contributions to absolute performance in our portion of the Fund came from media conglomerate Liberty Media, aerospace & defense contractor Boeing and consumer finance company American Express. Liberty Media, run by John Malone, owns a majority of Sirius XM Holdings, which continues to grow its subscriber base. In addition, Liberty Media made a profitable investment in Charter Communications and publicly announced that the company could be used as a vehicle to help consolidate the U.S. cable industry. Boeing’s stock performed well because of continued strong demand for the 787 family of planes. In addition, the company raised its dividend, revised its stock buy-back program and increased its 2013 earnings-per-share guidance. During the reporting period, earnings-per-share

1. See footnote on page 6 for more information on this index.

2. See footnote on page 6 for more information on Lipper Inc.

mainstayinvestments.com 9

at American Express benefited from expense containment, strong global network growth, an increased dividend and an enlarged share-repurchase program. As a result of the company’s strong stock performance, we trimmed the Fund’s position in American Express to take some profits.

Stocks that detracted from absolute performance in our portion of the Fund, included computers & peripherals company Apple, apparel retailer J.C. Penney and information technology services company International Business Machines (IBM). Shares of Apple were weak on concerns that the company’s margins and market share would continue to erode because of competition from lower-cost Android phones. We used the weakness in the stock to add to our position in Apple. J.C. Penney’s stock fell below our purchase price on concerns that the company would take longer than expected to return to profitability. As a result, we trimmed our position in the stock. IBM’s shares underperformed the Russell 3000^® Index because of tepid sales growth and concerns about earnings quality. We added to our position in the stock because we believed that the shares remained undervalued. We also believed that management’s strategy of exiting slow-growth businesses where IBM does not have a leading share and reinvesting into higher-growth sectors could enhance the company’s profitability, even if the progress takes longer than expected.

ICAP

In our portion of the Fund that invests in U.S. equities, the stocks that made the strongest positive contributions to the Fund’s absolute performance were media companies Time Warner and Viacom and auto parts manufacturer Johnson Controls. Time Warner outperformed the S&P 500^® Index, as the company continued its strong operational performance and provided expectations of growth in affiliate-fee revenue. Viacom benefited from improved network ratings as advertising revenue beat expectations. Johnson Controls provided strong results as its profit margins improved because of the company’s restructuring initiatives. All three positions remained in the Fund at the end of the reporting period.

In our portion of the Fund that invests in global equities, the stocks that made the greatest contributions to absolute performance were media companies Time Warner and Viacom and U.K. retail and commercial bank Lloyds Banking Group. Lloyds Banking Group benefited from improved net interest margins and strong cost control. All three positions remained in the Fund at the end of the reporting period.

In both our U.S. and global equity portions of the Fund, the largest individual detractors from absolute performance were gold miner Barrick Gold, integrated electric utility Exelon and natural gas producer Encana. Barrick Gold lagged as production delays and cost overruns hampered the company’s results and outlook. Since there was a risk that these issues would continue

rather than be resolved, we sold our positions in the stock in both our U.S. and global equity portions of the Fund. Exelon underperformed the S&P 500^® Index when the results of an electricity price auction suggested that electricity prices might decline. Encana lagged as continued low natural gas prices and increased capital expenditures weighed on results. Exelon and Encana remained in the Fund at the end of the reporting period, as we believed these stocks were attractively valued with strong catalysts for potential appreciation.

Did the Fund make any significant purchases or sales during the reporting period?

Markston International

We added to existing positions in Apple and IBM in our portion of the Fund during the reporting period. We felt that Wall Street had underestimated the ability of these companies to drive long-term shareholder value.

We reduced our position in electric utility Duke Energy, partially because we felt it was approaching full valuation. We used the reduction as a source of capital to meet shareholder redemptions. We sold financial exchange operator CME Group both to meet shareholder redemptions and to reduce the overweight position in the financials sector in our portion of the Fund.

ICAP

We continued to look for stocks with attractive valuations and specific catalysts that we believed could trigger appreciation over a 12- to 18-month time frame.

In our domestic and global equity portions of the Fund, we added diversified financial services company Bank of America. We believe that the company may increase profits, as the U.S. economic recovery drives loan growth and subsequent revenue increases while management executes a cost-cutting program. We also added aerospace & defense contractor Boeing. We anticipate strong delivery growth and cost improvement on the new 787 airplane. In our global equity portion of the Fund, we purchased a position in global dialysis equipment and services provider Fresenius. We believe the stock may benefit from continued geographic expansion into emerging markets that need existing low-priced injectable drugs and supplies.

In addition to the sales already mentioned, we sold software maker Microsoft and diversified health care company Johnson & Johnson in our domestic and global equity portions of the Fund. In our global equity portion of the Fund, we also sold French food, beverage and nutrition company Danone. In all three cases, we sold the positions when we found other stocks that we believed had greater upside potential and were more attractive on a relative-valuation basis.

10 MainStay MAP Fund

How did the Fund’s sector weightings change during the reporting period?

Markston International

In our portion of the Fund, we added exposure—slightly reducing the degree to which our portion of the Fund was underweight relative to the Russell 3000^® Index—in the industrials and information technology sectors. During the reporting period, we reduced cash holdings in our portion of the Fund.

ICAP

In our portion of the Fund that invests in U.S. equities, we increased sector weightings relative to the S&P 500^® Index in the consumer discretionary and utilities sectors during the reporting period. In consumer discretionary, our domestic equity portion of the Fund added to an already overweight position relative to the S&P 500^® Index. Despite increased exposure to utilities, our domestic equity portion of the Fund remained underweight relative to the S&P 500^® Index in the sector.

Our domestic equity portion of the Fund decreased its sector weightings relative to the S&P 500^® Index in health care and information technology. In health care, our domestic equity portion of the Fund moved from an overweight position to a slightly underweight position relative to the S&P 500^® Index. In information technology, the decreased exposure increased the degree to which the domestic equity portion of the Fund was underweight relative the S&P 500^® Index.

In our portion of the Fund that invests in global equities, we increased absolute weightings in the financials and consumer

discretionary sectors, while decreasing absolute weightings in the industrials and materials sectors.

How was the Fund positioned at the end of the reporting period?

Markston International

As of October 31, 2013, our portion of the Fund held overweight positions relative to the Russell 3000^® Index in the energy and financials sectors. As of the same date, our portion of the Fund held underweight positions relative to the Russell 3000^® Index in the health care and information technology sectors.

ICAP

As of October 31, 2013, the most significantly overweight sectors relative to the S&P 500^® Index in our portion of the Fund that invests in U.S. equities were consumer discretionary and energy. On the same date, the most significantly underweight sectors were information technology and consumer staples.

As of October 31, 2013, the largest sector weightings in our global equity portion of the Fund were in financials and healthcare, and the smallest sector weightings were in utilities and consumer staples.

In our domestic and global equity portions of the Fund, these positions reflected our view on the prospects for economic growth and the relative attractiveness of individual holdings in these sectors.

The opinions expressed are those of the portfolio managers as of the date of this report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

mainstayinvestments.com 11

Portfolio of Investments October 31, 2013

	Shares		Value
Common Stocks 97.7%†
Aerospace & Defense 4.9%
¨Boeing Co. (The)		438,970	$	57,285,585
GenCorp, Inc. (a)		166,100		2,790,480
Honeywell International, Inc.		354,002		30,702,593
Northrop Grumman Corp.		43,488		4,675,395
Orbital Sciences Corp. (a)		144,350		3,330,155
Raytheon Co.		52,150		4,295,595
United Technologies Corp.		23,650		2,512,813
				105,592,616
Auto Components 1.7%
Bridgestone Corp.		174,400		5,950,493
Johnson Controls, Inc.		675,390		31,169,249
				37,119,742
Automobiles 1.4%
Bayerische Motoren Werke A.G.		46,050		5,223,285
Ford Motor Co.		1,018,600		17,428,246
Nissan Motor Co., Ltd.		854,000		8,528,709
				31,180,240
Beverages 1.6%
Coca-Cola Co. (The)		430,190		17,022,618
PepsiCo., Inc.		199,922		16,811,441
				33,834,059
Biotechnology 0.7%
Alkermes PLC (a)		72,400		2,547,756
Celgene Corp. (a)		85,500		12,695,895
				15,243,651
Capital Markets 2.1%
Ameriprise Financial, Inc.		46,820		4,707,283
Bank of New York Mellon Corp.		112,125		3,565,575
Goldman Sachs Group, Inc. (The)		48,569		7,812,809
Julius Baer Group, Ltd. (a)		191,900		9,430,563
State Street Corp.		290,509		20,355,965
				45,872,195
Chemicals 4.2%
Akzo Nobel N.V.		89,083		6,478,209
E.I. du Pont de Nemours & Co.		365,050		22,341,060
¨Monsanto Co.		465,994		48,873,451
Mosaic Co. (The)		291,430		13,362,066
				91,054,786
Commercial Banks 4.0%
BB&T Corp.		316,200		10,741,314
DBS Group Holdings, Ltd.		640,600		8,632,784
Lloyds Banking Group PLC (a)		7,021,750		8,728,846
PNC Financial Services Group, Inc.		325,050		23,900,926

	Shares		Value
Commercial Banks (continued)
Popular, Inc. (a)		46,237	$	1,167,484
U.S. Bancorp		310,100		11,585,336
UniCredit S.p.A.		1,046,300		7,870,196
Wells Fargo & Co.		325,624		13,900,889
				86,527,775
Commercial Services & Supplies 0.8%
ADT Corp. (The)		86,594		3,755,582
Covanta Holding Corp.		260,403		4,471,119
Tyco International, Ltd.		169,189		6,183,858
Waste Management, Inc.		53,500		2,329,390
				16,739,949
Communications Equipment 0.9%
Cisco Systems, Inc.		831,300		18,704,250
Infinera Corp. (a)		121,700		1,242,557
				19,946,807
Computers & Peripherals 2.0%
Apple, Inc.		70,715		36,937,980
SanDisk Corp.		95,601		6,644,270
				43,582,250
Construction & Engineering 0.3%
Jacobs Engineering Group, Inc. (a)		121,676		7,400,334
Consumer Finance 3.3%
American Express Co.		366,935		30,015,283
Capital One Financial Corp.		404,700		27,790,749
Discover Financial Services		254,305		13,193,343
				70,999,375
Containers & Packaging 0.1%
MeadWestvaco Corp.		80,405		2,802,114
Diversified Consumer Services 0.3%
Outerwall, Inc. (a)		88,500		5,750,730
Diversified Financial Services 4.5%
Bank of America Corp.		2,121,154		29,611,310
Berkshire Hathaway, Inc. Class B (a)		24,249		2,790,575
Citigroup, Inc.		624,655		30,470,671
JPMorgan Chase & Co.		598,047		30,823,342
Leucadia National Corp.		182,059		5,159,552
				98,855,450
Diversified Telecommunication Services 1.4%
AT&T, Inc.		258,895		9,371,999
BCE, Inc.		141,950		6,179,083
Nippon Telegraph & Telephone Corp.		230,350		11,923,945

† Percentages indicated are based on Fund net assets.

¨ Among the Fund’s 10 largest holdings, as of October 31, 2013, excluding short-term investment. May be subject to change daily.

12 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Shares		Value
Common Stocks (continued)
Diversified Telecommunication Services (continued)
Verizon Communications, Inc.		38,900	$	1,964,839
				29,439,866
Electric Utilities 1.6%
Duke Energy Corp.		192,381		13,799,489
Exelon Corp.		713,700		20,368,998
				34,168,487
Electrical Equipment 0.9%
ABB, Ltd. (a)		340,950		8,706,466
Rockwell Automation, Inc.		95,757		10,572,530
				19,278,996
Electronic Equipment & Instruments 0.8%
Corning, Inc.		193,800		3,312,042
TE Connectivity, Ltd.		255,541		13,157,806
				16,469,848
Energy Equipment & Services 1.7%
Baker Hughes, Inc.		48,822		2,836,070
Exterran Holdings, Inc. (a)		63,100		1,801,505
Halliburton Co.		387,550		20,551,776
Schlumberger, Ltd.		106,144		9,947,816
Weatherford International, Ltd. (a)		79,000		1,298,760
				36,435,927
Food & Staples Retailing 2.8%
¨CVS Caremark Corp.		615,726		38,335,101
Wal-Mart Stores, Inc.		176,000		13,508,000
Walgreen Co.		168,765		9,997,638
				61,840,739
Food Products 0.3%
Bunge, Ltd.		26,400		2,168,232
China Huishan Dairy Holdings Co., Ltd. (a)		5,778,700		2,288,225
Mondelez International, Inc. Class A		65,000		2,186,600
				6,643,057
Gas Utilities 0.3%
National Fuel Gas Co.		77,735		5,561,939
Health Care Equipment & Supplies 3.9%
Abbott Laboratories		133,827		4,891,377
Baxter International, Inc.		565,993		37,281,959
Covidien PLC		503,519		32,280,603
Medtronic, Inc.		163,296		9,373,190
				83,827,129
Health Care Providers & Services 1.6%
Aetna, Inc.		386,480		24,232,296
Fresenius SE & Co. KGaA		72,450		9,416,858
SunLink Health Systems, Inc. (a)		48,768		39,259
				33,688,413

	Shares		Value
Hotels, Restaurants & Leisure 2.2%
¨McDonald’s Corp.		389,530	$	37,597,436
Starwood Hotels & Resorts Worldwide, Inc.		142,191		10,468,101
Yum! Brands, Inc.		6,615		447,306
				48,512,843
Household Products 0.5%
Colgate-Palmolive Co.		53,500		3,463,055
Procter & Gamble Co. (The)		103,850		8,385,888
				11,848,943
Industrial Conglomerates 3.8%
3M Co.		67,964		8,553,269
¨General Electric Co.		2,523,233		65,957,311
Siemens A.G.		59,400		7,595,646
				82,106,226
Insurance 3.4%
Allstate Corp. (The)		151,309		8,028,456
American International Group, Inc.		85,945		4,439,059
Aon PLC		77,440		6,124,730
Chubb Corp. (The)		78,156		7,196,604
Marsh & McLennan Cos., Inc.		54,194		2,482,085
MetLife, Inc.		196,751		9,308,290
Tokio Marine Holdings, Inc.		179,700		5,857,200
Travelers Companies, Inc. (The)		272,012		23,474,636
W.R. Berkley Corp.		173,333		7,611,052
				74,522,112
Internet & Catalog Retail 0.8%
Liberty Interactive Corp. Class A (a)		550,690		14,846,602
Liberty Ventures (a)		24,997		2,683,928
				17,530,530
Internet Software & Services 2.8%
eBay, Inc. (a)		392,290		20,677,606
Google, Inc. Class A (a)		24,710		25,465,632
VeriSign, Inc. (a)		244,120		13,250,833
Yahoo!, Inc. (a)		61,000		2,008,730
				61,402,801
IT Services 1.2%
Automatic Data Processing, Inc.		133,927		10,040,507
International Business Machines Corp.		90,349		16,191,445
				26,231,952
Machinery 0.4%
Caterpillar, Inc.		115,225		9,605,156
Media 7.7%
Cablevision Systems Corp. Class A		252,512		3,926,561
Comcast Corp. Class A		190,960		9,085,877
DIRECTV (a)		55,965		3,497,253
¨Liberty Media Corp. Class A (a)		326,959		49,995,301
Madison Square Garden Co. Class A (a)		135,809		8,219,161

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 13

Portfolio of Investments October 31, 2013 (continued)

	Shares		Value
Common Stocks (continued)
Media (continued)
Sirius XM Radio, Inc.		556,700	$	2,098,759
Starz Class A (a)		177,528		5,352,469
Time Warner Cable, Inc.		15,445		1,855,717
¨Time Warner, Inc.		607,332		41,748,002
Viacom, Inc., Class B		361,600		30,117,664
Walt Disney Co. (The)		40,743		2,794,562
Wolters Kluwer N.V.		323,250		8,769,071
				167,460,397
Metals & Mining 0.2%
ThyssenKrupp A.G. (a)		161,400		4,125,324
Multi-Utilities 0.1%
Dominion Resources, Inc.		31,200		1,989,000
Multiline Retail 0.2%
J.C. Penney Co., Inc. (a)		110,297		827,228
Target Corp.		62,650		4,059,093
				4,886,321
Oil, Gas & Consumable Fuels 10.8%
Anadarko Petroleum Corp.		139,734		13,315,253
Apache Corp.		128,709		11,429,359
Chesapeake Energy Corp.		194,124		5,427,707
Chevron Corp.		77,819		9,335,167
ConocoPhillips		146,626		10,747,686
Devon Energy Corp.		160,696		10,159,201
Encana Corp.		738,150		13,227,648
ENI S.p.A.		481,500		12,192,555
EOG Resources, Inc.		72,629		12,957,014
¨Exxon Mobil Corp.		442,500		39,656,850
Hess Corp.		110,361		8,961,313
Marathon Oil Corp.		628,174		22,149,415
Marathon Petroleum Corp.		215,768		15,461,935
Phillips 66		69,153		4,455,528
Southwestern Energy Co. (a)		443,750		16,516,375
Spectra Energy Corp.		392,650		13,966,560
Total S.A.		164,950		10,137,583
Williams Cos., Inc. (The)		125,681		4,488,069
				234,585,218
Pharmaceuticals 5.2%
AbbVie, Inc.		133,827		6,483,918
Bayer A.G.		82,900		10,303,506
Hospira, Inc. (a)		128,024		5,187,532
Johnson & Johnson		93,100		8,621,991
Mallinckrodt PLC (a)		15,827		664,892
Merck & Co., Inc.		130,726		5,894,435
Novartis A.G.		148,100		11,499,030
¨Pfizer, Inc.		1,860,250		57,072,470
Sanofi		50,750		5,411,860

	Shares		Value
Pharmaceuticals (continued)
Teva Pharmaceutical Industries, Ltd., Sponsored ADR		76,950	$	2,854,076
				113,993,710
Real Estate Investment Trusts 1.2%
HCP, Inc.		250,611		10,400,357
UDR, Inc.		497,719		12,348,408
Weyerhaeuser Co.		81,845		2,488,088
				25,236,853
Real Estate Management & Development 0.5%
Mitsubishi Estate Co., Ltd.		361,200		10,274,346
Road & Rail 0.9%
Celadon Group, Inc.		109,074		2,022,232
CSX Corp.		210,426		5,483,702
Union Pacific Corp.		79,250		11,998,450
				19,504,384
Semiconductors & Semiconductor Equipment 1.7%
Intel Corp.		274,570		6,707,745
Texas Instruments, Inc.		735,350		30,943,528
				37,651,273
Software 2.3%
Microsoft Corp.		518,913		18,343,575
Oracle Corp.		144,473		4,839,846
SAP A.G.		123,900		9,733,506
Symantec Corp.		737,800		16,777,572
				49,694,499
Specialty Retail 1.2%
Home Depot, Inc. (The)		128,723		10,026,235
Lowe’s Companies, Inc.		309,022		15,383,115
				25,409,350
Tobacco 0.1%
Philip Morris International, Inc.		19,410		1,729,819
Trading Companies & Distributors 0.3%
Mitsubishi Corp.		355,550		7,166,685
Wireless Telecommunication Services 2.1%
Shin Corp. PCL		881,500		2,386,068
¨Vodafone Group PLC, Sponsored ADR		1,199,000		44,147,180
				46,533,248
Total Common Stocks (Cost $1,505,471,513)				2,121,857,464

14 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

	Principal Amount		Value
Long-Term Bonds 0.1% Convertible Bonds 0.1%
Diversified Consumer Services 0.1%
Outerwall, Inc. 4.00%, due 9/1/14	$	900,000	$	1,464,750
Oil, Gas & Consumable Fuels 0.0%‡
Bill Barrett Corp. 5.00%, due 3/15/28		300		301
Total Convertible Bonds (Cost $892,589)				1,465,051
Total Long-Term Bonds (Cost $892,589)				1,465,051

	Principal Amount			Value
Short-Term Investment 1.4%
Repurchase Agreement 1.4%
State Street Bank and Trust Co. 0.00%, dated 10/31/13 due 11/1/13 Proceeds at Maturity $31,791,300 (Collateralized by Government Agency securities with rates between 2.11% and 2.14% and a maturity date of 11/7/22, with a Principal Amount of $34,460,000 and a Market Value of $32,436,533)	$	31,791,300		$	31,791,300
Total Short-Term Investment (Cost $31,791,300)					31,791,300
Total Investments (Cost $1,538,155,402) (b)		99.2	%		2,155,113,815
Other Assets, Less Liabilities		0.8			17,144,047
Net Assets		100.0	%	$	2,172,257,862

‡ Less than one-tenth of a percent.

(a) Non-income producing security.

(b) As of October 31, 2013, cost is $1,546,229,902 for federal income tax purposes and net unrealized appreciation is as follows:

Gross unrealized appreciation	$	633,378,465
Gross unrealized depreciation		(24,494,552	)
Net unrealized appreciation	$	608,883,913

The following abbreviation is used in the above portfolio:

ADR—American Depositary Receipt

The following is a summary of the fair valuations according to the inputs used as of October 31, 2013, for valuing the Fund’s assets.

Asset Valuation Inputs

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investments in Securities (a)
Common Stocks	$	2,121,857,464	$	—	$	—	$	2,121,857,464
Long-Term Bonds
Convertible Bonds		—		1,465,051		—		1,465,051
Short-Term Investment
Repurchase Agreement		—		31,791,300		—		31,791,300
Total Investments in Securities	$	2,121,857,464	$	33,256,351	$	—	$	2,155,113,815

(a) For a complete listing of investments and their industries, see the Portfolio of Investments.

The Fund recognizes transfers between the levels as of the beginning of the period.

As of October 31, 2013, foreign equity securities were not fair valued, as a result there were no transfers between Level 1 and Level 2 fair value measurements. (See Note 2)

As of October 31, 2013, the Fund did not hold any investments with significant unobservable inputs (Level 3). (See Note 2)

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 15

Statement of Assets and Liabilities as of October 31, 2013

Assets
Investment in securities, at value (identified cost $1,538,155,402)	$	2,155,113,815
Cash denominated in foreign currencies (identified cost $104)		103
Receivables:
Investment securities sold		15,798,919
Fund shares sold		4,886,778
Dividends and interest		2,410,150
Other assets		33,471
Total assets		2,178,243,236
Liabilities
Payables:
Investment securities purchased		2,932,256
Manager (See Note 3)		1,338,606
Fund shares redeemed		794,682
Transfer agent (See Note 3)		468,272
NYLIFE Distributors (See Note 3)		297,250
Shareholder communication		79,530
Professional fees		21,809
Custodian		11,897
Foreign capital gains tax (See Note 2(C))		6,013
Trustees		4,854
Accrued expenses		30,205
Total liabilities		5,985,374
Net assets	$	2,172,257,862
Composition of Net Assets
Shares of beneficial interest outstanding (par value of $.01 per share) unlimited number of shares authorized	$	499,373
Additional paid-in capital		1,499,546,597
		1,500,045,970
Undistributed net investment income		19,940,343
Accumulated net realized gain (loss) on investments and foreign currency transactions		35,310,882
Net unrealized appreciation (depreciation) on investments (a)		616,952,400
Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies		8,267
Net assets	$	2,172,257,862

Investor Class
Net assets applicable to outstanding shares	$	144,891,933
Shares of beneficial interest outstanding		3,350,920
Net asset value per share outstanding	$	43.24
Maximum sales charge (5.50% of offering price)		2.52
Maximum offering price per share outstanding	$	45.76
Class A
Net assets applicable to outstanding shares	$	356,657,011
Shares of beneficial interest outstanding		8,240,451
Net asset value per share outstanding	$	43.28
Maximum sales charge (5.50% of offering price)		2.52
Maximum offering price per share outstanding	$	45.80
Class B
Net assets applicable to outstanding shares	$	82,694,594
Shares of beneficial interest outstanding		2,063,320
Net asset value and offering price per share outstanding	$	40.08
Class C
Net assets applicable to outstanding shares	$	141,627,681
Shares of beneficial interest outstanding		3,533,268
Net asset value and offering price per share outstanding	$	40.08
Class I
Net assets applicable to outstanding shares	$	1,417,813,860
Shares of beneficial interest outstanding		32,090,846
Net asset value and offering price per share outstanding	$	44.18
Class R1
Net assets applicable to outstanding shares	$	6,736,892
Shares of beneficial interest outstanding		154,897
Net asset value and offering price per share outstanding	$	43.49
Class R2
Net assets applicable to outstanding shares	$	20,139,865
Shares of beneficial interest outstanding		464,294
Net asset value and offering price per share outstanding	$	43.38
Class R3
Net assets applicable to outstanding shares	$	1,696,026
Shares of beneficial interest outstanding		39,292
Net asset value and offering price per share outstanding	$	43.16

(a) Unrealized appreciation (depreciation) on investments recorded net of foreign capital gains tax of $6,013.

16 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Statement of Operations for the year ended October 31, 2013

Investment Income (Loss)
Income
Dividends (a)	$	46,835,999
Interest		65,107
Total income		46,901,106
Expenses
Manager (See Note 3)		15,723,412
Distribution/Service—Investor Class (See Note 3)		337,807
Distribution/Service—Class A (See Note 3)		813,716
Distribution/Service—Class B (See Note 3)		847,431
Distribution/Service—Class C (See Note 3)		1,326,244
Distribution/Service—Class R2 (See Note 3)		50,105
Distribution/Service—Class R3 (See Note 3)		8,628
Transfer agent (See Note 3)		2,785,352
Shareholder communication		179,074
Professional fees		130,032
Registration		106,074
Custodian		68,717
Trustees		44,053
Shareholder service (See Note 3)		29,555
Miscellaneous		97,300
Total expenses		22,547,500
Net investment income (loss)		24,353,606
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions
Net realized gain (loss) on:
Security transactions		177,879,987
Foreign currency transactions		(278,458	)
Net realized gain (loss) on investments and foreign currency transactions		177,601,529
Net change in unrealized appreciation (depreciation) on:
Investments (b)		335,277,942
Translation of other assets and liabilities in foreign currencies		32,014
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions		335,309,956
Net realized and unrealized gain (loss) on investments and foreign currency transactions		512,911,485
Net increase (decrease) in net assets resulting from operations	$	537,265,091

(a) Dividends recorded net of foreign withholding taxes in the amount of $853,207.

(b) Unrealized appreciation (depreciation) on investments recorded net of foreign capital gains tax in the amount of $6,013.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 17

Statements of Changes in Net Assets

for the years ended October 31, 2013 and October 31, 2012

	2013			2012
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$	24,353,606		$	24,656,600
Net realized gain (loss) on investments and foreign currency transactions		177,601,529			16,886,683
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions		335,309,956			199,585,099
Net increase (decrease) in net assets resulting from operations		537,265,091			241,128,382
Dividends to shareholders:
From net investment income:
Investor Class		(1,125,412	)		(1,095,797	)
Class A		(3,306,456	)		(3,428,788	)
Class B		(177,081	)		(195,661	)
Class C		(255,810	)		(237,900	)
Class I		(18,508,015	)		(17,003,986	)
Class R1		(63,811	)		(272,411	)
Class R2		(183,045	)		(244,869	)
Class R3		(10,894	)		(20,629	)
Total dividends to shareholders		(23,630,524	)		(22,500,041	)
Capital share transactions:
Net proceeds from sale of shares		320,171,647			335,367,832
Net asset value of shares issued to shareholders in reinvestment of dividends		23,021,367			21,744,554
Cost of shares redeemed		(713,542,943	)		(436,709,049	)
Increase (decrease) in net assets derived from capital share transactions		(370,349,929	)		(79,596,663	)
Net increase (decrease) in net assets		143,284,638			139,031,678
Net Assets
Beginning of year		2,028,973,224			1,889,941,546
End of year	$	2,172,257,862		$	2,028,973,224
Undistributed net investment income at end of year	$	19,940,343		$	20,005,478

18 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Investor Class	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	34.04		$	30.44		$	29.76		$	25.71		$	23.04
Net investment income (loss) (a)		0.34			0.34			0.31			0.19			0.22
Net realized and unrealized gain (loss) on investments		9.18			3.55			0.63			3.86			2.90
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.06	)		(0.00	)‡		0.00	‡
Total from investment operations		9.52			3.89			0.88			4.05			3.12
Less dividends:
From net investment income		(0.32	)		(0.29	)		(0.20	)		—			(0.45	)
Net asset value at end of year	$	43.24		$	34.04		$	30.44		$	29.76		$	25.71
Total investment return (b)		28.26	%		12.88	%		2.96	%		15.75	%		13.83	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.88	%		1.04	%		0.98	%		0.69	%		0.98	%
Net expenses		1.30	%		1.34	%		1.34	%		1.41	%		1.44	%
Expenses (before waiver/reimbursement)		1.30	%		1.34	%		1.34	%		1.41	%		1.50	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	144,892		$	120,771		$	114,786		$	113,557		$	99,663

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class A	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	34.07		$	30.47		$	29.79		$	25.68		$	23.04
Net investment income (loss) (a)		0.41			0.40			0.37			0.25			0.28
Net realized and unrealized gain (loss) on investments		9.19			3.56			0.63			3.86			2.90
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.06	)		(0.00	)‡		0.00	‡
Total from investment operations		9.60			3.96			0.94			4.11			3.18
Less dividends:
From net investment income		(0.39	)		(0.36	)		(0.26	)		—			(0.54	)
Net asset value at end of year	$	43.28		$	34.07		$	30.47		$	29.79		$	25.68
Total investment return (b)		28.47	%		13.14	%		3.16	%		16.00	%		14.12	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.07	%		1.24	%		1.18	%		0.90	%		1.25	%
Net expenses		1.11	%		1.14	%		1.14	%		1.21	%		1.20	%
Expenses (before waiver/reimbursement)		1.11	%		1.14	%		1.14	%		1.21	%		1.29	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	356,657		$	294,247		$	296,453		$	345,067		$	324,421

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 19

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class B	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	31.55		$	28.21		$	27.63		$	24.04		$	21.36
Net investment income (loss) (a)		0.06			0.10			0.07			(0.01	)		0.06
Net realized and unrealized gain (loss) on investments		8.54			3.29			0.58			3.60			2.70
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.05	)		(0.00	)‡		0.00	‡
Total from investment operations		8.60			3.39			0.60			3.59			2.76
Less dividends:
From net investment income		(0.07	)		(0.05	)		(0.02	)		—			(0.08	)
Net asset value at end of year	$	40.08		$	31.55		$	28.21		$	27.63		$	24.04
Total investment return (b)		27.30	%		12.04	%		2.18	%		14.93	%		12.97	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.16	%		0.33	%		0.24	%		(0.04	%)		0.31	%
Net expenses		2.05	%		2.09	%		2.09	%		2.16	%		2.19	%
Expenses (before waiver/reimbursement)		2.05	%		2.09	%		2.09	%		2.16	%		2.26	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	82,695		$	86,613		$	110,794		$	140,674		$	169,606

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

	Year ended October 31,
Class C	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	31.56		$	28.21		$	27.63		$	24.05		$	21.37
Net investment income (loss) (a)		0.05			0.09			0.07			(0.01	)		0.06
Net realized and unrealized gain (loss) on investments		8.54			3.31			0.58			3.59			2.70
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.05	)		(0.00	)‡		0.00	‡
Total from investment operations		8.59			3.40			0.60			3.58			2.76
Less dividends:
From net investment income		(0.07	)		(0.05	)		(0.02	)		—			(0.08	)
Net asset value at end of year	$	40.08		$	31.56		$	28.21		$	27.63		$	24.05
Total investment return (b)		27.26	%		12.07	%		2.18	%		14.89	%		12.96	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.14	%		0.31	%		0.23	%		(0.05	%)		0.29	%
Net expenses		2.05	%		2.09	%		2.09	%		2.16	%		2.19	%
Expenses (before waiver/reimbursement)		2.05	%		2.09	%		2.09	%		2.16	%		2.25	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	141,628		$	125,700		$	136,274		$	160,098		$	167,652

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions.

20 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class I	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	34.77		$	31.10		$	30.39		$	26.15		$	23.51
Net investment income (loss) (a)		0.52			0.49			0.45			0.32			0.33
Net realized and unrealized gain (loss) on investments		9.37			3.62			0.66			3.93			2.95
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.06	)		(0.00	)‡		0.00	‡
Total from investment operations		9.89			4.11			1.05			4.25			3.28
Less dividends:
From net investment income		(0.48	)		(0.44	)		(0.34	)		(0.01	)		(0.64	)
Net asset value at end of year	$	44.18		$	34.77		$	31.10		$	30.39		$	26.15
Total investment return (b)		28.79	%		13.40	%		3.43	%		16.26	%		14.38	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.33	%		1.48	%		1.42	%		1.12	%		1.45	%
Net expenses		0.86	%		0.89	%		0.89	%		0.95	%		0.98	%
Expenses (before waiver/reimbursement)		0.86	%		0.89	%		0.89	%		0.95	%		1.04	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	1,417,814		$	1,358,999		$	1,188,911		$	759,317		$	567,720

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class I shares are not subject to sales charges.

	Year ended October 31,
Class R1	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	34.23		$	30.63		$	29.93		$	25.84		$	23.23
Net investment income (loss) (a)		0.54			0.44			0.31			0.30			0.27
Net realized and unrealized gain (loss) on investments		9.14			3.58			0.77			3.87			2.94
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.07	)		(0.00	)‡		0.00	‡
Total from investment operations		9.68			4.02			1.01			4.17			3.21
Less dividends:
From net investment income		(0.42	)		(0.42	)		(0.31	)		(0.08	)		(0.60	)
Net asset value at end of year	$	43.49		$	34.23		$	30.63		$	29.93		$	25.84
Total investment return (b)		28.63	%		13.26	%		3.35	%		16.12	%		14.20	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		1.43	%		1.37	%		1.02	%		1.07	%		1.21	%
Net expenses		0.96	%		0.99	%		0.99	%		1.06	%		1.08	%
Expenses (before reimbursement/waiver)		0.96	%		0.99	%		0.99	%		1.06	%		1.14	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	6,737		$	21,761		$	17,611		$	325		$	626

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R1 shares are not subject to sales charges.

The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements. mainstayinvestments.com 21

Financial Highlights selected per share data and ratios

	Year ended October 31,
Class R2	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	34.12		$	30.53		$	29.85		$	25.76		$	23.06
Net investment income (loss) (a)		0.38			0.38			0.34			0.22			0.23
Net realized and unrealized gain (loss) on investments		9.21			3.54			0.63			3.87			2.93
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.06	)		(0.00	)‡		0.00	‡
Total from investment operations		9.59			3.92			0.91			4.09			3.16
Less dividends:
From net investment income		(0.33	)		(0.33	)		(0.23	)		—			(0.46	)
Net asset value at end of year	$	43.38		$	34.12		$	30.53		$	29.85		$	25.76
Total investment return (b)		28.36	%		12.99	%		3.05	%		15.88	%		13.96	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.98	%		1.16	%		1.08	%		0.80	%		1.01	%
Net expenses		1.21	%		1.24	%		1.24	%		1.31	%		1.33	%
Expenses (before waiver/reimbursement)		1.21	%		1.24	%		1.24	%		1.31	%		1.38	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	20,140		$	19,072		$	22,733		$	26,735		$	14,006

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R2 shares are not subject to sales charges.

	Year ended October 31,
Class R3	2013			2012			2011			2010			2009
Net asset value at beginning of year	$	33.94		$	30.38		$	29.71		$	25.70		$	22.97
Net investment income (loss) (a)		0.29			0.30			0.25			0.15			0.16
Net realized and unrealized gain (loss) on investments		9.16			3.53			0.64			3.86			2.93
Net realized and unrealized gain (loss) on foreign currency transactions		(0.00	)‡		(0.00	)‡		(0.06	)		(0.00	)‡		0.00	‡
Total from investment operations		9.45			3.83			0.83			4.01			3.09
Less dividends:
From net investment income		(0.23	)		(0.27	)		(0.16	)		—			(0.36	)
Net asset value at end of year	$	43.16		$	33.94		$	30.38		$	29.71		$	25.70
Total investment return (b)		28.03	%		12.72	%		2.79	%		15.60	%		13.65	%
Ratios (to average net assets)/Supplemental Data:
Net investment income (loss)		0.74	%		0.94	%		0.80	%		0.54	%		0.72	%
Net expenses		1.46	%		1.49	%		1.49	%		1.56	%		1.58	%
Expenses (before waiver/reimbursement)		1.46	%		1.49	%		1.49	%		1.56	%		1.63	%
Portfolio turnover rate		29	%		40	%		44	%		49	%		60	%
Net assets at end of year (in 000’s)	$	1,696		$	1,809		$	2,380		$	1,850		$	1,484

‡ Less than one cent per share.

(a) Per share data based on average shares outstanding during the year.

(b) Total investment return is calculated exclusive of sales charges and assumes the reinvestment of dividends and distributions. Class R3 shares are not subject to sales charges.

22 MainStay MAP Fund The notes to the financial statements are an integral part of,
and should be read in conjunction with, the financial statements.

Notes to Financial Statements

Note 1–Organization and Business

The MainStay Funds (the “Trust”) was organized on January 9, 1986, as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company, and is comprised of twelve funds (collectively referred to as the “Funds”). These financial statements and notes relate only to the MainStay MAP Fund (the “Fund”), a diversified fund.

The Fund currently offers eight classes of shares. Class A, Class B and Class C shares commenced operations on June 9, 1999. Class I shares commenced operations in 1970 (under a former class designation) and were redesignated as Class I shares on June 9, 1999. Class R1 and Class R2 shares commenced operations on January 2, 2004. Class R3 shares commenced operations on April 28, 2006. Investor Class shares commenced operations on February 28, 2008. Investor Class and Class A shares are offered at net asset value (“NAV”) per share plus an initial sales charge. No sales charge applies to investments of $1 million or more (and certain other qualified purchases) in Investor Class and Class A shares, but a contingent deferred sales charge (“CDSC”) is imposed on certain redemptions made within one year of the date of purchase. Class B and Class C shares are offered at NAV without an initial sales charge, although a declining CDSC may be imposed on redemptions made within six years of the date of purchase of Class B shares and a 1.00% CDSC may be imposed on redemptions made within one year of the date of purchase of Class C shares. Class I, Class R1, Class R2 and Class R3 shares are offered at NAV and are not subject to a sales charge. Depending upon eligibility, Class B shares convert to either Investor Class or Class A shares at the end of the calendar quarter eight years after the date they were purchased. Additionally, depending upon eligibility, Investor Class shares may convert to Class A shares and Class A shares may convert to Investor Class shares. The eight classes of shares have the same voting (except for issues that relate solely to one class), dividend, liquidation and other rights, and the same terms and conditions, except that Class B and Class C shares are subject to higher distribution and/or service fee rates than Investor Class, Class A, Class R2 and Class R3 shares under a distribution plan pursuant to Rule 12b-1 under the 1940 Act. Class I and Class R1 shares are not subject to a distribution and/or service fee. Class R1, Class R2 and Class R3 shares are subject to a shareholder service fee. This is in addition to any fees paid under a distribution plan, where applicable.

The Fund’s investment objective is to seek long-term appreciation of capital.

Note 2–Significant Accounting Policies

The Fund prepares its financial statements in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and follows the significant accounting policies described below.

(A)  Securities Valuation.  Investments are valued as of the close of regular trading on the New York Stock Exchange (“Exchange”) (generally 4:00 p.m. Eastern time) on each day the Fund is open for business (“valuation date”).

The Board of Trustees (the “Board”) has adopted procedures for the valuation of the Fund’s securities and has delegated the responsibility

for valuation measurements under those procedures to the Valuation Committee of the Fund (the “Valuation Committee”). The Board has authorized the Valuation Committee to appoint a Valuation Sub-Committee (the “Sub-Committee”) to deal in the first instance with questions that arise or cannot be resolved under these procedures. The Sub-Committee meets (in person, via electronic mail or via teleconference) on an as-needed basis. The Valuation Committee meets at a later time, as necessary, to ensure that actions taken by the Sub-Committee were appropriate. The procedures recognize that, subject to the oversight of the Board and unless otherwise noted, the responsibility for day-to-day valuation of portfolio assets (including securities for which market prices are not readily available) rests with New York Life Investment Management LLC (“New York Life Investments” or the “Manager”), aided to whatever extent necessary by the Subadvisors (as defined in Note 3(A)) to the Fund.

To assess the appropriateness of security valuations, the Manager or the Fund’s third party service provider, who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities and the sale prices to the prior and current day prices and challenges prices exceeding certain tolerance levels with third party pricing services or broker sources. For those securities valued through either a standardized fair valuation methodology or a fair valuation measurement, the Valuation Committee reviews and affirms the reasonableness of the valuation based on such methodologies and measurements on a regular basis after considering all relevant information that is reasonably available.

“Fair value” is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. Fair value measurements are estimated within a framework that has established a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. “Inputs” refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the information available in the circumstances. The inputs or methodology used for valuing securities may not be an indication of the risks associated with investing in those securities. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1—quoted prices in active markets for identical investments

• Level 2—other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

• Level 3—significant unobservable inputs (including the Fund’s own assumptions about the assumptions that market participants would use in measuring the fair value of investments)

mainstayinvestments.com 23

Notes to Financial Statements (continued)

The aggregate value by input level, as of October 31, 2013, for the Fund’s investments is included at the end of the Fund’s Portfolio of Investments.

The valuation techniques used by the Fund to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Fund may use third party vendor evaluations, whose prices may be derived from one or more of the following standard inputs:

•   Benchmark Yields	•   Reported Trades
•   Broker Dealer Quotes	•   Issuer Spreads
•   Two-sided markets	•   Benchmark securities
•   Bids/Offers	•   Reference Data (corporate actions or material event notices)
•   Industry and economic events	•   Comparable bonds
•   Equity and credit default swap curves	•   Monthly payment information

Securities for which market values cannot be measured using the methodologies described above are valued by methods deemed in good faith by the Valuation Committee, following the procedures established by the Board, to represent fair value. Under these procedures, the Fund primarily uses a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. For the year ended October 31, 2013, there have been no changes to the fair value methodologies.

Equity and non-equity securities which may be valued in this manner include, but are not limited to: (i) a security for which trading has been halted or suspended; (ii) a debt security that has recently gone into default and for which there is not a current market quotation; (iii) a security of an issuer that has entered into a restructuring; (iv) a security that has been de-listed from a national exchange; (v) a security for which the market price is not available from a third party pricing source or, if so provided, does not, in the opinion of the Fund’s Manager or Subadvisors reflect the security’s market value; and (vi) a security whose principal market has been temporarily closed at a time when, under normal conditions, it would be open. Securities for which market quotations or observable inputs are not readily available are generally categorized as Level 3 in the hierarchy. As of October 31, 2013, the Fund did not hold any securities that were fair valued in such a manner.

Certain events may occur between the time that foreign markets close, on which securities held by the Fund principally trade, and the time at which the Fund’s NAV is calculated. These events may include, but are not limited to, situations relating to a single issuer in a market sector, significant fluctuations in U.S. or foreign markets, natural disasters, armed conflicts, governmental actions or other developments not tied directly to the securities markets. Should the Manager or Subadvisors conclude that such events may have affected the accuracy of the last price of such securities reported on the local foreign market, the Sub-

Committee may, pursuant to procedures adopted by the Board, adjust the value of the local price to reflect the estimated impact on the price of such securities as a result of such events. In this instance, securities are generally categorized as Level 3 in the hierarchy. Additionally, certain foreign equity securities are also fair valued whenever the movement of a particular index exceeds an established threshold. In such cases, the securities are fair valued by applying factors provided by a third party vendor in accordance with the Fund’s policies and procedures and are generally categorized as Level 2 in the hierarchy. As of October 31, 2013, foreign equity securities held by the Fund were not fair valued in such a manner.

Equity securities and Exchange Traded Funds are valued at the latest quoted sales prices as of the close of regular trading on the Exchange on each valuation date. Securities that are not traded on the valuation date are valued at the mean of the latest quoted bid and ask prices. Prices normally are taken from the principal market in which each security trades. Investments in other mutual funds are valued at their respective NAVs as of the close of the Exchange on the valuation date. These securities are generally categorized as Level 1 in the hierarchy.

Debt securities (other than convertible and municipal bonds) are valued at the evaluated bid prices (evaluated mean prices in the case of convertible and municipal bonds) supplied by a pricing agent or broker selected by the Fund’s Manager, in consultation with the Fund’s Subadvisor, whose prices reflect broker/dealer supplied valuations and electronic data processing techniques, if such prices are deemed by the Fund’s Manager, in consultation with the Fund’s Subadvisor, to be representative of market values, at the regular close of trading of the Exchange on each valuation date. Debt securities purchased on delayed delivery basis are marked to market daily until settlement at the forward settlement date. Debt securities, including corporate bonds, U.S. government & federal agency bonds, municipal bonds, foreign bonds, Yankee bonds, convertible bonds, asset-backed securities and mortgage-backed securities, are generally categorized as Level 2 in the hierarchy.

Temporary cash investments acquired in excess of 60 days to maturity are valued using the latest bid prices or using valuations based on a matrix system (which considers such factors as security prices, yields, maturities, and ratings), both as furnished by independent pricing services. Other temporary cash investments which mature in 60 days or less (“Short-Term Investments”) are valued at amortized cost. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between such cost and the value on maturity date. Amortized cost approximates the current fair value of a security. Securities valued at amortized cost are not valued using a quoted price in an active market. These securities are generally categorized as Level 2 in the hierarchy.

Foreign currency forward contracts are valued at their fair market values measured on the basis of the mean between the last current bid and ask prices based on dealer or exchange quotations and are generally categorized as Level 2 in the hierarchy.

(B)  Income Taxes.  The Fund’s policy is to comply with the requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to

24 MainStay MAP Fund

distribute all of the taxable income to the shareholders of the Fund within the allowable time limits. Therefore, no federal, state and local income tax provisions are required.

Management evaluates the Fund’s tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years (for up to three tax years), and has concluded that no provisions for federal, state and local income tax are required in the Fund’s financial statements. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state and local departments of revenue.

(C)  Foreign Taxes.  Investment income received by the Fund from foreign sources may be subject to foreign income taxes. These foreign income taxes are generally withheld at the source, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.

The Fund may be subject to taxation on realized capital gains, repatriation proceeds and other transaction-based taxes imposed by certain countries in which it invests. The Fund will accrue such taxes as applicable based upon its current interpretation of tax rules and regulations that exist in the market in which it invests. Capital gains taxes relating to positions still held are reflected as a liability on the Statement of Assets and Liabilities, as well as an adjustment to the Fund’s net unrealized appreciation (depreciation). Taxes related to capital gains realized during the year ended October 31, 2013, if any, are reflected as part of net realized gain (loss) in the Statement of Operations. Changes in tax liabilities related to capital gains taxes on unrealized investment gains, if any, are reflected as part of the change in net unrealized appreciation (depreciation) on investments in the Statement of Operations. Transaction-based charges are generally assessed as a percentage of the transaction amount.

(D)  Dividends and Distributions to Shareholders.  Dividends and distributions are recorded on the ex-dividend date. The Fund intends to declare and pay dividends of net investment income and distributions of net realized capital and currency gains, if any, at least annually. Unless the shareholder elects otherwise, all dividends and distributions are reinvested in the same class of shares of the Fund, at NAV. Dividends and distributions to shareholders are determined in accordance with federal income tax regulations and may differ from GAAP.

(E)  Security Transactions and Investment Income.  The Fund records security transactions on the trade date. Realized gains and losses on security transactions are determined using the identified cost method. Dividend income is recognized on the ex-dividend date and interest income is accrued as earned using the effective interest rate method. Discounts and premiums on securities purchased, other than

Short-Term Investments, for the Fund are accreted and amortized, respectively, on the effective interest rate method over the life of the respective securities or, in the case of a callable security, over the period to the first date of call. Discounts and premiums on Short-Term Investments are accreted and amortized, respectively, on the straight-line method. Income from payment-in-kind securities is recorded daily based on the effective interest method of accrual.

Investment income and realized and unrealized gains and losses on investments of the Fund are allocated to separate classes of shares pro rata based upon their relative net assets on the date the income is earned or realized and unrealized gains and losses are incurred.

(F)  Expenses.  Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the respective Funds when the expenses are incurred, except where direct allocations of expenses can be made. Expenses (other than transfer agent expenses and fees incurred under the shareholder services plans and the distribution plans further discussed in Note 3(B)) are allocated to separate classes of shares pro rata based upon their relative net assets on the date the expenses are incurred. The expenses borne by the Fund, including those of related parties to the Fund, are shown in the Statement of Operations.

(G)  Use of Estimates.  In preparing financial statements in conformity with GAAP, management makes estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

(H)  Repurchase Agreements.  The Fund may enter into repurchase agreements to earn income. The Fund may enter into repurchase agreements only with financial institutions that are deemed by the Manager or Subadvisors to be creditworthy, pursuant to guidelines established by the Fund’s Board. During the term of any repurchase agreement, the Manager or Subadvisors will continue to monitor the creditworthiness of the seller. Under the 1940 Act, repurchase agreements are considered to be collateralized loans by a Fund to the seller secured by the securities transferred to the Fund.

When the Fund invests in repurchase agreements, the Fund’s custodian takes possession of the collateral pledged for investments in the repurchase agreement. The underlying collateral is valued daily on a mark-to-market basis to determine that the value, including accrued interest, exceeds the repurchase price. In the event of the seller’s default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. Under certain circumstances, such as in the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral may be subject to legal proceedings and possible realized loss to the Fund.

(I)  Rights and Warrants.  Rights are certificates that permit the holder to purchase a certain number of shares, or a fractional share, of a new stock from the issuer at a specific price. Warrants are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. The Fund may enter into rights and warrants when securities are acquired through a corporate action. These investments can provide a greater potential for profit or loss than an equivalent investment in the underlying security. Prices of these investments do not necessarily move in tandem with the prices of the underlying securities.

mainstayinvestments.com 25

Notes to Financial Statements (continued)

There is risk involved in the purchase of rights and warrants in that these investments are speculative investments. The Fund could also lose the entire value of its investment in warrants if such warrants are not exercised by the date of its expiration. The Fund is exposed to risk until the sale or exercise of each right or warrant is completed. As of October 31, 2013, the Fund did not hold any rights or warrants.

(J)  Securities Lending.  In order to realize additional income, the Fund may engage in securities lending, subject to the limitations set forth in the 1940 Act and relevant guidance by the staff of the Securities and Exchange Commission. In the event the Fund does engage in securities lending, the Fund will lend through its custodian, State Street Bank and Trust Company (“State Street”). State Street will manage the Fund’s cash collateral in accordance with the lending agreement between the Fund and State Street, and indemnify the Fund’s portfolio against counterparty risk. The loans will be collateralized by cash or securities at least equal at all times to the market value of the securities loaned. Collateral will consist of U.S. government securities, cash equivalents or irrevocable letters of credit. The Fund may bear the risk of delay in recovery of, or loss of rights in, the securities loaned should the borrower of the securities experience financial difficulty. The Fund may also record realized gain or loss on securities deemed sold due to a borrower’s inability to return securities on loan. The Fund will receive compensation for lending its securities in the form of fees or the retention of a portion of the interest on the investment of any cash received as collateral. The Fund also will continue to receive interest and dividends on the securities loaned and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the account of the Fund.

Although the Fund and New York Life Investments have temporarily suspended securities lending, the Fund and New York Life Investments reserve the right to reinstitute lending when deemed appropriate. The Fund did not have any portfolio securities on loan as of October 31, 2013.

(K)  Foreign Currency Forward Contracts.  The Fund may enter into foreign currency forward contracts, which are agreements to buy or sell currencies of different countries on a specified future date at a specified rate. The Fund is subject to foreign currency exchange rate risk in the normal course of investing in these transactions. During the period the forward contract is open, changes in the value of the contract are recognized as unrealized appreciation or depreciation by “marking-to-market” such contract on a daily basis to reflect the market value of the contract at the end of each day’s trading. Cash movement occurs on settlement date. When the forward contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract. The Fund may enter into foreign currency forward contracts to reduce currency risk versus the benchmark or for trade settlement.

The use of foreign currency forward contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statement of Assets and Liabilities. The contract amount reflects the extent of the Fund’s involvement in these financial instruments. Risks arise from the possible movements in the foreign exchange rates underlying these instruments. While the Fund may enter into forward con-

tracts to reduce currency exchange risks, changes in currency exchange rates may result in poorer overall performance for the Fund than if it had not engaged in such transactions. Exchange rate movements can be large, depending on the currency, and can last for extended periods of time, affecting the value of the Fund’s assets. Moreover, there may be an imperfect correlation between the Fund’s holdings of securities denominated in a particular currency and the forward contracts entered into by the Fund. Such imperfect correlation may prevent the Fund from achieving the intended hedge or expose the Fund to the risk of currency exchange loss. The unrealized appreciation (depreciation) on forward contracts reflects the Fund’s exposure at valuation date to credit loss in the event of a counterparty’s failure to perform its obligations.

(L)  Foreign Currency Transactions.  The books and records of the Fund are kept in U.S. dollars. Prices of securities denominated in foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates last quoted by any major U.S. bank at the following dates:

(i) market value of investment securities, other assets and liabilities—at the valuation date, and

(ii) purchases and sales of investment securities, income and expenses—at the date of such transactions.

The assets and liabilities that are denominated in foreign currency amounts are presented at the exchange rates and market values at the close of the period. The realized and unrealized changes in net assets arising from fluctuations in exchange rates and market prices of securities are not separately presented.

Net realized gain (loss) on foreign currency transactions represents net gains and losses on foreign currency forward contracts, net currency gains or losses realized as a result of differences between the amounts of securities sale proceeds or purchase cost, dividends, interest and withholding taxes as recorded on the Fund’s books, and the U.S. dollar equivalent amount actually received or paid. Net currency gains or losses from valuing such foreign currency denominated assets and liabilities, other than investments at valuation date exchange rates, are reflected in unrealized foreign exchange gains or losses.

(M)  Concentration of Risk.  The Fund may invest in foreign securities, which carry certain risks that are in addition to the usual risks inherent in domestic instruments. These risks include those resulting from currency fluctuations, future adverse political and economic developments and possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. These risks are likely to be greater in emerging markets than in developed markets. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic or political developments in a specific country, industry or region.

(N)  Indemnifications.  Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities that may arise out of performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and which may provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that

26 MainStay MAP Fund

have not yet occurred. Based on experience, management is of the view that the risk of loss in connection with these potential indemnification obligations is remote. However, there can be no assurance that material liabilities related to such obligations will not arise in the future, which could adversely impact the Fund.

(O)  Quantitative Disclosure of Derivative Holdings.  The following tables show additional disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial positions, performance and cash flows. These derivatives are not accounted for as hedging instruments.

The effect of derivative instruments on the Statement of Operations for the year ended October 31, 2013:

Realized Gain (Loss)

	Statement of Operations Location	Equity Contracts Risk		Total
Rights	Net realized gain (loss) on security transactions	$	71	$	71
Total Realized Gain (Loss)		$	71	$	71

Note 3–Fees and Related Party Transactions

(A)  Manager and Subadvisors.  New York Life Investments, a registered investment adviser and an indirect, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”), serves as the Fund’s Manager, pursuant to an Amended and Restated Management Agreement (“Management Agreement”). The Manager provides offices, conducts clerical, recordkeeping and bookkeeping services, and keeps most of the financial and accounting records required to be maintained by the Fund. Except for the portion of salaries and expenses that are the responsibility of the Fund, the Manager pays the salaries and expenses of all personnel affiliated with the Fund and certain operational expenses of the Fund. The Fund reimburses New York Life Investments in an amount equal to a portion of the salary of the Chief Compliance Officer (“CCO”) of the Fund. Markston International LLC (“Markston” or “Subadvisor”) and Institutional Capital LLC (“ICAP”or “Subadvisor”), each registered investment advisers, serve as Subadvisors to the Fund and manage a portion of the Fund’s assets, as designated by New York Life Investments from time to time, subject to the oversight of New York Life Investments. ICAP is a wholly-owned subsidiary of New York Life. Each Subadvisor is responsible for the day-to-day portfolio management of the Fund with respect to its allocated portion of the Fund’s assets. Pursuant to the terms of an Amended and Restated Subadvisory Agreement between New York Life Investments and ICAP, and pursuant to the terms of a Subadvisory Agreement between New York Life Investments and Markston (“Subadvisory Agreements”), New York Life Investments pays for the services of the Subadvisors.

The Fund pays the Manager a monthly fee for services performed and facilities furnished at an annual rate of the Fund’s average daily net assets as follows: 0.75% up to $1 billion; 0.70% from $1 billion to $3 billion; and 0.675% in excess of $3 billion, plus a fee for fund accounting services previously provided by New York Life Investments under a separate fund accounting agreement furnished at an annual rate of the Fund’s average daily net assets as follows: 0.05% up to

$20 million; 0.0333% from $20 million to $100 million; and 0.01% in excess of $100 million.

The effective management fee rate (exclusive of any applicable waivers/reimbursements) was 0.73% for the year ended October 31, 2013, inclusive of a fee for fund accounting services of 0.01% of the Fund’s average daily net assets.

For the year ended October 31, 2013, New York Life Investments earned fees from the Fund in the amount of $15,723,412.

State Street, 1 Lincoln Street, Boston, Massachusetts 02111, provides sub-administration and sub-accounting services to the Fund pursuant to an agreement with New York Life Investments. These services include calculating the daily NAVs of the Fund, maintaining the general ledger and sub-ledger accounts for the calculation of the Fund’s respective NAVs, and assisting New York Life Investments in conducting various aspects of the Fund’s administrative operations. For providing these services to the Fund, State Street is compensated by New York Life Investments.

(B)  Distribution, Service and Shareholder Service Fees.  The Trust, on behalf of the Fund, has entered into a distribution agreement with NYLIFE Distributors LLC (the “Distributor”), an indirect, wholly-owned subsidiary of New York Life. The Fund has adopted distribution plans (the “Plans”) in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Investor Class, Class A and Class R2 Plans, the Distributor receives a monthly distribution fee from the Investor Class, Class A and Class R2 shares, at an annual rate of 0.25% of the average daily net assets of the Investor Class, Class A and Class R2 shares for distribution and/or service activities as designated by the Distributor. Pursuant to the Class B and Class C Plans, Class B and Class C shares pay the Distributor a monthly distribution fee at an annual rate of 0.75% of the average daily net assets of the Class B and Class C shares, along with a service fee at an annual rate of 0.25% of the average daily net assets of the Class B and Class C shares, for a total 12b-1 fee of 1.00%. Pursuant to the Class R3 Plan, the Distributor receives a monthly distribution and/or service fee from the Class R3 shares at an annual rate of 0.50% of the average daily net assets of the Class R3 shares. Class I and Class R1 shares are not subject to a distribution and/or service fee.

The Plans provide that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Fund’s shares and service activities.

In accordance with the Shareholder Services Plans for the Class R1, Class R2 and Class R3 shares, the Manager has agreed to provide, through its affiliates or independent third parties, various shareholder and administrative support services to shareholders of the Class R1, Class R2 and Class R3 shares. For its services, the Manager, its affiliates or independent third party service providers are entitled to a shareholder service fee accrued daily and paid monthly at an annual rate of 0.10% of the average daily net assets of the Class R1, Class R2 and Class R3 shares. This is in addition to any fees paid under a distribution plan, where applicable.

mainstayinvestments.com 27

Notes to Financial Statements (continued)

Shareholder Service Fees incurred by the Fund for the year ended October 31, 2013, were as follows:

Class R1	$	7,787
Class R2		20,042
Class R3		1,726

(C)  Sales Charges.  The Fund was advised by the Distributor that the amount of sales charges retained on sales of Investor Class and Class A shares were $46,629 and $52,825, respectively, for the year ended October 31, 2013. The Fund was also advised that the Distributor retained CDSCs on redemptions of Investor Class, Class A, Class B and Class C shares of $13, $1,822, $71,064 and $4,896, respectively, for the year ended October 31, 2013.

(D)  Transfer, Dividend Disbursing and Shareholder Servicing Agent.  NYLIM Service Company LLC, an affiliate of New York Life Investments, is the Fund’s transfer, dividend disbursing and shareholder servicing agent pursuant to an agreement between NYLIM Service Company LLC and the Trust. NYLIM Service Company LLC has entered into an agreement with Boston Financial Data Services, Inc. (“BFDS”) pursuant to which BFDS performs certain transfer agent services on behalf of NYLIM Service Company LLC. Transfer agent expenses incurred by the Fund for the year ended October 31, 2013, were as follows:

Investor Class	$	386,407
Class A		323,058
Class B		242,919
Class C		379,470
Class I		1,424,091
Class R1		7,787
Class R2		19,906
Class R3		1,714

(E)  Small Account Fee.  Shareholders with small accounts adversely impact the cost of providing transfer agency services. In an effort to reduce total transfer agency expenses, the Fund has implemented a small account fee on certain types of accounts. Certain shareholders with an account balance of less than $1,000 are charged an annual per account fee of $20 (assessed semi-annually), the proceeds from which offset transfer agent fees as reflected in the Statement of Operations.

(F)  Capital.  As of October 31, 2013, New York Life and its affiliates beneficially held shares of the Fund with values and percentages of net assets as follows:

Class A	$	4,168	0.0	%‡
Class I		126,537,405	8.9

‡ Less than one-tenth of a percent.

Note 4–Federal Income Tax

As of October 31, 2013, the components of accumulated gain (loss) on a tax basis were as follows:

Ordinary   Income		Accumulated Capital and Other Gain (Loss)		Capital Loss Carry Forward			Unrealized Appreciation (Depreciation)		Total Accumulated Gain (Loss)
	$19,940,343	$	45,601,013	$	(2,215,631	)	$	608,886,167	$	672,211,892

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is primarily due to wash sale adjustments, return of capital distributions received on investments other than Real Estate Investment Trusts (REITs) and REITs.

The following table discloses the current year reclassifications between undistributed net investment income (loss), accumulated net realized gain (loss) on investments, and additional paid-in capital arising from permanent differences; net assets as of October 31, 2013 were not affected.

Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gain (Loss) on Investments		Additional Paid-In Capital
$(788,217)	$	788,217	$	0

The reclassifications for the Fund are primarily due to foreign currency gain (loss), return of capital distributions from REITs and investments other than REITs, and capital gain distributions from REITs.

Under the Regulated Investment Company Modernization Act of 2010, the Fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010, for an unlimited period. However, any losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

As of October 31, 2013, for federal income tax purposes, capital loss carryforwards of $2,215,631 were available as shown in the table below, to the extent provided by the regulations to offset future realized gains of the Fund through the years indicated. To the extent that these capital loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Capital Loss Available Through	Short-Term Capital Loss Amounts (000’s)		Long-Term Capital Loss Amounts (000’s)
2015	$	2,216	$	—

The Fund utilized $128,179,555 of capital loss carryforwards during the year ended October 31, 2013.

28 MainStay MAP Fund

The tax character of distributions paid during the years ended October 31, 2013 and October 31, 2012 shown in the Statements of Changes in Net Assets was as follows:

	2013		2012
Distributions paid from:
Ordinary Income	$	23,630,524	$	22,500,041

Note 5–Custodian

State Street is the custodian of the cash and the securities of the Fund. Custodial fees are charged to the Fund based on the Fund’s net assets and/or the market value of securities in the Fund and the number of certain cash transactions incurred by the Fund.

Note 6–Line of Credit

The Fund and certain affiliated funds maintain a line of credit with a syndicate of banks in order to secure a source of funds for temporary purposes to meet unanticipated or excessive redemption requests.

Effective August 28, 2013, under a second amended and restated credit agreement (the “Credit Agreement”), the aggregate commitment amount is $300,000,000 with an optional maximum amount of $400,000,000. The commitment fee is an annual rate of 0.08% of the average commitment amount payable quarterly, regardless of usage, to Bank of New York Mellon and State Street, who serve as the agents to the syndicate. The commitment fee is allocated among the Fund and certain affiliated funds based upon net assets and other factors. Interest on any revolving credit loan is charged based upon the Federal Funds Advances rate or the one month London InterBank Offered Rate, whichever is higher. The Credit Agreement expires on August 27, 2014, although the Fund, certain affiliated funds and the syndicate of banks may renew the Credit Agreement for an additional year on the same or different terms. Prior to August 28, 2013, the aggregate commitment amount was $200,000,000 with an optional maximum amount of $250,000,000. There were no borrowings made or outstanding with respect to the Fund under the Credit Agreement during the year ended October 31, 2013.

Note 7–Purchases and Sales of Securities (in 000’s)

During the year ended October 31, 2013, purchases and sales of securities, other than short-term securities, were $603,703 and $957,668, respectively.

Note 8–Capital Share Transactions

Investor Class	Shares			Amount
Year ended October 31, 2013:
Shares sold		252,224		$	9,750,331
Shares issued to shareholders in reinvestment of dividends and distributions		32,727			1,121,243
Shares redeemed		(461,896	)		(17,660,467	)
Net increase (decrease) in shares outstanding before conversion		(176,945	)		(6,788,893	)
Shares converted into Investor Class (See Note 1)		327,104			12,571,419
Shares converted from Investor Class (See Note 1)		(347,678	)		(13,877,792	)
Net increase (decrease)		(197,519	)	$	(8,095,266	)
Year ended October 31, 2012:
Shares sold		244,302		$	7,912,675
Shares issued to shareholders in reinvestment of dividends and distributions		35,955			1,090,857
Shares redeemed		(589,239	)		(19,079,790	)
Net increase (decrease) in shares outstanding before conversion		(308,982	)		(10,076,258	)
Shares converted into Investor Class (See Note 1)		446,562			14,347,291
Shares converted from Investor Class (See Note 1)		(359,912	)		(11,878,827	)
Net increase (decrease)		(222,332	)	$	(7,607,794	)
Class A	Shares			Amount
Year ended October 31, 2013:
Shares sold		1,074,871		$	40,847,667
Shares issued to shareholders in reinvestment of dividends and distributions		86,511			2,962,125
Shares redeemed		(1,982,422	)		(76,665,047	)
Net increase (decrease) in shares outstanding before conversion		(821,040	)		(32,855,255	)
Shares converted into Class A (See Note 1)		454,375			17,940,725
Shares converted from Class A (See Note 1)		(29,409	)		(1,175,780	)
Net increase (decrease)		(396,074	)	$	(16,090,310	)
Year ended October 31, 2012:
Shares sold		596,933		$	19,366,654
Shares issued to shareholders in reinvestment of dividends and distributions		97,531			2,956,499
Shares redeemed		(2,377,806	)		(77,188,057	)
Net increase (decrease) in shares outstanding before conversion		(1,683,342	)		(54,864,904	)
Shares converted into Class A (See Note 1)		615,901			20,108,065
Shares converted from Class A (See Note 1)		(23,886	)		(822,053	)
Net increase (decrease)		(1,091,327	)	$	(35,578,892	)

mainstayinvestments.com 29

Notes to Financial Statements (continued)

Class B	Shares			Amount
Year ended October 31, 2013:
Shares sold		213,136		$	7,628,224
Shares issued to shareholders in reinvestment of dividends and distributions		5,244			167,643
Shares redeemed		(465,480	)		(16,570,529	)
Net increase (decrease) in shares outstanding before conversion		(247,100	)		(8,774,662	)
Shares converted from Class B (See Note 1)		(434,564	)		(15,458,572	)
Net increase (decrease)		(681,664	)	$	(24,233,234	)
Year ended October 31, 2012:
Shares sold		213,487		$	6,423,390
Shares issued to shareholders in reinvestment of dividends and distributions		6,439			182,293
Shares redeemed		(673,595	)		(20,259,640	)
Net increase (decrease) in shares outstanding before conversion		(453,669	)		(13,653,957	)
Shares converted from Class B (See Note 1)		(729,019	)		(21,754,476	)
Net increase (decrease)		(1,182,688	)	$	(35,408,433	)
Class C	Shares			Amount
Year ended October 31, 2013:
Shares sold		245,648		$	8,729,002
Shares issued to shareholders in reinvestment of dividends and distributions		6,294			201,279
Shares redeemed		(701,835	)		(24,595,714	)
Net increase (decrease)		(449,893	)	$	(15,665,433	)
Year ended October 31, 2012:
Shares sold		187,726		$	5,614,520
Shares issued to shareholders in reinvestment of dividends and distributions		6,452			182,715
Shares redeemed		(1,041,053	)		(31,171,633	)
Net increase (decrease)		(846,875	)	$	(25,374,398	)
Class I	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,259,552		$	246,128,596
Shares issued to shareholders in reinvestment of dividends and distributions		525,727			18,332,087
Shares redeemed		(13,779,074	)		(549,858,964	)
Net increase (decrease)		(6,993,795	)	$	(285,398,281	)
Year ended October 31, 2012:
Shares sold		8,582,918		$	286,653,962
Shares issued to shareholders in reinvestment of dividends and distributions		544,655			16,813,162
Shares redeemed		(8,270,927	)		(274,064,591	)
Net increase (decrease)		856,646		$	29,402,533

Class R1	Shares			Amount
Year ended October 31, 2013:
Shares sold		36,997		$	1,421,756
Shares issued to shareholders in reinvestment of dividends and distributions		1,856			63,811
Shares redeemed		(519,773	)		(18,144,842	)
Net increase (decrease)		(480,920	)	$	(16,659,275	)
Year ended October 31, 2012:
Shares sold		163,523		$	5,157,490
Shares issued to shareholders in reinvestment of dividends and distributions		8,918			271,181
Shares redeemed		(111,653	)		(3,635,065	)
Net increase (decrease)		60,788		$	1,793,606
Class R2	Shares			Amount
Year ended October 31, 2013:
Shares sold		141,151		$	5,413,156
Shares issued to shareholders in reinvestment of dividends and distributions		4,724			162,285
Shares redeemed		(240,517	)		(9,260,544	)
Net increase (decrease)		(94,642	)	$	(3,685,103	)
Year ended October 31, 2012:
Shares sold		113,272		$	3,679,467
Shares issued to shareholders in reinvestment of dividends and distributions		7,477			227,218
Shares redeemed		(306,479	)		(9,969,993	)
Net increase (decrease)		(185,730	)	$	(6,063,308	)
Class R3	Shares			Amount
Year ended October 31, 2013:
Shares sold		6,666		$	252,915
Shares issued to shareholders in reinvestment of dividends and distributions		318			10,894
Shares redeemed		(20,982	)		(786,836	)
Net increase (decrease)		(13,998	)	$	(523,027	)
Year ended October 31, 2012:
Shares sold		17,183		$	559,674
Shares issued to shareholders in reinvestment of dividends and distributions		681			20,629
Shares redeemed		(42,901	)		(1,340,280	)
Net increase (decrease)		(25,037	)	$	(759,977	)

Note 9–Subsequent Events

In connection with the preparation of the financial statements of the Fund as of and for the year ended October 31, 2013, events and transactions subsequent to October 31, 2013, through the date the financial statements were issued have been evaluated by the Fund’s management for possible adjustment and/or disclosure. No subsequent events requiring financial statement adjustment or disclosure have been identified.

30 MainStay MAP Fund

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

The MainStay Funds:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the MainStay MAP Fund (the “Fund”), one of the funds constituting The MainStay Funds, as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the MainStay MAP Fund of The MainStay Funds as of October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

December 20, 2013

mainstayinvestments.com 31

Federal Income Tax Information

(Unaudited)

The Fund is required under the Internal Revenue Code to advise shareholders in a written statement as to the federal tax status of dividends paid by the Fund during such fiscal years.

For the fiscal year ended October 31, 2013, the Fund designated approximately $23,630,524 under the Internal Revenue Code as qualified dividend income eligible for reduced tax rates.

The dividends paid by the Fund during the fiscal year ended October 31, 2013, should be multiplied by 100.0% to arrive at the amount eligible for the corporate dividends received deduction.

In February 2014, shareholders will receive an IRS Form 1099-DIV or substitute Form 1099 which will show the federal tax status of the distributions received by shareholders in calendar year 2013. The amounts that will be reported on such 1099-DIV or substitute Form 1099 will be the amounts you are to use on your federal income tax return and will differ from the amounts which we must report for the Fund’s fiscal year ended October 31, 2013.

Proxy Voting Policies and Procedures and Proxy Voting Record

A description of the policies and procedures that New York Life Investments uses to vote proxies related to the Fund’s securities is available without charge, upon request, (i) by visiting the Fund’s website at mainstayinvestments.com; or (ii) on the SEC’s website at www.sec.gov.

The Fund is required to file with the SEC its proxy voting record for the 12-month period ending June 30 on Form N-PX. The Fund’s most recent Form N-PX is available free of charge upon request (i) by calling 800-MAINSTAY (624-6782); (ii) by visiting the Fund’s website at mainstayinvestments.com; or (iii) on the SEC’s website at www.sec.gov.

Shareholder Reports and Quarterly Portfolio Disclosure

The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N-Q. The Fund’s Form N-Q is available without charge on the SEC’s website at www.sec.gov or by calling MainStay Investments at 800-MAINSTAY (624-6782). You also can obtain and review copies of Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

32 MainStay MAP Fund

Board Members and Officers (Unaudited)

The Board Members oversee the MainStay Group of Funds (which is comprised of Funds that are series of The MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund, and MainStay DefinedTerm Municipal Opportunities Fund) (collectively, the “Fund Complex”), the Manager and, when applicable, the Subadvisor(s) and other service providers to the Fund Complex. Each Board Member serves until his or her successor is elected and qualified or until his or her resignation, death or removal. The Retirement Policy provides that a Board Member shall tender his or her resignation by the end of the calendar year during which he or she reaches the age of 75.

Officers serve a term of one year and are elected annually by the Board Members. The business address of each Board Member and officer listed below is 51 Madison Avenue, New York, New York 10010.

The Statement of Additional Information applicable to the Fund includes additional information about the Board Members and is available without charge, upon request, by calling 800-MAINSTAY (624-6782) or by going online to mainstayinvestments.com.

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Interested Board Members	John Y. Kim* 9/24/60	Indefinite; MainStay Funds: Trustee since 2008; MainStay Funds Trust: Trustee since 2008***.	Chief Investment Officer, New York Life Insurance Company (since 2011); President, Investments Group—New York Life Insurance Company (since 2012); Chairman of the Board of Managers and Chief Executive Officer, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC (since 2008); Member of the Board, MacKay Shields LLC, Institutional Capital LLC, Madison Capital Funding LLC, and Cornerstone Capital Management Holdings LLC (fka Madison Square Investors LLC) (since 2008); Member of the Board of Managers, McMorgan and Company LLC and GoldPoint Partners (fka NYLCAP Manager LLC) (2008-2012); Member of the Board of Private Advisors, L.L.C.(since 2010); Member of the Board of MCF Capital Management LLC (since 2012); and President, Prudential Retirement, a business unit of Prudential Financial, Inc. (2002 to 2007)	79	MainStay VP Funds Trust: Trustee since 2008 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

* This Board Member is considered to be an “interested person” of the MainStay Group of Funds within the meaning of the 1940 Act because of his affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Cornerstone Capital Management Holdings LLC, MacKay Shields LLC, Institutional Capital LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During the Past Five Years.”

mainstayinvestments.com 33

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held By Board Member
Non-Interested Board Members	Susan B. Kerley 8/12/51	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 1990***.	President; Strategic Management Advisors LLC (since 1990)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (50 portfolios).
	Alan R. Latshaw 3/27/51	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2006; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2007***.	Retired; Partner, Ernst & Young LLP (2002 to 2003); Partner, Arthur Andersen LLP (1989 to 2002); Consultant to the MainStay Funds Audit and Compliance Committee (2004 to 2006)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011; State Farm Associates Funds Trusts: Trustee since 2005 (4 portfolios); State Farm Mutual Fund Trust: Trustee since 2005 (15 portfolios); and State Farm Variable Product Trust: Trustee since 2005 (9 portfolios).
	Peter Meenan 12/5/41	Indefinite; MainStay Funds: Chairman since 2013 and Trustee since 2007; MainStay Funds Trust: Chairman since 2013 and Trustee since 2002***.	Retired; Independent Consultant (2004 to 2013); President and Chief Executive Officer, Babson—United, Inc. (financial services firm) (2000 to 2004); Independent Consultant (1999 to 2000); Head of Global Funds, Citicorp (1995 to 1999)	79	MainStay VP Funds Trust: Chairman since 2013 and Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Chairman since 2013 and Trustee since 2011; Private Advisors Alternative Strategies Fund: Chairman since 2013 and Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Chairman since 2013 and Trustee since 2011.
	Richard H. Nolan, Jr. 11/16/46	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Managing Director, ICC Capital Management; President—Shields/ Alliance, Alliance Capital Management (1994 to 2004)	79	MainStay VP Funds Trust: Trustee since 2006 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.
	Richard S. Trutanic 2/13/52	Indefinite; MainStay Funds: Trustee since 1994; MainStay Funds Trust: Trustee since 2007***.	Chairman and Chief Executive Officer, Somerset & Company (financial advisory firm) (since 2004); Managing Director, The Carlyle Group (private investment firm) (2002 to 2004); Senior Managing Director, Partner and Board Member, Groupe Arnault S.A. (private investment firm) (1999 to 2002)	79	MainStay VP Funds Trust: Trustee since 2007 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011.

34 MainStay MAP Fund

	Name and Date of Birth	Term of Office, Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years	Number of Portfolios in Fund Complex Overseen by Board Member	Other Directorships Held by Board Member
Non-Interested Board Members	Roman L. Weil 5/22/40	Indefinite; MainStay Funds: Trustee and Audit Committee Financial Expert since 2007; MainStay Funds Trust: Trustee and Audit Committee Financial Expert since 2009.	Visiting Professor, University of California—San Diego (since 2012); President, Roman L. Weil Associates, Inc. (consulting firm) (since 1981); Visiting Professor, Johns Hopkins University (2013); Visiting Professor, Southern Methodist University (2011); Visiting Professor, NYU Stern School of Business, New York University (2011); V. Duane Rath Professor Emeritus of Accounting, Chicago Booth School Business, University of Chicago (since 2008)	79	MainStay VP Funds Trust: Trustee and Audit Committee Financial Expert since 1994 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee and Audit Committee Financial Expert since 2011; Private Advisors Alternative Strategies Fund: Trustee and Audit Committee Financial Expert since 2011; and MainStay DefinedTerm Municipal Opportunities Fund: Trustee and Audit Committee Financial Expert since 2011.
	John A. Weisser 10/22/41	Indefinite; MainStay Funds: Trustee since 2007; MainStay Funds Trust: Trustee since 2007***.	Retired; Managing Director of Salomon Brothers, Inc. (1971 to 1995)	79	MainStay VP Funds Trust: Trustee since 1997 (29 portfolios)**; Private Advisors Alternative Strategies Master Fund: Trustee since 2011; Private Advisors Alternative Strategies Fund: Trustee since 2011; MainStay DefinedTerm Municipal Opportunities Fund: Trustee since 2011; Direxion Insurance Trust: Trustee since 2007 (1 portfolio); Direxion Funds: Trustee since 2007 (25 portfolios); and Direxion Shares ETF Trust: Trustee since 2008 (52 portfolios).

** Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

*** Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust.

mainstayinvestments.com 35

The following individuals have been appointed by the Board Members to serve as Officers of the MainStay Group of Funds.*

	Name and Date of Birth	Position(s) Held and Length of Service	Principal Occupation(s) During Past Five Years
Officers	Stephen P. Fisher 2/22/59	President, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Manager, President and Chief Operating Officer, NYLIFE Distributors LLC (since 2008); Chairman of the Board, NYLIM Service Company LLC (since 2008); Senior Managing Director and Chief Marketing Officer, New York Life Investment Management LLC (since 2005); President, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jack R. Benintende 5/12/64	Treasurer and Principal Financial and Accounting Officer, MainStay Funds (since 2007), MainStay Funds Trust (since 2009)	Assistant Treasurer, New York Life Investment Management Holdings LLC (since 2008); Managing Director, New York Life Investment Management LLC (since 2007); Treasurer and Principal Financial and Accounting Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2007)**
	Jeffrey A. Engelsman 9/28/67	Vice President and Chief Compliance Officer, MainStay Funds and MainStay Funds Trust (since 2009)	Managing Director, Compliance, New York Life Investment Management LLC (since 2009); Director and Associate General Counsel, New York Life Investment Management LLC (2005 to 2008); Assistant Secretary, NYLIFE Distributors LLC (2006 to 2008); Vice President and Chief Compliance Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2009)**; Assistant Secretary, MainStay Funds (2006 to 2008) and MainStay VP Series Fund, Inc. (2005 to 2008)**
	J. Kevin Gao 10/13/67	Secretary and Chief Legal Officer, MainStay Funds and MainStay Funds Trust (since 2010)	Managing Director and Associate General Counsel, New York Life Investment Management LLC (since 2010); Secretary and Chief Legal Officer, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2010)**; Director and Counsel, Credit Suisse; Chief Legal Officer and Secretary, Credit Suisse Asset Management LLC and Credit Suisse Funds (2003 to 2010)
	Scott T. Harrington 2/8/59	Vice President—Administration, MainStay Funds (since 2005), MainStay Funds Trust (since 2009)	Director, New York Life Investment Management LLC (including predecessor advisory organizations) (since 2000); Executive Vice President, New York Life Trust Company and New York Life Trust Company, FSB (2006 to 2012); Vice President—Administration, Private Advisors Alternative Strategies Master Fund, Private Advisors Alternative Strategies Fund and MainStay DefinedTerm Municipal Opportunities Fund (since 2011) and MainStay VP Funds Trust (since 2005)**

* The Officers listed above are considered to be “interested persons” of the MainStay Group of Funds within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company, New York Life Investment Management LLC, New York Life Insurance Company, New York Life Investment Management LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail in the column captioned “Principal Occupation(s) During Past Five Years.” Officers are elected annually by the Board to serve a one year term.

** Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust.

36 MainStay MAP Fund

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MainStay Funds

MainStay offers a wide range of Funds for virtually any investment need. The full array of MainStay open-end offerings is listed here, with information about the manager, subadvisors, legal counsel and independent registered public accounting firms.

Equity

U.S. Equity Funds

MainStay Common Stock Fund

MainStay Cornerstone Growth Fund

MainStay Epoch U.S. All Cap Fund

MainStay Epoch U.S. Equity Yield Fund

MainStay ICAP Equity Fund

MainStay ICAP Select Equity Fund

MainStay Large Cap Growth Fund¹

MainStay MAP Fund

MainStay S&P 500 Index Fund

MainStay U.S. Equity Opportunities Fund

MainStay U.S. Small Cap Fund

International/Global Equity Funds

MainStay Emerging Markets Opportunities Fund

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 International Opportunities Fund

Income

Taxable Bond Funds

MainStay Floating Rate Fund

MainStay Global High Income 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 Duration High Yield Fund

MainStay Short Term Bond Fund

MainStay Unconstrained Bond Fund

Municipal Bond Funds

MainStay California Tax Free Opportunities Fund²

MainStay High Yield Municipal Bond Fund

MainStay New York Tax Free Opportunities Fund³

MainStay Tax Free Bond Fund

Money Market Fund

MainStay Money Market Fund

Mixed Asset

MainStay Balanced Fund

MainStay Convertible Fund

MainStay Income Builder Fund

MainStay Marketfield Fund

Asset Allocation/Target Date

MainStay Conservative Allocation Fund

MainStay Growth Allocation Fund

MainStay Moderate Allocation Fund

MainStay Moderate Growth Allocation Fund

MainStay Retirement 2010 Fund

MainStay Retirement 2020 Fund

MainStay Retirement 2030 Fund

MainStay Retirement 2040 Fund

MainStay Retirement 2050 Fund

Manager

New York Life Investment Management LLC

New York, New York

Subadvisors

Cornerstone Capital Management Holdings LLC⁴

New York, New York

Cornerstone Capital Management LLC⁴

Bloomington, Minnesota

Epoch Investment Partners, Inc.

New York, New York

Institutional Capital LLC⁴

Chicago, Illinois

MacKay Shields LLC⁴

New York, New York

Marketfield Asset Management LLC

New York, New York

Markston International LLC

White Plains, New York

Winslow Capital Management LLC

Minneapolis, Minnesota

Legal Counsel

Dechert LLP

Independent Registered Public Accounting Firms

KPMG LLP

PricewaterhouseCoopers LLP

1. Effective January 13, 2012, the Fund was closed to new investors with certain exceptions.

2. This Fund is only registered for sale in AZ, CA, NV, OR, UT, and WA.

3. This Fund is only registered for sale in CT, DE, FL, MA, NJ, NY, and VT.

4. An affiliate of New York Life Investment Management LLC.

Not part of the Annual Report

For more information

800-MAINSTAY (624-6782)

mainstayinvestments.com

The MainStay Funds^® are managed by New York Life Investment Management LLC 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 FINRA/SIPC.

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.

This report may be distributed only when preceded or accompanied by a current Fund prospectus.

©2013 NYLIFE Distributors LLC. All rights reserved.

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

NYLIM-32050 MS322-13 MSMP11-12/13 NL030

Item 2. Code of Ethics.

As of the end of the period covered by this report, the Registrant has adopted a code of ethics (the “Code”) that applies to the Registrant’s principal executive officer (“PEO”) and principal financial officer (“PFO”). A copy of the Code is filed herewith. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.

Item 3. Audit Committee Financial Expert.

The Board of Trustees has determined that the Registrant has two audit committee financial experts serving on its Audit Committee. The Audit Committee financial experts are Alan R. Latshaw and Roman L. Weil. Messrs. Latshaw and Weil are “independent” within the meaning of that term under the Investment Company Act of 1940.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees

The aggregate fees billed for the fiscal year ended October 31, 2013 for professional services rendered by KPMG for the audit of the Registrant’s annual financial statements or services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements for that fiscal year were $575,160.

The aggregate fees billed for the fiscal year ended October 31, 2012 for professional services rendered by KPMG LLP (“KPMG”) for the audit of the Registrant’s annual financial statements or services that are normally provided by KPMG in connection with statutory and regulatory filings or engagements for that fiscal year were $600,700.

(b) Audit-Related Fees

The aggregate fees billed for assurance and related services by KPMG that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item were: (i) $2,500 for the fiscal year ended October 31, 2013, and (ii) $2,500 for the fiscal year ended October 31, 2012. These audit-related services include review of financial highlights for Registrant’s registration statements and issuance of consents to use the auditor’s reports.

(c) Tax Fees

The aggregate fees billed for professional services rendered by KPMG for tax compliance, tax advice, and tax planning were: (i) $66,570 during the fiscal year ended October 31, 2013, and (ii) $63,395 during the fiscal year ended October 31, 2012. These services primarily included preparation of federal, state and local income tax returns and excise tax returns, as well as services relating to excise tax distribution requirements.

(d) All Other Fees

The aggregate fees billed for products and services provided by KPMG, other than the services reported in paragraphs (a) through (c) of this Item were: (i) $0 during the fiscal year ended October 31, 2013, and (ii) $0 during the fiscal year ended October 31, 2012.

(e) Pre-Approval Policies and Procedures

(1) The Registrant’s Audit and Compliance Committee has adopted pre-approval policies and procedures (the “Procedures”) to govern the Committee’s pre-approval of (i) all audit services and permissible non-audit services to be provided to the Registrant by its independent accountant, and (ii) all permissible non-audit services to be provided by such independent accountant to the Registrant’s investment adviser and to any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant (collectively, the “Service Affiliates”) if the services directly relate to the Registrant’s operations and financial reporting. In accordance with the Procedures, the Audit and Compliance Committee is responsible for the engagement of the independent accountant to certify the Registrant’s financial statements for each fiscal year. With respect to the pre-approval of non-audit services provided to the Registrant and its Service Affiliates, the Procedures provide that the Audit and Compliance Committee may annually pre-approve a list of the types of services that may be provided to the Registrant or its Service Affiliates, or the Audit and Compliance Committee may pre-approve such services on a project-by-project basis as they arise. Unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit and Compliance Committee if it is to be provided by the independent accountant. The Procedures also permit the Audit and Compliance Committee to delegate authority to one or more of its members to pre-approve any proposed non-audit services that have not been previously pre-approved by the Audit and Compliance Committee, subject to the ratification by the full Audit and Compliance Committee no later than its next scheduled meeting. To date, the Audit and Compliance Committee has not delegated such authority.

(2) With respect to the services described in paragraphs (b) through (d) of this Item 4, no amount was approved by the Audit and Compliance Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) There were no hours expended on KPMG’s engagement to audit the Registrant’s financial statements for the most recent fiscal year attributable to work performed by persons other than KPMG’s full-time, permanent employees.

(g) All non-audit fees billed by KPMG for services rendered to the Registrant for the fiscal years ended October 31, 2013 and October 31, 2012 are disclosed in 4(b)-(d) above.

The aggregate non-audit fees billed by KPMG for services rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant were approximately: (i) $0 for the fiscal year ended October 31, 2013, and (ii) $0 for the fiscal year ended October 31, 2012.

(h) The Registrant’s Audit and Compliance Committee has determined that the non-audit services rendered by KPMG for the fiscal year ended October 31, 2013 to the Registrant’s investment adviser and any entity controlling, controlled by, or under common control with the Registrant’s investment adviser that provides ongoing services to the Registrant that were not required to be pre-approved by the Audit and Compliance Committee because they did not relate directly to the operations and financial reporting of the registrant were compatible with maintaining the respective independence of KPMG during the relevant time period.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

The Schedule of Investments is included as part of Item 1 of this report.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not Applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Since the Registrant’s last response to this Item, there have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a) Based on an evaluation of the Registrant’s Disclosure Controls and Procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) (the “Disclosure Controls”), as of a date within 90 days prior to the filing date (the “Filing Date”) of this Form N-CSR (the “Report”), the Registrant’s principal executive officer and principal financial officer have concluded that the Disclosure Controls are reasonably designed to ensure that information required to be disclosed by the Registrant in the Report is recorded, processed, summarized and reported by the Filing Date, including ensuring that information required to be disclosed in the Report is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d)) under the Investment Company Act of 1940 that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)	Code of Ethics
(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2 under the Investment Company Act of 1940.
(b)	Certifications of principal executive officer and principal financial officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE MAINSTAY FUNDS

By:	/s/ Stephen P. Fisher
	Stephen P. Fisher
	President and Principal Executive Officer

Date: January 8, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ Stephen P. Fisher
	Stephen P. Fisher
	President and Principal Executive Officer

Date: January 8, 2014

By:	/s/ Jack R. Benintende
	Jack R. Benintende
	Treasurer and Principal Financial
	and Accounting Officer

Date: January 8, 2014

EXHIBIT INDEX

(a)(1)	Code of Ethics
(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2 under the Investment Company Act of 1940.
(b)	Certification of principal executive officer and principal financial officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.

EX-99.CODE ETH

Exhibit (a)(1)

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE OFFICER AND

PRINCIPAL FINANCIAL OFFICERS

MAINSTAY GROUP OF FUNDS (THE “FUNDS”)

Mainstay Funds Trust

The Mainstay Funds

Mainstay VP Funds Trust

MainStay DefinedTerm Municipal Opportunities Fund

Private Advisors Alternative Strategies Fund

Private Advisors Alternative Strategies Master Fund

Approved by the Board of the Directors/Trustees

of Mainstay Group of Funds (the “Board”)

on September 30, 2009

Pursuant to the Sarbanes-Oxley Act Of 2002

I. Introduction and Application

The Funds recognize the importance of high ethical standards in the conduct of their business and requires this Code of Ethics (“Code”) be observed by their principal executive officers (each, a “Covered Officer”) (defined below). In accordance with the Sarbanes-Oxley Act of 2002 (the “Act”) and the rules promulgated thereunder by the U.S. Securities and Exchange Commission (“SEC”) the Funds are required to file reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“1934 Act”), and must disclose whether each has adopted a code of ethics applicable to the principal executive officers. The Board, including a majority of its Independent Directors/Trustees (defined below), has approved this Code as compliant with the requirements of the Act and related SEC rules.

All recipients of the Code are directed to read it carefully, retain it for future reference, and abide by the rules and policies set forth herein. Any questions concerning the applicability or interpretation of such rules and policies, and compliance therewith, should be directed to the relevant Compliance Officer (defined below).

II. Purpose

This Code has been adopted by the Board in accordance with the Act and the rules promulgated by the SEC in order to deter wrongdoing and promote:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents filed by the Funds with the SEC or made in other public communications by the Funds;

• compliance with applicable governmental laws, rules and regulations;

• prompt internal reporting to an appropriate person or persons of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

III. Definitions

(A) “Covered Officer” means the principal executive officer and senior financial officers, including the principal financial officer, controller or principal accounting officer, or persons performing similar functions. The Covered Officers of the Funds shall be identified in Schedule I, as amended from time to time.

(B) “Compliance Officer” means the person appointed by the Funds’ Board to administer the Code. The Compliance Officer of the Funds shall be identified in Schedule II as amended from time to time.

(C) “Director” or “Trustee” means a director or trustee of the Funds, as applicable.

(D) “Executive Officer” shall have the same meaning as set forth in Rule 3b-7 of the 1934 Act. Subject to any changes in the Rule, an Executive Officer means the president, any vice president, any officer who performs a policy making function, or any other person who performs similar policy making functions for the Funds.

(E) “Independent Director/Trustee” means a director/trustee of the Board who is not an “interested person” of the Funds within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (“Investment Company Act”).

(F) “Implicit Waiver” means the Compliance Officer failed to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an Executive Officer.

(G) “Restricted List” means that listing of securities maintained by the Compliance Officer in which trading by certain individuals subject to the Funds’ 17j-1 code of ethics is generally prohibited.

(H) “Waiver” means the approval by the Compliance Officer of a material departure from a provision of the Code.

IV. Honest and Ethical Conduct

(A) Overview. A “conflict of interest” occurs when a Covered Officer’s personal interest interferes with the interests of, or his or her service to, the Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Funds.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the Investment Company Act and the Investment Advisers Act of 1940, as amended (the “Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Funds because of their status as “affiliated persons” of the Funds. The Funds’ and certain of its service providers’ compliance policies, programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, restate or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts may arise or result from the contractual relationship between the Funds and New York Life Investment Management LLC (the “Adviser”). The Covered Officers may be officers or employees of the Adviser. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for

the Funds or the Adviser), be involved in establishing policies and implementing decisions that will have different effects on the Adviser and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationships between the Funds and the Adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Advisers Act, such activities normally will be deemed to have been handled ethically. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

(B) General Policy. Each Covered Officer shall adhere to high standards of honest and ethical conduct. Each Covered Officer has a duty to exercise his or her authority and responsibility for the benefit of the Funds and its shareholders, to place the interests of the shareholders first, and to refrain from having outside interests that conflict with the interests of the Funds and its shareholders. Each such person must avoid any circumstances that might adversely affect, or appear to affect, his or her duty of loyalty to the Funds and its shareholders in discharging his or her responsibilities, including the protection of confidential information and corporate integrity.

(C) Conflicts of Interest. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions of the Investment Company Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Funds.

(1) Prohibited Conflicts of Interest. Each Covered Officer must:

• not use his or her personal influence or personal relationships improperly to influence decisions or financial reporting by the Funds whereby the Covered Officer would benefit personally to the detriment of the Funds;

• not cause the Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than benefit the Funds;

• not use material non-public knowledge of portfolio transactions made or contemplated for the Funds to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; or

• report at least annually the information elicited in the Funds’ Director/Trustee’s and Officer’s Questionnaire relating to potential conflicts of interest.

(2) Duty to Disclose Conflicts. Each Covered Officer has the duty to disclose to the Compliance Officer any interest that he or she may have in any firm, corporation or business entity that is not affiliated or participating in any joint venture or partnership with the Funds or its affiliates and that does business with the Funds or that otherwise presents a possible conflict of interest. Disclosure must be timely so that the Funds may take action concerning any possible conflict as it deems appropriate. It is recognized, however, that the Funds or its affiliates may have business relationships with many organizations and that a relatively small interest in publicly traded securities of an organization does not necessarily give rise to a prohibited conflict of interest. Therefore, the following procedures have been adopted.

(3) Conflicts of Interest that may be Waived. There are some conflict of interest situations for which a Covered Officer may seek a Waiver from a provision(s) of the Code. Waivers must be sought in accordance with Section VII of the Code. Examples of these include:

• Board Memberships. Except as described below, it is considered generally incompatible with the duties of a Covered Officer to assume the position of director of a corporation not affiliated with the Funds. A report should be made by a Covered Officer to the Compliance Officer of any invitation to serve as a director of a corporation that is not an affiliate and the person must receive the approval of the Compliance Officer prior to accepting any such directorship. In the event that approval is given, the Compliance Officer shall immediately determine whether the corporation in question is to be placed on the Funds’ Restricted List.

• “Other” Business Interests. Except as described below, it is considered generally incompatible with the duties of a Covered Officer to act as an officer, general partner, consultant, agent, representative or employee of any business other than an affiliate. A report should be made of any invitation to serve as an officer, general partner, consultant, agent, representative or employee of any business that is not an affiliate for the approval of the Compliance Officer prior to accepting any such position. In the event that approval is given, the Compliance Officer shall immediately determine whether the business in question is to be placed on the Funds’ Restricted List.

• Gifts, Entertainment, Favors or Loans. Covered Officers are subject to the New York Life Investment Management Gift and Entertainment Policy and should refer to that Policy for guidance with respect to the limits on giving and receiving gifts/entertainment to and from third parties that do business with the Funds.

• Permissible Outside Activities. Covered Officers who, in the regular course of their duties relating to the Funds’ private equity/venture capital advisory and investment activities, are asked to serve as the director, officer, general partner, consultant, agent, representative or employee of a privately-held business may do so with the prior written approval of the Compliance Officer.

• Doing Business with the Funds. Except as approved by the Compliance Officer, Covered Officers may not have a monetary interest, as principal, co-principal, agent or beneficiary, directly or indirectly, or through any substantial interest in any other corporation or business unit, in any transaction involving the Funds, subject to such exceptions as are specifically permitted under law.

V. Full, Fair, Accurate, Timely And Understandable Disclosure And Compliance

Covered Officers shall:

• be familiar with the disclosure requirements generally applicable to the Funds;

• not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including the Funds’ Directors/Trustees and auditors, governmental regulators and self-regulatory organizations;

• to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds, the Adviser and other Funds service providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds files with, or submits to, the SEC and in other public communications made by the Funds; and

• promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

VI. Internal Reporting by Covered Persons

(A) Certifications and Accountability. Each Covered Officer shall:

(1) upon adoption of the Code (or thereafter as applicable upon becoming a Covered Officer), affirm in writing on Schedule A hereto that the Covered Officer has received, read, and understands the Code;

(2) annually thereafter affirm on Schedule A hereto that the Covered Officer has complied with the requirements of the Code; and

(3) not retaliate against any other Covered Officer or employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith.

(B) Reporting. A Covered Officer shall promptly report any knowledge of a material violation of this Code to the Compliance Officer. Failure to do so is itself a violation of the Code.

VII. Waivers of Provisions of the Code

(A) Application of the Code. The Compliance Officer is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. The Compliance Officer is authorized to consult, as appropriate, with counsel to the Funds/counsel to the Independent Directors/Trustees. However, any approvals or Waivers sought by and/or granted to a Covered Officer will be reported to the Board in accordance with Section VIII, below.

(B) Waivers. The Compliance Officer may grant Waivers to the Code in circumstances that present special hardship. Waivers shall be structured to be as narrow as is reasonably practicable with appropriate safeguards designed to prevent abuse of the Waiver. To request a Waiver from the Code, the Covered Officer shall submit to the Compliance Officer a written request describing the transaction, activity or relationship for which a Waiver is sought. The request shall briefly explain the reason for engaging in the transaction, activity or relationship. Notwithstanding the foregoing, no exception will be granted where such exception would result in a violation of SEC rules or other applicable laws.

(C) Documentation. The Compliance Officer shall document all Waivers (including Implicit Waivers). If a Waiver is granted, the Compliance Officer shall prepare a brief description of the nature of the Waiver, the name of the Covered Officer and the date of the Waiver so that this information may be disclosed in the next Form N-CSR to be filed on behalf of the Funds or posted on the Funds’ internet website within five business days following the date of the Waiver. All Waivers must be reported to the Board at each quarterly meeting as set forth in Section VIII below.

VIII. Board Reporting

The Compliance Officer shall report any violations of the Code to the Board for its consideration on a quarterly basis. At a minimum, the report shall:

• describe the violation under the Code and any sanctions imposed;

• identify and describe any Waivers sought or granted under the Code; and

• identify any recommended changes to the Code.

IX. Amendments

The Covered Officers and the Compliance Officer may recommend amendments to the Code for the consideration and approval of the Board. In connection with any amendment to the Code, the Compliance Officer shall prepare a brief description of the amendment so that the necessary disclosure may be made with the next Form N-CSR to be filed on behalf of the Funds, or posted on the Funds’ internet website within five business days following the date of the amendment.

X. Sanctions

Compliance by Covered Officers with the provisions of the Code is required. Covered Officers should be aware that in response to any violation, the Funds will take whatever action is deemed necessary under the circumstances, including, but not limited to, the imposition of appropriate sanctions. These sanctions may include, among others, the reversal of trades, reallocation of trades to client accounts, fines, disgorgement of profits, suspension or termination.

XI. Record-keeping

The Compliance Officer shall maintain all records, including any internal memoranda, relating to compliance with the Code or Waivers of a provision(s) of the Code, for a period of 7 years from the end of the fiscal year in which such document was created, 2 years in an accessible place.

XII. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Adviser, and NYLIFE Distributors LLC (the “Underwriter”), or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds’ the Adviser’s and the Underwriter’s codes of ethics under Rule 17j-1 under the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.

XIII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board, the Adviser and the Compliance Officer, and their respective counsels.

XIV. Internal Use

The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of the Funds, as to any fact, circumstance, or legal conclusion.

SCHEDULE I

COVERED OFFICERS

Stephen P. Fisher, President and Principal Executive Officer

Jack R. Benintende, Treasurer and Principal Financial and Accounting Officer

SCHEDULE II

COMPLIANCE OFFICER

Jeffrey A. Engelsman

EXHIBIT A

MainStay Group of Funds

Mainstay Funds Trust

The Mainstay Funds

Mainstay VP Funds Trust

MainStay DefinedTerm Municipal Opportunities Fund

Private Advisors Alternative Strategies Fund

Private Advisors Alternative Strategies Master Fund

Code of Ethics for

Principal Executive Officer and Principal Financial Officers

INITIAL AND ANNUAL CERTIFICATION OF

COMPLIANCE WITH THE

MAINSTAY GROUP OF FUNDS CODE OF ETHICS FOR

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICERS

x I hereby certify that I have received the MainStay Group of Funds Code of Ethics for Principal Executive Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the “Code”) and that I have read and understood the Code. I further certify that I am subject to the Code and will comply with each of the Code’s provisions to which I am subject.

x I hereby certify that I have received the MainStay Group of Funds Code of Ethics for Principal Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the “Code”) and that I have read and understood the Code. I further certify that I have complied with and will continue to comply with each of the provisions of the Code to which I am subject.

By:	/s/ Stephen P. Fisher
Name:	Stephen P. Fisher
Title:	President and Principal Executive Officer
Date:	January 8, 2014
By:	/s/ Jack R. Benintende
Name:	Jack R. Benintende
Title:	Treasurer and Principal Financial and Accounting Officer
Date:	January 8, 2014

EX-99.CERT

Exhibit (a)(2)

SECTION 302 CERTIFICATIONS

I, Stephen P. Fisher, President and Principal Executive Officer of The MainStay Funds, certify that:

1. I have reviewed this report on Form N-CSR of The MainStay Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Stephen P. Fisher
	Stephen P. Fisher
	President and Principal Executive Officer, The MainStay Funds
	Date: January 8, 2014

SECTION 302 CERTIFICATIONS

I, Jack R. Benintende, Treasurer and Principal Financial and Accounting Officer of The MainStay Funds, certify that:

1. I have reviewed this report on Form N-CSR of The MainStay Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Jack R. Benintende
	Jack R. Benintende
	Treasurer and Principal Financial and Accounting Officer, The MainStay Funds
	Date: January 8, 2014

EX-99.906CERT

Exhibit (b)

SECTION 906 CERTIFICATIONS

In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

By:	/s/ Stephen P. Fisher
	Stephen P. Fisher
	President and Principal Executive Officer, The MainStay Funds
	Date: January 8, 2014

SECTION 906 CERTIFICATIONS

In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

By:	/s/ Jack R. Benintende
	Jack R. Benintende
	Treasurer and Principal Financial and Accounting Officer, The MainStay Funds
	Date: January 8, 2014