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 811-23654
MAINSTAY CBRE GLOBAL
INFRASTRUCTURE MEGATRENDS
FUND
(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.
30 Hudson Street
Jersey City, New Jersey 07302
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 576-7000
Date of fiscal year end: May 31
Date of reporting period: May 31, 2022
Item 1. | Reports to Stockholders. |
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Not FDIC/NCUA Insured | Not a Deposit | May Lose Value | No Bank Guarantee | Not Insured by Any Government Agency |
President
Cumulative Total Returns for the Period-Ended May 31, 2022 | |
Since Inception1 | |
Net Asset Value (“NAV”)2 | 6.28 % |
Market Price2 | (4.02) |
FTSE Global Core Infrastructure 50/50 Index (Net)3 | 5.61 |
1. | The Fund commenced operations on October 27, 2021. |
2. | Total returns assume dividends and capital gains distributions are reinvested. For periods of less than one year, total return is not annualized. |
3. | The FTSE Global Core Infrastructure 50/50 Index (Net) is the Fund’s primary broad-based securities market index for comparison purposes. The FTSE Global Core Infrastructure 50/50 Index (Net) gives participants an industry-defined interpretation of infrastructure and adjusts the exposure to certain infrastructure sub-sectors. Results assume reinvestment of all dividends and capital gains. An investment cannot be made directly in an index. |
NYSE Symbol | MEGI | Premium/Discount 1 | (9.90)% |
CUSIP | 56064Q107 | Total Net Assets (millions) | $1,077.3 |
Commencement of Operations | 10/27/2021 | Total Managed Assets (millions)2 | $1,505.2 |
Market Price | $18.65 | Leverage 3 | 28.43% |
NAV | $20.70 |
1. | Premium/Discount is the percentage (%) difference between the market price and the NAV. When the market price exceeds the NAV, the Fund is trading at a premium. When the market price is less than the NAV, the Fund is trading at a discount. |
2. | "Managed Assets" is defined as the Fund’s total assets, including assets attributable to any form of leverage minus liabilities (other than debt representing leverage and the aggregate liquidation preference of any preferred shares that may be outstanding). |
3. | Leverage is based on the use of funds borrowed from banks or other financial institutions, expressed as a percentage of Managed Assets. |
United States | 39.8% |
United Kingdom | 11.2 |
Spain | 9.1 |
Italy | 6.7 |
Canada | 6.3 |
France | 5.9 |
China | 5.0 |
Australia | 4.6 |
Singapore | 4.2% |
Hong Kong | 3.6 |
Guernsey | 1.8 |
Ireland | 0.7 |
Jersey, C.I. | 0.3 |
Other Assets, Less Liabilities | 0.8 |
100.0% |
† | As a percentage of Managed Assets. |
1. | National Grid plc |
2. | Enel SpA |
3. | ONEOK, Inc. |
4. | Williams Cos., Inc. (The) |
5. | Enagas SA |
6. | Enbridge, Inc. |
7. | Eutelsat Communications SA |
8. | Atlantica Sustainable Infrastructure plc |
9. | Edison International |
10. | Guangdong Investment Ltd. |
6 | MainStay CBRE Global Infrastructure Megatrends Fund |
1. | See page 5 for more information on Fund returns. |
8 | MainStay CBRE Global Infrastructure Megatrends Fund |
Shares | Value | |
Closed-End Funds 6.0% | ||
Guernsey 2.6% (1.8% of Managed Assets) | ||
Bluefield Solar Income Fund Ltd. (Decarbonization) | 4,785,487 | $ 7,840,097 |
Renewables Infrastructure Group Ltd. (The) (Decarbonization) | 11,865,304 | 19,947,115 |
27,787,212 | ||
Jersey, C.I. 0.4% (0.3% of Managed Assets) | ||
GCP Asset-Backed Income Fund Ltd. (Asset Modernization) | 3,391,651 | 4,197,428 |
United Kingdom 3.0% (2.1% of Managed Assets) | ||
Foresight Solar Fund Ltd. (Decarbonization) | 5,213,000 | 7,806,305 |
Greencoat UK Wind plc (Decarbonization) | 9,030,000 | 17,070,188 |
HICL Infrastructure plc (Asset Modernization) | 3,340,514 | 7,452,185 |
32,328,678 | ||
Total Closed-End Funds (Cost $64,033,379) | 64,313,318 | |
Common Stocks 111.7% | ||
Australia 6.4% (4.6% of Managed Assets) | ||
APA Group (Asset Modernization) | 1,797,000 | 14,633,590 |
Atlas Arteria Ltd. (Asset Modernization) | 7,628,000 | 39,330,067 |
Aurizon Holdings Ltd. (Asset Modernization) | 5,340,000 | 15,369,553 |
69,333,210 | ||
Canada 7.0% (5.0% of Managed Assets) | ||
Enbridge, Inc. (Asset Modernization) | 998,200 | 46,112,050 |
Pembina Pipeline Corp. (Asset Modernization) | 576,500 | 23,245,049 |
TransAlta Renewables, Inc. (Decarbonization) | 413,800 | 5,672,840 |
75,029,939 | ||
China 6.9% (5.0% of Managed Assets) | ||
Beijing Enterprises Water Group Ltd. (Asset Modernization) | 33,170,000 | 10,982,030 |
Guangdong Investment Ltd. (Asset Modernization) | 38,701,728 | 48,798,622 |
Jiangsu Expressway Co. Ltd. Class H (Asset Modernization) | 5,064,000 | 5,233,183 |
Shares | Value | |
China (continued) | ||
Zhejiang Expressway Co. Ltd. Class H (Asset Modernization) | 10,800,000 | $ 9,510,296 |
74,524,131 | ||
France 8.2% (5.9% of Managed Assets) | ||
Engie SA (Decarbonization) | 2,769,985 | 37,246,563 |
Eutelsat Communications SA (Digital Transformation) | 4,320,677 | 51,303,860 |
88,550,423 | ||
Hong Kong 5.0% (3.6% of Managed Assets) | ||
CK Infrastructure Holdings Ltd. (Decarbonization) | 4,329,500 | 29,008,191 |
Power Assets Holdings Ltd. (Decarbonization) | 3,833,000 | 25,039,676 |
54,047,867 | ||
Ireland 1.0% (0.7% of Managed Assets) | ||
Greencoat Renewables plc (Decarbonization) | 8,495,490 | 10,490,156 |
Italy 9.4% (6.7% of Managed Assets) | ||
Atlantia SpA (Asset Modernization) | 362,239 | 8,786,355 |
Enel SpA (Decarbonization) | 11,479,084 | 74,566,021 |
Infrastrutture Wireless Italiane SpA (Digital Transformation) | 450,000 | 5,009,904 |
Terna - Rete Elettrica Nazionale (Decarbonization) | 1,555,497 | 13,181,404 |
101,543,684 | ||
Singapore 5.9% (4.2% of Managed Assets) | ||
Keppel Infrastructure Trust (Asset Modernization) | 29,000,000 | 11,949,551 |
Mapletree Industrial Trust (Digital Transformation) | 4,812,000 | 8,701,031 |
NetLink NBN Trust (Digital Transformation) | 60,860,000 | 43,073,831 |
63,724,413 | ||
Spain 12.7% (9.1% of Managed Assets) | ||
Atlantica Sustainable Infrastructure plc (Decarbonization) | 1,517,400 | 49,543,110 |
Enagas SA (Asset Modernization) | 2,466,351 | 56,452,465 |
Endesa SA (Decarbonization) | 1,411,697 | 31,277,616 |
137,273,191 | ||
United Kingdom 12.8% (9.1% of Managed Assets) | ||
National Grid plc (Decarbonization) | 5,481,098 | 81,127,172 |
SSE plc (Decarbonization) | 1,635,607 | 36,549,618 |
Shares | Value | |
Common Stocks (continued) | ||
United Kingdom (continued) | ||
United Utilities Group plc (Asset Modernization) | 1,485,384 | $ 19,813,226 |
137,490,016 | ||
United States 36.4% (26.0% of Managed Assets) | ||
American Electric Power Co., Inc. (Decarbonization) | 81,259 | 8,290,855 |
Clearway Energy, Inc. Class C (Decarbonization) | 453,300 | 15,888,165 |
Crown Castle International Corp. (Digital Transformation) | 182,529 | 34,616,625 |
Edison International (Decarbonization) | 705,700 | 49,335,487 |
FirstEnergy Corp. (Decarbonization) | 596,100 | 25,608,456 |
Iron Mountain, Inc. (Digital Transformation) | 543,000 | 29,267,700 |
Kinder Morgan, Inc. (Asset Modernization) | 534,400 | 10,522,336 |
Medical Properties Trust, Inc. (Asset Modernization) | 466,500 | 8,667,570 |
OGE Energy Corp. (Decarbonization) | 1,024,500 | 42,311,850 |
ONEOK, Inc. (Asset Modernization) | 970,000 | 63,874,500 |
South Jersey Industries, Inc. (Asset Modernization) | 349,100 | 12,166,135 |
Southern Co. (The) (Decarbonization) | 162,000 | 12,256,920 |
Uniti Group, Inc. (Digital Transformation) | 1,374,800 | 15,590,232 |
Williams Cos., Inc. (The) (Asset Modernization) | 1,707,200 | 63,268,832 |
391,665,663 | ||
Total Common Stocks (Cost $1,170,231,485) | 1,203,672,693 | |
Convertible Preferred Stocks 10.8% | ||
United States 10.8% (7.7% of Managed Assets) | ||
AES Corp. (The) (Decarbonization) | ||
6.875% | 364,900 | 32,695,040 |
American Electric Power Co., Inc. (Decarbonization) | ||
6.125% | 79,107 | 4,499,606 |
Dominion Energy, Inc. (Decarbonization) | ||
Series A | ||
7.25% | 377,000 | 38,306,970 |
South Jersey Industries, Inc. (Asset Modernization) | ||
8.75% | 1,811 | 126,770 |
Shares | Value | |
United States (continued) | ||
Southern Co. (The) (Decarbonization) | ||
Series 2019 | ||
6.75% | 560,514 | $ 31,612,990 |
Spire, Inc. (Asset Modernization) | ||
Series A | ||
7.50% | 169,000 | 9,203,740 |
Total Convertible Preferred Stocks (Cost $114,361,804) | 116,445,116 | |
Principal Amount | ||
Corporate Bonds 3.6% | ||
United States 3.6% (2.6% of Managed Assets) | ||
Vistra Corp. (Decarbonization) (a)(b) | ||
7.00% (5 Year Treasury Constant Maturity Rate + 5.74%), due 12/15/26 | $ 29,000,000 | 27,810,130 |
8.00% (5 Year Treasury Constant Maturity Rate + 6.93%), due 10/15/26 | 11,000,000 | 10,917,500 |
Total Corporate Bonds (Cost $40,618,001) | 38,727,630 | |
Shares | ||
Preferred Stocks 6.7% | ||
Canada 1.8% (1.3% of Managed Assets) | ||
Algonquin Power & Utilities Corp. (Decarbonization) (b) | ||
5.091% | 54,200 | 1,074,273 |
5.162% | 62,900 | 1,195,988 |
AltaGas Ltd. (Asset Modernization) | ||
5.393% (b) | 66,300 | 1,294,707 |
Brookfield BRP Holdings Canada, Inc. (Decarbonization) | ||
4.875% (b) | 451,794 | 9,203,044 |
Enbridge, Inc. (Asset Modernization) (b) | ||
4.376% | 244,400 | 3,588,179 |
4.46% | 221,400 | 3,345,024 |
19,701,215 | ||
United States 4.9% (3.5% of Managed Assets) | ||
CMS Energy Corp. (Decarbonization) | ||
5.875% | 377,994 | 9,649,986 |
Digital Realty Trust, Inc. (Digital Transformation) (b) | ||
5.20% | 172,388 | 4,268,327 |
10 | MainStay CBRE Global Infrastructure Megatrends Fund |
Shares | Value | ||
Preferred Stocks (continued) | |||
United States (continued) | |||
Digital Realty Trust, Inc. (Digital Transformation) (b) (continued) | |||
5.25% | 161,791 | $ 3,988,148 | |
5.85% | 170,000 | 4,460,800 | |
DTE Energy Co. (Asset Modernization) | |||
5.25% | 145,000 | 3,548,150 | |
Duke Energy Corp. (Decarbonization) | |||
5.75% (b) | 287,000 | 7,441,910 | |
NextEra Energy Capital Holdings, Inc. (Decarbonization) | |||
5.65% | 140,000 | 3,596,600 | |
NiSource, Inc. (Asset Modernization) | |||
6.50% (b) | 286,000 | 7,418,840 | |
Sempra Energy (Asset Modernization) | |||
5.75% | 148,000 | 3,707,400 | |
Spire, Inc. (Asset Modernization) | |||
5.90% (b) | 159,620 | 4,014,443 | |
52,094,604 | |||
Total Preferred Stocks (Cost $77,042,515) | 71,795,819 | ||
Total Investments (Cost $1,466,287,184) | 138.8% | 1,494,954,576 | |
Line of Credit Borrowing | (39.6) | (427,000,000) | |
Other Assets, Less Liabilities | 0.8 | 9,296,833 | |
Net Assets | 100.0% | $ 1,077,251,409 |
† | Percentages indicated are based on Fund net assets applicable to Common Shares. |
(a) | Floating rate—Rate shown was the rate in effect as of May 31, 2022. |
(b) | Security is perpetual and, thus, does not have a predetermined maturity date. The date shown, if applicable, reflects the next call date. |
Affiliated Investment Companies | Value, Beginning of Period | Purchases at Cost | Proceeds from Sales | Net Realized Gain/(Loss) on Sales | Change in Unrealized Appreciation/ (Depreciation) | Value, End of Period | Dividend Income | Other Distributions | Shares End of Period |
MainStay U.S. Government Liquidity Fund | $ — | $ 944,993 | $ (944,993) | $ — | $ — | $ — | $ 3 | $ — | — |
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||
Asset Valuation Inputs | |||||||
Investments in Securities (a) | |||||||
Closed-End Funds | $ — | $ 64,313,318 | $ — | $ 64,313,318 | |||
Common Stocks | |||||||
Australia | — | 69,333,210 | — | 69,333,210 | |||
China | — | 74,524,131 | — | 74,524,131 | |||
France | — | 88,550,423 | — | 88,550,423 | |||
Hong Kong | — | 54,047,867 | — | 54,047,867 | |||
Ireland | — | 10,490,156 | — | 10,490,156 | |||
Italy | — | 101,543,684 | — | 101,543,684 | |||
Singapore | — | 63,724,413 | — | 63,724,413 | |||
Spain | 49,543,110 | 87,730,081 | — | 137,273,191 | |||
United Kingdom | — | 137,490,016 | — | 137,490,016 | |||
All Other Countries | 466,695,602 | — | — | 466,695,602 | |||
Total Common Stocks | 516,238,712 | 687,433,981 | — | 1,203,672,693 | |||
Convertible Preferred Stocks | 116,445,116 | — | — | 116,445,116 | |||
Corporate Bonds | — | 38,727,630 | — | 38,727,630 | |||
Preferred Stocks | 71,795,819 | — | — | 71,795,819 | |||
Total Investments in Securities | $ 704,479,647 | $ 790,474,929 | $ — | $ 1,494,954,576 |
(a) | For a complete listing of investments and their industries, see the Portfolio of Investments. |
Value | Percent | ||
Decarbonization | $ 778,061,842 | 72.2% | |
Asset Modernization | 516,612,276 | 48.0 | |
Digital Transformation | 200,280,458 | 18.6 | |
1,494,954,576 | 138.8 | ||
Line of Credit Borrowing | (427,000,000) | (39.6) | |
Other Assets, Less Liabilities | 9,296,833 | 0.8 | |
Net Assets | $1,077,251,409 | 100.0% |
† Percentages indicated are based on Fund net assets applicable to Common Shares |
12 | MainStay CBRE Global Infrastructure Megatrends Fund |
Assets | |
Investment in securities, at value (identified cost $1,466,287,184) | $1,494,954,576 |
Cash | 314,276 |
Cash denominated in foreign currencies (identified cost $101,082) | 101,101 |
Receivables: | |
Dividends and interest | 9,131,148 |
Investment securities sold | 3,691,867 |
Other assets | 38,986 |
Total assets | 1,508,231,954 |
Liabilities | |
Payable for Line of Credit | 427,000,000 |
Payables: | |
Investment securities purchased | 1,332,571 |
Manager (See Note 3) | 1,248,140 |
Shareholder communication | 289,805 |
Custodian | 73,265 |
Professional fees | 47,400 |
Transfer agent | 5,701 |
Trustees | 396 |
Accrued expenses | 39,605 |
Interest expense and fees payable | 943,662 |
Total liabilities | 430,980,545 |
Net assets applicable to Common shares | $1,077,251,409 |
Common shares outstanding | 52,047,534 |
Net asset value per Common share (Net assets applicable to Common shares divided by Common shares outstanding) | $ 20.70 |
Net Assets Applicable to Common Shares Consist of | |
Common shares, $0.001 par value per share, unlimited number of shares authorized | $ 52,048 |
Additional paid-in-capital | 1,040,557,027 |
1,040,609,075 | |
Total distributable earnings (loss) | 36,642,334 |
Net assets applicable to Common shares | $1,077,251,409 |
Investment Income (Loss) | |
Income | |
Dividends-unaffiliated (net of foreign tax withholding of $2,857,635) | $40,083,705 |
Interest | 1,321,426 |
Dividends-affiliated | 2,557 |
Total income | 41,407,688 |
Expenses | |
Manager (See Note 3) | 8,317,624 |
Interest expense and fees | 2,198,776 |
Excise tax | 341,605 |
Professional fees | 315,180 |
Shareholder communication | 309,423 |
Trustees | 131,189 |
Custodian | 105,436 |
Transfer agent | 18,868 |
Miscellaneous | 110,062 |
Total expenses | 11,848,163 |
Net investment income (loss) | 29,559,525 |
Realized and Unrealized Gain (Loss) | |
Net realized gain (loss) on: | |
Unaffiliated investment transactions | 6,631,492 |
Foreign currency transactions | (393,351) |
Net realized gain (loss) | 6,238,141 |
Net change in unrealized appreciation (depreciation) on: | |
Unaffiliated investments | 28,667,392 |
Translation of other assets and liabilities in foreign currencies | 19,411 |
Net change in unrealized appreciation (depreciation) | 28,686,803 |
Net realized and unrealized gain (loss) | 34,924,944 |
Net increase (decrease) in net assets to Common shares resulting from operations | $64,484,469 |
14 | MainStay CBRE Global Infrastructure Megatrends Fund |
for the period October 27, 2021 (commencement of operations) through May 31, 2022
2022 | |
Increase (Decrease) in Net Assets Applicable to Common Shares | |
Operations: | |
Net investment income (loss) | $ 29,559,525 |
Net realized gain (loss) | 6,238,141 |
Net change in unrealized appreciation (depreciation) | 28,686,803 |
Net increase (decrease) in net assets applicable to Common shares resulting from operations | 64,484,469 |
Distributions to Common shareholders | (28,183,740) |
Capital share transactions (Common shares): | |
Net proceeds from sales of shares | 1,040,850,680 |
Net increase (decrease) in net assets applicable to Common shares | 1,077,151,409 |
Net Assets Applicable to Common Shares | |
Beginning of period | 100,000 |
End of period | $1,077,251,409 |
for the period October 27, 2021 (commencement of operations) through May 31, 2022
Cash Flows From (Used in) Operating Activities: | |
Net increase in net assets resulting from operations | $ 64,484,469 |
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities: | |
Long term investments purchased | (1,614,041,463) |
Long term investments sold | 152,281,763 |
Amortization (accretion) of discount and premium, net | 2,103,989 |
Increase in investment securities sold receivable | (3,691,867) |
Increase in dividends and interest receivable | (9,131,148) |
Increase in other assets | (38,986) |
Increase in investment securities purchased payable | 1,332,571 |
Increase in professional fees payable | 47,400 |
Increase in custodian payable | 73,265 |
Increase in shareholder communication payable | 289,805 |
Increase in due to Trustees | 396 |
Increase in due to manager | 1,248,140 |
Increase in due to transfer agent | 5,701 |
Increase in accrued expenses | 39,605 |
Increase in interest expense and fees payable | 943,662 |
Net realized gain from investments | (6,631,492) |
Net change in unrealized (appreciation) depreciation on unaffiliated investments | (28,667,392) |
Net cash used in operating activities | (1,439,351,582) |
Cash Flows From (Used in) Financing Activities: | |
Proceeds from shares sold | 1,040,850,680 |
Proceeds from line of credit | 535,500,000 |
Payments on line of credit | (108,500,000) |
Cash distributions paid, net of change in Common share dividend payable | (28,183,740) |
Net cash from financing activities | 1,439,666,940 |
Effect of exchange rate changes on cash | 19 |
Net increase in cash | 315,377 |
Cash at beginning of period | 100,000 |
Cash at end of period | $ 415,377 |
Supplemental disclosure of cash flow information: | |
Cash | $314,276 |
Cash denominated in foreign currencies | 101,101 |
Total cash shown in the Statement of Cash Flows | $415,377 |
16 | MainStay CBRE Global Infrastructure Megatrends Fund |
October 27, 2021^ through May 31, | |
2022 | |
Net asset value at beginning of period applicable to Common shares | $ 20.00 |
Net investment income (loss) (a) | 0.58 |
Net realized and unrealized gain (loss) | 0.66 |
Total from investment operations | 1.24 |
Dividends and distributions to Common shareholders | (0.54) |
Dilution effect on net asset value from overallotment issuance | 0.00‡ |
Net asset value at end of period applicable to Common shares | $ 20.70 |
Market price at end of period applicable to Common shares | $ 18.65 |
Total investment return on market price (b) | (4.02)% |
Total investment return on net asset value (b) | 6.28% |
Ratios (to average net assets of Common shareholders)/ Supplemental Data: | |
Net investment income (loss) | 4.78%†† |
Net expenses (including interest expense and fees) (c)(d)(e) | 1.92%†† |
Interest expense and fees (f) | 0.36%†† |
Portfolio Turnover Rate | 12% |
Net assets applicable to Common shareholders at end of period (in 000’s) | $ 1,077,251 |
^ | Commencement of Operations |
‡ | Less than one cent per share. |
†† | Annualized. |
(a) | Per share data based on average shares outstanding during the year. |
(b) | Total investment return on market price is calculated assuming a purchase of a Common share at the market price on the first day and a sale on the last day business day of each month. Dividends and distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return on net asset value reflects the changes in net asset value during each period and assumes the reinvestment of dividends and distributions at net asset value on the last business day of each month. This percentage may be different from the total investment return on market price, due to differences between the market price and the net asset value. For periods less than one year, total investment return is not annualized. |
(c) | Net of Excise tax expense of 0.06%. |
(d) | In addition to the fees and expenses which the Fund bears directly, it also indirectly bears a pro-rata share of the fees and expenses of the underlying funds in which it invests. Such indirect expenses are not included in the above expense ratios. |
(e) | The expense ratio is higher than the Fund anticipates for a typical fiscal year due to the short fiscal period and the annualization of all expenses, some of which are fixed or non-recurring. |
(f) | Interest expense and fees relate to the Line of Credit borrowing (See Note 6). |
18 | MainStay CBRE Global Infrastructure Megatrends Fund |
• | Level 1—quoted prices in active markets for an identical asset or liability |
• | Level 2—other significant observable inputs (including quoted prices for a similar asset or liability in active markets, interest rates and yield curves, prepayment speeds, credit risk, etc.) |
• | Level 3—significant unobservable inputs (including the Fund's own assumptions about the assumptions that market participants would use in measuring fair value of an asset or liability) |
• Broker/dealer quotes | • Benchmark securities |
• Two-sided markets | • Reference data (corporate actions or material event notices) |
• Bids/offers | • Monthly payment information |
• Industry and economic events | • Reported trades |
20 | MainStay CBRE Global Infrastructure Megatrends Fund |
Federal Tax Cost | Gross Unrealized Appreciation | Gross Unrealized (Depreciation) | Net Unrealized Appreciation/ (Depreciation) | |
Investments in Securities | $1,469,142,284 | $86,652,432 | $(60,840,140) | $25,812,292 |
Ordinary income | Accumulated Capital and Other Gain (Loss) | Other Temporary Differences | Unrealized Appreciation (Depreciation) | Total Accumulated Gain (Loss) |
$10,810,632 | $— | $— | $25,831,702 | $36,642,334 |
Total Distributable Earnings (Loss) | Additional Paid-In Capital | |
$341,605 | $(341,605) |
2022 | |
Distributions paid from: | |
Ordinary Income | $28,183,740 |
22 | MainStay CBRE Global Infrastructure Megatrends Fund |
Common Shares | Shares | Amount |
Period October 27, 2021 (commencement of operations) through May 31, 2022: | ||
Shares sold | 52,042,534 | $1,040,850,680 |
24 | MainStay CBRE Global Infrastructure Megatrends Fund |
26 | MainStay CBRE Global Infrastructure Megatrends Fund |
28 |
30 |
• | Communication infrastructure companies are subject to risks involving changes in government regulation, competition, dependency on patent protection, equipment incompatibility, changing consumer preferences, technological obsolescence and large capital expenditures and debt burdens. |
• | Energy infrastructure companies are subject to adverse changes in fuel prices, the effects of energy conservation policies and other risks, such as increased regulation, negative effects of economic slowdowns, reduced demand, cleanup and litigation costs as a result of environmental damage, changing and international politics and regulatory policies of various governments. Natural disasters or terrorist attacks damaging sources of energy supplies will also negatively impact energy infrastructure companies. |
• | Social infrastructure companies/issuers are subject to government regulation and the costs of compliance with such regulations and delays or failures in receiving required regulatory approvals. The enactment of new or additional regulatory requirements may negatively affect the business of a social infrastructure company. |
• | Transportation infrastructure companies can be significantly affected by economic changes, fuel prices, labor relations, insurance costs and government regulations. Transportation infrastructure companies will also be negatively impacted by natural disasters or terrorist attacks. |
• | Utilities company revenues and costs are subject to regulation by states and other regulators. Regulatory authorities also may restrict a company's access to new markets. Utilities companies may incur unexpected increases in fuel and other operating costs. Utilities companies are also subject to considerable costs associated with environmental compliance, nuclear waste clean-up and safety regulation. |
32 |
• | political and economic instability; |
• | the impact of currency exchange rate fluctuations; |
• | reduced information about issuers; |
• | higher transaction costs; |
• | less stringent regulatory and accounting standards; and |
• | delayed settlement. |
34 |
• | Credit risk: Credit risk is the risk that an issuer, guarantor, or liquidity provider of a debt security may be unable or unwilling, or may be perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable or unwilling, to make timely principal and/or interest payments, or to otherwise honor its obligations. By purchasing a debt security, in certain circumstances, a buyer is effectively lending money to the issuer of that security. If the issuer does not pay back the loan, the holder of the security may experience a loss on its investment. Changes in an issuer's credit rating or the market's perception of an issuer's creditworthiness may also affect the value of the Fund's investment. Actual or perceived changes in economic, social, health, financial or political conditions in general or that affect a particular type of instrument, issuer, guarantor or counterparty can reduce the ability of the party to meet its obligations, which can affect the credit quality, liquidity and/or value of an instrument. The value of an instrument also may decline for reasons that relate directly to the issuer, guarantor or counterparty, such as management performance, financial leverage and reduced demand for goods and services. Although credit quality ratings may not accurately reflect the true credit risk or liquidity of an instrument, a change in the credit quality rating of an instrument or an issuer can have a rapid, adverse effect on the instrument's liquidity and make it more difficult to sell the instrument at an advantageous price or time. Credit ratings assigned by rating agencies are based on a number of factors and subjective judgments and, therefore, do not necessarily represent an issuer's actual financial condition or the volatility or liquidity of the security. |
• | Maturity risk: Maturity is the average expected repayment date of the Fund's portfolio, taking into account the expected final repayment dates of the securities in the portfolio. A debt security with a longer maturity may fluctuate in value more than a debt security with a shorter maturity. Therefore, the NAV of the Fund that holds debt securities with a longer average maturity may fluctuate in value more than the NAV of the Fund that holds debt securities with a shorter average maturity. 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. However, measures such as average duration may not accurately reflect the true interest rate sensitivity of the Fund's investments or its overall portfolio. |
• | Market risk: Like other securities, debt securities are subject to the forces of supply and demand. Low demand may negatively impact the price of a debt security. |
• | Interest rate risk: A variety of factors can cause interest rates to change, including central bank monetary policies, inflation rates and general economic conditions. The value of a debt security usually changes when interest rates change. Generally, when interest rates go up, the value of a debt security goes down and when interest rates go down, the value of a debt security goes up. During periods of very low or negative interest rates, the Fund's susceptibility to interest rate risk may be magnified, its yield may be diminished and its performance may be adversely affected. As of the date of this prospectus, interest rates in the United States and many parts of the world, including certain European countries, continue to be near recent historically low levels. These levels of interest rates (or negative interest rates) may magnify the risks associated with rising interest rates. The Fund may face a heightened level of interest rate risk due to certain changes or uncertainty in monetary policy, such as an interest rate increase by the Federal Reserve in response to inflationary pressure, among other reasons. For more information on the risks associated inflation, please see “Inflation Risk.” |
• | Extension risk and Prepayment risk: An issuer could exercise its right to pay principal on an obligation held by the Fund later than expected. This may happen when there is a rise in interest rates. Under these circumstances, the value of the obligation may decrease, and the Fund may also suffer from the inability to reinvest in higher yielding securities. An issuer may exercise its right to redeem outstanding debt securities prior to their maturity (known as a "call") or otherwise pay principal earlier than expected for a number of reasons (e.g., declining interest rates, changes in credit spreads and improvements in the issuer's credit quality). If an issuer calls or "prepays" a security in which the Fund has invested, the Fund may not recoup the full amount of its initial investment and may be required to reinvest in generally lower-yielding securities, securities with greater credit risks or securities with other, less favorable features or terms than the security in which the Fund initially invested. |
• | the likelihood of greater volatility of net asset value, market price and dividend rate of the common shares than a comparable portfolio without leverage; |
• | the risk that fluctuations in interest rates on borrowings and short-term debt or in the interest or dividend rates on any other leverage that the Fund must pay will reduce the return to the holders of the Fund's common shares; |
36 |
• | the effect of leverage in a declining market, which is likely to cause a greater decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the market price of the common shares; |
• | when the Fund uses leverage, the investment advisory fees payable to the Manager and the Subadvisor will be higher than if the Fund did not use leverage; and |
• | leverage may increase operating costs, which may reduce total return. |
38 |
40 |
MEGI | |
Common Share Total Return for (10.00)% Assumed Portfolio Total Return | -15.28% |
Common Share Total Return for (5.00)% Assumed Portfolio Total Return | -8.14 |
Common Share Total Return for 0.00% Assumed Portfolio Total Return | -0.99 |
Common Share Total Return for 5.00% Assumed Portfolio Total Return | 6.15 |
Common Share Total Return for 10.00% Assumed Portfolio Total Return | 13.29 |
42 |
Name and Year 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 Trustee | Other Directorships Held by Trustee | |
Yie-Hsin Hung* 1962 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since March 2021 | Senior Vice President of New York Life since joining in 2010, Member of the Executive Management Committee since 2017, Chief Executive Officer, New York Life Investment Management Holdings LLC & New York Life Investment Management LLC since 2015. Senior Managing Director and Co-President of New York Life Investment Management LLC from January 2014 to May 2015. Previously held positions of increasing responsibility, including head of NYLIM International, Alternative Growth Businesses, and Institutional investments since joining New York Life in 2010 | 78 | MainStay VP Funds Trust: Trustee since 2017 (31 portfolios); MainStay Funds: Trustee since 2017 (12 funds); MainStay Funds Trust: Trustee since 2017 (33 funds); MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2017; and Turtle Beach Corporation: Director since April 2021 |
* | This Trustee is considered to be an “interested person” of the MainStay Group of Funds, MainStay VP Funds Trust, MainStay CBRE Global Infrastructure Megatrends Fund and MainStay MacKay DefinedTerm Municipal Opportunities Fund, within the meaning of the 1940 Act because of her affiliation with New York Life Insurance Company, New York Life Investment Management LLC, Candriam Belgium S.A., Candriam Luxembourg S.C.A., IndexIQ Advisors LLC, MacKay Shields LLC, NYL Investors LLC, NYLIFE Securities LLC and/or NYLIFE Distributors LLC, as described in detail above in the column entitled “Principal Occupation(s) During Past Five Years.” |
44 | MainStay CBRE Global Infrastructure Megatrends Fund |
Name and Year 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 Trustee | Other Directorships Held by Trustee | |
David H. Chow 1957 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 and Audit Committee Financial Expert | Founder and CEO, DanCourt Management, LLC since 1999 | 78 | MainStay VP Funds Trust: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (31 portfolios); MainStay Funds: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (12 funds); MainStay Funds Trust: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (33 funds); MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2016, Advisory Board Member (June 2015 to December 2015); VanEck Vectors Group of Exchange- Traded Funds: Independent Chairman of the Board of Trustees since 2008 and Trustee since 2006 (56 portfolios); and Berea College of Kentucky: Trustee since 2009, Chair of Investment Committee since 2018 | |
Susan B. Kerley 1951 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 and Audit Committee Financial Expert | President, Strategic Management Advisors LLC since 1990 | 78 | MainStay VP Funds Trust: Chairman since 2017 and Trustee since 2007 (31 portfolios)***; MainStay Funds: Chairman since 2017 and Trustee since 2007 (12 funds); MainStay Funds Trust: Chairman since 2017 and Trustee since 1990 (33 funds)**; MainStay MacKay DefinedTerm Municipal Opportunities Fund: Chairman since 2017 and Trustee since 2011; and Legg Mason Partners Funds: Trustee since 1991 (45 portfolios) | |
Alan R. Latshaw 1951 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 and Audit Committee Financial Expert | 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) | 78 | MainStay VP Funds Trust: Trustee since 2007 (31 portfolios)***; MainStay Funds: Trustee since 2006 (12 funds); MainStay Funds Trust: Trustee since 2007 (33 funds)**; and MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2011 | |
Richard H. Nolan, Jr. 1946**** | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 | Managing Director, ICC Capital Management since 2004; President—Shields/Alliance, Alliance Capital Management (1994 to 2004) | 78 | MainStay VP Funds Trust: Trustee since 2006 (31 portfolios)***; MainStay Funds: Trustee since 2007 (12 funds); MainStay Funds Trust: Trustee since 2007 (33 funds)**; and MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2011 |
Name and Year 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 Trustee | Other Directorships Held by Trustee | |
Karen Hammond 1956 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since December 2021 and Audit Committee Financial Expert, Advisory Board Member (June 2021 to December 2021) | Retired; Managing Director, Devonshire Investors (2007 to 2013); Senior Vice President, Fidelity Management & Research Co. (2005 to 2007); Senior Vice President and Corporate Treasurer, FMR Corp. (2003 to 2005); Chief Operating Officer, Fidelity Investments Japan (2001 to 2003) | 78 | MainStay VP Funds Trust: Trustee since December 2021, Advisory Board Member (June 2021 to December 2021) (31 portfolios); MainStay Funds: Trustee since December 2021, Advisory Board Member (June 2021 to December 2021) (12 funds); MainStay Funds Trust: Trustee since December 2021, Advisory Board Member (June 2021 to December 2021) (33 funds); MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since December 2021, Advisory Board Member (June 2021 to December 2021); Two Harbors Investment Corp.: Director since 2018; Rhode Island School of Design: Director and Chair of the Finance Committee since 2015; and Blue Cross Blue Shield of Rhode Island: Director since 2019 | |
Jacques P. Perold 1958 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 | Founder and Chief Executive Officer, CapShift Advisors LLC since 2018; President, Fidelity Management & Research Company (2009 to 2014); President and Chief Investment Officer, Geode Capital Management, LLC (2001 to 2009) | 78 | MainStay VP Funds Trust: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (31 portfolios); MainStay Funds: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (12 funds); MainStay Funds Trust: Trustee since 2016, Advisory Board Member (June 2015 to December 2015) (33 funds); MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2016, Advisory Board Member (June 2015 to December 2015); Partners in Health: Trustee since 2019; Allstate Corporation: Director since 2015; and MSCI Inc.: Director since 2017 | |
Richard S. Trutanic 1952 | MainStay CBRE Global Infrastructure Megatrends Fund: Trustee since June 2021 | 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) | 78 | MainStay VP Funds Trust: Trustee since 2007 (31 portfolios)***; MainStay Funds: Trustee since 1994 (12 funds); MainStay Funds Trust: Trustee since 2007 (33 funds)**; and MainStay MacKay DefinedTerm Municipal Opportunities Fund: Trustee since 2011 |
** | Includes prior service as a Director/Trustee of certain predecessor entities to MainStay Funds Trust. |
*** | Includes prior service as a Director of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust. |
**** | Pursuant to the Board's retirement policy, Mr. Nolan retired from the Board effective December 31, 2021. |
46 | MainStay CBRE Global Infrastructure Megatrends Fund |
Name and Year of Birth | Position(s) Held and Length of Service | Principal Occupation(s) During Past Five Years | ||
Kirk C. Lehneis 1974 | President, MainStay CBRE Global Infrastructure Megatrends Fund since 2021 | Chief Operating Officer and Senior Managing Director since 2016, New York Life Investment Management LLC and New York Life Investment Management Holdings LLC; Member of the Board of Managers since 2017 and Senior Managing Director since 2018, NYLIFE Distributors LLC; Chairman of the Board and Senior Managing Director, NYLIM Service Company LLC since 2017; Trustee, President and Principal Executive Officer of IndexIQ Trust, IndexIQ ETF Trust and IndexIQ Active ETF Trust since 2018; President, MainStay MacKay DefinedTerm Municipal Opportunities Fund, MainStay Funds, MainStay Funds Trust and MainStay VP Funds Trust since January 2017**; Senior Managing Director, Global Product Development (2015 to 2016); Managing Director, Product Development (2010 to 2015), New York Life Investment Management LLC | ||
Jack R. Benintende 1964 | Treasurer and Principal Financial and Accounting Officer, MainStay CBRE Global Infrastructure Megatrends Fund since 2021 | Managing Director, New York Life Investment Management LLC since 2007; Treasurer and Principal Financial and Accounting Officer, MainStay Funds since 2007, MainStay Funds Trust since 2009, MainStay VP Funds Trust since 2007** and MainStay MacKay DefinedTerm Municipal Opportunities Fund since 2011; and Assistant Treasurer, New York Life Investment Management Holdings LLC (2008 to 2012) | ||
J. Kevin Gao 1967 | Secretary and Chief Legal Officer, MainStay CBRE Global Infrastructure Megatrends Fund since 2021 | Managing Director and Associate General Counsel, New York Life Investment Management LLC since 2010; Secretary and Chief Legal Officer, MainStay Funds, MainStay Funds Trust, MainStay VP Funds Trust since 2010** and MainStay MacKay DefinedTerm Municipal Opportunities Fund since 2011 | ||
Scott T. Harrington 1959 | Vice President— Administration, MainStay CBRE Global Infrastructure Megatrends Fund since 2021 | Managing Director, New York Life Investment Management LLC (including predecessor advisory organizations) since 2000; Member of the Board of Directors, New York Life Trust Company since 2009; Vice President—Administration, MainStay Funds since 2005, MainStay Funds Trust since 2005, MainStay VP Funds Trust since 2005**, and MainStay MacKay DefinedTerm Municipal Opportunities Fund since 2011 | ||
Kevin M. Bopp 1969 | Vice President and Chief Compliance Officer, MainStay CBRE Global Infrastructure Megatrends Fund since 2021 | Vice President and Chief Compliance Officer, New York Life Investments Alternatives LLC and New York Life Investment Management Holdings LLC (since 2020); Vice President (since 2018) and Chief Compliance Officer (since 2016), New York Life Investment Management LLC; Vice President and Chief Compliance Officer, IndexIQ Advisors LLC, IndexIQ Holdings Inc., IndexIQ LLC and IndexIQ Trust (since 2017); Director and Associate General Counsel (2011 to 2014) and Vice President and Assistant General Counsel (2010 to 2011), New York Life Investment Management LLC; Vice President and Chief Compliance Officer, MainStay Funds, MainStay Funds Trust and MainStay VP Funds Trust and MainStay MacKay DefinedTerm Municipal Opportunities Fund (since June 2021 and 2014 to 2020); Assistant Secretary, MainStay Funds, MainStay Funds Trust and MainStay VP Funds Trust (2010 to 2014)**, MainStay MacKay DefinedTerm Municipal Opportunities Fund (2011 to 2014) |
* | The officers listed above are considered to be “interested persons” of the MainStay Group of Funds, MainStay VP Funds Trust, MainStay CBRE Global Infrastructure Megatrends Fund and MainStay MacKay DefinedTerm Municipal Opportunities Fund within the meaning of the 1940 Act because of their affiliation with the MainStay Group of Funds, New York Life Insurance Company and/or its affiliates, including New York Life Investment Management LLC, NYLIM Service Company 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. |
** | Includes prior service as an Officer of MainStay VP Series Fund, Inc., the predecessor to MainStay VP Funds Trust. |
Louisville, Kentucky 40233
(855) 456-9683
1943565MS130-22 | MSMEGI11-07/22 |
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. Schedule II of the Code has been amended to name Kevin M. Bopp as the Compliance Officer. 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 (“Board”) has determined that the Registrant has three audit committee financial experts serving on its Audit Committee. The Audit Committee financial experts are Alan R. Latshaw, Karen Hammond and Susan B. Kerley. Mr. Latshaw, Ms. Hammond, and Ms. Kerley are “independent” as defined by Item 3 of Form N-CSR.
Item 4. | Principal Accountant Fees and Services. |
(a) Audit Fees
The aggregate fees billed for the fiscal year ended May 31, 2022 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 $29,500.
(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 $0 for the fiscal year ended May 31, 2022. 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) $0 during the fiscal year ended May 31, 2022.
(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 $0 during the fiscal year ended May 31, 2022, and (ii) $0 during the fiscal year ended May 31, 2021.
(e) Pre-Approval Policies and Procedures
(1) | The Registrant’s Audit 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, “Service Affiliates”) if the services directly relate to the Registrant’s operations and financial reporting. In accordance with the Procedures, the Audit 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 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 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 Committee if it is to be provided by the independent accountant. The Procedures also permit the Audit 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 Committee, subject to the ratification by the full Audit Committee no later than its next scheduled meeting. To date, the Audit 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 Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) There were no hours expended on PwC’s engagement to audit the Registrant’s financial statements for the most recent fiscal year was attributable to work performed by persons other than PwC’s full-time, permanent employees.
(g) All non-audit fees billed by PwC for services rendered to the Registrant for the fiscal years ended May 31, 2022 and May, 31, 2021 are disclosed in 4(b)-(d) above.
The aggregate non-audit fees billed by PwC for services rendered to the Registrant’s investment adviser (not including any subadvisor 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 $32,255 for the fiscal year ended May 31, 2022.
(h) The Registrant’s Audit Committee has determined that the non-audit services rendered by PwC for the fiscal year ended May 31, 2022 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 Committee because they did not relate directly to the operations and financial reporting of the Registrant were compatible with maintaining the respective independence of PwC during the relevant time period.
Item 5. | Audit Committee of Listed Registrants. |
(a) The Board has a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act (“Exchange Act”) (15 U.S.C. 78c(a)(58)(A)). The members of the Audit Committee are Alan R. Latshaw, Karen Hammond and Susan B. Kerley.
(b) Not applicable.
Item 6. | Investments. |
(a) | The Schedule of Investments is included as part of Item 1 of this report. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
It is the policy of the Fund that proxies received by the Fund are voted in the best interests of the Fund’s shareholders. The Board has adopted Proxy Voting Policies and Procedures for the Fund that delegate all responsibility for voting proxies received relating to the Fund’s portfolio securities to New York Life Investments, subject to the oversight of the Board. The Manager has adopted its own Proxy Voting Policies and Procedures in order to assure that proxies voted on behalf of the Fund are voted in the best interests of the Fund and their shareholders. Where a Fund has retained the services of a Subadvisor to provide day-to-day portfolio management for the Fund, the Manager may delegate proxy voting authority to the Subadvisor; provided that, as specified in the Manager’s Proxy Voting Policies and Procedures, the Subadvisor either (1) follows the Manager’s Proxy Voting Policy and the Fund’s Procedures; or (2) has demonstrated that its proxy voting policies and procedures are consistent with the Manager’s Proxy Voting Policies and Procedures or are otherwise implemented in the best interests of the Manager’s clients and appear to comply with governing regulations. The Fund may revoke all or part of this delegation (to the Manager and/or Subadvisors as applicable) at any time by a vote of the Board.
Conflicts of Interest. When a proxy presents a conflict of interest, such as when the Manager has actual knowledge of a material business arrangement between a particular proxy issuer or closely affiliated entity and the Manager or an affiliated entity of the Manager, both the Fund’s and the Manager’s proxy voting policies and procedures mandate that the Manager follow an alternative voting procedure rather than voting proxies in its sole discretion. In these cases, the Manager may: (1) cause the proxies to be voted in accordance with the recommendations of an independent service provider; (2) notify the Board or a designated committee of the Manager, or a representative of either of the conflict of interest and seek a waiver of the conflict to permit the Manager to vote the proxies as it deems appropriate and in the best interest of Fund shareholders, under its usual policy; or (3) forward the proxies to the Board, or a designated committee of the Manager, so that the Board or the committee may vote the proxies itself. In the case of proxies received in connection with a fund of funds structure, whereby the Manager, on behalf of the Fund, receives proxies in its capacity as a shareholder in an affiliated underlying fund, the Manager may vote in accordance with its predetermined or custom voting guidelines, if applicable. If there is no relevant predetermined guideline, the Manager will vote in accordance with the recommendation of its independent service provider, Institutional Shareholder Services Inc. (“ISS”). If ISS does not provide a recommendation, the Manager then may address the conflict by “echoing” or “mirroring” the vote of the other shareholders in the affiliated underlying fund.
In the case of proxies received in connection with a fund of funds structure, whereby the Manager, on behalf of a Fund, receives proxies in its capacity as a shareholder in an unaffiliated underlying fund, where the Fund relies on Section 12(d)(1)(F) of the 1940 Act, the Fund will either seek instructions from its shareholders as to how to vote shares of the unaffiliated underlying fund, or vote the shares in the same proportion as the vote of all other shareholders of the acquired fund or “echoing” or “mirroring” the vote of the other shareholders in the affiliated underlying fund.
As part of its delegation of proxy voting responsibility to the Manager, the Fund also delegated to the Manager responsibility for resolving conflicts of interest based on the use of acceptable alternative voting procedures, as described above. If the Manager chooses to override a voting recommendation made by ISS, the Manager’s compliance department will review the override prior to voting to determine the existence of any potential conflicts of interest. If the compliance department determines a material conflict may exist, the issue is referred to the Manager’s Proxy Voting Committee who will consider the facts and circumstances and determine whether to allow the override or take other action, such as the alternative voting procedures just mentioned.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
(a)(1) The Registrant’s portfolio is managed on a team basis. As of May 31, 2022, the following persons are primarily responsible for the day-to-day management of the registrant’s portfolio.
Jeremy Anagnos, CFA. Mr. Anagnos has managed the MainStay CBRE Global Infrastructure Megatrends Fund since 2021 and the MainStay CBRE Global Infrastructure Fund since 2019. Prior to joining CBRE in 2011, he served as Co-Chief Investment Officer of CB Richard Ellis Investors’ Securities Team responsible for portfolio management of global real estate securities separate accounts and funds. Mr. Anagnos was a founder of the securities group at CBRE and assisted in raising over $3 billion in assets as well as overseeing the global 28 member investment and operations team. During his career, he has worked in various management and research positions in the real estate industry with LaSalle Investment Management in Baltimore/Amsterdam and Deutsche Bank in London. Mr. Anagnos has over 24 years of real asset investment management experience. He has a B.S. from Boston College and is a Chartered Financial Analyst® (“CFA®”) charterholder.
Daniel Foley, CFA. Mr. Foley has managed the MainStay CBRE Global Infrastructure Megatrends Fund since 2021 and the MainStay CBRE Global Infrastructure Fund since 2019. He joined CBRE in 2006, and has over 13 years of financial industry experience. In his tenure with CBRE and its predecessor firm, Mr. Foley has gained extensive, multi-disciplined experience evaluating real asset securities spanning developed and emerging markets across the globe. During his long tenure with the firm, he has covered wide-ranging business models. Mr. Foley has an M.B.A. from Villanova University and a B.S. from Drexel University. He is also a CFA® charterholder.
Hinds Howard. Mr. Howard has managed the MainStay CBRE Global Infrastructure Megatrends Fund since 2021 and the MainStay CBRE Global Infrastructure Fund since 2019 and also managed its Predecessor Fund. He joined CBRE in 2013. Prior to that, he was a portfolio manager and partner managing separate accounts with an MLP investment focus at Guzman Investment Strategies. Prior to Guzman, Mr. Howard co-founded and managed Curbstone Group, a Texas-based registered investment advisor firm that managed MLP portfolios on behalf of high net worth clients. He previously worked for Lehman Brothers analyzing and modeling public and private energy MLPs, first in the investment banking division and subsequently for an investment fund investing in MLPs. Mr. Howard has over 15
years of listed MLP and North American energy investment experience. He has an M.B.A. from Babson College and a B.S. from Boston University.
Joseph Smith, CFA. Mr. Smith has managed the MainStay CBRE Global Infrastructure Megatrends Fund since 2021 and the MainStay CBRE Global Infrastructure Fund since 2021. He joined CBRE’s predecessor firm in 1997. Prior to that, Mr. Smith worked in various management and analyst positions in the real estate industry including positions at Alex Brown & Sons, PaineWebber and Radnor Advisors. Mr. Smith has over 29 years of real estate investment management experience. He has his B.S. from Villanova University and his M.B.A. from the Wharton School, University of Pennsylvania. He is also a CFA® charterholder.
(a)(2) Other Accounts Managed by Portfolio Managers or Management Team Member and Potential Conflicts of Interest as of May 31, 2022.
NUMBER OF OTHER ACCOUNTS MANAGED AND ASSETS BY ACCOUNT TYPE | NUMBER OF ACCOUNTS AND ASSETS MANAGED FOR WHICH THE ADVISORY FEE IS BASED ON PERFORMANCE | |||||||||||
PORTFOLIO MANAGER | REGISTERED INVESTMENT COMPANY | OTHER POOLED INVESTMENT VEHICLES | OTHER ACCOUNTS | REGISTERED INVESTMENT COMPANY | OTHER POOLED INVESTMENT VEHICLES | OTHER ACCOUNTS | ||||||
Jeremy Anagnos | 3 RICs $3,333,470,009 | 4 Accounts $635,795,015 | 10 Accounts $1,068,409,301 | 0 RICs $0 | 1 Accounts $25,628,172 | 0 Accounts $0 | ||||||
Daniel Foley | 3 RICs $3,333,470,009 | 3 Accounts $595,624,486 | 10 Accounts $1,068,409,301 | 0 RICs $0 | 0 Accounts $0 | 0 Accounts $0 | ||||||
Hinds Howard | 3 RICs $3,333,470,009 | 3 Accounts $610,166,843 | 10 Accounts $1,068,409,301 | 0 RICs $0 | 0 Accounts $0 | 0 Accounts $0 | ||||||
Joseph Smith | 8 RICs $6,641,166,352 | 10 Accounts $1,186,515,703 | 21 Accounts $2,156,932,502 | 0 RICs $0 | 1 Accounts $25,628,172 | 6 Accounts $197,601,805 |
Potential Conflicts of Interest
Certain portfolio managers who are responsible for managing certain institutional accounts share a performance fee based on the performance of the account. These accounts are distinguishable from the Fund because they use techniques that are not permitted for the Fund, such as short sales and leveraging.
A portfolio manager who makes investment decisions with respect to the Fund and/or other accounts, including accounts in which the portfolio manager is personally invested, may be presented with one or more of the following potential conflicts:
• | The management of multiple funds and/or accounts may result in the portfolio manager devoting unequal time and attention to the management of each fund and/or account; |
• | If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one fund or account managed by the portfolio manager, the Fund may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible funds and accounts managed by the portfolio manager; |
• | A portfolio manager may take a position for a fund or account in a security that is contrary to the position held in the same security by other funds or accounts managed by the portfolio manager. For example, the portfolio manager may sell certain securities short for one fund or account while other funds or accounts managed by the portfolio manager simultaneously hold the same or related securities long; and |
• | An apparent conflict may arise where an adviser receives higher fees from certain funds or accounts that it manages than from others, or where an adviser receives a performance-based fee from certain funds or accounts that it manages and not from others. In these cases, there may be an incentive for a portfolio manager to favor the higher and/or performance-based fee funds or accounts over other funds or accounts managed by the portfolio manager. |
To address potential conflicts of interest, New York Life Investments and the Subadvisor have adopted various policies and procedures to provide for equitable treatment of trading activity and to ensure that investment opportunities are allocated in a fair and appropriate manner. In addition, New York Life Investments has adopted a Code of Ethics that recognizes the Manager’s obligation to treat all of its clients, including the Fund, fairly and equitably. These policies, procedures and the Code of Ethics are designed to restrict the portfolio manager from favoring one client over another. There is no guarantee that the policies, procedures and the Code of Ethics will be successful in every instance.
A portfolio manager may be subject to potential conflicts of interest because the portfolio manager is responsible for other accounts in addition to the Fund. These accounts may include, among others, other closed-end funds, mutual funds, separately managed advisory accounts, commingled trust accounts, insurance separate accounts, wrap fee programs and hedge funds. Potential conflicts may arise out of the implementation of differing investment strategies for a portfolio manager’s various accounts, the allocation of investment opportunities among those accounts or differences in the advisory fees paid by the portfolio manager’s accounts.
A potential conflict of interest may arise as a result of a portfolio manager’s responsibility for multiple accounts with similar investment guidelines. Under these circumstances, a potential investment may be suitable for more than one of the portfolio manager’s accounts, but the quantity of the investment available for purchase is less than the aggregate amount the accounts would ideally devote to the opportunity. Similar conflicts may arise when multiple accounts seek to dispose of the same investment.
A portfolio manager may also manage accounts whose objectives and policies differ from those of the Fund. These differences may be such that under certain circumstances, trading activity appropriate for one account managed by a portfolio manager may have adverse consequences for another account managed by the portfolio manager. For example, if an account were to sell a significant position in a security, which could cause the market price of that security to decrease while the Fund maintained its position in that security.
A potential conflict may arise when a portfolio manager is responsible for accounts that have different advisory fees – the difference in the fees may create an incentive for the portfolio manager to favor one account over another, for example, in terms of access to particularly appealing investment opportunities. This conflict may be heightened where an account is subject to a performance-based fee.
CBRE recognizes the duty of loyalty it owes to its client and has established and implemented certain policies and procedures designed to control and mitigate conflicts of interest arising from the execution of a variety of portfolio management and trading strategies across the firm’s diverse client base. Such policies and procedures include but are not limited to: (i) investment process, portfolio management and trade allocation procedures; (ii) procedures regarding short sales in securities recommended for other clients; and (iii) procedures regarding personal trading by the firm’s employees (contained in the Code of Ethics).
(a)(3) | Portfolio Managers or Management Team Members’ Compensation Structure |
The Subadvisor has in place a compensation program for all eligible investment and non-investment employees that is consistent with its business strategy, objectives, values and long-term interests. Moreover, this program encourages an alignment of long-term interests between the Subadvisor and Fund shareholders. The Subadvisor has structured its compensation plan to be competitive with other investment management firms.
Compensation for each Portfolio Manager is structured to align with the interests of Fund shareholders by incentivizing performance without placing emphasis on unreasonable risk taking. Further, to balance any potential conflict or disparate treatment of clients, Portfolio Managers are evaluated on a variety of firm-level criteria. Portfolio Manager compensation is structured as follows:
• | Base Salary— Each Portfolio Manager receives a base salary. Base salaries have been established at competitive market levels and are set forth in the Portfolio Manager’s employment agreement. While base salaries are reviewed periodically by the Subadvisor’s Compensation Committee and its Board of Directors, adjustments are relatively infrequent. |
• | Bonus— Portfolio Manager bonuses are drawn from an incentive compensation pool into which a significant percentage of firm’s pre-tax profits is set aside. Incentive compensation allocations are determined by the Subadvisor’s Compensation Committee based on a variety of factors, including the performance of particular investment strategies. To avoid the pitfalls of relying solely on a rigid performance format, however, incentive compensation decisions also take into account other important factors, such as the Portfolio Manager’s contribution to the team, firm, and overall investment process. Incentive compensation allocations are reported to the Subadvisor’s Board of Directors, though the Board’s approval is not required. |
• | Deferred Compensation— The Subadvisor requires deferral of a percentage of incentive compensation exceeding a certain threshold with respect to a single fiscal year. The Subadvisor’s Compensation Committee may, in its discretion, require the deferral of additional amounts. Such deferred amounts are subject to the terms of a Deferred Bonus Plan adopted by the Subadvisor’s Board of Directors. The purpose of the Deferred Bonus Plan is to foster the retention of key employees, to focus plan participants on value creation and growth, and to encourage continued cooperation among key employees in providing services to the Subadvisor’s clients, including the Fund. The value of deferred bonus amounts is tied to the performance of investment funds managed by the Subadvisor, as chosen by the Compensation Committee, although the Committee may elect to leave a portion of the assets un-invested. Deferred compensation vests incrementally, one-third after two years, three years and four years. The Deferred Bonus Plan provides for forfeiture upon voluntary termination of employment, termination for cause, or conduct detrimental to the firm. |
• | Profit Participation— Certain Portfolio Managers are equity owners and either own shares of the Subadvisor’s equity or participates in a bonus program featuring awards tied to Subadvisor’s operating income. Some shares remain unvested, and the owners will forfeit these shares if they voluntarily resign. Income-linked bonus awards are paid out on a deferred basis, and participants will forfeit the unpaid portion of an award if they voluntarily resign. |
Other Compensation— Portfolio Managers participate in benefit plans and programs available to all employees, such as the Subadvisor’s 401(k) plan.
(a)(4) | Disclosure of Securities Ownership |
The following table states, as of May 31, 2022, the dollar range of fund securities beneficially owned by each Portfolio Manager in the Registrant ($1-$10,000, $10,001-$50,000, $50,001-$100,000, $100,001- $500,000, $500,001-$1,000,000, or over $1,000,000).
PORTFOLIO MANAGER | RANGE OF OWNERSHIP | |||
Jeremy Anagnos | $100,001- $500,000 | |||
Daniel Foley | $10,001-$50,000 | |||
Hinds Howard | $10,001-$50,000 | |||
Joseph Smith | $100,001- $500,000 |
(b) | Changes in Portfolio Management |
Not applicable
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
There have been no purchases of equity securities by or on behalf of the Registrant of shares or other units of any registered class of the Registrant’s equity securities.
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 Board.
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, as amended (“1940 Act”) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act) (“Disclosure Controls”), as of a date within 90 days prior to the filing date (“Filing Date”) of this Form N-CSR (“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 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. | Disclosure of Securities Lending Activities for Closed End Management Investment Companies. |
Not applicable
Item 13. | Exhibits. |
(a)(1) Code of Ethics
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.
MAINSTAY CBRE GLOBAL INFRASTRUCTURE MEGATRENDS FUND
By: | /s/Kirk C. Lehneis | |
Kirk C. Lehneis President and Principal Executive Officer | ||
Date: | August 5, 2022 |
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/ Kirk C. Lehneis | |
Kirk C. Lehneis President and Principal Executive Officer | ||
Date: | August 5, 2022 | |
By: | /s/ Jack R. Benintende | |
Jack R. Benintende Treasurer and Principal Financial and Accounting Officer | ||
Date: | August 5, 2022 |