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)
Marguerite E.H. Morrison, Esq.
169 Lackawanna Avenue
Parsippany, NJ 07054
(Name and address of agent for service)
Registrant's telephone number, including area code: (973) 394-4437
Date of fiscal year end: October 31
Date of reporting period: 7/1/04-6/30/05
Item 1. Reports to Stockholders.
(MAINSTAY LOGO)
MAINSTAY
LARGE CAP GROWTH FUND
The MainStay Funds
Annual Report
June 30, 2005
This page intentionally left blank
2 MainStay Large Cap Growth Fund
MESSAGE FROM
THE PRESIDENT
During the 12 months ended June 30, 2005, stocks and bonds both advanced, with
most major indexes recording reasonable gains. Real estate investment trusts and
emerging-market debt were particularly strong during the 12-month reporting
period. The stock market's advance was uneven, as investors reacted to the U.S.
presidential election, continuing geopolitical tensions, and mixed economic
news.
Investors showed a strong preference for value stocks over growth stocks at all
capitalization levels during the reporting period. The rising price of oil
helped energy-related companies record impressive gains. Technology companies,
on the other hand, generally declined during the 12-month period.
At the end of June 2004, the Federal Open Market Committee raised the targeted
federal funds rate for the first time since May of 2000. In the year that
followed, the Federal Open Market Committee raised the federal funds target rate
an additional eight times, with a 25-basis-point increase on each occasion. (A
basis point is one-hundredth of one percentage point.) At the end of June 2005,
the federal funds target rate stood at 3.25%, which the Federal Open Market
Committee believed was still accommodative. Although bonds usually suffer when
short-term rates rise, substantial purchases from foreign investors helped
longer-term bonds provide attractive returns for the 12 months ended June 30,
2005.
Even in volatile markets, MainStay Large Cap Growth Fund pursues its investment
objective by seeking to consistently apply an established investment approach.
By sticking closely to the Fund's investment strategies and investment process
as outlined in the Prospectus, the portfolio managers seek competitive returns
for shareholders over full market cycles. They also seek to avoid style drift,
which could detract from the role individual Funds are designed to play in a
diversified portfolio.
The report that follows provides more detailed information about the specific
securities, market forces, and management decisions that affected your MainStay
Large Cap Growth Fund investment during the 12 months ended June 30, 2005. We
appreciate the confidence and trust you have placed in The MainStay Funds, and
we look forward to serving your investment needs for many years to come.
Sincerely,
/s/ Christopher O. Blunt
Christopher O. Blunt
President
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TABLE OF CONTENTS
<Table>
Message from the President 3
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Investment and Performance Comparison 4
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Portfolio Management Discussion and Analysis 9
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Portfolio of Investments 12
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Financial Statements 14
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Notes to Financial Statements 18
Report of Independent Registered Public Accounting Firm 23
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Trustees and Officers 24
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Proxy Voting Policies and Procedures 27
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Shareholder Reports and Quarterly Portfolio Disclosure 27
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MainStay Funds 28
</Table>
www.MAINSTAYfunds.com 3
INVESTMENT AND PERFORMANCE COMPARISON (UNAUDITED)
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. DUE TO MARKET VOLATILITY, CURRENT PERFORMANCE MAY
BE LESS OR HIGHER THAN THE FIGURES SHOWN. INVESTMENT RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT UPON REDEMPTION, SHARES MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST. FOR CURRENT TO THE MOST RECENT MONTH-END PERFORMANCE
INFORMATION, PLEASE CONTACT 1-800-MAINSTAY (1-800-624-6782) OR VISIT
WWW.MAINSTAYFUNDS.COM. PERFORMANCE DATA SHOWN EXCLUDING SALES CHARGES DOES NOT
REFLECT THE DEDUCTION OF ANY SALES LOAD, WHICH, IF REFLECTED, WOULD REDUCE
PERFORMANCE QUOTED.
CLASS A SHARES--MAXIMUM 5.5% INITIAL SALES CHARGE
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<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- -----------------------------------------------
With sales charges 1.96% -5.61% 6.36%
Excluding sales charges 7.89 -4.53 6.96
</Table>
(LINE GRAPH FOR CLASS A SHARES IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 9450 10000 10000
11869 12781 12600
13154 16787 16972
17608 22056 22091
19055 28070 27119
23352 35274 29084
18555 22514 24771
14346 16551 20315
14492 17037 20366
17164 20083 24258
6/30/05 18518 20421 25792
</Table>
CLASS B SHARES--MAXIMUM 5% CDSC IF REDEEMED WITHIN THE FIRST SIX YEARS OF
PURCHASE
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- -----------------------------------------------
With sales charges 2.28% -5.59% 6.18%
Excluding sales charges 7.28 -5.21 6.18
</Table>
(LINE GRAPH FOR CLASS B SHARES IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 10000 10000 10000
12466 12781 12600
13713 16787 16972
18218 22056 22091
19568 28070 27119
23801 35274 29084
18770 22514 24771
14404 16551 20315
14442 17037 20366
16976 20083 24258
6/30/05 18213 20421 25792
</Table>
CLASS C SHARES--MAXIMUM 1% CDSC IF REDEEMED WITHIN ONE YEAR OF PURCHASE
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- -----------------------------------------------
With sales charges 6.07% -5.25% 6.16%
Excluding sales charges 7.07 -5.25 6.16
</Table>
(LINE GRAPH FOR CLASS C SHARES IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 10000 10000 10000
12466 12781 12600
13713 16787 16972
18218 22056 22091
19568 28070 27119
23801 35274 29084
18770 22514 24771
14404 16551 20315
14442 17037 20366
16976 20083 24258
6/30/05 18177 20421 25792
</Table>
Performance tables and graphs do not reflect the deduction of taxes that a
shareholder would pay on distributions or Fund-share redemptions. Total returns
reflect change in share price, reinvestment of dividend and capital-gain
distributions, and maximum applicable sales charges explained in this paragraph.
The graphs assume an initial investment of $10,000 and reflect the deduction of
all sales charges that would have applied for the period of investment. Class A
shares are sold with a maximum initial sales charge of 5.5% and an annual 12b-1
fee of .25%. Class B shares are sold with no initial sales charge, are subject
to a contingent deferred sales charge (CDSC) of up to 5% if redeemed within the
first six years of purchase, and have an annual 12b-1 fee of 1.00%. Class C
shares are sold with no initial sales charge, are subject to a CDSC of 1% if
redeemed within one year of purchase, and have an annual 12b-1 fee of 1.00%.
Class I shares are sold with no initial sales charge or CDSC, have no annual
12b-1 fee, and are generally available to corporate and institutional investors
with a minimum initial investment of $5 million. Class R1 shares are sold with
no initial sales charge or CDSC and have no annual 12b-1 fee.
THE DISCLOSURE AND FOOTNOTES ON THE FOLLOWING TWO PAGES ARE AN INTEGRAL PART OF
THE TABLES AND GRAPHS AND SHOULD BE CAREFULLY READ IN CONJUNCTION WITH THEM.
4 MainStay Large Cap Growth Fund
CLASS I SHARES--NO SALES CHARGE
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ---------------------------------------------
8.31% -4.27% 7.24%
</Table>
(LINE GRAPH FOR CLASS I IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 10000 10000 10000
12592 12781 12600
13990 16787 16972
18773 22056 22091
20367 28070 27119
25022 35274 29084
19932 22514 24771
15449 16551 20315
15646 17037 20366
18577 20083 24258
6/30/05 20119 20421 25792
</Table>
CLASS R1 SHARES--NO SALES CHARGE
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ---------------------------------------------
8.01% -4.40% 7.12%
</Table>
(LINE GRAPH FOR CLASS R1 IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 10000 10000 10000
12579 12781 12600
13962 16787 16972
18717 22056 22091
20285 28070 27119
24897 35274 29084
19812 22514 24771
15341 16551 20315
15521 17037 20366
18410 20083 24258
6/30/05 19885 20421 25792
</Table>
CLASS R2 SHARES--NO SALES CHARGE
- --------------------------------------------------------------------------------
<Table>
<Caption>
AVERAGE ANNUAL ONE FIVE TEN
TOTAL RETURNS YEAR YEARS YEARS
- ---------------------------------------------
7.60% -4.66% 6.83%
</Table>
(LINE GRAPH FOR CLASS R2 IN $)
<Table>
<Caption>
MAINSTAY LARGE CAP RUSSELL 1000 GROWTH
GROWTH FUND INDEX S&P 500 INDEX
------------------ ------------------- -------------
6/30/95 10000 10000 10000
12547 12781 12600
13892 16787 16972
18577 22056 22091
20084 28070 27119
24587 35274 29084
19517 22514 24771
15075 16551 20315
15214 17037 20366
18000 20083 24258
6/30/05 19367 20421 25792
</Table>
<Table>
<Caption>
ONE FIVE TEN
BENCHMARK PERFORMANCE YEAR YEARS YEARS
- -----------------------------------------------------------------
Russell 1000(R) Growth Index(1) 1.68% -10.36% 7.40%
S&P 500(R) Index(2) 6.32 -2.37 9.94
Average Lipper large-cap growth fund(3) 2.90 -8.81 6.90
</Table>
Class R2 shares are sold with no initial sales charge or CDSC and have an annual
12b-1 fee of .25%. Class R1 and Class R2 shares are only available through
corporate-sponsored retirement programs, which include certain minimum program
requirements. Performance figures reflect certain fee waivers and/or expense
limitations, without which total returns may have been lower. The fee waivers
and/or expense limitations are voluntary and may be discontinued at any time. On
4/1/05, FMI Winslow Growth Fund was reorganized as MainStay Large Cap Growth
Fund Class A shares. Performance for MainStay Large Cap Growth Fund Class A
shares, first offered 4/1/05, includes the historical performance of FMI Winslow
Growth Fund from inception (7/1/95) through 3/31/05 adjusted to reflect the
applicable sales charge and fees and expenses for such shares. Performance for
Class B, C, and I shares, first offered 4/1/05, includes the performance of
Class A shares adjusted to reflect the applicable sales charge (or CDSC) and
fees and expenses for Class B, C, and I shares.
THE DISCLOSURE AND FOOTNOTES ON THE PRECEDING PAGE AND THE FOLLOWING PAGE ARE AN
INTEGRAL PART OF THE TABLES AND GRAPHS AND SHOULD BE CAREFULLY READ IN
CONJUNCTION WITH THEM.
www.MAINSTAYfunds.com 5
Prior to the reorganization, FMI Winslow Growth Fund had no sales charge and its
total net expenses were capped at 1.30%. The total expenses of MainStay Large
Cap Growth Fund are currently capped at 1.40%. Fund performance for all shares
classes prior to 4/1/05 has not been adjusted to reflect the current expense
cap; had it been, the performance shown would have been lower.
1. The Russell 1000(R) Growth Index is an unmanaged index that measures the
performance of those Russell 1000(R) companies with higher price-to-book
ratios and higher forecasted growth values. The Russell 1000(R) Index is an
unmanaged index that measures the performance of the 1,000 largest U.S.
companies based on total market capitalization. Results assume the
reinvestment of all income and capital gains. The Russell 1000(R) Growth
Index is considered to be the Fund's broad-based securities-market index for
comparison purposes. An investment cannot be made directly into an index.
2. "S&P 500(R)" is a trademark of The McGraw-Hill Companies, Inc. The S&P 500(R)
is an unmanaged index and is widely regarded as the standard for measuring
large-cap U.S. stock-market performance. Results assume reinvestment of all
income and capital gains. An investment cannot be made directly into an
index.
3. Lipper Inc. is an independent fund performance monitor. Results are based on
total returns with all dividend and capital-gain distributions reinvested.
On 4/1/05, FMI Winslow Growth Fund was reorganized as MainStay Large Cap Growth
Fund Class A shares. Effective 6/29/05, MainStay Blue Chip Growth Fund, which
had assets of $234.1 million, merged into MainStay Large Cap Growth Fund, which
had assets of $16.5 million. Performance for MainStay Large Cap Growth Fund
includes the performance history of FMI Winslow Growth Fund from inception
(7/1/95) through 3/31/05, during which time FMI Winslow Growth Fund's asset size
generally was in the range of $4 million to $52 million. Performance history
shown for MainStay Large Cap Growth Fund through 3/31/05, therefore, reflects
performance of a much smaller portfolio than the current MainStay Large Cap
Growth Fund. Performance shown may not be indicative of what performance would
have been had the portfolio been larger.
THE DISCLOSURE AND FOOTNOTES ON THE TWO PRECEDING PAGES ARE AN INTEGRAL PART OF
THE TABLES AND GRAPHS 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
The example below is intended to describe the fees and expenses borne by
shareholders during the reporting period 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 redemption fees, if applicable, exchange fees, and sales
charges (loads) on purchase payments, and (2) ongoing costs, including
management fees, distribution and/or service (12b-1) fees, and other Fund
expenses. 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 period and held for the entire period
from January 1, 2005, to June 30, 2005.
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 over the period. 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 balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and 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
redemption fees, if applicable, 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.
<Table>
<Caption>
ENDING ACCOUNT ENDING ACCOUNT
VALUE (BASED VALUE (BASED
BEGINNING ON ACTUAL EXPENSES ON HYPOTHETICAL EXPENSES
ACCOUNT RETURNS AND PAID 5% RETURN AND PAID
VALUE EXPENSES) DURING ACTUAL EXPENSES) DURING
SHARE CLASS 1/1/05 6/30/05 PERIOD 6/30/05 PERIOD
CLASS A SHARES(1) $1,000.00 $ 997.95 $6.72 $1,018.25 $6.79
- -------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES(2,3) $1,000.00 $1,001.23 $5.30 $1,019.63 $5.35
- -------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES(2,3) $1,000.00 $ 999.23 $5.30 $1,019.63 $5.35
- -------------------------------------------------------------------------------------------------------------------------
CLASS I SHARES(2,3) $1,000.00 $1,003.15 $2.52 $1,022.45 $2.54
- -------------------------------------------------------------------------------------------------------------------------
CLASS R1 SHARES(2,3) $1,000.00 $1,001.20 $2.76 $1,022.20 $2.79
- -------------------------------------------------------------------------------------------------------------------------
CLASS R2 SHARES(2,3) $1,000.00 $ 999.18 $3.38 $1,021.58 $3.41
- -------------------------------------------------------------------------------------------------------------------------
</Table>
1. Expenses are equal to the Fund's annualized expense ratio of 1.35% for Class
A multiplied by the average account value over the period, divided by 365,
multiplied by 182 (to reflect the one-half year period).
2. Expenses are equal to the Fund's annualized expense ratio (2.15% for Class B
and Class C, 1.02% for Class I, 1.12% for Class R1, and 1.37% for Class R2)
multiplied by the average account value over the period, divided by 365,
multiplied by 90, (to reflect the three month period).
3. Class B, C, I, R1 and R2 shares were first offered on April 1, 2005. Expenses
paid during the period reflect ongoing costs for the three-month period
ending June 30, 2005. Had Class B, C, I, R1 and R2 shares been offered for
the six months ended June 30, 2005 based on a hypothetical 5% return,
expenses paid during the period would be $10.80, $10.80, $5.14, $5.64 and
$6.89 respectively, and the ending account value would be $1,014.25,
$1,014.25, $1,019.90, $1,019.40, $1,018.15, respectively.
www.MAINSTAYfunds.com 7
PORTFOLIO COMPOSITION AS OF JUNE 30, 2005
(PORTFOLIO COMPOSITION PIE CHART)
<Table>
Common Stocks 95.3
Cash and Other Assets (less liabilities) 2.5
Short-Term Investment 2.2
</Table>
See Portfolio of Investments on page 12 for specific holdings within these
categories.
TOP TEN HOLDINGS AS OF JUNE 30, 2005 (EXCLUDING SHORT-TERM INVESTMENTS)
<Table>
1. Caremark Rx, Inc.
2. UnitedHealth Group, Inc.
3. Google, Inc.
4. Fisher Scientific International, Inc.
5. Procter & Gamble Co. (The)
6. SLM Corp.
7. Dell, Inc.
8. XTO Energy, Inc.
9. Microsoft Corp.
10. General Electric Co.
</Table>
8 MainStay Large Cap Growth Fund
PORTFOLIO MANAGEMENT DISCUSSION AND ANALYSIS
Questions answered by portfolio managers Clark J. Winslow, Justin Kelly, CFA,
and Bart Wear, CFA, of Winslow Capital Management, Inc.
CAN YOU BRIEFLY DESCRIBE THE FUND'S INVESTMENT APPROACH?
The Fund invests in companies that have the potential for above-average future
earnings growth and the prospect of exceeding consensus earnings estimates.
Under normal circumstances, the Fund invests at least 80% of its total assets in
large-capitalization companies. These are companies having a market
capitalization in excess of $4.0 billion at the time of purchase and generally
are improving their financial returns. In implementing this strategy, we look
for companies with attractive attributes, such as consistent and sustainable
future growth of revenue and earnings, low financial leverage with strong cash
flow, high return on equity and a low debt-to-total capital ratio, management
focused on shareholder value, and market dominance. We use a "bottom-up"
investment approach, basing investment decisions on company specific factors,
not general economic conditions. We also employ strict sell disciplines.
On April 1, 2005, FMI Winslow Growth Fund was reorganized as MainStay Large Cap
Growth Fund Class A shares. Class B, C, I, R1, and R2 shares were subsequently
added. Effective June 29, 2005, MainStay Blue Chip Growth Fund merged into
MainStay Large Cap Growth Fund. The Fund is subadvised by Winslow Capital
Management.
WHAT MAJOR FACTORS INFLUENCED THE STOCK MARKET DURING THE 12-MONTH PERIOD ENDED
JUNE 30, 2005?
During the 12-month reporting period, investors paid close attention to the
fundamentals of specific companies as well as a variety of macroeconomic
factors, such as gross-domestic-product growth, the earnings outlook, inflation,
and interest rates. The market was also influenced by periodic issues such as
the Presidential election, geopolitical concerns, and the price of energy.
Although the economy, corporate profits, and inflation have not varied much from
expectations over the past four quarters, investors' confidence has oscillated
noticeably. These changes caused the stock market to decline in the third
quarter of 2004, then rally in the fourth quarter. The market declined again in
the first quarter of 2005, which was followed by improvement in the second
quarter. For the 12 months ended June 30, 2005, the Russell 1000(R) Growth
Index(1) returned 1.68%. Gross domestic product continued to grow in the area of
3.4%. As anticipated, aggregate profit growth has slowed toward its long-term
trend of about 7%. Inflation remained well contained, and the 10-year U.S.
Treasury yield closed the reporting period little changed from its position a
year earlier.
We believe that the current environment emphasizes investor gains from
stock-selection skills and bottom-up analysis, which is consistent with our
approach.
WHICH SECTORS WERE STRONG AND WEAK PERFORMERS DURING THE REPORTING PERIOD?
The four sectors that made the strongest contributions to the Fund's return and
its outperformance were information technology, health care, financials, and
energy. Relative to the Fund's primary benchmark, the Russell 1000(R) Growth
Index, the Fund was market weighted in information technology, modestly
underweighted in health care, and moderately overweighted in financials and
energy. The strong contributions these sectors made to the Fund's performance,
however, did not come from sector weightings, but rather from stock selection.
The principal underperforming sector was industrials. Although the Fund's
weighting in the sector was in line with that of the Russell 1000(R) Growth
Index, the Fund was hurt when slowing enrollment growth took a toll on the
Fund's for-profit education-industry stocks.
WHICH INDIVIDUAL STOCKS WERE AMONG THE FUND'S STRONG PERFORMERS FOR THE YEAR
ENDED JUNE 30, 2005?
Major gainers in the information technology sector were Google (+289%),(2)
VeriSign (+45%), and Corning (+27%). The Fund's long-held positions in
UnitedHealth Group (+68%), Caremark Rx (+35%), and Genentech (+43%) were
beneficial. A newer purchase, Alcon (+49%), gained from the time of purchase. In
the financials sector, long-term holdings were among the primary positive
contributors, with strong performance from Franklin Resources (+49%)
Typically, the subadvisor intends to invest substantially all of the Fund's
investable assets in domestic securities. However, the Fund is permitted to
invest up to 20% of its net assets in foreign securities. Foreign securities may
be subject to greater risks than U.S. investments, including currency
fluctuations, less-liquid trading markets, greater price volatility, political
and economic instability, less publicly available information, and changes in
tax or currency laws or monetary policy.
1. See footnote on page 6 for more information on the Russell 1000(R) Growth
Index.
www.MAINSTAYfunds.com 9
and SLM (+28%). Energy purchases, including XTO Energy (+48%), Noble Energy
(+17%), and Suncor Energy (+25%), added to the Fund's performance for the 12
months ended June 30, 2005.
WHICH STOCKS DETRACTED FROM PERFORMANCE?
Biogen Idec (-38%), eBay (-35%), Mercury Interactive (-23%), QUALCOMM (-16%),
Best Buy (-15%), and Manpower (-14%) all detracted from the Fund's performance
for the reporting period. Near the end of February 2005, in a surprise
announcement, Biogen Idec withdrew a new drug that had carried high
expectations. The withdrawal caused the company's share price to decline 43%
that day. Since the company had removed its major source of growth potential, we
sold the Fund's position in the stock.
In calendar year 2004, eBay rose 83%. In mid-December 2004, we reduced the
Fund's position in eBay on concerns about the stock's high valuation. In January
2005, the stock declined after the company reported a disappointing 2005
earnings outlook. We subsequently reduced the position to manage Fund risk.
WERE THERE ANY SIGNIFICANT PURCHASES DURING THE REPORTING PERIOD?
We increased the Fund's energy weighting over the 12-month reporting period. We
added to the Fund's position in Schlumberger, an international leader in oil
services. We also added Suncor Energy and Noble Energy to the Fund's portfolio
to benefit from their respective reserves in oil tar sands and natural gas.
When Procter & Gamble proposed an acquisition of Gillette, we saw potential in
the merger and took advantage of a price dip to add to the Fund's position in
Procter & Gamble. Still believing in the favorable outlook for the managed-care
industry, we purchased shares of WellPoint, which we believe should benefit from
its merger with Anthem. In the telecommunication services sector, we added
Mexico-based America Movil S.A. de C.V. The company is the fastest-growing
significant cell-phone operator in Latin America, where penetration levels
remain relatively low. We purchased Google for the Fund at $102 when the stock
began trading in August 2004, and by the end of June 2005, the stock had
advanced to $294.
WHICH STOCKS DID THE FUND SELL DURING THE REPORTING PERIOD?
In addition to the sales we previously mentioned, we eliminated the Fund's
position in American International Group because of legal and accounting
uncertainties that developed during the reporting period. We also sold Royal
Caribbean Cruises because rising oil costs were having a negative effect on the
company's earnings growth. We eliminated the Fund's positions in Teva
Pharmaceutical Industries and Manpower because of earnings-growth questions, and
we sold the Fund's entire position in Univision when television advertising
markets showed less strength than we had expected.
WERE THERE ANY ADJUSTMENTS MADE TO THE FUND'S SECTOR WEIGHTINGS?
As of June 30, 2005, information technology was the Fund's largest weighting at
31% versus 26% in the Fund's primary benchmark, the Russell 1000(R) Growth
Index. We began to reduce the Fund's technology holdings in the first half of
2004, and the Fund's sector weighting bottomed at 21% in August, an
underweighting of approximately five percentage points relative to the same
sector in the Index. After stocks in the sector declined, we identified several
opportunities among technology stocks, and during the remainder of the reporting
period, we increased the Fund's weighting in the sector by ten percentage
points. The Fund's increased exposure to the energy sector had a positive impact
on the Fund's performance. The Fund's weightings in other sectors were not
materially different from the sector weightings in the Russell 1000(R) Growth
Index.
WHAT DO YOU ANTICIPATE FOR THE MARKETS AND THE FUND?
While various economic components are somewhat different from our earlier
expectations, we anticipate gross domestic product growth of 3.3% in 2005--in
line with the historical average--and inflation around 2.8%. We expect corporate
profits to increase about 9% in 2005, with the stock market potentially
achieving a similar return. Higher energy prices and rising interest rates are
dampening consumer spending somewhat, which is offsetting some inflationary
pressures. In the industrials sector, good earnings and strong cash flow are
supporting favorable business capital spending, acquisitions, and corporate
stock buybacks.
2. Performance percentages reflect returns of the securities mentioned and
include the impact of purchases and sales within the Fund for the 12 months
ended June 30, 2005, or for the portion of the reporting period the
securities were held in the Fund, if shorter.
10 MainStay Large Cap Growth Fund
We are mindful of the many uncertainties across the investing landscape and will
closely monitor these issues. We will continue to emphasize bottom-up stock
selection, as we look for solid and improving businesses. Even though corporate
profit growth is slowing and moving closer to its historical average of 7%, we
see potential opportunities. While paying close attention to risk, we will
continue to emphasize quality companies with positive growth prospects and
favorable valuations.
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 forecasts
made will come to pass. This material does not constitute investment advice and
is not intended as an endorsement of any specific investment.
INFORMATION ON THIS PAGE AND THE PRECEDING PAGES HAS NOT BEEN AUDITED.
www.MAINSTAYfunds.com 11
PORTFOLIO OF INVESTMENTS JUNE 30, 2005
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (95.3%)+
- -----------------------------------------------------------------------------
BIOTECHNOLOGY (2.6%)
Amgen, Inc. (a) 50,900 $ 3,077,414
Genentech, Inc. (a) 46,300 3,716,964
------------
6,794,378
------------
CAPITAL MARKETS (4.7%)
Franklin Resources, Inc. 57,100 4,395,558
Goldman Sachs Group, Inc. (The) 54,000 5,509,080
Merrill Lynch & Co., Inc. 40,100 2,205,901
------------
12,110,539
------------
COMMERCIAL SERVICES & SUPPLIES (2.2%)
Apollo Group, Inc. Class A (a) 39,600 3,097,512
Robert Half International, Inc. 97,200 2,427,084
------------
5,524,596
------------
COMMUNICATIONS EQUIPMENT (8.3%)
Cisco Systems, Inc. (a) 297,900 5,692,869
Comverse Technology, Inc. (a) 46,300 1,094,995
Corning, Inc. (a) 296,300 4,924,506
Juniper Networks, Inc. (a) 118,200 2,976,276
QUALCOMM, Inc. 199,100 6,572,291
------------
21,260,937
------------
COMPUTERS & PERIPHERALS (5.1%)
V Dell, Inc. (a) 189,800 7,498,998
EMC Corp. (a) 138,000 1,891,980
Network Appliance, Inc. (a) 132,700 3,751,429
------------
13,142,407
------------
CONSUMER FINANCE (2.9%)
V SLM Corp. 148,600 7,548,880
------------
DIVERSIFIED FINANCIAL SERVICES (1.4%)
Citigroup, Inc. 77,200 3,568,956
------------
ENERGY EQUIPMENT & SERVICES (2.6%)
Baker Hughes, Inc. 63,300 3,238,428
Schlumberger Ltd. 44,800 3,402,112
------------
6,640,540
------------
FOOD & STAPLES RETAILING (2.4%)
Wal-Mart Stores, Inc. 49,400 2,381,080
Walgreen Co. 83,300 3,830,967
------------
6,212,047
------------
HEALTH CARE EQUIPMENT & SUPPLIES (8.6%)
Alcon, Inc. 30,900 3,378,915
V Fisher Scientific International, Inc. (a) 120,400 7,813,960
Medtronic, Inc. 47,900 2,480,741
St. Jude Medical, Inc. (a) 106,500 4,644,465
Zimmer Holdings, Inc. (a) 47,800 3,640,926
------------
21,959,007
------------
</Table>
<Table>
<Caption>
SHARES VALUE
HEALTH CARE PROVIDERS & SERVICES (9.1%)
V Caremark Rx, Inc. (a) 219,200 $ 9,758,784
V UnitedHealth Group, Inc. 186,800 9,739,752
WellPoint, Inc. (a) 55,600 3,871,984
------------
23,370,520
------------
HOTELS, RESTAURANTS & LEISURE (2.0%)
Carnival Corp. 95,700 5,220,435
------------
HOUSEHOLD PRODUCTS (3.0%)
V Procter & Gamble Co. (The) 143,500 7,569,625
------------
INDUSTRIAL CONGLOMERATES (3.8%)
3M Co. 44,800 3,239,040
V General Electric Co. 189,800 6,576,570
------------
9,815,610
------------
INTERNET & CATALOG RETAIL (0.9%)
eBay, Inc. (a) 69,500 2,294,195
------------
INTERNET SOFTWARE & SERVICES (6.2%)
V Google, Inc. (a) 27,800 8,177,370
VeriSign, Inc. (a) 169,800 4,883,448
Yahoo!, Inc. (a) 83,300 2,886,345
------------
15,947,163
------------
IT SERVICES (1.3%)
Paychex, Inc. 98,800 3,214,952
------------
MACHINERY (2.0%)
Danaher Corp. 95,700 5,008,938
------------
MULTILINE RETAIL (2.2%)
Kohl's Corp. (a) 44,900 2,510,359
Target Corp. 58,600 3,188,426
------------
5,698,785
------------
OIL & GAS (4.9%)
Noble Energy, Inc. 35,400 2,678,010
Suncor Energy, Inc. 61,100 2,891,252
V XTO Energy, Inc. 201,666 6,854,627
------------
12,423,889
------------
</Table>
+ Percentages indicated are based on Fund net assets.
V Among the Portfolio's 10 largest holdings, excluding short-term investments.
May be subject to change daily.
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.
<Table>
<Caption>
SHARES VALUE
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.9%)
Broadcom Corp. Class A (a) 67,900 $ 2,411,129
Maxim Integrated Products, Inc. 61,700 2,357,557
------------
4,768,686
------------
SOFTWARE (7.0%)
Amdocs Ltd. (a) 102,500 2,709,075
Mercury Interactive Corp. (a) 43,200 1,657,152
V Microsoft Corp. 268,900 6,679,476
NAVTEQ Corp. (a) 30,900 1,148,862
Oracle Corp. (a) 253,100 3,340,920
SAP AG (b) 57,100 2,472,430
------------
18,007,915
------------
SPECIALTY RETAIL (5.1%)
Bed Bath & Beyond, Inc. (a) 148,200 6,191,796
Lowe's Cos., Inc. 97,200 5,658,984
Weight Watchers International, Inc. (a) 24,100 1,243,801
------------
13,094,581
------------
TEXTILES, APPAREL & LUXURY GOODS (1.1%)
Coach, Inc. (a) 84,900 2,850,093
------------
THRIFTS & MORTGAGE FINANCE (0.9%)
Golden West Financial Corp. 37,000 2,382,060
------------
TRADING COMPANIES & DISTRIBUTORS (1.6%)
Fastenal Co. 66,400 4,067,664
------------
WIRELESS TELECOMMUNICATION SERVICES (1.5%)
America Movil S.A. de C.V. Series L (b) 66,400 3,958,104
------------
Total Common Stocks
(Cost $230,987,952) 244,455,502
------------
</Table>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENT (2.2%)
- -----------------------------------------------------------------------------
TIME DEPOSIT (2.2%)
Bank of New York Cayman
2.0625%, due 7/1/05 $5,771,000 $ 5,771,000
------------
Total Short-Term Investment
(Cost $5,771,000) 5,771,000
------------
Total Investments
(Cost $236,758,952)(c) 97.5% 250,226,502(d)
Cash and Other Assets,
Less Liabilities 2.5 6,379,188
---------- ------------
Net Assets 100.0% $256,605,690
========== ============
</Table>
<Table>
(a) Non-income producing security.
(b) ADR -- American Depositary Receipt.
(c) The cost for federal income tax purposes is
$237,931,816.
(d) At June 30, 2005 net unrealized appreciation was
$12,294,686 based on the cost for federal income tax
purposes. This consisted of aggregate gross unrealized
appreciation for all investments on which there was an
excess of market value over cost of $14,816,643 and
aggregate unrealized depreciation for all investments on
which there was an excess of cost over market value of
$2,521,957.
</Table>
+ Percentages indicated are based on Fund net assets.
V Among the Portfolio's 10 largest holdings, 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.
www.MAINSTAYfunds.com 13
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2005
<Table>
ASSETS:
Investment in securities, at value
(identified cost $236,758,952) $ 250,226,502
Cash 631,632
Receivables:
Fund shares sold 9,075,935
Investment securities sold 1,839,497
Dividends and interest 121,244
Other assets 10,774
--------------
Total assets 261,905,584
--------------
LIABILITIES:
Payables:
Investments securities purchased 3,129,784
Fund shares redeemed 1,371,421
Transfer agent 375,068
NYLIFE Distributors 160,225
Manager 145,565
Custodian 5,973
Accrued expenses 111,858
--------------
Total liabilities 5,299,894
--------------
Net assets $ 256,605,690
==============
COMPOSITION OF NET ASSETS:
Shares of beneficial interest outstanding
(par value of $.01 per share) unlimited
number of shares authorized:
Class A $ 132,381
Class B 332,256
Class C 14,226
Class I 28,323
Class R1 4
Class R2 4
Additional paid-in capital 411,311,716
Accumulated net realized loss on investments (168,680,770)
Net unrealized appreciation on investments 13,467,550
--------------
Net assets $ 256,605,690
==============
CLASS A
Net assets applicable to outstanding shares $ 66,999,838
==============
Shares of beneficial interest outstanding 13,238,061
==============
Net asset value per share outstanding $ 5.06
Maximum sales charge (5.50% of offering
price) 0.29
--------------
Maximum offering price per share outstanding $ 5.35
==============
CLASS B
Net assets applicable to outstanding shares $ 168,062,981
==============
Shares of beneficial interest outstanding 33,225,643
==============
Net asset value and offering price per share
outstanding $ 5.06
==============
CLASS C
Net assets applicable to outstanding shares $ 7,189,749
==============
Shares of beneficial interest outstanding 1,422,576
==============
Net asset value and offering price per share
outstanding $ 5.05
==============
CLASS I
Net assets applicable to outstanding shares $ 14,348,940
==============
Shares of beneficial interest outstanding 2,832,252
==============
Net asset value and offering price per share
outstanding $ 5.07
==============
CLASS R1
Net assets applicable to outstanding shares $ 2,093
==============
Shares of beneficial interest outstanding 414
==============
Net asset value and offering price per share
outstanding $ 5.06
==============
CLASS R2
Net assets applicable to outstanding shares $ 2,089
==============
Shares of beneficial interest outstanding 414
==============
Net asset value and offering price per share
outstanding $ 5.05
==============
</Table>
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 JUNE 30, 2005
<Table>
INVESTMENT INCOME:
INCOME:
Dividends (a) $ 69,095
Interest 5,837
-----------
Total income 74,932
-----------
EXPENSES:
Manager 76,091
Shareholder communication 51,404
Professional 35,023
Registration 15,985
Transfer agent -- Classes A, B and C 15,789
Custodian 11,955
Trustees 9,142
Distribution -- Class B 8,952
Distribution -- Class C 623
Service -- Class A 7,008
Service -- Class B 2,984
Service -- Class C 208
Service -- R2 1
Recordkeeping 3,033
Miscellaneous 9,958
-----------
Total expenses before waiver and
reimbursement 248,156
Fee waived/reimbursed by Manager (136,738)
-----------
Net expenses 111,418
-----------
Net investment loss (36,486)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 456,600
Net change in unrealized appreciation on
investments (1,598,830)
-----------
Net realized and unrealized loss on investments (1,142,230)
-----------
Net decrease in net assets resulting from
operations $(1,178,716)
===========
</Table>
(a) Dividends recorded net of foreign withholding taxes in the amount of $222.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
www.MAINSTAYfunds.com 15
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2005 AND JUNE 30, 2004
<Table>
<Caption>
2005 2004
INCREASE IN NET ASSETS:
Operations:
Net investment loss $ (36,486) $ (35,407)
Net realized gain on investments 456,600 484,687
Net change in unrealized
appreciation on investments (1,598,830) 326,080
-------------------------
Net increase (decrease) in net
assets resulting from operations (1,178,716) 775,360
-------------------------
Capital share transactions:
Net proceeds from sale of shares:
Class A 3,512,262 518,473
Class B 2,153,623 --
Class C 544,063 --
Class I 14,337,964 --
Class R1 2,075 --
Class R2 2,075 --
Net asset value of shares issued in connection
with acquisition of MainStay Blue Chip Growth
Fund:
Class A 59,916,067 --
Class B 167,355,893 --
Class C 6,736,178 --
-------------------------
254,560,200 518,473
Cost of shares redeemed:
Class A (1,379,081) (339,697)
Class B (217,268) --
Class C (44,709) --
Class I (60,723) --
Class R1 (72) --
Class R2 (72) --
-------------------------
(1,701,925) (339,697)
-------------------------
Increase in net assets derived
from capital share transactions 252,858,275 178,776
-------------------------
Net increase in net assets 251,679,559 954,136
NET ASSETS:
Beginning of year 4,926,131 3,971,995
-------------------------
End of year $256,605,690 $4,926,131
=========================
</Table>
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
<Table>
<Caption>
CLASS A
-----------------------------------------------------
YEAR ENDED JUNE 30,
2005 2004 2003 2002 2001
Net asset value at beginning
of period $ 4.69 $ 3.96 $ 3.92 $ 5.07 $ 11.62
------- ------ ------ ------- -------
Net investment loss (a) (0.03) (0.03) (0.03) (0.03) (0.05)
Net realized and unrealized
gain (loss) on investments 0.40 0.76 0.07 (1.12) (1.94)
------- ------ ------ ------- -------
Total from investment
operations 0.37 0.73 0.04 (1.15) (1.99)
------- ------ ------ ------- -------
Less distributions:
From net realized gain on
investments -- -- -- -- (4.56)
------- ------ ------ ------- -------
Net asset value at end of
period $ 5.06 $ 4.69 $ 3.96 $ 3.92 $ 5.07
======= ====== ====== ======= =======
Total investment return 7.89% 18.43% 1.02% (22.53%) (20.54%)
Ratios (to average net
assets)/Supplemental Data:
Net investment loss (0.29%) (0.77%) (0.74%) (0.73%) (0.70%)
Net expenses 1.35% 1.30% 1.30% 1.30% 1.30%
Expenses (before
reimbursement) 3.01% 2.78% 3.17% 2.71% 1.87%
Portfolio turnover rate 27% 94% 108% 71% 112%
Net assets at end of period
(in 000's) $67,000 $4,926 $3,972 $ 4,144 $ 5,860
</Table>
<Table>
<Caption>
CLASS B CLASS C CLASS I CLASS R1 CLASS R2
-------- -------- -------- -------- --------
APRIL 1, APRIL 1, APRIL 1, APRIL 1, APRIL 1,
2005* 2005* 2005* 2005* 2005*
THROUGH THROUGH THROUGH THROUGH THROUGH
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2005 2005 2005 2005 2005
Net asset value at beginning
of period $ 4.83 $ 4.83 $ 4.83 $ 4.83 $ 4.83
-------- ------ ------- ------ ------
Net investment income (loss)
(a) 0.00(b) (0.01) (0.01) (0.03) (0.03)
Net realized and unrealized
gain (loss) on investments 0.23 0.23 0.25 0.26 0.25
-------- ------ ------- ------ ------
Total from investment
operations 0.23 0.22 0.24 0.23 0.22
-------- ------ ------- ------ ------
Less distributions:
From net realized gain on
investments -- -- -- -- --
-------- ------ ------- ------ ------
Net asset value at end of
period $ 5.06 $ 5.05 $ 5.07 $ 5.06 $ 5.05
======== ====== ======= ====== ======
Total investment return 4.76% 4.55% 4.97% 4.76% 4.55%
Ratios (to average net
assets)/Supplemental Data:
Net investment loss (1.41%)+ (1.41%)+ (0.28%)+ (0.38%)+ (0.63%)+
Net expenses 2.15%+ 2.15%+ 1.02%+ 1.12%+ 1.37%+
Expenses (before
reimbursement) 4.24%+ 4.24%+ 3.11%+ 3.21%+ 3.46%+
Portfolio turnover rate 27% 27% 27% 27% 27%
Net assets at end of period
(in 000's) $168,063 $7,190 $14,349 $ 2 $ 2
</Table>
<Table>
(a) Per share data based on average shares outstanding during the period.
(b) Less than one cent per share.
* Commencement of Operations.
+ Annualized.
</Table>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements. www.MAINSTAYfunds.com 17
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 comprises nineteen funds (collectively referred to as the
"Funds"). These financial statements and notes relate only to MainStay Large Cap
Growth Fund (the "Fund"), a diversified fund. The Fund commenced operations on
April 1, 2005.
On March 31, 2005, the Fund acquired all the net assets of the FMI Winslow
Growth Fund (the "Winslow Fund"), a series of the FMI Mutual Funds, Inc.,
pursuant to an Agreement and Plan of Reorganization approved by the shareholders
of the Winslow Fund on March 28, 2005. The acquisition was accomplished by the
transfer of all the assets and liabilities of the Winslow Fund (valued at
$5,417,292), to the Fund. Following the transfer, 1,122,224 shares of the Fund
were distributed to shareholders in liquidation of the Winslow Fund in a tax
free exchange for 1,122,224 shares of the Winslow Fund. The reorganization
qualifies as a tax-free reorganization for federal income tax purposes with no
gain or loss recognized by the portfolios or their shareholders. The Fund
constitutes the surviving entity for financial reporting purposes; therefore, it
is deemed the "accounting survivor" for the merger. The financial statements of
the Fund (fiscal year end of October 31) reflect the historical financial
highlights of the Winslow Fund (fiscal year end of June 30) prior to the
reorganization.
On June 29, 2005, the Fund acquired substantially all the net assets of the
MainStay Blue Chip Growth Fund, a series of the Trust, pursuant to an Agreement
and Plan of Reorganization approved by the shareholders on June 27, 2005. The
acquisition was accomplished by a transfer of all the assets and liabilities of
the MainStay Blue Chip Growth Fund (valued at $234,008,138), to the Fund.
Following the transfer, 45,899,942 shares of the Fund were distributed to
shareholders in liquidation of the MainStay Blue Chip Growth Fund in a tax free
exchange for 24,366,396 shares of the MainStay Blue Chip Growth Fund. The
reorganization qualified as a tax-free reorganization for federal income tax
purposes with no gain or loss recognized by the portfolios or their
shareholders. The MainStay Blue Chip Growth Fund's net assets at the date of
acquisition, including $15,306,040 and ($1,310,067) of unrealized appreciation
(depreciation), respectively, ($168,915,585) of accumulated net realized loss
and ($1,052,103) of undistributed net investment loss and ($846,002) of
liabilities were combined with those of the MainStay Large Cap Growth Fund.
The Fund constitutes the surviving entity for financial reporting purposes;
therefore it is deemed the "accounting survivor" for the merger. Effective June
29, 2005, the Fund's operations are combined with that of the Mainstay Blue Chip
Growth Fund in the accompanying Statement of Operations, Statements of Changes
in Net Assets, and Financial Highlights.
The Fund currently offers six classes of shares, Class A, Class B, Class C
shares, Class I shares, Class R1 shares and Class R2 shares, whose distribution
commenced on March 31, 2005. Class A shares are offered at net asset value per
share plus an initial sales charge. No sales charge applies on investments of $1
million or more (and certain other qualified purchases) in Class A shares, but a
contingent deferred sales charge is imposed on certain redemptions of such
shares within one year of the date of purchase. Class B shares and Class C
shares are offered without an initial sales charge, although a declining
contingent deferred sales charge may be imposed on redemptions made within six
years of purchase of Class B shares and within one year of purchase of Class C
shares. Class I, Class R1 and Class R2 shares are not subject to sales charge.
The six classes of shares bear the same voting (except for issues that relate
solely to one class), dividend, liquidation and other rights and conditions
except that Class B shares and Class C shares are subject to higher distribution
fee rates than Class A shares and Class R2 shares under a distribution plan
pursuant to Rule 12b-1 under the 1940 Act. Class I shares and Class R1 shares
are not subject to a distribution or service fee. Class R1 and Class R2 shares
are authorized to pay to New York Life Investment Management LLC, its
affiliates, or independent third-party service providers, as compensation for
services rendered to shareholders of Class R1 or Class R2 shares, a shareholder
service fee.
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 in the United States of America and follows the
significant accounting policies described below.
(A) SECURITIES VALUATION. Equity securities are valued at the latest quoted
sales prices as of the close of trading on the New York Stock Exchange
(generally 4:00 p.m. Eastern time) on the valuation date; such securities not
traded on the valuation date are valued at the mean of the latest quoted bid and
asked prices. Prices are taken from the primary market in which each security
trades. Temporary cash investments acquired over 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 are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued by
methods
18 MainStay Large Cap Growth Fund
deemed by the Board of Trustees to represent fair value. Reasons for which
securities may be valued in this manner include, but are not limited to, trading
for a security has been halted or suspended, a security has been de-listed from
a national exchange, or trading on a security's primary market is temporarily
closed at a time when under normal conditions it would be open. The Fund did not
hold securities at June 30, 2005, that were valued in such manner.
(B) FEDERAL INCOME TAXES. The Fund's policy is to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to the shareholders of the Fund within the
allowable time limits. Therefore, no federal income or excise tax provision is
required.
Investment income received by the Fund from foreign sources may be subject to
foreign income taxes. These foreign income taxes are withheld at the source.
(C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. The Fund intends to declare and pay any
dividends quarterly and capital gain distributions, if any, annually. Income
dividends and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles. These "book/tax differences" are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require
reclassification.
The following table discloses the current year reclassifications between
accumulated net investment loss, accumulated net realized loss on investments
and additional paid-in-capital arising from permanent differences; net assets at
June 30, 2005 are not affected.
<Table>
<Caption>
NET INVESTMENT ADDITIONAL
LOSS PAID-IN CAPITAL
$36,486 $ (36,486)
--------------------------------
</Table>
The reclassification for the Fund is due to the acquisition of capital losses
from the Fund's merger with MainStay Blue Chip Growth Fund and the
reclassification of net operating losses to offset net short-term capital gains.
(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.
Discounts and premiums on short-term securities 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 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 expenses incurred under the distribution plans) are allocated to
separate classes of shares based upon their relative net asset value 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. The preparation of financial statements in accordance
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
NOTE 3 -- FEES AND RELATED PARTY TRANSACTIONS:
(A) MANAGER AND SUBADVISOR. Effective March 31, 2005, New York Life Investment
Management LLC ("NYLIM" or the "Manager"), an indirect wholly-owned subsidiary
of New York Life Insurance Company ("New York Life"), began to serve as the
Fund's manager. The Manager provides offices, conducts clerical, recordkeeping
and bookkeeping services, and keeps the financial and accounting records
required for the Fund. The Manager also pays the salaries and expenses of all
personnel affiliated with the Fund and all the operational expenses that are not
the responsibility of the Fund. Winslow Capital Management Inc. (the
"Subadvisor"), is responsible for the day-to-day portfolio management of the
Fund. Prior to March 31, 2005, the Fund was advised by Fiduciary Management,
Inc. ("FMI") (Resource Capital Advisers, Inc. prior to October 15, 2001) and
sub-advised by the Subadvisor.
The Trust, on behalf of the Fund, pays the Manager a monthly fee for services
performed and the facilities furnished at an annual percentage of the Fund's
average daily net assets as follows: 0.80% up to $250 million, 0.75% on assets
from $250 million up to $500 million, 0.725% on assets from $500 million up to
$750 million, 0.70% on assets from $750 million up to $2.0 billion, 0.65% on
assets from $2.0 billion up to $3.0 billion, and 0.60% on assets in excess of
$3.0 billion. The Manager has also voluntarily agreed to waive a portion of its
management fee so that the management fee does not exceed 0.75% on assets up to
$250 million. In addition, the manager has voluntarily agreed to waive other
fees and/or reimburse the Fund so
www.MAINSTAYfunds.com 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
that total annual fund operating expenses do not exceed on an annualized basis
1.40%, 2.15% and 2.15% of the average daily net assets of the Class A, Class B
and Class C shares, respectively, and an equivalent amount for Class I, Class R1
and Class R2 shares. For the period from March 31, 2005 through June 30, 2005,
the Manager earned from the Fund $31,005 and waived its fee and/or reimbursement
expense in the amount of $82,942.
Prior to March 31, 2005, the Winslow Fund paid FMI a monthly fee for services
performed at an annual percentage of 1% of the Fund's average daily net assets.
FMI was contractually obligated to reimburse the Winslow Fund for expenses over
2.00% of the daily net assets of the Winslow Fund. In addition to the
reimbursement required under the management agreement, FMI voluntarily
reimbursed the Winslow Fund for expenses over 1.30% of the daily net assets of
the Fund. For the period from July 1, 2004 through March 31, 2005, FMI earned
from the Fund $37,572 and waived its fee and/or reimbursement expense in the
amount of $53,796.
Pursuant to the terms of a Sub-Advisory Agreement between NYLIM and the
Subadvisor, dated April 1, 2005, the Manager paid the Subadvisor a monthly fee
at an annual rate of the Fund's average daily net assets as follows: 0.40% up to
$250 million, 0.35% on assets from $250 million up to $500 million, 0.30% on
assets from $500 million up to $750 million, 0.25% on assets from $750 million
up to $1.0 billion, and 0.20% on assets in excess of $1.0 billion.
Prior to March 31, 2005, Winslow Capital Management, Inc., ("Winslow") served as
sub-advisor to the Winslow Fund. FMI paid Winslow a fee of 0.75% of the Winslow
Fund's management fee.
In addition, prior to March 31, 2005, pursuant to the terms of an administrative
agreement with FMI, the Winslow Fund paid FMI a monthly administrative fee at
the annual rate of 0.20% on the first $25.0 million of the Winslow Fund's daily
net assets, 0.10% on the next $20.0 million of the Winslow Fund's daily net
assets, and 0.05% over $45.0 million of the Winslow Fund's daily net assets,
subject to a fiscal year minimum of $20,000. FMI voluntarily waived this
minimum. Administration fees of $7,514 are included in Management Fees in the
accompanying Statement of Operations.
(B) DISTRIBUTION AND SERVICE FEES. The Trust, on behalf of the Fund, has a
Distribution Agreement with NYLIFE Distributors LLC ("the Distributor"), an
indirect wholly-owned subsidiary of New York Life. Effective March 31, 2005, the
Fund, with respect to each class of shares other than Class I shares, has
adopted distribution plans (the "Plans") in accordance with the provisions of
Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Distributor
receives a monthly fee from the Fund at an annual rate of 0.25% of the average
daily net assets of the Fund's Class A shares, which is an expense of the Class
A shares of the Fund for distribution or service activities as designated by the
Distributor. Pursuant to the Class B and Class C Plans, the Fund pays the
Distributor a monthly fee, which is an expense of the Class B and Class C shares
of the Fund, at the annual rate of 0.75% of the average daily net assets of the
Fund's Class B and Class C shares. The Distribution Plans provide that the Class
B, Class C and Class R2 shares of the Fund also incur a service fee at the
annual rate of 0.25% of the average daily net asset value of the Class B or
Class C shares of the Fund. Class I shares and Class R1 shares are not subject
to a distribution 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.
The Fund has adopted a shareholder services plan with respect to Class R1 and R2
shares. Under the terms of this plan, Class R1 and Class R2 shares are
authorized to pay to NYLIM, its affiliates, or independent third-party
providers, as compensation for services rendered, a shareholder service fee at
the rate of 0.10% of the average daily net assets of the Fund's Class R1 and R2
shares.
Prior to March 31, 2005, the Winslow Fund had entered into a Distribution Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan
provided that the Fund may incur certain costs which may not exceed the lesser
of a monthly amount equal to 0.25% of the Fund's daily net assets or the actual
distribution cost incurred during the year.
(C) SALES CHARGES. The Fund was advised by the Distributor that the amount of
sales charges retained on sales of Class A shares was $2,990 for the period from
March 31, 2005 through June 30, 2005. The Fund was also advised that the
Distributor retained contingent deferred sales charges on redemptions of Class
A, Class B and Class C shares of $162, $2,089 and $3 respectively, for the
period from March 31, 2005 through June 30, 2005.
(D) TRANSFER, DIVIDEND DISBURSING AND SHAREHOLDER SERVICING AGENT. Effective
March 31, 2005, NYLIM Service Company LLC ("NYLIM Service"), an affiliate of
NYLIM, is the Fund's transfer, dividend disbursing and shareholder servicing
agent. NYLIM Service has entered into an agreement with Boston Financial Data
Services ("BFDS") pursuant to which BFDS will perform certain of the services
for which NYLIM Service is responsible. Transfer agent expenses paid to NYLIM
Service for the period March 31, 2005 through June 30, 2005 were $4,189.
Prior to March 31, 2005, Transfer Agent expenses paid to U.S. Bancorp Fund
Services, LLC for the period July 1, 2004 through March 31, 2005 were $11,600.
20 MainStay Large Cap Growth Fund
(E) NON-INTERESTED TRUSTEES. Non-Interested Trustees are paid an annual
retainer fee of $45,000, $2,000 for each Board meeting, $1,000 for each
Committee meeting and $500 for each Valuation Subcommittee telephonic meeting
attended plus reimbursement for travel and out-of-pocket expenses. The Lead
Non-Interested Trustee is also paid an annual retainer fee of $20,000. The Audit
and Compliance Committee Chairman receives an additional $2,000 for each meeting
of the Audit and Compliance Committee attended and the Chairpersons of the
Brokerage and Expenses Committee, Operations Committee and Performance Committee
each receive an additional $1,000 for each meeting of the Brokerage and Expenses
Committee, Operations Committee and Performance Committee attended,
respectively. In addition, each Non-Interested Trustee is paid $1,000 for
attending meetings of the Non-Interested Trustees held in advance of or in
connection with Board/Committee meetings. The Trust allocates trustees fees in
proportion to the net assets of the respective Funds. Thus effective March 31,
2005, the Large Cap Growth Fund only pays a portion of the fees identified
above.
(F) OTHER. Fees for the cost of legal services, included in Professional fees
as shown on the Statement of Operations, provided to the Fund by the Office of
the General Counsel of NYLIM amounted to $5,814 for the period from March 31,
2005 through June 30, 2005. Legal fees paid for the period July 1, 2004 through
March 31, 2005 were $15,881.
Effective March 31, 2005, the Fund pays the Manager a monthly fee for certain
pricing and recordkeeping services provided under the Accounting Agreement at
the annual rate of 1/20 of 1% for the first $20 million of average monthly net
assets, 1/30 of 1% of the next $80 million of average monthly net assets and
1/100 of 1% of any amount in excess of $100 million of average monthly net
assets. Fees for these services provided to the Fund by the Manager amounted to
$3,033 for the period from March 31, 2005 through June 30, 2005.
(G) INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
NOTE 4 -- CUSTODIAN:
For the period March 31, 2005 through July 31, 2005, The Bank of New York was
custodian of cash and securities of the Fund. Custodial fees are charged to the
Fund based on the market value of securities in the Fund and the number of
certain cash transactions incurred by the Fund. Effective August 1, 2005,
Investors Bank & Trust Company will be the custodian for the Fund. Prior to
March 31, 2005, U.S. Bank NA was custodian of cash and securities of the Fund.
NOTE 5 -- FEDERAL INCOME TAX:
As of June 30, 2005, the components of accumulated loss on a tax basis were as
follows:
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
UNDISTRIBUTED LONG TERM CAPITAL TOTAL
ORDINARY CAPITAL AND OTHER UNREALIZED ACCUMULATED
INCOME GAINS LOSSES APPRECIATION LOSS
$42,026 $159,986 $ (167,709,919) $12,294,686 $ (155,213,221)
------------------------------------------------------------------------------
</Table>
The difference between book-basis and tax-basis unrealized appreciation is
primarily due to wash sale deferrals.
At June 30, 2005, for federal income tax purposes, capital loss carryforwards of
$167,709,919 were available as shown in the table below, to the extent provided
by the regulations to offset future realized gains through the years indicated.
To the extent that these loss carryforwards are used to offset future capital
gains, it is probable that the capital gains so offset will not be distributed
to shareholders.
<Table>
<Caption>
CAPITAL LOSS AMOUNT
AVAILABLE THROUGH (000'S)
2008 $ 9,590
-------------------------------------------
2009 99,424
-------------------------------------------
2010 53,277
-------------------------------------------
2011 5,419
-------------------------------------------
$167,710
-------------------------------------------
</Table>
NOTE 6 -- PURCHASES AND SALES OF SECURITIES (IN 000'S):
During the year ended June 30, 2005, purchases and sales of securities, other
than short-term securities, were $18,178 and $6,595, respectively.
NOTE 7 -- LINE OF CREDIT:
The Fund and certain affiliated funds maintain a line of credit of $160,000,000
with a syndicate of banks in order to secure a source of funds for temporary
purposes to meet unanticipated or excessive shareholder redemption requests. The
funds pay a commitment fee, at an annual rate of .075% of the average commitment
amount, regardless of usage, to The Bank of New York, which acts as agent to the
syndicate. Such commitment fees are allocated among the funds based upon net
assets and other factors. Interest on any revolving credit loan is charged based
upon the Federal Funds Advances rate. There were no borrowings on the line of
credit during the year ended June 30, 2005.
www.MAINSTAYfunds.com 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 -- CAPITAL SHARE TRANSACTIONS (IN 000'S):
<Table>
<Caption>
YEAR ENDED
JUNE 30, 2005
CLASS A CLASS B* CLASS C*
Shares sold 714 439 110
- -----------------------------------------------------------------------
Shares issued in connection with
acquisition of MainStay Blue Chip Growth
Fund(a) 11,748 32,830 1,322
- -----------------------------------------------------------------------
12,462 33,269 1,432
- -----------------------------------------------------------------------
Shares redeemed (274) (43) (9)
- -----------------------------------------------------------------------
Net increase 12,188 33,226 1,423
- -----------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED
JUNE 30, 2005
CLASS I* CLASS R1* CLASS R2*
Shares sold 2,845 429 429
- --------------------------------------------------------------------------
Shares redeemed (13) (15) (15)
- --------------------------------------------------------------------------
Net increase 2,832 414 414
- --------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED
JUNE 30, 2004
CLASS A
Shares sold 120,700
- -------------------------------------------------------
Shares redeemed (75,339)
- -------------------------------------------------------
Net increase 45,361
- -------------------------------------------------------
</Table>
* Commencement of Operations.
(a) On June 29, 2005 and pursuant to shareholder approval, the assets of the
MainStay Blue Chip Growth Fund were acquired by the MainStay Large Cap
Growth Fund.
NOTE 9 -- OTHER MATTERS:
NYLIM and mutual funds that NYLIM advises have received requests for information
from various government authorities and regulatory bodies regarding market
timing, late trading, operations, fees, expenses, and other matters. NYLIM and
the Funds it advises have substantially completed their responses to these
requests and are cooperating fully with the authorities in these matters. As
reported in response to those requests for information, NYLIM was previously
party to agreements with certain registered representatives of broker-dealers
relating to the level of trading by clients or customers of those registered
representatives in shares of certain funds of the Trust. NYLIM and the Trust's
Audit and Compliance Committee are reviewing what effect, if any, transactions
under these agreements and other trading activity may have had on the Funds. The
Board, upon consultation with NYLIM and recommendation of the Audit and
Compliance Committee, will determine what course of action, if any, is
appropriate. NYLIM does not believe at this time that such trading had any
material effect on the Funds' financial statements or their shareholders. To
date, substantially all of the costs associated with these and other regulatory
matters have been borne by NYLIM, except approximately $262,000 relating to
analytical support services and legal services authorized by the Audit and
Compliance Committee. Except as described below, neither NYLIM nor the Funds
advised by it have any reason to believe that they have been targeted as the
subject of any governmental or regulatory enforcement action.
The SEC Staff has raised concerns relating to a guarantee provided to
shareholders of the MainStay Equity Index Fund and the fees and expenses of that
Fund, as well as the related guarantee disclosure to Fund shareholders.
Discussions have been held with the SEC concerning a possible resolution of this
matter. There can be no assurance at this time as to the outcome of these
efforts.
22 MainStay Large Cap Growth 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 Large Cap Growth Fund (the
"Fund"), one of the funds constituting The MainStay Funds, as of June 30, 2005,
and the related statements of operations and changes in net assets, and the
financial highlights for the year 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 audit. The statement of changes in net assets
for the year ended June 30, 2004, and the financial highlights for the years
presented through June 30, 2004, were audited by other auditors, whose report
dated August 4, 2004, expressed an unqualified opinion thereon.
We conducted our audit 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
also 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 June 30, 2005, by correspondence with the custodian and
brokers. As to securities purchased or sold but not yet received or delivered,
we performed other appropriate auditing procedures. 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 audit provides 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 as of June 30, 2005, the results of its
operations, the changes in its net assets, and its financial highlights for the
year then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
Philadelphia, Pennsylvania
August 29, 2005
www.MAINSTAYfunds.com 23
TRUSTEES AND OFFICERS
Following are the Trustees and Officers of The MainStay Funds, along with a
brief description of their principal occupations during the past five years.
Each Trustee serves until (1) such time as less than a majority of the Trustees
holding office have been elected by shareholders, in which case the trustees
then in office will call a shareholder meeting for the election of Trustees, or
(2) his or her resignation, death, or removal. Officers serve a term of one year
and are elected annually by the Trustees.
The business address of each Trustee and Officer is 51 Madison Avenue, New York,
New York 10010.
<Table>
<Caption>
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS OTHER
NAME AND FUND AND LENGTH PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
DATE OF BIRTH OF SERVICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES*
GARY E. Chairman since 2002, Chief Executive Officer, Chairman, and 57 None
WENDLANDT Chief Executive Manager, New York Life Investment
10/8/50 Officer since 2004, Management LLC (including predecessor
and Trustee since advisory organizations) and New York
2000 Life Investment Management Holdings LLC;
Executive Vice President, New York Life
Insurance Company; Executive Vice
President and Manager, NYLIFE LLC;
Chairman, McMorgan & Company LLC,
Madison Capital Funding LLC, and NYLCAP
Manager LLC; Manager, MacKay Shields
LLC; Executive Vice President, New York
Life Insurance and Annuity Corporation;
Chairman, Chief Executive Officer, and
Director, MainStay VP Series Fund, Inc.
(21 portfolios); Chief Executive
Officer, Eclipse Funds (3 Portfolios)
and Eclipse Funds Inc. (13 Portfolios)
(since June 2005); Executive Vice
President and Chief Investment Officer,
MassMutual Life Insurance Company (1993
to 1999).
------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
CHARLYNN GOINS Trustee since 2001 Retired. Consultant to U.S. Commerce 19 None
9/15/42 Department, Washington, DC (1998 to
2000).
------------------------------------------------------------------------------------------------------------------------
EDWARD J. HOGAN Trustee since 1996 Rear Admiral U.S. Navy (Retired); 19 None
8/17/32 Independent Management Consultant (1997
to 2002).
------------------------------------------------------------------------------------------------------------------------
TERRY L. LIERMAN Trustee since 1991 Community Volunteer; Chairman, 19 None
1/4/48 Smartpaper Networks Corporation;
Partner, Health Ventures LLC (2001 to
2005); Vice Chair, Employee Health
Programs (1990 to 2002); Partner,
TheraCom (1994 to 2001); President,
Capitol Associates, Inc. (1984 to 2001).
------------------------------------------------------------------------------------------------------------------------
JOHN B. Trustee since 1997 Chairman, Ulster Television Plc; Pro 19 Non-Executive
MCGUCKIAN Chancellor, Queen's University (1985 to Director,
11/13/39 2001). Allied Irish
Banks Plc;
Chairman and
Non-Executive
Director, Irish
Continental
Group, Plc;
Chairman, AIB
Group (UK) Plc;
Non-Executive
Director,
Unidare Plc.
------------------------------------------------------------------------------------------------------------------------
DONALD E. Trustee since 1994 Retired. Vice Chairman, Harbour Group 19 Director,
NICKELSON and Lead Non- Industries, Inc. (leveraged buyout Adolor
12/9/32 Interested Trustee firm). Corporation;
since 2000 Director, First
Advantage
Corporation.
------------------------------------------------------------------------------------------------------------------------
</Table>
* Certain Trustees are considered to be interested persons of the Trust
within the meaning of the 1940 Act because of their affiliation with New
York Life Insurance Company, New York Life Investment Management LLC,
MacKay Shields LLC, McMorgan & Company LLC, Eclipse Funds, Eclipse Funds
Inc., MainStay VP Series Fund, Inc., NYLIFE Securities Inc., and/or
NYLIFE Distributors LLC, as described in detail in the column "Principal
Occupation(s) During Past 5 Years." All Trustees not considered to be
interested persons of the Trust are referred to as "Non-Interested
Trustees."
24 MainStay Large Cap Growth Fund
<Table>
<Caption>
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS OTHER
NAME AND FUND AND LENGTH PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
DATE OF BIRTH OF SERVICE DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
RICHARD S. Trustee since 1994 Chairman, Somerset Group (financial 19 None
TRUTANIC advisory firm); Managing Director and
2/13/52 Advisor, The Carlyle Group (private
investment firm) (2001 to 2004); Senior
Managing Director, Groupe Arnault
(private investment firm) (1999 to
2001).
------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS OTHER
NAME AND FUND AND LENGTH PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
DATE OF BIRTH OF SERVICE DURING PAST 5 YEARS OVERSEEN BY OFFICER HELD BY OFFICER
------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
ROBERT A. Chief Legal Officer Senior Managing Director, General 57 None
ANSELMI since 2003 Counsel, and Secretary, New York Life
10/19/46 Investment Management LLC (including
predecessor advisory organizations);
General Counsel and Secretary, New York
Life Investment Management Holdings LLC;
Senior Vice President, New York Life
Insurance Company; Vice President and
Secretary, McMorgan & Company LLC;
Secretary, NYLIM Service Company LLC,
NYLCAP Manager LLC, and Madison Capital
Funding LLC; Chief Legal Officer,
Eclipse Funds, Eclipse Funds Inc., and
MainStay VP Series Fund, Inc.; Managing
Director and Senior Counsel, Lehman
Brothers Inc. (October 1998 to December
1999); General Counsel and Managing
Director, JP Morgan Investment
Management Inc. (1986 to September
1998).
------------------------------------------------------------------------------------------------------------------------
CHRISTOPHER O. President since 2005 Executive Vice President, New York Life 36 None
BLUNT Investment Management LLC and New York
5/13/61 Life Investment Management Holdings LLC
(since July 2004); Manager and Executive
Vice President, NYLIM Product
Distribution, NYLIFE Distributors LLC
(since January 2005); Chairman, NYLIM
Service Company LLC (since March 2005);
Chairman and Class C Director, New York
Life Trust Company, FSB (since December
2004); Chairman, New York Life Trust
Company (since February 2005);
President, Eclipse Funds and Eclipse
Funds Inc. (since June 2005); Chairman
and Chief Executive Officer, Giving
Capital, Inc. (2001 to June 2004); Chief
Marketing Officer--Americas, Merrill
Lynch Investment Managers, and
President, Mercury Funds Distributors
(1999 to 2001).
------------------------------------------------------------------------------------------------------------------------
</Table>
www.MAINSTAYfunds.com 25
<Table>
<Caption>
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS OTHER
NAME AND FUND AND LENGTH PRINCIPAL OCCUPATION(S) IN FUND COMPLEX DIRECTORSHIPS
DATE OF BIRTH OF SERVICE DURING PAST 5 YEARS OVERSEEN BY OFFICER HELD BY OFFICER
------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
JEFFREY J. Vice President, Managing Director of Fund Accounting and 63 None
GABOURY Treasurer, and Chief Administration, New York Life Investment
10/23/68 Financial Officer Management LLC (since December 2004);
since 2005 Manager, NYLIM Service Company LLC
(since March 2005); Executive Vice
President, New York Life Trust Company
(since February 2005); Vice President,
Treasurer, and Chief Financial Officer,
Eclipse Funds, Eclipse Funds Inc., and
MainStay VP Series Fund, Inc. (since
June 2005); Treasurer and Principal
Financial Officer, McMorgan Funds;
Director of Fund Administration,
Investors Bank & Trust Company (1995 to
2004).
------------------------------------------------------------------------------------------------------------------------
SCOTT T. Vice President-- Director, New York Life Investment 57 None
HARRINGTON Administration since Management LLC (including predecessor
2/8/59 2005 advisory organizations); Vice
President--Administration, MainStay VP
Series Fund, Inc., Eclipse Funds, and
Eclipse Funds Inc. (since June 2005).
------------------------------------------------------------------------------------------------------------------------
ALISON H. Vice President-- Managing Director and Chief Compliance 57 None
MICUCCI Compliance since 2004 Officer, New York Life Investment
12/16/65 Management LLC (since June 2003); Chief
Compliance Officer, New York Life
Investment Management Holdings LLC
(since June 2003); Managing Director,
Compliance, NYLIFE Distributors LLC;
Vice President--Compliance, Eclipse
Funds, Eclipse Funds Inc., and MainStay
VP Series Fund, Inc.; Deputy Chief
Compliance Officer, New York Life
Investment Management LLC (September
2002 to June 2003); Vice President and
Compliance Officer, Goldman Sachs Asset
Management (November 1999 to August
2002).
------------------------------------------------------------------------------------------------------------------------
MARGUERITE E.H. Secretary since 2004 Managing Director and Associate General 57 None
MORRISON Counsel, New York Life Investment
3/26/56 Management LLC (since June 2004);
Managing Director and Secretary, NYLIFE
Distributors LLC; Secretary, Eclipse
Funds, Eclipse Funds Inc., and MainStay
VP Series Fund, Inc.; Chief Legal
Officer--Mutual Funds and Vice President
and Corporate Counsel, The Prudential
Insurance Company of America (2000 to
June 2004).
------------------------------------------------------------------------------------------------------------------------
RICHARD W. Vice President--Tax Vice President, New York Life Insurance 57 None
ZUCCARO since 1991 Company; Vice President, New York Life
12/12/49 Insurance and Annuity Corporation, New
York Life Trust Company, FSB, NYLIFE
Insurance Company of Arizona, NYLIFE
LLC, and NYLIFE Securities Inc.; Vice
President, Tax, NYLIFE Distributors LLC;
Tax Vice President, New York Life
International, LLC, New York Life Trust
Company, and NYLIM Service Company LLC;
Vice President--Tax, Eclipse Funds,
Eclipse Funds Inc., and MainStay VP
Series Fund, Inc.
------------------------------------------------------------------------------------------------------------------------
</Table>
26 MainStay Large Cap Growth Fund
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that New York Life Investment
Management LLC (NYLIM) uses to vote proxies related to the Fund's securities is
available without charge, upon request, (i) by calling 1-800-MAINSTAY
(1-800-624-6782); (ii) by visiting the Fund's website at www.mainstayfunds.com;
or (iii) on the Securities and Exchange Commission's ("SEC") 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 1-800-MAINSTAY
(1-800-624-6782), (ii) by visiting the Fund's website at www.mainstayfunds.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
NYLIM at 1-800-MAINSTAY (1-800-624-6782). You can obtain copies of Form N-Q by
(i) 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); (ii) sending your request and a duplicating fee to the SEC's
Public Reference Room, Washington, DC 20549-0102; or (iii) sending your request
electronically to publicinfo@sec.gov.
www.MAINSTAYfunds.com 27
MAINSTAY FUNDS
MAINSTAY OFFERS A WIDE RANGE OF FUNDS FOR VIRTUALLY ANY INVESTMENT NEED. THE
FULL ARRAY OF MAINSTAY OFFERINGS IS LISTED HERE, WITH INFORMATION ABOUT THE
MANAGER, SUBADVISORS, LEGAL COUNSEL, AND INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
EQUITY FUNDS
MainStay All Cap Growth Fund
MainStay All Cap Value Fund
MainStay Capital Appreciation Fund
MainStay Common Stock Fund
MainStay Equity Index Fund(1)
MainStay Large Cap Growth Fund
MainStay MAP Fund
MainStay Mid Cap Growth Fund
MainStay Mid Cap Opportunity Fund
MainStay Mid Cap Value Fund
MainStay S&P 500 Index Fund
MainStay Small Cap Growth Fund
MainStay Small Cap Opportunity Fund
MainStay Small Cap Value Fund
MainStay Value Fund
INCOME FUNDS
MainStay Cash Reserves Fund
MainStay Diversified Income Fund
MainStay Floating Rate Fund
MainStay Government Fund
MainStay High Yield Corporate Bond Fund
MainStay Indexed Bond Fund
MainStay Intermediate Term Bond Fund
MainStay Money Market Fund
MainStay Short Term Bond Fund
MainStay Tax Free Bond Fund
BLENDED FUNDS
MainStay Asset Manager Fund
MainStay Balanced Fund
MainStay Convertible Fund
MainStay Total Return Fund
INTERNATIONAL FUNDS
MainStay Global High Income Fund
MainStay International Equity Fund
ASSET ALLOCATION FUNDS
MainStay Conservative Allocation Fund
MainStay Growth Allocation Fund
MainStay Moderate Allocation Fund
MainStay Moderate Growth Allocation Fund
MANAGER
NEW YORK LIFE INVESTMENT MANAGEMENT LLC
Parsippany, New Jersey
SUBADVISORS
MACKAY SHIELDS LLC(2)
New York, New York
JENNISON ASSOCIATES LLC
New York, New York
MARKSTON INTERNATIONAL LLC
White Plains, New York
WINSLOW CAPITAL MANAGEMENT, INC.
Minneapolis, Minnesota
LEGAL COUNSEL
DECHERT LLP
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL OR CALL 1-800-MAINSTAY
(1-800-624-6782) FOR A FREE PROSPECTUS. INVESTORS ARE ASKED TO CONSIDER THE
INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES OF THE INVESTMENT
CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION
ABOUT THE INVESTMENT COMPANY. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING.
1. Closed to new purchases as of January 1, 2002.
2. An affiliate of New York Life Investment Management LLC.
28 MainStay Large Cap Growth Fund
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(NEW YORK LIFE INVESTMENT MANAGEMENT LLC LOGO)
- ------------------------------------------------
Not FDIC insured. No bank guarantee. May lose value.
NYLIFE DISTRIBUTORS LLC, 169 LACKAWANNA AVENUE,
PARSIPPANY, NEW JERSEY 07054
This report may only be distributed when preceded or accompanied
by a current Fund prospectus.
www.mainstayfunds.com The MainStay Funds
(C) 2005 by NYLIFE Distributors LLC. All rights reserved.
SEC File Number: 811-04550
NYLIM-A07465 MS288-05 (RECYCLE LOGO) MSLG11-08/05
31
FORM N-CSR
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 office ("PEO") and principal financial officer ("PFO"). There were no
amendments to the Code during the period covered by the report. 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 its Audit Committee does not currently
have any member that qualifies as an "audit committee financial expert" as
defined under rules adopted by the Securities and Exchange Commission. In
accordance the authority granted under the Registrant's Audit Committee Charter,
the Audit Committee has retained a third party consultant to provide the
Committee and the Registrant with the financial expertise, knowledge and skills
similar to those of an audit committee financial expert.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees
The aggregate fees billed for: (i) the period from October 31, 2004 through
June 30, 2005 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 $541,500; (ii) the fiscal year ended
October 31, 2004 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 $820,000; and (iii) the fiscal period ended October 31,
2003 for professional services rendered by PricewaterhouseCoopers LLP ("PWC")
for the audit of the Registrant's annual financial statements or services that
were normally provided by the PWC in connection with statutory and regulatory
filings or engagements for that fiscal years were $782,662.
(b) Audit Related Fees
The aggregate fees billed for: (i) the period from October 31, 2004 through
June 30, 2005 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; (ii) the fiscal
year ended October 31, 2004 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 $7,500;
(iii) the fiscal year ended October 31, 2004 for assurance and related services
by PWC 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 $8,000; and (iv) the fiscal period ended October 31, 2003 for
assurance and related services by PWC 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 $6,000.
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(c) Tax Fees
The aggregate fees billed during: (i) the period from October 31, 2004 through
June 30, 2005 for professional services rendered by KPMG for tax compliance, tax
advice, and tax planning were $103,600; (ii) the fiscal year ended October 31,
2004 for professional services rendered by KPMG for tax compliance, tax advice,
and tax planning were $116,000; and (iii) the fiscal period ended October 31,
2003 for professional services rendered by PWC for tax compliance, tax advice,
and tax planning were $151,300. These services primarily included preparation of
federal, state and local income tax returns. Additionally, services included the
preparation of excise tax returns and excise tax distribution requirements.
(d) All Other Fees
The aggregate fees billed during: (i) period from October 31, 2004 through
June 30, 2005 for products and services provided by KPMG, other than the
services reported in paragraphs (a) through (c) of this Item were $0; (ii) the
fiscal year ended October 31, 2004 for products and services provided by KPMG,
other than the services reported in paragraphs (a) through (c) of this Item were
$0; and (iii) during the fiscal period ended October 31, 2003 for products and
services provided by PWC, other than the services reported in paragraphs (a)
through (c) of this Item were $0.
(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, the "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 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.
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(g) All non-audit fees billed by: (i) KPMG for services rendered to the
Registrant for the period from October 31, 2004 through June 30, 2005; (ii) KPMG
for services rendered to the Registrant for the fiscal year ended October 31,
2004; and (iii) PWC for services rendered to the Registrant for the fiscal
period ended October 31, 2003 are disclosed in 4(b)-(d) above.
The aggregate non-audit fees billed by: (i) KPMG for the period from October 31,
2004 through June 30, 2005 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 $0;
(ii) KPMG for the year ended October 31, 2004 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 $0; and (iii) PWC for the fiscal period ended October 31, 2003 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 $0.
(h) The Registrant's Audit Committee has determined that the non-audit services
rendered by (i) KPMG for the period from October 31, 2004 through June 30, 2005;
(ii) KPMG for the fiscal year ended October 31, 2004; and (iii) PWC for the
fiscal period ended October 31, 2003 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 KPMG
and PWC during the relevant time periods.
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.
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Item 10. Submission of Matters to a Vote of Security Holders.
At a meeting held on December 10-11, 2004, the Nominating Committee of the
Registrant adopted policies for considering Board Member candidates. The
Committee may consider nominations from shareholders of the Registrant. Each
eligible shareholder or shareholder group may submit no more than one candidate
each calendar year, and recommendations should be forwarded to the attention of
the Registrant's Secretary.
A shareholder's submission to the Secretary of the Registrant must include: (a)
contact information for the nominating shareholder or shareholder group; (b) a
certification from the nominating shareholder which provides the number of
shares which the person or group has: (i) sole power to vote or direct the vote;
(ii) shared power to vote or direct the vote; (iii) sole power to dispose or
direct the disposition of such shares; and (iv) shared power to dispose or
direct the disposition of such shares. In addition the certification shall
provide that the shares have been held continuously for at least two years as of
the date of the nomination; (c) the candidate's contact information and the
number of applicable Registrant shares owned by the candidate; (d) all
information regarding the candidate that would be required to be disclosed in
solicitations of proxies for elections of trustees required by Regulation 14A
under the Securities Exchange Act of 1934, as amended; and (e) a notarized
letter executed by the candidate, stating his or her intention to serve as a
candidate and be named in the Registrant's proxy statement, if so designated by
the Nominating Committee and the Registrant's Board.
It shall be in the Nominating Committee's sole discretion whether to seek
corrections of a deficient submission or to exclude a candidate from
consideration.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the 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) Code of Ethics
(b)(1) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2 under the Investment Company Act of 1940.
(b)(2) Certifications of principal executive officer and principal financial
officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
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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/ Christopher O. Blunt
---------------------------------
CHRISTOPHER O. BLUNT
President
Date: September 2, 2005
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/ Christopher O. Blunt
-------------------------------------
CHRISTOPHER O. BLUNT
President
Date: September 2, 2005
By: /s/ Jeffrey J. Gaboury
-------------------------------------
JEFFREY J. GABOURY
Vice President, Treasurer and Chief
Financial Officer
Date: September 2, 2005
EXHIBIT INDEX
(a) Code of Ethics
(b)(1) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2 under the Investment Company
Act of 1940.
(b)(2) Certification of principal executive officer and principal financial
officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
6