Note 1--Organization and Business:
The MainStay Funds (the "Trust") was organized on January 9, 1986 as a Massachusetts business trust. The
Trust is registered under the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company and is comprised of twenty-two funds (collectively referred to as the "Funds").
These financial statements and notes relate only to MainStay Small Cap Growth Fund (the "Fund").
The Fund commenced operations on June 1, 1998 and currently offers two classes of shares. Class A shares are
offered at net asset value per share plus an initial sales charge. Class B 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. Class A shares and Class B shares bear the same voting (except for issues that relate solely to
one class), dividend, liquidation and other rights and conditions except that the Class B shares are subject to
higher distribution fee rates. Each class of shares bears distribution and/or service fee payments under a
distribution plan pursuant to Rule 12b-1 under the 1940 Act.
The Fund's investment objective is to seek long-term capital appreciation by investing primarily in securities of
Small-capitalization companies may be more volatile in price and have significantly lower trading volumes than
companies with larger capitalizations. They may be more vulnerable to adverse business or market developments
than large-capitalization companies.
Note 2--Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Fund:
Valuation of Fund Shares. The net asset value per share of each class of shares is calculated on each day the
New York Stock Exchange (the "Exchange") is open for trading as of the close of regular trading on the
Exchange. The net asset value per share of each class of shares is determined by taking the assets attrib