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-three funds (collectively referred to as the
"Funds"). These financial statements and notes relate only to MainStay Global High Yield Fund (the "Fund").
The Fund currently offers three classes of shares. Distribution of Class A shares and Class B shares commenced
on June 1, 1998. Class C shares were initially offered on September 1, 1998. 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 A shares, Class B shares and Class C 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 and Class
C 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 to provide maximum current income by investing primarily in high yield
debt securities of non-U.S. issuers. Capital appreciation is a secondary objective.
The Fund principally invests in high yield securities (sometimes called "junk bonds"), which are generally
considered speculative because they present a greater risk of lo