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
Strategic Value Fund (the "Fund").
The Fund commenced operations on October 22, 1997, 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 maximum long-term total return from a combination of common stocks, convertible
securities and high yield securities.
The Fund invests in high yield bonds. These bonds may involve special risks not commonly associated with investment in higher rated
debt securities. High yield bonds may be more susceptible to real or perceived adverse economic and competitive industry conditions
than higher grade bonds. Also, the secondary market on which high yield bonds are traded may be less liquid than the market for
higher grade bonds.
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