MainStay Funds are offered by a subsidiary of New York Life Insurance Company. New York Life is one of the nation's largest and oldest financial services firms, with a history of over 170 years of asset management. Large insurance companies are particularly adept at managing mixed asset portfolios.
Five MainStay mutual funds are very well-suited to creating a diverse portfolio for retirement savings. All returns are based on the net asset value (NAV) of the fund’s Class A shares.
MainStay Balanced Fund
The MainStay Balanced Fund (MBAIX) seeks to provide total return through a combination of growth and current income. The fund consists of a mixed portfolio of equity securities and fixed income securities. It attempts to allocate 60% in equities and 40% in fixed income. Fund managers may change that allocation to take advantage of opportunities in the marketplace, but they must keep at least 25% in fixed income.
The fund mainly invests in U.S. securities but it may invest up to 20% of assets in international issues. The fund's primary holdings are large- and mid-cap value-oriented common stocks combined with investment-grade bonds. The fund has a yield of 1.41%. The balance philosophy provides wide diversity along with a reasonable rate of return.
MainStay Income Builder Fund
The MainStay Income Builder Fund (MTRAX) is a Morningstar four-star rated fund that operates on the same general investment principles as the Balanced Fund. The difference is that the Income Builder Fund may invest in a wider spectrum of asset classes and grades of fixed income securities. The Income Builder fund also invests on a more global basis with larger holdings of international securities.
The fund has a yield of 3.24% and is an excellent investment for a Roth IRA account that shields the entire yield from federal income taxes.
MainStay S&P 500 Index Fund
The MainStay S&P 500 Index Fund (MSXAX) is a passively managed fund that seeks to match the total return of the Standard & Poor's (S&P) 500 Index. It accomplishes this task by investing in all the stocks that make up the S&P 500 Index in accordance with each stock’s weighted average within the index. Investors receive increased diversity as they own a fractional interest in each of the 500 largest publicly traded corporations in the United States.
Mainstay U.S. Equity Opportunities Fund
Every well-planned retirement portfolio has a component designed for extra capital appreciation. The Mainstay U.S. Equity Opportunities Fund (MYCIX) focuses on long-term growth. The fund invests in the common stocks of corporations in the Russell 1000 Index or corporations with capitalization roughly equivalent to the Index. It does not focus on income. Instead, fund managers attempt to select stocks of companies with increasing revenues that they believe will outperform the general index. The fund differs from many traditional stock funds in that it may take leverage short or long positions in securities up to 40% of NAV. This provides fund managers with the unique ability to profit from shifting economic conditions and can provide cushioning in a falling market. The fund is a 2015 Lipper Fund Award winner and is rated five stars by Morningstar.
MainStay Convertible Fund
The MainStay Convertible Fund (MCOAX) adds additional diversity by investing in a unique class of securities. Convertible securities are instruments such as bonds, preferred stock or corporate debt that are convertible into a corporation's common stock while currently paying interest or dividends to the fund. Fund managers take into account the stability of a firm's financials and the growth potential of its common stock. The convertibility option positions the fund to take extra advantage of a rising stock market. Convertibility also protects investors in fixed income securities during periods of rising interest rates, as convertible securities hold their value better than other fixed income securities. The current yield of this Morningstar four-star-rated fund is 3.7%.