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MAINSTAY FUNDS - Notes to Mutual Funds Financial Statements - 1-8-2004

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					Notes to Financial Statements

                                                           21

cost of) the closing transaction and the Fund's basis in the contract. The Fund invests in stock index futures
contracts to gain full exposure to changes in stock market prices to fulfill its investment objective.

The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount
recognized in the Statement of Assets and Liabilities. The contract or notional amounts and variation margin
reflect the extent of the Fund's involvement in open futures positions. Risks arise from the possible imperfect
correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets, and the
possible inability of counterparties to meet the terms of their contracts. However, the Fund's activities in futures
contracts are conducted through regulated exchanges which minimize counterparty credit risks.

(C) 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.

(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are recorded
on the ex-dividend date. The Fund intends to declare and pay dividends and capital gain distributions 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 period reclassification between accumulated undistributed net investment
income and accumulated net realized loss on investments arising from permanent differences; net assets at
October 31, 2003, are not affected.

                                        ACCUMULATED               ACCUMULATED
                                       UNDISTRIBUTED              NET REALIZED
                                       NET INVESTMENT               LOSS ON
                                           INCOME                 INVESTMENTS
                                       --------------             ------------
                                           $1,667                   $(1,667)




The reclassification for the Fund is due to real estate investment trust distributions.

(E) 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
MainStay Equity Index Fund

22

earned. Discounts and premiums on short-term securities are accreted and amortized, respectively, on the straight
line method.

(F) EXPENSES. Expenses of the Trust are allocated to the individual Funds in proportion to the net assets of the
respective Funds where the expenses are incurred except when 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.

(G) 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. New York Life Investment Management LLC ("NYLIM" or the "Manager"), an indirect
wholly-owned subsidiary of New York Life Insurance Company ("New York Life"), serves 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.
The Fund is advised by the Manager directly, without a Subadviser.

The Trust, on behalf of the Fund, paid the Manager a monthly fee for services performed and the facilities
furnished at an annual rate of 0.50% of the Fund's average daily net assets. For the ten months ended October
31, 2003, the Manager earned from the Fund $2,510,779. For the year ended December 31, 2002, the
Manager earned from the Fund $3,750,311.

(B) DISTRIBUTION 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. The Fund has
adopted a distribution plan (the "Plan") in accordance with the provisions of Rule 12b-1 under the 1940 Act.

Pursuant to the Plan, the Distributor receives payments from the Fund at an annual rate of 0.25% of the Fund's
average daily net assets, which is an expense of the Fund for distribution or service activities as designated by the
Distributor.

The Plan provides 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.

(C) TRANSFER, DIVIDEND DISBURSING AND SHAREHOLDER SERVICING AGENT. NYLIM
Service Company LLC, ("NYLIM Service"), an affiliate of NYLIM, is the Fund's transfer, dividend disbursing
and shareholder
Notes to Financial Statements (continued)

                                                         23

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 accrued to NYLIM Service for the ten months ended October 31, 2003, and the year ended
December 31, 2002, amounted to $1,027,131 and $1,356,974, respectively.

(D) TRUSTEES FEES. Trustees, other than those affiliated with NYLIM, are paid an annual 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 fee of $20,000. Beginning January 1, 2003, the Audit Committee
Chairman receives an additional $2,000 for each meeting of the Audit Committee attended. Also, beginning
January 1, 2003, the Chairpersons of the Brokerage Committee and the Operations Committee each receive an
additional $1,000 for each meeting of the Brokerage Committee and Operations Committee attended,
respectively. The Trust allocates trustees fees in proportion to the net assets of the respective Funds. Thus the
Equity Index Fund only pays a portion of the fees identified above.

(E) OTHER. Fees for the cost of legal services, included in Professional fees as shown in the Statement of
Operations, provided to the Fund by the Office of the General Counsel of NYLIM amounted to $12,586 for the
ten months ended October 31, 2003, and $14,199 for the year ended December 31, 2002.

The Fund pays the Manager a monthly fee for 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 recordkeeping services provided to the Fund by the Manager amounted to $72,426
for the ten months ended October 31, 2003, and $101,674 for the year ended December 31, 2002.

NOTE 4--FEDERAL INCOME TAX:

At November 30, 2002, the Fund's year end for federal income tax purposes, the components of accumulated
loss on a tax basis were as follows:

                    UNDISTRIBUTED       ACCUMULATED
                    NET INVESTMENT      CAPITAL AND        UNREALIZED       TOTAL ACCUMULATED
                        INCOME          OTHER LOSSES      DEPRECIATION            LOSS
                    --------------      ------------      ------------      -----------------
                      $4,375,079        $(67,391,477)     $(12,735,768)       $(75,752,166)




The difference between book-basis and tax-basis unrealized depreciation is due to wash sale deferrals and real
estate investment trust distributions.

At November 30, 2002, for federal income tax purposes, capital loss carryforwards of $89,852,496 were
available, to the extent provided by the regulations, to offset future realized gains through 2010. 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.
MainStay Equity Index Fund

24

The tax character of distributions paid during the years ended December 31, 2002 and December 31, 2001,
shown in the Statement of Changes in Net Assets, were as follows:

                                                                            2002             2001
                                                                         -----------      -----------
           Distributions paid from:
             Ordinary Income:                                            $ 6,679,103      $ 4,112,722
             Long-term Capital Gains                                      22,461,019       29,560,108
                                                                         -----------      -----------
                                                                         $29,140,122      $33,672,830
                                                                         ===========      ===========




NOTE 5--PURCHASES AND SALES OF SECURITIES (IN 000'S):

During the period ended October 31, 2003, purchases and sales of securities, other than short-term securities,
were $14,738 and $63,939, respectively.

NOTE 6--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
ten months ended October 31, 2003.

NOTE 7--CAPITAL SHARE TRANSACTIONS (IN 000'S):

                                                                          JANUARY 1               YEAR ENDED
                                                                           THROUGH               DECEMBER 31,
                                                                         OCTOBER 31,          -------------------
                                                                            2003*              2002         2001
                                                                         -----------           ----         ----
Shares sold.................................................                    6                 75        5,689
Shares issued in reinvestment of dividends and
  distributions.............................................                   --              1,022             911
                                                                           ------             ------          ------
                                                                                6              1,097           6,600
Shares redeemed.............................................               (1,782)            (5,120)         (6,760)
Reduction of shares due to reverse share split..............                   --             (1,056)           (940)
                                                                           ------             ------          ------
Net decrease................................................               (1,776)            (5,079)         (1,100)
                                                                           ======             ======          ======




* The Fund changed its fiscal year end from December 31 to October 31.
Notes to Financial Statements (continued)

                                                        25

NOTE 8--GUARANTEE:

NYLIFE LLC ("NYLIFE"), a wholly-owned subsidiary of New York Life, will guarantee unconditionally and
irrevocably pursuant to a Guaranty Agreement between NYLIFE and the Equity Index Fund (the "Guarantee")
that if, on the business day immediately after ten years from the date of purchase (the "Guarantee Date"), the net
asset value ("NAV") of a Fund share plus the value of all dividends and distributions paid, including cumulative
reinvested dividends and distributions attributable to such share paid during that ten-year period ("Guaranteed
Share"), is less than the price initially paid for the Fund share ("Guaranteed Amount"), NYLIFE will pay
shareholders an amount equal to the difference between the Guaranteed Amount for each such share and the net
asset value of each such Guaranteed Share outstanding and held by shareholders as of the close of business on
the Guarantee Date. There is no charge to the Fund or its shareholders for the Guarantee.

NOTE 9--SUBSEQUENT EVENT:

The Fund declared a dividend of $0.1277 per share which was paid on December 18, 2003, and also underwent
a reverse share split on that day. The reverse share split rate was 0.9965 per share outstanding calculated on
fund shares outstanding immediately after reinvestment of dividends.

NOTE 10--OTHER MATTERS:

New York Life Investment Management LLC (NYLIM) and mutual funds that NYLIM advises, including The
MainStay Funds, have received requests for information from various government authorities and regulatory
bodies regarding market timing, late trading and other matters. We are cooperating fully in responding to these
requests. We have no reason to believe that NYLIM or any of the mutual funds NYLIM advises has been
targeted as the subject of any governmental or regulatory enforcement action.
26

Report of Independent Auditors

To the Board of Trustees of The MainStay Funds and Shareholders of MainStay Equity Index Fund

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the
related statements of operations and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of MainStay Equity Index Fund (one of the funds constituting The
MainStay Funds, hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the ten
months ended October 31, 2003 and the year ended December 31, 2002, the changes in its net assets for the
ten months ended October 31, 2003 and each of the two years in the period ended December 31, 2002 and the
financial highlights for each of the periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits, which
included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 18, 2003
                                                          27

The MainStay Funds--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 his/her successor is elected and qualified or until his/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.

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
        NAME AND          AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES*
---------------------------------------------------------------------------------------------------------
Gary E. Wendlandt         Chairman since   Chief Executive Officer, Chairman, and         43
10/8/50                   2002 and         Manager, New York Life Investment
                          Trustee since    Management LLC (including predecessor
                          2000             advisory organizations) and New York
                                           Life Investment Management Holdings LLC;
                                           Executive Vice President, New York Life
                                           Insurance Company; Executive Vice
                                           President and Manager, NYLIFE LLC;
                                           Manager, NYLIFE Distributors LLC; Vice
                                           Chairman, McMorgan & Company 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. (19
                                           portfolios); Executive Vice President
                                           and Chief Investment Officer, MassMutual
                                           Life Insurance Company (1993 to 1999).
---------------------------------------------------------------------------------------------------------
Stephen C. Roussin        President,       President, Chief Operating Officer, and        41
7/12/63                   Chief            Manager, New York Life Investment
                          Executive        Management LLC (including predecessor
                          Officer, and     advisory organizations) and New York
                          Trustee since    Life Investment Management Holdings LLC;
                          1997             Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, NYLIFE LLC; Director, NYLIFE
                                           Securities, Inc.; Chairman, President,
                                           and Manager, NYLIFE Distributors LLC;
                                           Manager, McMorgan & Company LLC;
                                           Chairman, Trustee, and President,
                                           Eclipse Funds, (4 portfolios); Chairman
                                           and Director, Eclipse Funds Inc. (13
                                           portfolios); Senior Vice President,
                                           Smith Barney (1994 to 1997).
---------------------------------------------------------------------------------------------------------
* Certain Trustees are considered to be interested persons of the Trust within the meaning of the 1940 Ac
  their affiliation with New York Life Insurance Company, New York Life Investment Management LLC, MacKay
  LLC, McMorgan & Company LLC, Eclipse Funds, Eclipse Funds Inc., MainStay VP Series Fund, Inc., NYLIFE S
  Inc., and/or NYLIFE Distributors LLC, as described in detail in the column "Principal Occupation(s) Dur
  Years."
28

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Harry G. Hohn             Trustee since    Retired. Chairman and Chief Executive          24
3/1/32                    1996             Officer, New York Life Insurance Company
                                           (1990 to 1997); Chairman of the Board,
                                           Life Insurance Council of New York (1996
                                           to 1997); Director, Million Dollar
                                           Roundtable Foundation (1996 to 1997).
---------------------------------------------------------------------------------------------------------
Donald K. Ross            Trustee since    Retired. Manager, MacKay Shields LLC;          24
7/1/25                    1991             Chairman, Chief Executive Officer, and
                                           President, New York Life Insurance
                                           Company (1981 to 1990).
---------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Charlynn Goins            Trustee since    Retired. Consultant to U.S. Commerce           24
9/15/42                   2001             Department, Washington, DC (1998 to
                                           2000); Senior Vice President and
                                           Director of International Marketing,
                                           Prudential Mutual Funds and Annuities
                                           (1990 to 1997).
---------------------------------------------------------------------------------------------------------
Edward J. Hogan           Trustee since    Rear Admiral U.S. Navy (Retired);              24
8/17/32                   1996             Independent Management Consultant.
---------------------------------------------------------------------------------------------------------
Terry L. Lierman          Trustee since    Partner, Health Ventures LLC; Vice             24
1/4/48                    1991             Chair, Employee Health Programs;
                                           Partner, TheraCom (1994 to 2001);
                                           President, Capitol Associates, Inc.
                                           (1984 to 2001).
---------------------------------------------------------------------------------------------------------
John B. McGuckian         Trustee since    Chairman, Ulster Television Plc; Pro           24      Non-Exe
11/13/39                  1997             Chancellor, Queen's University (1985 to                Directo
                                           2001).                                                 Irish B
                                                                                                  Non-Exe
                                                                                                  Directo
                                                                                                  Contine
                                                                                                  Plc; No
                                                                                                  Directo
                                                                                                  Plc.
---------------------------------------------------------------------------------------------------------
Donald E. Nickelson       Trustee since    Retired. Vice Chairman, Harbour Group          24      Directo
12/9/32                   1994 and Lead    Industries, Inc. (leveraged buyout                     Corpora
                          Non-             firm).                                                 Directo
                          Interested                                                              Advanta
                          Trustee                                                                 Corpora
---------------------------------------------------------------------------------------------------------
Michael H. Sutton         Trustee since    Retired. Independent Consultant (1999 to       24
9/19/40                   2003             present); Special Consultant, Financial
                                           Accounting Standards Board (1998 to
                                           1999); Chief Accountant, United States
                                           Securities and Exchange Commission (1995
                                           to 1998).
---------------------------------------------------------------------------------------------------------
                                               29

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Richard S. Trutanic       Trustee since    Advisor (July 2003 to present) and             24
2/13/52                   1994             Managing Director (2001 to June 2003),
                                           The Carlyle Group (private investment
                                           firm); Chairman and Chief Executive
                                           Officer, Somerset Group (financial
                                           advisory firm); Senior Managing
                                           Director, Groupe Arnault (private
                                           investment firm) (1999 to 2001).
---------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
---------------------------------------------------------------------------------------------------------
Jefferson C. Boyce        Senior Vice      Senior Managing Director, New York Life       N/A
9/17/57                   President        Investment Management LLC (including
                          since 1995       predecessor advisory organizations);
                                           Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, Eclipse Funds and Eclipse
                                           Funds Inc.; Manager, NYLIFE Distributors
                                           LLC.
---------------------------------------------------------------------------------------------------------
Patrick J. Farrell        Chief            Managing Director, New York Life              N/A
9/27/59                   Financial and    Investment Management LLC (including
                          Accounting       predecessor advisory organizations);
                          Officer,         Treasurer, Chief Financial and
                          Treasurer, and   Accounting Officer, Eclipse Funds Inc.,
                          Vice President   Eclipse Funds, and MainStay VP Series
                          since 2001       Fund, Inc.; Chief Financial Officer and
                                           Assistant Treasurer, McMorgan Funds.
---------------------------------------------------------------------------------------------------------
Robert A. Anselmi         Secretary        Senior Managing Director, General             N/A
10/19/46                  since 2001       Counsel, and Secretary, New York Life
                                           Investment Management LLC (including
                                           predecessor advisory organizations);
                                           Secretary, New York Life Investment
                                           Management Holdings LLC; Senior Vice
                                           President, New York Life Insurance
                                           Company; Vice President and Secretary,
                                           McMorgan & Company LLC; Secretary,
                                           NYLIFE Distributors LLC; Secretary,
                                           MainStay VP Series Fund, Inc., Eclipse
                                           Funds Inc., and Eclipse Funds; 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).
---------------------------------------------------------------------------------------------------------
Richard W. Zuccaro        Tax Vice         Vice President, New York Life Insurance       N/A
12/12/49                  President        Company; Vice President, New York Life
                          since 1991       Insurance and Annuity Corporation,
                                           NYLIFE Insurance Company of Arizona,
                                           NYLIFE LLC, NYLIFE Securities Inc.; Vice
                                           President-Financial Operations and Chief
                                           Financial Officer, NYLIFE Distributors
                                           LLC; Tax Vice President, New York Life
                                           International, LLC; Tax Vice President,
                                           Eclipse Funds, Eclipse Funds Inc., and
                                           MainStay VP Series Fund, Inc.
---------------------------------------------------------------------------------------------------------
30

THE MAINSTAY FUNDS

EQUITY FUNDS
MainStay Blue Chip Growth Fund
MainStay Capital Appreciation Fund
MainStay Equity Index Fund(1)
MainStay Mid Cap Growth Fund
MainStay Select 20 Equity Fund(2)
MainStay Small Cap Growth Fund
MainStay Small Cap Value Fund(3)
MainStay U.S. Large Cap Equity Fund

EQUITY AND INCOME FUNDS
MainStay Convertible Fund
MainStay Equity Income Fund
MainStay Growth Opportunities Fund
MainStay MAP Fund
MainStay Research Value Fund
MainStay Strategic Value Fund
MainStay Total Return Fund
MainStay Value Fund

INCOME FUNDS
MainStay Government Fund
MainStay High Yield Corporate Bond Fund
MainStay Money Market Fund
MainStay Strategic Income Fund
MainStay Tax Free Bond Fund

INTERNATIONAL FUNDS
MainStay Global High Yield Fund
MainStay International Bond Fund
MainStay International Equity Fund
INVESTMENT ADVISOR

NEW YORK LIFE INVESTMENT MANAGEMENT LLC
Parsippany, New Jersey

SUBADVISORS

MACKAY SHIELDS LLC(4)
New York, New York

DALTON, GREINER, HARTMAN, MAHER & CO.
New York, New York

FUND ASSET MANAGEMENT, L.P.
d/b/a Mercury Advisors
Plainsboro, New Jersey

GABELLI ASSET MANAGEMENT COMPANY
Rye, New York

JENNISON ASSOCIATES LLC
New York, New York

MARKSTON INTERNATIONAL, LLC
White Plains, New York

MCMORGAN & COMPANY LLC(4)
San Francisco, California


1 Closed to new purchases as of January 1, 2002. 2 Ceased operations as of November 28, 2003. 3 Closed to
new investors as of December 1, 2001. 4 An affiliate of New York Life Investment Management LLC.
Trustees and Officers(1)

                         GARY E. WENDLANDT             Chairman and Trustee
                         STEPHEN C. ROUSSIN            President, Chief Executive
                                                       Officer, and Trustee
                         CHARLYNN GOINS                Trustee
                         EDWARD J. HOGAN               Trustee
                         HARRY G. HOHN                 Trustee
                         TERRY L. LIERMAN              Trustee
                         JOHN B. MCGUCKIAN             Trustee
                         DONALD E. NICKELSON           Trustee
                         DONALD K. ROSS                Trustee
                         MICHAEL H. SUTTON             Trustee
                         RICHARD S. TRUTANIC           Trustee
                         JEFFERSON C. BOYCE            Senior Vice President
                         PATRICK J. FARRELL            Chief Financial and
                                                       Accounting Officer,
                                                       Treasurer, and
                                                       Vice President
                         ROBERT A. ANSELMI             Secretary
                         RICHARD W. ZUCCARO            Tax Vice President




DECHERT LLP
Legal Counsel

PRICEWATERHOUSECOOPERS LLP
Independent Auditors
1. As of October 31, 2003.

[MAINSTAY LOGO]

MainStay is a division of New York Life Investment Management LLC, the investment advisor to The MainStay
Funds.


Not FDIC insured. No bank guarantee. May lose value.

NYLIFE DISTRIBUTORS LLC
169 Lackawanna Avenue
Parsippany, New Jersey 07054

www.mainstayfunds.com

This report may only be distributed when preceded or accompanied by a current Fund prospectus.

(C)2003 NYLIFE Distributors LLC. All rights reserved. MSEI11- 12/03 NYLIM-A04432 06
[RECYCLE LOGO]

                                     [MAINSTAY FUNDS LOGO]

MainStay(R)
Equity Index Fund

                                           ANNUAL REPORT

                                           OCTOBER 31, 2003

                                          [MAINSTAY LOGO]
                Table of Contents

President's Letter                              2
$10,000 Invested in MainStay Equity Income
Fund versus Russell 1000(R) Value Index,
Russell Midcap(R) Value Index, and
Inflation--Class A, Class B, and Class C
Shares                                          3
Portfolio Management Discussion and Analysis    5
Year-by-Year and 10-Month Performance           6
Portfolio of Investments                        9
Financial Statements                           11
Notes to Financial Statements                  16
Report of Independent Auditors                 23
Trustees and Officers                          24
The MainStay(R) Funds                          27
President's Letter

The first 10 months of 2003 represented a positive period for most investors. Although the stock market
struggled from mid-January through early March, it recovered strongly through the end of October. The rally
began several days before coalition forces entered Iraq and continued long after the conclusion of major combat
operations. Although difficulties in Iraq, the Middle East, and North Korea continued to raise concerns, investors
have tended to focus on corporate earnings and the potential for an economic turnaround.

The Federal Reserve remained accommodative throughout the 10-month period, and the Federal Open Market
Committee lowered the targeted federal funds rate by 25 basis points on June 25, 2003, to a low 1.0%. Real
gross domestic product, which grew at a modest 1.4% in the first quarter of 2003, rose by 3.3% in the second
quarter. According to preliminary estimates by the Bureau of Economic Analysis, real gross domestic product
grew at a seasonally adjusted annual rate of 8.2% in the third quarter. Much of this increase resulted from robust
consumer spending. Although unemployment rates remain high, the figures have declined from their peak in June
2003, and the Federal Reserve recently observed that "the labor market appears to be stabilizing."

Within the equity market, smaller companies generally outperformed larger ones and growth stocks tended to
appreciate more than value equities at all capitalization levels. The bond markets benefited from anticipation of the
Federal Reserve's easing move, and while yields on short-term securities continued to decline, yields on longer-
term bonds rose to a peak in early September and closed the reporting period higher than where they began. For
the 10-month period, corporate bonds generally outpaced Treasury securities, and high-yield bonds and
emerging-market debt provided outstanding returns.

At MainStay, each of our Funds seeks to achieve its investment objective with an established process that is
consistently applied in all market environments. While markets may shift and results may vary, we believe that our
time-tested investment strategies can help you pursue your long-range goals with confidence.

As you may have noted, the date of this report differs from the date of previous annual reports. The MainStay
Board of Trustees recently approved making October 31 the end of the fiscal year for most MainStay Funds.
The report that follows provides details about the specific market conditions and portfolio management decisions
that affected the performance of your MainStay Fund during the first 10 months of 2003. If you have any
questions about this report or your MainStay Fund investments, your Registered Representative will be pleased
to assist you.

Sincerely,

                                             /s/ STEPHEN C. ROUSSIN
                                             Stephen C. Roussin
                                             November 2003




                                                         2
$10,000 Invested in MainStay Equity
Income Fund versus Russell 1000(R) Value Index, Russell Midcap(R) Value Index, and Inflation

CLASS A SHARES Total Returns with Sales Charges: 1 Year 15.66%, 5 years 10.09%, Since Inception
(6/1/98) 9.14%
[PERFORMANCE GRAPH]

                                              MAINSTAY EQUITY          RUSSELL 1000 VALUE      RUSSELL MIDCAP VALU
                                                INCOME FUND                INDEX (1)                INDEX (2)
                                              ---------------          ------------------      -------------------
6/1/98                                             9450.00                  10000.00                 10000.00
10/31/98                                           9389.00                   9648.00                  9223.00
10/31/99                                          11932.00                  11243.00                  9748.00
10/31/00                                          14743.00                  11863.00                 10903.00
10/31/01                                          14406.00                  10456.00                 10753.00
10/31/02                                          13128.00                   9408.00                 10434.00
10/31/03                                          16067.00                  11561.00                 13927.00




CLASS B SHARES Total Returns with Sales Charges: 1 Year 16.52%, 5 Years 10.23%, Since Inception
(6/1/98) 9.34%
[PERFORMANCE GRAPH]

                                              MAINSTAY EQUITY          RUSSELL 1000 VALUE      RUSSELL MIDCAP VALU
                                                INCOME FUND                INDEX (1)                INDEX (2)
                                              ---------------          ------------------      -------------------
6/1/98                                             10000                     10000                    10000
10/31/98                                            9908                      9648                     9223
10/31/99                                           12488                     11243                     9748
10/31/00                                           15309                     11863                    10903
10/31/01                                           14863                     10456                    10753
10/31/02                                           13433                      9408                    10434
10/31/03                                           16224                     11561                    13927




CLASS C SHARES Total Returns with Sales Charges: 1 Year 20.52%, 5 Years 10.50%, Since Inception
(6/1/98) 9.46%
[PERFORMANCE GRAPH]

                                              MAINSTAY EQUITY          RUSSELL 1000 VALUE      RUSSELL MIDCAP VALU
                                                INCOME FUND                INDEX (1)                INDEX (2)
                                              ---------------          ------------------      -------------------
6/1/98                                             10000                     10000                    10000
10/31/98                                            9908                      9648                     9223
10/31/99                                           12488                     11243                     9748
10/31/00                                           15309                     11863                    10903
10/31/01                                           14863                     10456                    10753
10/31/02                                           13433                      9408                    10434
10/31/03                                           16324                     11561                    13927




PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET
VOLATILITY, CURRENT PERFORMANCE MAY BE LESS THAN THAT SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, UPON REDEMPTION, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MORE CURRENT
PERFORMANCE INFORMATION PLEASE VISIT WWW.MAINSTAYFUNDS.COM.

                                                     3
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 deduction of all sales charges that would have applied for the period of
investment. Class A share performance reflects the effect of the maximum 5.5% initial sales charge. Class B
shares are subject to a contingent deferred sales charge (CDSC) of up to 5% if shares are redeemed within the
first six years of purchase. Class B share performance reflects a CDSC of 1%, which would apply for the period
shown. Class C share performance includes the historical performance of the Class B shares for periods from
6/1/98 through 8/31/98. Class C shares would be subject to a CDSC of 1% if redeemed within one year of
purchase.

1. The Russell 1000(R) Value Index is an unmanaged index that measures the performance of those Russell 1000
(R) companies with lower price-to-book ratios and lower 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 reinvestment of all income and capital gains. An investment cannot be made directly
into an index.

2. The Russell Midcap(R) Value Index is an unmanaged index that measures the performance of those Russell
Midcap(R) companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap
(R) Index is an unmanaged index that measures the performance of the 800 smallest companies in the Russell
1000(R) Index, which, in turn, is an unmanaged index that measures the performance of the 1,000 largest U.S.
companies based on total market capitalization. Results assume reinvestment of all income and capital gains. An
investment cannot be made directly into an index.

3. Inflation is measured by the Consumer Price Index (CPI), which is a commonly used measure of the rate of
inflation and shows the changes in the cost of selected goods. The rate of inflation does not represent an
investment return.

                                                        4
Portfolio Management Discussion and Analysis

The equity market was generally weak in the opening months of 2003, largely because of the anemic economy
and uncertainty regarding the possibility of a war in Iraq. Since mid-March 2003, however, stocks have
rebounded sharply. The stock market is often a "leading indicator," meaning that people attempt to anticipate the
future direction of the economy and corporate profits and then invest accordingly. In hindsight, the strong rally
suggests that investors had correctly anticipated the economic recovery that followed. According to preliminary
estimates from the Bureau of Economic analysis, real gross domestic product rose 8.2% in the third quarter of
2003. The figure, which exceeded expectations, was largely driven by robust consumer spending. Business
spending also increased after several years of weakness.

The stock market's rally was accompanied by a return to speculative activity at a level that we have not seen
since the run-up in information technology stocks in the late 1990s. For the first 10 months of 2003, much of the
best stock performance has come from unprofitable businesses and companies with fewer earnings.

PERFORMANCE REVIEW

For the 10 months ended October 31, 2003, MainStay Equity Income Fund returned 17.53% for Class A
shares and 16.81% for Class B and Class C shares, excluding all sales charges. All share classes
underperformed the 17.61% return of the average Lipper(1) equity income fund over the same period. All share
classes also underperformed the 20.84% return of the Russell 1000(R) Value Index(2) and the 28.63% return of
the Russell Midcap(R) Value Index(3) for the 10-months ended October 31, 2003.

While the Fund produced strong absolute results, it lagged its benchmarks during the reporting period. Many of
the Fund's largest holdings are in sectors whose positive supply-and-demand characteristics are likely to become
apparent during an economic recovery. Unfortunately, the war in Iraq, higher energy prices, and weak business
spending delayed the economic rebound until the second half of 2003, which hurt the Fund's relative results.

In light of these trends, however, our conviction in the appropriateness of the Fund's portfolio has grown.
Exposure to the capital goods, basic materials, and energy sectors continues to comprise a meaningful portion of
Fund's portfolio. Ironically, although we have the greatest confidence in the Fund's basic materials and energy
investments, Fund holdings in these sectors were among the leading detractors from the Fund's performance
during the reporting period. Needless to say, we have methodically reviewed our commitment to these industry
groups. In doing so, we have concluded that the stocks the Fund holds in these sectors not only have improving
fundamentals and compelling

------- 5
1. Lipper Inc. is an independent fund performance monitor. Results are based on total returns with all dividend
and capital gain distributions reinvested.
2. See footnote on page 4 for more information about the Russell 1000(R) Value Index.
3. See footnote on page 4 for more information about the Russell Midcap(R) Value Index.
YEAR-BY-YEAR AND 10-MONTH PERFORMANCE (WITHOUT SALES CHARGES)

CLASS A SHARES
[BAR GRAPH]

                                                                                              CLASS A SHARES
                                                                                              --------------
    12/98                                                                                           4.01
    12/99                                                                                          25.11
    12/00                                                                                          22.79
    12/01                                                                                           4.88
    12/02                                                                                         -13.67
    10/03                                                                                          17.53




CLASS B AND C SHARES
[BAR GRAPH]

                                                                                              CLASS B SHARES
                                                                                              --------------
    12/98                                                                                           3.56
    12/99                                                                                          24.16
    12/00                                                                                          21.83
    12/01                                                                                           4.17
    12/02                                                                                         -14.35
    10/03                                                                                          16.81




valuations but also meet our guidelines for positive catalysts and our margin-of-safety requirements.

STRONG AND WEAK PERFORMERS

During the reporting period, Navistar International was the Fund's top contributor to performance. The stock of
this commercial truck and diesel engine maker appreciated by 66%,(4) as the outlook for equipment-replacement
demand remained favorable and the firm's aggressive internal restructuring drove investor interest in the stock.
Similar dynamics helped engine manufacturer Cummins advance 73%. PG&E, a utility in the process of
reorganization,

6
4. Percentages reflect the price performance of the securities mentioned for the 10 months ended October 31,
2003, or for the portion of the reporting period shares were held in the Fund, if shorter. Percentages do not
reflect the impact of dividends received, if any. Due to purchases and sales, the performance of Fund holdings
may differ from that of the securities themselves.
gained nearly 76%, as investors acknowledged the company's strong core earnings power and valuable asset
base. Oil refiner and chemical producer Sunoco appreciated 32% as its profitability rebounded from low levels.
Temple-Inland, a manufacturer of corrugated packaging and building products, rose 21% on improving demand.

The largest detractors from the Fund's performance included AGCO, a global designer, manufacturer, and
distributor of agricultural equipment and replacement parts. AGCO's stock fell 18% because of a weak
worldwide agricultural environment and manufacturing inefficiencies that resulted from AGCO's aggressive plant-
rationalization efforts. While the stock's performance was clearly disappointing, we believe that we're in the early
stages of the farm economy's emergence from a prolonged downturn. If the turnaround proceeds as we
anticipate, we feel strongly that AGCO will benefit accordingly.

Transocean, an offshore energy driller, declined 17%. We added to the Fund's position on weakness, since we
believe that the company's strong free cash flow and long-term business prospects are favorable. Payless
ShoeSource, the country's largest family-footwear retailer, fell 23% on disappointing sales, which continued to
put pressure on the company's profit margins. ENSCO International, an offshore oil and gas drilling contractor,
declined 10% because of weak demand for its services. We continue to hold ENSCO, since the company is in
the midst of contractual negotiations that could increase its rig-fleet utilization.

PORTFOLIO WEIGHTINGS

During the reporting period, the Fund maintained an underweighted exposure to several sectors where we found
few attractive stocks and questionable fundamentals. For example, in the consumer cyclical sector we continue to
see unattractive valuations and a lack of traditional pent-up demand relative to typical post-recession periods.
The consumer staples sector also appears to have few stocks with attractive valuations. We expect that the
financials sector will continue to be troubled in the wake of the lending and expansion frenzy of the late 1990s.
Over the 10-month reporting period, the Fund's underexposure to most of these sectors enhanced relative
returns, although consumer cyclicals provided an exception and had a slightly negative impact on the Fund's
relative performance.

The Fund also continues to maintain an underweighted position in the infor- mation technology sector, where we
believe valuations are high. We have had difficulty identifying attractively priced information technology
companies that are experiencing fundamental business improvements. Indeed, we continue to see little value--and
little sign of a sustainable demand recovery--in most areas of the sector. It would appear that company insiders
share our concern, since they have continued to liquidate private holdings at a very high rate.

                                                         7
Unfortunately, the Fund's underweighted position in information technology stocks hurt relative results during the
reporting period, as the sector rebounded sharply. In this market environment, we have seen the best
performance generated by the riskier, more speculative information technology companies.

LOOKING AHEAD

We are optimistic regarding both the outlook for value-oriented stocks and the opportunities we are finding in the
marketplace. We are hopeful that the combined effect of historical postrecessionary outperformance for value
equities and improving fundamentals will bear fruit on a timely basis. In the meantime, we will remain focused on
applying our disciplined investment process to identify undervalued equities with numerous catalysts for
appreciation.

Whatever the markets or the economy may bring, the Fund will continue to seek to realize maximum long-term
total return from a combination of capital appreciation and income.

RICHARD A. ROSEN
MICHAEL C. SHERIDAN
Portfolio Managers
MacKay Shields LLC

INFORMATION ON THIS PAGE AND THE PRECEDING PAGES HAS NOT BEEN AUDITED.

                                                         8
Portfolio of Investments October 31, 2003

                                                      SHARES           VALUE
                                                    ----------------------------
                  COMMON STOCKS (91.9%)+

                  AEROSPACE & DEFENSE (1.1%)
                  Raytheon Co. ..................    120,242       $ 3,184,008
                                                                   ------------

                  AUTO COMPONENTS (1.2%)
                  Delphi Corp. ..................    380,200           3,383,780
                                                                    ------------

                  BUILDING PRODUCTS (1.8%)
                  American Standard Cos., Inc.
                   (a)...........................     53,683           5,137,463
                                                                    ------------

                  CHEMICALS (4.8%)
                  Air Products & Chemicals,
                   Inc. .........................     74,003           3,360,476
                  Arch Chemicals, Inc. ..........    190,982           4,235,981
                  Crompton Corp. ................    168,200             901,552
                  IMC Global, Inc. ..............     26,300             183,837
                  Imperial Chemicals Industries
                   PLC ADR (b)...................    236,500           3,088,690
                  Olin Corp. ....................    100,225           1,744,917
                                                                    ------------
                                                                      13,515,453
                                                                    ------------
                  COMMERCIAL BANKS (6.2%)
                  BB&T Corp. ....................     40,400           1,562,268
                  Compass Bancshares, Inc. ......    140,214           5,297,285
                  Hibernia Corp. Class A.........     72,057           1,627,768
                  Marshall & Ilsley Corp. .......     49,443           1,771,048
                  PNC Financial Services Group,
                   Inc. .........................     24,657           1,320,876
                  SouthTrust Corp. ..............    179,374           5,713,062
                                                                    ------------
                                                                      17,292,307
                                                                    ------------
                  COMMERCIAL SERVICES & SUPPLIES (2.2%)
                  Imagistics International, Inc.
                   (a)...........................     10,196             327,802
                  Pitney Bowes, Inc. ............    143,411           5,894,192
                                                                    ------------
                                                                       6,221,994
                                                                    ------------
                  COMMUNICATIONS EQUIPMENT (0.3%)
                  Tellabs, Inc. (a)..............    105,136             791,674
                                                                    ------------
                  CONTAINERS & PACKAGING (7.1%)
                  Smurfit-Stone Container Corp.
                   (a)...........................    397,700           6,164,350
                  Temple-Inland, Inc. ...........    253,700          13,707,411
                                                                    ------------
                                                                      19,871,761
                                                                    ------------
                  DIVERSIFIED TELECOMMUNICATION SERVICES (0.9%)
                  ALLTEL Corp. ..................     53,113           2,510,652
                                                                    ------------
                                                      SHARES           VALUE
                                                    ----------------------------
                  ELECTRIC UTILITIES (5.4%)
                  DTE Energy Co. ................    115,379       $   4,255,178
                  Entergy Corp. .................     56,987           3,071,599
                  FirstEnergy Corp. .............     61,488           2,114,572
                  PG&E Corp. (a).................     68,125           1,665,656
                  PPL Corp. .....................    103,400           4,127,728
                                                                    ------------
                                                                      15,234,733
                                                                    ------------
                      ENERGY EQUIPMENT & SERVICES (9.6%)
                      ENSCO International, Inc. .....           273,722              7,212,575
                      Pride International, Inc.
                       (a)...........................           231,600             3,793,608
                      Rowan Cos., Inc. (a)...........           329,000             7,879,550
                      GlobalSantaFe Corp. ...........           112,156             2,524,632
                      Transocean, Inc. (a)...........           278,800             5,350,172
                                                                                 ------------
                                                                                   26,760,537
                                                                                 ------------
                      FOOD & STAPLES RETAILING (1.1%)
                      Safeway, Inc. (a)..............           143,900             3,036,290
                                                                                 ------------

                      HEALTH CARE PROVIDERS & SERVICES (1.0%)
                      Apria Healthcare Group, Inc.
                       (a)...........................    101,700                    2,949,300
                                                                                 ------------

                      HOTELS, RESTAURANTS & LEISURE (1.5%)
                      Yum! Brands, Inc. (a)..........    123,064                    4,201,405
                                                                                 ------------

                      HOUSEHOLD DURABLES (1.2%)
                      Fortune Brands, Inc. ..........             49,439            3,220,951
                                                                                 ------------

                      INSURANCE (2.8%)
                      Axis Capital Holdings, Ltd. ...              9,500               237,975
                      Hartford Financial Services
                       Group, Inc. ..................           104,947             5,761,590
                      St. Paul Cos., Inc. ...........            48,500             1,849,305
                                                                                 ------------
                                                                                    7,848,870
                                                                                 ------------
                      IT SERVICES (1.2%)
                      Computer Sciences Corp. (a)....             85,152            3,373,722
                                                                                 ------------

                      LEISURE EQUIPMENT & PRODUCTS (1.4%)
                      Callaway Golf Co. .............    238,741                    3,879,541
                                                                                 ------------

                      MACHINERY (12.2%)
                      AGCO Corp. (a).................           364,183              6,555,294
                      Cummins, Inc. .................           192,225              9,111,465
                      Ingersoll-Rand Co. Class A.....            35,793              2,161,897
                      Navistar International Corp.
                       (a)...........................           404,602            16,358,059
                                                                                 ------------
                                                                                   34,186,715
                                                                                 ------------
                      -------
                      + Percentages indicated are based on Fund net assets.




                                                          9

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
MainStay Equity Income Fund

                                                     SHARES           VALUE
                                                   ----------------------------
               COMMON STOCKS (CONTINUED)
               OIL & GAS (9.5%)
               Burlington Resources, Inc. ....       80,900       $   3,934,976
               Kerr-McGee Corp. ..............      105,900           4,394,850
               Premcor, Inc. (a)..............      203,800           4,809,680
               Sunoco, Inc. ..................       86,859           3,800,950
               Unocal Corp. ..................      114,276           3,620,264
               Valero Energy Corp. ...........      140,600           6,003,620
                                                                   ------------
                                                                     26,564,340
                                                                   ------------
               PAPER & FOREST PRODUCTS (10.7%)
               Boise Cascade Corp. ...........      287,900           8,075,595
               Bowater, Inc. .................      272,051          11,107,842
               MeadWestvaco Corp. ............      410,955          10,651,954
                                                                   ------------
                                                                     29,835,391
                                                                   ------------
               REAL ESTATE (3.0%)
               Health Care Property Investors,
                Inc. .........................       76,121           3,549,522
               Highwoods Properties, Inc. ....      112,363           2,786,602
               Mack-Cali Realty Corp. ........       54,220           2,043,552
                                                                   ------------
                                                                      8,379,676
                                                                   ------------
               ROAD & RAIL (2.3%)
               Burlington Northern Santa Fe
                Corp. ........................      141,895           4,106,441
               CSX Corp. .....................       71,961           2,289,799
                                                                   ------------
                                                                      6,396,240
                                                                   ------------
               SPECIALTY RETAIL (0.7%)
               Payless ShoeSource, Inc. (a)...      156,709           2,073,260
                                                                   ------------
               THRIFTS & MORTGAGE FINANCE (2.7%)
               PMI Group, Inc. (The)..........       80,600           3,081,338
               Sovereign Bancorp, Inc. .......      209,621           4,362,213
                                                                   ------------
                                                                      7,443,551
                                                                   ------------
               Total Common Stocks
                (Cost $242,202,130)...........                      257,293,614
                                                                   ------------
               CONVERTIBLE PREFERRED STOCKS (0.4%)
               PAPER & FOREST PRODUCTS (0.1%)
               International Paper Capital
                Trust
                5.25%, due 7/20/25 Series.....        5,370             265,815
                                                                   ------------

               REAL ESTATE (0.3%)
               General Growth Properties, Inc.
                7.25%, due 7/15/08 Series
                (c)...........................        9,516             727,974
                                                                   ------------
               Total Convertible Preferred
                Stocks
                (Cost $651,369)...............                          993,789
                                                                   ------------
                                                 PRINCIPAL
                                                   AMOUNT           VALUE
                                                 ----------------------------
               LONG-TERM BONDS (0.1%)
               CORPORATE BONDS (0.1%)

               DIVERSIFIED FINANCIAL SERVICES (0.1%)
               Caithness Coso Funding Corp.
                     Series B
                     9.05%, due 12/15/09...........         $ 392,297          $    419,758
                                                                               ------------
                    Total Long-Term Bonds
                     (Cost $349,140)...............                                  419,758
                                                                                ------------
                    SHORT TERM INVESTMENTS (9.4%)

                    COMMERCIAL PAPER (5.0%)
                    Federal National Mortgage
                     Association
                     1.00%, due 11/5/03............         4,805,000              4,804,466
                    Morgan Stanley Dean Witter &
                     Co.
                     1.03%, due 11/7/03............         4,000,000              3,999,313
                    UBS Finance (Delaware) LLC
                     1.03%, due 11/3/03............         5,170,000              5,169,704
                                                                                ------------
                    Total Commercial Paper
                     (Cost $13,973,483)............                               13,973,483
                                                                                ------------
                                                              SHARES
                                                            ----------
                    INVESTMENT COMPANY (4.4%)
                    Merrill Lynch Premier
                     Institutional Fund............         12,330,492            12,330,492
                                                                                ------------
                    Total Investment Company
                     (Cost $12,330,492)............                               12,330,492
                                                                                ------------
                    Total Short-Term Investments
                     (Cost $26,303,975)............                               26,303,975
                                                                                ------------
                    Total Investments
                     (Cost $269,506,614) (d).......              101.8%          285,011,136(e)
                    Liabilities in Excess of
                     Cash and Other Assets.........              (1.8)           (5,044,818)
                                                            ----------         ------------
                    Net Assets.....................             100.0%         $279,966,318
                                                            ==========         ============



                     -------
                     (a) Non-income producing security.
                     (b) ADR--American Depositary Receipt.
                     (c) PIERS--Preferred Income Equity Redeemable Stock.
                     (d) The cost for federal income tax purposes is $269,949,970.
                     (e) At October 31, 2003 net unrealized appreciation was
                          $15,061,166, based on 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 $23,797,608, and
                          aggregate gross unrealized depreciation for all
                          investments on which there was an excess of cost over
                          market value of $8,736,442.




10
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
Statement of Assets and Liabilities as of October 31, 2003

          ASSETS:
          Investment in securities, at value (identified cost
            $269,506,614).............................................                      $285,011,136
          Cash........................................................                             4,169
          Receivables:
            Investment securities sold................................                         1,853,947
            Fund shares sold..........................................                         1,064,980
            Dividends and interest....................................                           187,550
          Other assets................................................                            14,471
                                                                                            ------------
                    Total assets........................................                     288,136,253
                                                                                            ------------
          LIABILITIES:
          Payables:
            Investment securities purchased...........................                         6,962,631
            Fund shares redeemed......................................                           565,444
            Transfer agent............................................                           191,248
            NYLIFE Distributors.......................................                           177,018
            Manager...................................................                           167,845
            Custodian.................................................                             4,742
            Trustees..................................................                             3,143
          Accrued expenses............................................                            97,864
                                                                                            ------------
                    Total liabilities...................................                       8,169,935
                                                                                            ------------
          Net assets..................................................                      $279,966,318
                                                                                            ============
          COMPOSITION OF NET ASSETS:
          Shares of beneficial interest outstanding (par value of $.01
            per share) unlimited number of shares authorized:
            Class A...................................................                      $     66,938
            Class B...................................................                           117,064
            Class C...................................................                            25,119
          Additional paid-in capital..................................                       273,917,718
          Accumulated net realized loss on investments................                        (9,665,043)
          Net unrealized appreciation on investments..................                        15,504,522
                                                                                            ------------
          Net assets..................................................                      $279,966,318
                                                                                            ============
          CLASS A
          Net assets applicable to outstanding shares.................                      $ 90,348,758
                                                                                            ============
          Shares of beneficial interest outstanding...................                         6,693,799
                                                                                            ============
          Net asset value per share outstanding.......................                      $      13.50
          Maximum sales charge (5.50% of offering price)..............                              0.78
                                                                                            ------------
          Maximum offering price per share outstanding................                      $      14.28
                                                                                            ============
          CLASS B
          Net assets applicable to outstanding shares.................                      $156,116,137
                                                                                            ============
          Shares of beneficial interest outstanding...................                        11,706,364
                                                                                            ============
          Net asset value and offering price per share outstanding....                      $      13.34
                                                                                            ============
          CLASS C
          Net assets applicable to outstanding shares.................                      $ 33,501,423
                                                                                            ============
          Shares of beneficial interest outstanding...................                         2,511,911
                                                                                            ============
          Net asset value and offering price per share outstanding....                      $      13.34
                                                                                            ============




                                                         11

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 period January 1, 2003 through October 31, 2003* and the year ended
December 31, 2002

                                                                                   2003*              2002
                                                                                -----------       ------------
    INVESTMENT INCOME:
    Income:
      Dividends (a).............................................               $ 3,966,601        $  4,494,566
      Interest..................................................                    82,143             229,326
                                                                               -----------        ------------
         Total income............................................                4,048,744           4,723,892
                                                                               -----------        ------------
    Expenses:
      Manager...................................................                  1,424,103          1,500,247
      Transfer agent............................................                    919,706            854,117
      Distribution--Class B.....................................                    851,462            974,792
      Distribution--Class C.....................................                    181,424            159,337
      Service--Class A..........................................                    164,313            157,760
      Service--Class B..........................................                    283,821            324,931
      Service--Class C..........................................                     60,475             53,112
      Shareholder communication.................................                     84,728             90,141
      Professional..............................................                     57,521             54,857
      Registration..............................................                     46,784             50,551
      Recordkeeping.............................................                     42,554             48,098
      Custodian.................................................                     24,214             47,515
      Trustees..................................................                     12,439             13,805
      Miscellaneous.............................................                     21,215             24,108
                                                                                -----------       ------------
         Total expenses..........................................                 4,174,759          4,353,371
                                                                                -----------       ------------
    Net investment income (loss)................................                   (126,015)           370,521
                                                                                -----------       ------------
    REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
    Net realized gain (loss) on investments.....................                  6,922,632        (16,417,265)
    Net change in unrealized appreciation (depreciation) on
      investments...............................................                 31,657,415        (22,869,402)
                                                                                -----------       ------------
    Net realized and unrealized gain (loss) on investments......                 38,580,047        (39,286,667)
                                                                                -----------       ------------
    Net increase (decrease) in net assets resulting from
      operations................................................               $38,454,032        $(38,916,146)
                                                                               ===========        ============




                            The Fund changed its fiscal year end from December 31 to
                       *    October 31.
                            Dividends recorded net of foreign withholding taxes of
                      (a)   $6,756 and $3,516 for 2003 and 2002, respectively.




12
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
Statement of Changes in Net Assets for the period January 1, 2003 through October 31, 2003* and the years
ended December 31, 2002 and December 31, 2001

                                                                               2003*              2002              2001
                                                                            ------------      ------------      ------------
INCREASE IN NET ASSETS:
Operations:
  Net investment income (loss)..............................                $    (126,015)    $    370,521      $        520,904
  Net realized gain (loss) on investments...................                    6,922,632      (16,417,265)            6,274,177
  Net change in unrealized appreciation (depreciation) on
    investments.............................................                  31,657,415       (22,869,402)       (2,240,520)
                                                                            ------------      ------------      ------------
  Net increase (decrease) in net assets resulting from
    operations..............................................                  38,454,032       (38,916,146)        4,554,561
                                                                            ------------      ------------      ------------
Dividends and distributions to shareholders:
  From net investment income:
    Class A.................................................                     (144,291)         (328,297)           (345,009)
    Class B.................................................                           --                --            (166,447)
    Class C.................................................                           --                --             (12,543)
  From net realized gain on investments:
    Class A.................................................                          --          (446,252)         (550,888)
    Class B.................................................                          --          (729,043)       (1,436,957)
    Class C.................................................                          --          (157,334)         (142,699)
                                                                            ------------      ------------      ------------
       Total dividends and distributions to shareholders.....                   (144,291)       (1,660,926)       (2,654,543)
                                                                            ------------      ------------      ------------
Capital share transactions:
  Net proceeds from sale of shares:
    Class A.................................................                    34,317,491      79,196,510          31,563,044
    Class B.................................................                    28,908,125      88,864,443          69,126,492
    Class C.................................................                     7,734,088      27,200,106           9,528,951
  Net asset value of shares issued to shareholders in
    reinvestment of dividends and distributions:
    Class A.................................................                     119,561           628,017           699,740
    Class B.................................................                          --           646,444         1,394,741
    Class C.................................................                          --           120,713           129,388
                                                                            ------------      ------------      ------------
                                                                              71,079,265       196,656,233       112,442,356
  Cost of   shares redeemed:
    Class   A.................................................               (36,894,690)      (28,346,039)      (24,755,991)
    Class   B.................................................               (24,289,812)      (40,257,593)      (16,884,222)
    Class   C.................................................                (6,887,181)       (5,251,703)       (2,034,483)
                                                                            ------------      ------------      ------------
       Increase in net assets derived from capital share
         transactions........................................                  3,007,582       122,800,898        68,767,660
                                                                            ------------      ------------      ------------
      Net increase in net assets............................                  41,317,323        82,223,826        70,667,678
NET ASSETS:
Beginning of period.........................................                 238,648,995       156,425,169        85,757,491
                                                                            ------------      ------------      ------------
End of period...............................................                $279,966,318      $238,648,995      $156,425,169
                                                                            ============      ============      ============
Distributions in excess of net investment income............                $         --      $   (125,073)     $         --
                                                                            ============      ============      ============




                      *    The Fund changed its fiscal year end from December 31 to
                           October 31.




                                                         13

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

                                                                                                 Class A
                                                           ---------------------------------------------------------
                                                           January 1,
                                                              2003
                                                             through                   Year ended December 31,
                                                           October 31,      ----------------------------------------
                                                              2003*          2002         2001           2000
                                                           -----------      -------      -------       -------     -
Net asset value at beginning of period........               $ 11.51        $ 13.47      $ 13.14       $ 11.81     $
                                                             -------        -------      -------       -------     -
Net investment income (loss)..................                  0.04           0.06         0.12           0.21
Net realized and unrealized gain (loss) on
 investments..................................                  1.97             (1.90)           0.52            2.44
                                                             -------           -------         -------         -------     -
Total from investment operations..............                  2.01             (1.84)           0.64            2.65
                                                             -------           -------         -------         -------     -
Less dividends and distributions:
From net investment income....................                  (0.02)            (0.06)          (0.12)          (0.21)
From net realized gain on investments.........                     --             (0.06)          (0.19)          (1.02)
In excess of net realized gain on
 investments..................................                    --                --              --           (0.09)
                                                             -------           -------         -------         -------     -
Total dividends and distributions.............                 (0.02)            (0.12)          (0.31)          (1.32)
                                                             -------           -------         -------         -------     -
Net asset value at end of period..............               $ 13.50           $ 11.51         $ 13.47         $ 13.14     $
                                                             =======           =======         =======         =======     =
Total investment return (a)...................                 17.53%           (13.67%)          4.88%          22.79%
Ratios (to average net assets)
 Supplemental Data:
   Net investment income (loss)...............                  0.45%+            0.71%           0.95%           1.66%
   Net expenses...............................                  1.54%+            1.50%           1.53%           1.59%
   Expenses (before reimbursement)............                  1.54%+            1.50%           1.53%           1.59%
Portfolio turnover rate.......................                    30%               46%            100%            148%
Net assets at end of period (in 000's)........               $90,349           $80,442         $40,692         $32,782     $




                    *     The Fund changed its fiscal year end from December 31 to
                          October 31.
                  **      Commencement of Operations.
                  ***     Class C shares were first offered on September 1, 1998.
                   +      Annualized.
                  (a)     Total return is calculated exclusive of sales charges and is
                          not annualized.
                  (b)     Less than one thousand.




14
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
                                Class B                                                                      Class C
--------------------------------------------------------------------                   ----------------------------------
January 1,                                                                             January 1,
   2003                                                    June 1**                       2003
  through               Year ended December 31,            through                       through            Year ended Dec
October 31,   ---------------------------------------    December 31,                  October 31,   --------------------
   2003*        2002         2001       2000     1999        1998                         2003*        2002       2001
-----------   --------     --------   -------   -------  ------------                  -----------   --------    -------
 $ 11.42      $ 13.41      $ 13.09    $ 11.78   $ 10.24     $10.00                       $ 11.42     $ 13.41     $ 13.09
 --------     --------     --------   -------   -------     ------                       -------     --------    -------
    (0.03)      (0.01)         0.03       0.12     0.15       0.04                         (0.03)      (0.01)        0.03
     1.95       (1.92)         0.51       2.42     2.28       0.31                          1.95       (1.92)        0.51
 --------     --------     --------   -------   -------     ------                       -------     --------    -------
     1.92       (1.93)         0.54       2.54     2.43       0.35                          1.92       (1.93)        0.54
 --------     --------     --------   -------   -------     ------                       -------     --------    -------
        --           --      (0.03)     (0.12)    (0.15)     (0.04)                            --           --    (0.03)
        --      (0.06)       (0.19)     (1.02)    (0.74)     (0.07)                            --      (0.06)     (0.19)
        --           --           --    (0.09)        --        --                             --           --         --
 --------     --------     --------   -------   -------     ------                       -------     --------    -------
        --      (0.06)       (0.22)     (1.23)    (0.89)     (0.11)                            --      (0.06)     (0.22)
 --------     --------     --------   -------   -------     ------                       -------     --------    -------
 $ 13.34      $ 11.42      $ 13.41    $ 13.09   $ 11.78     $10.24                       $ 13.34     $ 11.42     $ 13.41
 ========     ========     ========   =======   =======     ======                       =======     ========    =======
    16.81%      (14.35%)       4.17%     21.83%   24.16%      3.56%                        16.81%      (14.35%)      4.17%
    (0.30%)+     (0.04%)       0.20%      0.91%    1.19%      0.45%+                       (0.30%)+     (0.04%)      0.20%
     2.29%+       2.25%        2.28%      2.34%    2.40%      3.86%+                        2.29%+       2.25%       2.28%
     2.29%+       2.25%        2.28%      2.34%    2.57%      3.86%+                        2.29%+       2.25%       2.28%
        30%          46%        100%       148%     193%       270%                            30%          46%       100%
 $156,116     $130,024     $105,146   $50,172   $23,803     $4,166                       $33,501     $ 28,183    $10,586

    Class C
 --------------

 September 1***
    through
  December 31,
       1998
 --------------
     $ 9.06
     ------
        0.04
        1.25
     ------
        1.29
     ------
       (0.04)
       (0.07)
          --
     ------
       (0.11)
     ------
     $10.24
     ======
       14.30%
        0.45%+
        3.86%+
        3.86%+
         270%
     $    --(b)




                                                         15

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
MainStay Equity Income Fund

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 twenty-four funds (collectively referred to as the "Funds").
These financial statements and notes relate only to MainStay Equity Income Fund (the "Fund"), a diversified 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 realize maximum long-term total return from a combination of capital
appreciation and income.

Effective January 1, 2004, the Fund will change its name to MainStay Mid Cap Value Fund.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:

The Fund prepares its financial statements in accordance with generally accepted accounting principles 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.

Debt securities are valued at prices supplied by a pricing agent selected by the Fund's Manager, whose prices
reflect broker/dealer supplied valuations and electronic data processing techniques if those prices are deemed by
the Fund's Manager to be representative of market values at the regular close of business of the New York
Stock Exchange. Temporary cash investments acquired over 60 days to

                                                        16
Notes to Financial Statements

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 deemed by the Board of Trustees to represent
fair value.

(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 undistributed net investment
income and additional paid-in-capital arising from permanent differences; net assets at October 31, 2003, are not
affected.

                             DISTRIBUTIONS
                              IN EXCESS OF
                             NET INVESTMENT                                ADDITIONAL
                                 INCOME                                 PAID-IN CAPITAL
                             --------------                             ---------------
                                $395,379                                   $(395,379)




The reclassifications for the Fund are primarily due to a reclassification of distributions and net operating losses.

(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 securities, other than short-term securities, purchased for the Fund are accreted and
amortized, respectively to interest income, on the constant yield method over the life

                                                          17
MainStay Equity Income Fund

of the respective securities or, in the case of a callable security, over the period to the first date of call. 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. New York Life Investment Management LLC ("NYLIM" or the
"Manager"), an indirect wholly-owned subsidiary of New York Life Insurance Company ("New York Life"),
serves 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. MacKay Shields LLC (the "Subadvisor") a registered investment advisor and indirect
wholly-owned subsidiary of New York Life is responsible for the day-to-day portfolio management of the Fund.

The Trust, on behalf of the Fund, paid the Manager a monthly fee for services performed and the facilities
furnished at an annual rate of 0.70% of the Fund's average daily net assets. The Manager has voluntarily agreed
to reimburse the expenses of the Fund to the extent that operating expenses would exceed on an annualized basis
1.65%, 2.40% and 2.40% of the average daily net assets of the Class A, Class B and Class C shares,
respectively. For the ten months ended October 31, 2003 and year ended December 31, 2002, the Manager
earned from the Fund $1,424,103 and $1,500,247, respectively. It was not necessary for the Manager to
reimburse the Fund for expenses for the ten months ended October 31, 2003 and the year ended December 31,
2002.

                                                           18
Notes to Financial Statements (continued)

Pursuant to the terms of a Sub-Advisory Agreement between NYLIM and the Subadvisor, the Manager paid the
Subadvisor a monthly fee at an annual rate of 0.35% of the average daily net assets of the Fund.

(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. The
Fund, with respect to each class of 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 and Class C
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.

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.

(C) SALES CHARGES. The Fund was advised by the Distributor that the amount of sales charges retained on
sales of Class A shares was $15,582 for the ten months ended October 31, 2003. 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 $66,953, $193,218 and $9,388, respectively, for the ten months ended October 31, 2003.

(D) TRANSFER, DIVIDEND DISBURSING AND SHAREHOLDER SERVICING AGENT. 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 accrued to NYLIM Service for the ten months ended October 31, 2003
and year ended December 31, 2002, amounted to $919,706 and $854,117, respectively.

(E) TRUSTEES FEES. Trustees, other than those affiliated with NYLIM, are paid an annual 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 fee of $20,000. Beginning January 1, 2003, the Audit Committee
Chairman receives an additional $2,000 for each meeting of the Audit Committee

                                                        19
MainStay Equity Income Fund

attended. Also, beginning January 1, 2003, the Chairpersons of the Brokerage Committee and the Operations
Committee each receive an additional $1,000 for each meeting of the Brokerage Committee and Operations
Committee attended, respectively. The Trust allocates trustees fees in proportion to the net assets of the
respective Funds. Thus the Equity Income 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 $5,180 for the
ten months ended October 31, 2003 and $4,558 for the year ended December 31, 2002.

The Fund pays the Manager a monthly fee for 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 recordkeeping services provided to the Fund by the Manager amounted to $42,554
for the ten months ended October 31, 2003 and $48,098 for the year ended December 31, 2002.

NOTE 4--FEDERAL INCOME TAX:

As of October 31, 2003, the components of accumulated loss on a tax basis were as follows:

                           ACCUMULATED CAPITAL        UNREALIZED        TOTAL ACCUMULATED
                            AND OTHER LOSSES         APPRECIATION             LOSS
                           -------------------       ------------       -----------------
                              $(9,221,687)           $15,061,166           $5,839,479




The differences between book-basis and tax-basis unrealized appreciation is primarily due to wash sale deferrals
and real estate investment trust distributions.

At October 31, 2003, for federal income tax purposes, capital loss carryforwards of $9,221,687 were available,
to the extent provided by regulations to offset future realized gains of the Fund through 2010. To the extent that
these carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be
distributed to shareholders.

The Fund utilized $1,761,366 of capital loss carryforwards during the ten months ended October 31, 2003.

                                                          20
Notes to Financial Statements (continued)

The tax character of distributions paid during the period ended October 31, 2003 and the years ended
December 31, 2002 and December 31, 2001, shown in the Statement of Changes in Net Assets, are as follows:

                                                      2003           2002               2001
                                                    ---------     -----------        -----------
                  Distributions paid from:
                    Ordinary income                 $144,291      $ 328,297          $ 523,999
                    Long-term capital gain                --       1,332,629          2,130,544
                                                    --------      ----------         ----------
                                                    $144,291      $1,660,926         $2,654,543
                                                    ========      ==========         ==========




NOTE 5--PURCHASES AND SALES OF SECURITIES (IN 000'S):

During the ten months ended October 31, 2003, purchases and sales of securities, other than short-term
securities, were $69,349 and $74,418, respectively.

NOTE 6--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
ten months ended October 31, 2003.

NOTE 7--CAPITAL SHARE TRANSACTIONS (IN 000'S):

                                                                                  YEAR ENDED DECEMBER 31,
                                 JANUARY 1 THROUGH              ---------------------------------------------------
                                 OCTOBER 31, 2003*                         2002                            2001
                            ---------------------------         ---------------------------    ---------------------
                            CLASS A   CLASS B   CLASS C         CLASS A   CLASS B    CLASS C   CLASS A    CLASS B  C
                            -------   -------   -------         -------   -------    -------   -------    -------  -
Shares sold...........       2,811     2,413       642           6,186     6,744      2,094     2,381      5,212
Shares issued in
  reinvestment of
  dividends and
  distributions.......          11          --         --           54          57          11         53         106
                            ------      ------       ----       ------      ------      ------     ------      ------    -
                             2,822       2,413        642        6,240       6,801       2,105      2,434       5,318
Shares redeemed.......      (3,114)     (2,089)      (597)      (2,275)     (3,261)       (428)    (1,908)     (1,307)
                            ------      ------       ----       ------      ------      ------     ------      ------    -
Net increase
  (decrease)..........        (292)        324         45        3,965       3,540       1,677        526       4,011
                            ======      ======       ====       ======      ======      ======     ======      ======    =




                     *    The Fund changed its fiscal year end from December 31 to
                          October 31.




                                                       21
MainStay Equity Income Fund

NOTE 8--OTHER MATTERS:

New York Life Investment Management LLC (NYLIM) and mutual funds that NYLIM advises, including The
MainStay Funds, have received requests for information from various government authorities and regulatory
bodies regarding market timing, late trading and other matters. We are cooperating fully in responding to these
requests. We have no reason to believe that NYLIM or any of the mutual funds NYLIM advises has been
targeted as the subject of any governmental or regulatory enforcement action.

                                                       22
Report of Independent Auditors

To the Trustees of The MainStay Funds and Shareholders of MainStay Equity Income Fund

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the
related statements of operations and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of MainStay Equity Income Fund (one of the funds constituting The
MainStay Funds, hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for the ten
months ended October 31, 2003 and the year ended December 31, 2002, the changes in its net assets for the
ten months ended October 31, 2003 and each of the two years in the period ended December 31, 2002 and the
financial highlights for each of the periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits, which
included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 18, 2003

                                                         23
The MainStay Funds--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 his/her successor is elected and qualified or until his/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.

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
        NAME AND          AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES*
---------------------------------------------------------------------------------------------------------
Gary E. Wendlandt         Chairman since   Chief Executive Officer, Chairman, and         43
10/8/50                   2002 and         Manager, New York Life Investment
                          Trustee since    Management LLC (including predecessor
                          2000             advisory organizations) and New York
                                           Life Investment Management Holdings LLC;
                                           Executive Vice President, New York Life
                                           Insurance Company; Executive Vice
                                           President and Manager, NYLIFE LLC;
                                           Manager, NYLIFE Distributors LLC; Vice
                                           Chairman, McMorgan & Company 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. (19
                                           portfolios); Executive Vice President
                                           and Chief Investment Officer, MassMutual
                                           Life Insurance Company (1993 to 1999).
---------------------------------------------------------------------------------------------------------
Stephen C. Roussin        President,       President, Chief Operating Officer, and        41
7/12/63                   Chief            Manager, New York Life Investment
                          Executive        Management LLC (including predecessor
                          Officer, and     advisory organizations) and New York
                          Trustee since    Life Investment Management Holdings LLC;
                          1997             Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, NYLIFE LLC; Director, NYLIFE
                                           Securities, Inc.; Chairman, President,
                                           and Manager, NYLIFE Distributors LLC;
                                           Manager, McMorgan & Company LLC;
                                           Chairman, Trustee, and President,
                                           Eclipse Funds, (4 portfolios); Chairman
                                           and Director, Eclipse Funds Inc. (13
                                           portfolios); Senior Vice President,
                                           Smith Barney (1994 to 1997).
---------------------------------------------------------------------------------------------------------
* Certain Trustees are considered to be interested persons of the Trust within the meaning of the 1940 Ac
  their affiliation with New York Life Insurance Company, New York Life Investment Management LLC, MacKay
  LLC, McMorgan & Company LLC, Eclipse Funds, Eclipse Funds Inc., MainStay VP Series Fund, Inc., NYLIFE S
  Inc., and/or NYLIFE Distributors LLC, as described in detail in the column "Principal Occupation(s) Dur
  Years."




                                                          24
                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Harry G. Hohn             Trustee since    Retired. Chairman and Chief Executive          24
3/1/32                    1996             Officer, New York Life Insurance Company
                                           (1990 to 1997); Chairman of the Board,
                                           Life Insurance Council of New York (1996
                                           to 1997); Director, Million Dollar
                                           Roundtable Foundation (1996 to 1997).
---------------------------------------------------------------------------------------------------------
Donald K. Ross            Trustee since    Retired. Manager, MacKay Shields LLC;          24
7/1/25                    1991             Chairman, Chief Executive Officer, and
                                           President, New York Life Insurance
                                           Company (1981 to 1990).
---------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Charlynn Goins            Trustee since    Retired. Consultant to U.S. Commerce           24
9/15/42                   2001             Department, Washington, DC (1998 to
                                           2000); Senior Vice President and
                                           Director of International Marketing,
                                           Prudential Mutual Funds and Annuities
                                           (1990 to 1997).
---------------------------------------------------------------------------------------------------------
Edward J. Hogan           Trustee since    Rear Admiral U.S. Navy (Retired);              24
8/17/32                   1996             Independent Management Consultant.
---------------------------------------------------------------------------------------------------------
Terry L. Lierman          Trustee since    Partner, Health Ventures LLC; Vice             24
1/4/48                    1991             Chair, Employee Health Programs;
                                           Partner, TheraCom (1994 to 2001);
                                           President, Capitol Associates, Inc.
                                           (1984 to 2001).
---------------------------------------------------------------------------------------------------------
John B. McGuckian         Trustee since    Chairman, Ulster Television Plc; Pro           24      Non-Exe
11/13/39                  1997             Chancellor, Queen's University (1985 to                Directo
                                           2001).                                                 Irish B
                                                                                                  Non-Exe
                                                                                                  Directo
                                                                                                  Contine
                                                                                                  Plc; No
                                                                                                  Directo
                                                                                                  Plc.
---------------------------------------------------------------------------------------------------------
Donald E. Nickelson       Trustee since    Retired. Vice Chairman, Harbour Group          24      Directo
12/9/32                   1994 and Lead    Industries, Inc. (leveraged buyout                     Corpora
                          Non-             firm).                                                 Directo
                          Interested                                                              Advanta
                          Trustee                                                                 Corpora
---------------------------------------------------------------------------------------------------------
Michael H. Sutton         Trustee since    Retired. Independent Consultant (1999 to       24
9/19/40                   2003             present); Special Consultant, Financial
                                           Accounting Standards Board (1998 to
                                           1999); Chief Accountant, United States
                                           Securities and Exchange Commission (1995
                                           to 1998).
---------------------------------------------------------------------------------------------------------




                                               25
                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Richard S. Trutanic       Trustee since    Advisor (July 2003 to present) and             24
2/13/52                   1994             Managing Director (2001 to June 2003),
                                           The Carlyle Group (private investment
                                           firm); Chairman and Chief Executive
                                           Officer, Somerset Group (financial
                                           advisory firm); Senior Managing
                                           Director, Groupe Arnault (private
                                           investment firm) (1999 to 2001).
---------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
---------------------------------------------------------------------------------------------------------
Jefferson C. Boyce        Senior Vice      Senior Managing Director, New York Life       N/A
9/17/57                   President        Investment Management LLC (including
                          since 1995       predecessor advisory organizations);
                                           Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, Eclipse Funds and Eclipse
                                           Funds Inc.; Manager, NYLIFE Distributors
                                           LLC.
---------------------------------------------------------------------------------------------------------
Patrick J. Farrell        Chief            Managing Director, New York Life              N/A
9/27/59                   Financial and    Investment Management LLC (including
                          Accounting       predecessor advisory organizations);
                          Officer,         Treasurer, Chief Financial and
                          Treasurer, and   Accounting Officer, Eclipse Funds Inc.,
                          Vice President   Eclipse Funds, and MainStay VP Series
                          since 2001       Fund, Inc.; Chief Financial Officer and
                                           Assistant Treasurer, McMorgan Funds.
---------------------------------------------------------------------------------------------------------
Robert A. Anselmi         Secretary        Senior Managing Director, General             N/A
10/19/46                  since 2001       Counsel, and Secretary, New York Life
                                           Investment Management LLC (including
                                           predecessor advisory organizations);
                                           Secretary, New York Life Investment
                                           Management Holdings LLC; Senior Vice
                                           President, New York Life Insurance
                                           Company; Vice President and Secretary,
                                           McMorgan & Company LLC; Secretary,
                                           NYLIFE Distributors LLC; Secretary,
                                           MainStay VP Series Fund, Inc., Eclipse
                                           Funds Inc., and Eclipse Funds; 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).
---------------------------------------------------------------------------------------------------------
Richard W. Zuccaro        Tax Vice         Vice President, New York Life Insurance       N/A
12/12/49                  President        Company; Vice President, New York Life
                          since 1991       Insurance and Annuity Corporation,
                                           NYLIFE Insurance Company of Arizona,
                                           NYLIFE LLC, NYLIFE Securities Inc.; Vice
                                           President-Financial Operations and Chief
                                           Financial Officer, NYLIFE Distributors
                                           LLC; Tax Vice President, New York Life
                                           International, LLC; Tax Vice President,
                                           Eclipse Funds, Eclipse Funds Inc., and
                                           MainStay VP Series Fund, Inc.
---------------------------------------------------------------------------------------------------------




                                               26
THE MAINSTAY FUNDS

EQUITY FUNDS
MainStay Blue Chip Growth Fund
MainStay Capital Appreciation Fund
MainStay Equity Index Fund(1)
MainStay Mid Cap Growth Fund
MainStay Select 20 Equity Fund(2)
MainStay Small Cap Growth Fund
MainStay Small Cap Value Fund(3)
MainStay U.S. Large Cap Equity Fund

EQUITY AND INCOME FUNDS
MainStay Convertible Fund
MainStay Equity Income Fund
MainStay Growth Opportunities Fund
MainStay MAP Fund
MainStay Research Value Fund
MainStay Strategic Value Fund
MainStay Total Return Fund
MainStay Value Fund

INCOME FUNDS
MainStay Government Fund
MainStay High Yield Corporate Bond Fund
MainStay Money Market Fund
MainStay Strategic Income Fund
MainStay Tax Free Bond Fund

INTERNATIONAL FUNDS
MainStay Global High Yield Fund
MainStay International Bond Fund
MainStay International Equity Fund

INVESTMENT ADVISOR

NEW YORK LIFE INVESTMENT MANAGEMENT LLC
Parsippany, New Jersey

SUBADVISORS

MACKAY SHIELDS LLC(4)
New York, New York

DALTON, GREINER, HARTMAN, MAHER & CO.
New York, New York

FUND ASSET MANAGEMENT, L.P.
D/B/A MERCURY ADVISORS
Plainsboro, New Jersey

GABELLI ASSET MANAGEMENT COMPANY
Rye, New York

JENNISON ASSOCIATES LLC
New York, New York

MARKSTON INTERNATIONAL, LLC
White Plains, New York

McMORGAN & COMPANY LLC(4)
San Francisco, California


1. Closed to new purchases as of January 1, 2002.
2. Ceased operations as of November 28, 2003.
3. Closed to new investors as of December 1, 2001.
4. An affiliate of New York Life Investment Management LLC.

                                                   27
Trustees and Officers(1)

                         GARY E. WENDLANDT             Chairman and Trustee
                         STEPHEN C. ROUSSIN            President, Chief Executive
                                                       Officer, and Trustee
                         CHARLYNN GOINS                Trustee
                         EDWARD J. HOGAN               Trustee
                         HARRY G. HOHN                 Trustee
                         TERRY L. LIERMAN              Trustee
                         JOHN B. MCGUCKIAN             Trustee
                         DONALD E. NICKELSON           Trustee
                         DONALD K. ROSS                Trustee
                         MICHAEL H. SUTTON             Trustee
                         RICHARD S. TRUTANIC           Trustee
                         JEFFERSON C. BOYCE            Senior Vice President
                         PATRICK J. FARRELL            Chief Financial and
                                                       Accounting Officer,
                                                       Treasurer, and
                                                       Vice President
                         ROBERT A. ANSELMI             Secretary
                         RICHARD W. ZUCCARO            Tax Vice President




DECHERT LLP
Legal Counsel

PRICEWATERHOUSECOOPERS LLP
Independent Auditors

1. As of October 31, 2003.

[MAINSTAY LOGO]

MainStay is a division of New York Life Investment Management LLC, the investment advisor to The MainStay
Funds.


Not FDIC insured. No bank guarantee. May lose value.

NYLIFE DISTRIBUTORS LLC
169 Lackawanna Avenue
Parsippany, New Jersey 07054

www.mainstayfunds.com

This report may only be distributed when preceded or accompanied by a current Fund prospectus.

(C)2003 NYLIFE Distributors LLC. All rights reserved. MSEN11- 12/03 NYLIM-A04348 19

[RECYCLE LOGO]

                                     [MAINSTAY FUNDS LOGO]

MainStay(R)
Equity Income Fund

                                           ANNUAL REPORT
                                           OCTOBER 31, 2003

                                          [MAINSTAY LOGO]
                Table of Contents

President's Letter                              3
$10,000 Invested in MainStay U.S. Large Cap
Equity Fund versus S&P 500(R) Index and
Inflation--Class A, Class B, and Class C
Shares                                          4
Portfolio Management Discussion and Analysis    6
Performance                                     7
Portfolio of Investments                       10
Financial Statements                           12
Notes to Financial Statements                  16
Report of Independent Auditors                 22
Trustees and Officers                          23
The MainStay(R) Funds                          26
2 This page intentionally left blank
                                                         3

President's Letter

The first 10 months of 2003 represented a positive period for most investors. Although the stock market
struggled from mid-January through early March, it recovered strongly through the end of October. The rally
began several days before coalition forces entered Iraq and continued long after the conclusion of major combat
operations. Although difficulties in Iraq, the Middle East, and North Korea continued to raise concerns, investors
have tended to focus on corporate earnings and the potential for an economic turnaround.

The Federal Reserve remained accommodative throughout the 10-month period, and the Federal Open Market
Committee lowered the targeted federal funds rate by 25 basis points on June 25, 2003, to a low 1.0%. Real
gross domestic product, which grew at a modest 1.4% in the first quarter of 2003, rose by 3.3% in the second
quarter. According to preliminary estimates by the Bureau of Economic Analysis, real gross domestic product
grew at a seasonally adjusted annual rate of 8.2% in the third quarter. Much of this increase resulted from robust
consumer spending. Although unemployment rates remain high, the figures have declined from their peak in June
2003, and the Federal Reserve recently observed that "the labor market appears to be stabilizing."

Within the equity market, smaller companies generally outperformed larger ones and growth stocks tended to
appreciate more than value equities at all capitalization levels. The bond markets benefited from anticipation of the
Federal Reserve's easing move, and while yields on short-term securities continued to decline, yields on longer-
term bonds rose to a peak in early September and closed the reporting period higher than where they began. For
the 10-month period, corporate bonds generally outpaced Treasury securities, and high-yield bonds and
emerging-market debt provided outstanding returns.

At MainStay, each of our Funds seeks to achieve its investment objective with an established process that is
consistently applied in all market environments. While markets may shift and results may vary, we believe that our
time-tested investment strategies can help you pursue your long-range goals with confidence.

As you may have noted, the date of this report differs from the date of previous annual reports. The MainStay
Board of Trustees recently approved making October 31 the end of the fiscal year for most MainStay Funds.
The report that follows provides details about the specific market conditions and portfolio management decisions
that affected the performance of your MainStay Fund during the first 10 months of 2003. If you have any
questions about this report or your MainStay Fund investments, your Registered Representative will be pleased
to assist you.

Sincerely,

                                             /s/ STEPHEN C. ROUSSIN
                                             Stephen C. Roussin
                                             November 2003
4
The disclosure and footnotes on the following page are an integral part of these graphs and should be carefully
read in conjunction with them.

$10,000 Invested in MainStay
U.S. Large Cap Equity Fund versus
S&P 500(R) Index and Inflation

CLASS A SHARES
Total Returns with Sales Charges: 1 Year 8.37%, Since Inception (1/2/02) -11.48%
[LINE GRAPH]

                                                          MAINSTAY U.S. LARGE CAP
                                                                EQUITY FUND                   S+P 500 INDEX(1)
                                                          -----------------------             ----------------
1/2/02                                                            9450.00                         10000.00
02                                                                6974.00                          7816.00
10/31/03                                                          7998.00                          9442.00




CLASS B SHARES
Total Returns with Sales Charges: 1 Year 8.79%, Since Inception (1/2/02) -11.35%
[LINE GRAPH]

                                                          MAINSTAY U.S. LARGE CAP
                                                                EQUITY FUND                   S+P 500 INDEX(1)
                                                          -----------------------             ----------------
1/2/02                                                           10000.00                         10000.00
02                                                                7340.00                          7816.00
10/31/03                                                          8019.00                          9442.00




CLASS C SHARES
Total Returns with Sales Charges: 1 Year 12.79%, Since Inception (1/2/02) -9.36%
[LINE GRAPH]

                                                          MAINSTAY U.S. LARGE CAP
                                                                EQUITY FUND                   S+P 500 INDEX(1)
                                                          -----------------------             ----------------
1/2/02                                                           10000.00                         10000.00
02                                                                7340.00                          7816.00
10/31/03                                                          8352.00                          9442.00




PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. DUE TO MARKET
VOLATILITY, CURRENT PERFORMANCE MAY BE LESS THAN THAT SHOWN. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, UPON REDEMPTION, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR MORE CURRENT
PERFORMANCE INFORMATION, PLEASE VISIT WWW.MAINSTAYFUNDS.COM.
                                                       5


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 deduction of all sales charges that would have applied for the period of
investment. Class A share performance reflects the effect of the maximum 5.5% initial sales charge. Class B
shares are subject to a contingent deferred sales charge (CDSC) of up to 5% if shares are redeemed within the
first six years of purchase. Class B share performance reflects a CDSC of 4%, which would apply for the period
shown. Class C shares would be subject to a CDSC of 1% if redeemed within one year of purchase.

1. "S&P 500(R)" is a trademark of The McGraw-Hill Companies, Inc. The S&P 500 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.

2. Inflation is measured by the Consumer Price Index (CPI), which is a commonly used measure of the rate of
inflation and shows the changes in the cost of selected goods. The rate of inflation does not represent an
investment return.
6
1. Lipper Inc. is an independent fund performance monitor. Results are based on total returns with all dividend
and capital gain distributions reinvested.
2. See footnote on page 5 for more information about the S&P 500 Index.

Portfolio Management Discussion and Analysis

In the first two weeks of 2003, stocks rallied, but from mid-January through early March, share prices dropped
precipitously. In mid-March, the equity market staged a turnaround that began eight days before coalition troops
invaded Iraq and lasted long after President Bush announced that major combat operations had ended. The rally
continued through most of the second and third quarters, before losing some ground in September, primarily
because of concerns about the falling U.S. dollar, rising oil prices, and uncertain third-quarter corporate earnings.

Optimism returned to the equity markets in October with the release of positive economic data, including job
growth and lower initial unemployment claims. The manufacturing sector showed evidence of expansion, and
according to preliminary estimates by the Bureau of Economic Analysis, real gross domestic product grew at a
seasonally adjusted annual rate of 8.2% in the third quarter, the fastest growth since early 1984.

Interest rates remained low throughout the reporting period. Near the end of June, the Federal Open Market
committee lowered the targeted federal funds rate by 25 basis points to 1.0%, the lowest level in several
decades. Toward the end of the 10-month period, the Federal Reserve suggested that its accommodative policy
could be maintained for a "considerable period." Fiscal policy also helped stimulate the economy when Congress
approved a tax bill that included tax cuts on corporate dividends.

The equity market rally that began in mid-March has been led by higher-risk, lower-quality companies. We
believe that such a trend is unlikely to be sustainable for long.

PERFORMANCE REVIEW

For the 10 months ended October 31, 2003, MainStay U.S. Large Cap Equity Fund returned 14.89% for Class
A shares and 14.09% for Class B and Class C shares, excluding all sales charges. All share classes
underperformed the 19.16% return of the average Lipper(1) large-cap core fund over the same period. All share
classes also underperformed the 21.21% return of the S&P 500 Index(2) for the first 10 months of 2003.

Much of the Fund's relative underperformance resulted from its single-minded focus on higher-quality, lower-risk
stocks in a period when investors appeared to favor just the opposite. Investors continued to bid up lower-
quality companies with little if any earnings.
                                                      7

PERFORMANCE (WITHOUT SALES CHARGES)

CLASS A SHARES
[BAR CHART]

                                                                                                 CLASS A
                                                                                                 -------
     12/02                                                                                       -26.34
     10/03                                                                                        14.89




CLASS B AND CLASS C SHARES
[BAR CHART]

                                                                                                 CLASS B
                                                                                                 -------
     12/02                                                                                       -26.79
     10/03                                                                                        14.09




The Fund was also affected by its emphasis on larger-cap companies. Mid-cap and small-cap companies
significantly outperformed their large-cap counterparts during the 10-month period.

STRATEGIC POSITIONING

In selecting Fund investments, we emphasized companies that we believed could increase earnings in a slower-
growth environment, since it was by no means evident that robust economic growth could be sustained. In the
first quarter, we trimmed or eliminated Fund positions in lower-quality companies with
8 inconsistent or low earnings growth and focused on higher-quality companies with consistent and sustainable
earnings.

We reduced the number of stocks held in the Fund from about 100 to around 80. In the process, we increased
the Fund's weightings in the consumer staples and consumer discretionary sectors and trimmed the Fund's
commitment to stocks in the financials and information technology sectors.

Overall, this positioning hurt the Fund's performance during the first 10 months of 2003. In light of the significant
valuation disparity between higher-quality and low-quality companies at the end of the reporting period, however,
we believe that the Fund may be well-positioned going forward. While many low- quality stocks were trading at
high price/earnings ratios, the Fund's portfolio of higher-quality companies was more reasonably valued.

We also made a decision during the reporting period to add Fund holdings among companies with market
capitalizations in the $5 billion to $30 billion range. While the Fund still has a larger capitalization size than the
S&P 500 Index, we reduced positions in larger companies.

SIGNIFICANT PURCHASES AND SALES

During the reporting period, we added quality companies such as Nokia, The Gap, MBNA, State Street,
Nabors Industries, Best Buy, MedImmune, and Lexmark to the Fund's portfolio. We expect each of these
companies to post good earnings growth over the next few years, even if economic growth does not maintain its
recent robust pace. At the same time, these companies appear to be positioned to experience stronger-than-
average earnings growth if the economy sustains its accelerated growth rate.

During the reporting period, we continued to eliminate lower-quality companies with relatively poor valuations
and lower earnings-growth prospects.

WEIGHTING CHANGES

As we sought to maintain a high-quality bias in the Fund's portfolio, we increased consumer staples from an
underweighted to an overweighted position by establishing or adding to positions in companies with a long history
of stable growth. These included PepsiCo, Anheuser Busch, Sysco, Costco Wholesale, Sara Lee, and Procter &
Gamble. Although the Fund remains underweighted in consumer discretionary stocks, investments in Comcast,
Viacom, Target, and Home Depot brought the Fund closer to a market weighting.

As we trimmed the Fund's information technology holdings, we also shifted the portfolio's focus within the sector.
We added Accenture and Affiliated Computer Services at more reasonable valuations than we saw in other
technology
                                                          9

stocks, many of which had risen to relatively high levels. During the first 10 months of 2003, we increased the
Fund's weighting in information technology services and reduced positions in the communications equipment,
computers & peripherals, and semiconductors & semiconductor equipment industries.

We also trimmed financials from a slightly overweighted position at the beginning of the reporting period to a
slightly underweighted position at the end of October 2003. We increased exposure to the insurance and capital
markets industries and trimmed exposure to commercial banks and companies in the thrifts & mortgage finance
industry.

LOOKING AHEAD

We believe that low interest rates will likely continue to make stocks attractive relative to other investments. A
weaker dollar may boost earnings for multi-
national corporations and attract foreign investors to the U.S. equity markets. Lower taxes on dividends and
capital gains may also provide incentives for investment.

Although investors now appear to view the investment glass as half full instead of half empty, we believe that
going forward, investors are more likely to focus on valuations, earnings, dividends, and cash flows, and we have
positioned the Fund accordingly.

Whatever the markets or the economy may bring, the Fund will continue to seek to realize above-average total
return consistent with reasonable risk.

Portfolio Management Team
McMorgan & Company LLC

INFORMATION ON THIS PAGE AND THE PRECEDING PAGES HAS NOT BEEN AUDITED.
10

MainStay U.S. Large Cap Equity Fund

                                                       SHARES         VALUE
                                                       -----------------------
                  COMMON STOCKS (97.4%)+
                  AEROSPACE & DEFENSE (1.7%)
                  General Dynamics Corp. ...........   2,000      $    167,400
                  Honeywell International, Inc. ....   9,600           293,856
                                                                   -----------
                                                                       461,256
                                                                   -----------
                  AIR FREIGHT & LOGISTICS (1.0%)
                  United Parcel Service, Inc. Class
                   B................................   3,800           275,576
                                                                   -----------

                  AUTOMOBILES (0.5%)
                  General Motors Corp. .............   2,900           123,743
                                                                   -----------

                  BEVERAGES (3.5%)
                  Anheuser-Busch Cos., Inc. ........   9,150           450,729
                  PepsiCo, Inc. ....................   10,300          492,546
                                                                   -----------
                                                                       943,275
                                                                   -----------
                  BIOTECHNOLOGY (1.5%)
                  Amgen, Inc. (a)...................   4,800           296,448
                  MedImmune, Inc. (a)...............   4,000           106,640
                                                                   -----------
                                                                       403,088
                                                                   -----------
                  CAPITAL MARKETS (2.5%)
                  Merrill Lynch & Co., Inc. ........   6,700           396,640
                  State Street Corp. ...............   5,300           277,508
                                                                   -----------
                                                                       674,148
                                                                   -----------
                  CHEMICALS (2.9%)
                  Dow Chemical Co. (The)............   5,500           207,295
                  E.I. du Pont de Nemours & Co. ....   6,500           262,600
                  PPG Industries, Inc. .............   5,300           305,545
                                                                   -----------
                                                                       775,440
                                                                   -----------
                  COMMERCIAL BANKS (4.7%)
                  Bank of America Corp. ............   3,450           261,268
                  Bank One Corp. ...................   7,200           305,640
                  U.S. Bancorp......................   12,000          326,640
                  Wachovia Corp. ...................   7,800           357,786
                                                                   -----------
                                                                     1,251,334
                                                                   -----------
                  COMMUNICATIONS EQUIPMENT (3.4%)
                  Cisco Systems, Inc. (a)...........   27,000          566,460
                  Nokia Corp. ADR (b)...............   19,400          329,606
                                                                   -----------
                                                                       896,066
                                                                   -----------
                  COMPUTERS & PERIPHERALS (4.9%)
                  Dell, Inc. (a)....................   5,600          202,272
                  Hewlett-Packard Co. ..............   23,638         527,364
                  International Business Machines
                   Corp. ...........................   4,050           362,394
                  Lexmark International, Inc. (a)...   2,900           213,469
                                                                   -----------
                                                                     1,305,499
                                                                   -----------
                  CONSUMER FINANCE (1.0%)
                  MBNA Corp. .......................   11,200          277,200
                                                                   -----------
                                     SHARES         VALUE
                                     -----------------------
DIVERSIFIED FINANCIALS (3.9%)
Citigroup, Inc. ..................   21,800     $ 1,033,320
                                                -----------

DIVERSIFIED TELECOMMUNICATION SERVICES (1.7%)
SBC Communications, Inc. ......... 8,700             208,626
Verizon Communications, Inc. ..... 7,250             243,600
                                                 -----------
                                                     452,226
                                                 -----------
ELECTRIC UTILITIES (2.0%)
Entergy Corp. ....................   4,400           237,160
Exelon Corp. .....................   4,600           291,870
                                                 -----------
                                                     529,030
                                                 -----------
ELECTRICAL EQUIPMENT (1.0%)
Emerson Electric Co. .............   4,850           275,238
                                                 -----------

ENERGY EQUIPMENT & SERVICES (1.9%)
Nabors Industries Ltd. (a)........   7,500           283,500
Schlumberger Ltd. ................   4,700           220,759
                                                 -----------
                                                     504,259
                                                 -----------
FOOD & STAPLES RETAILING (4.1%)
Costco Wholesale Corp. (a)........   9,600           339,552
Sysco Corp. ......................   3,600           121,176
Wal-Mart Stores, Inc. ............   7,650           450,967
Walgreen Co. .....................   5,400           188,028
                                                 -----------
                                                   1,099,723
                                                 -----------
FOOD PRODUCTS (1.2%)
Sara Lee Corp. ...................   15,800          314,894
                                                 -----------

HEALTH CARE EQUIPMENT & SUPPLIES (2.1%)
Medtronic, Inc. .................. 6,100             277,977
Zimmer Holdings, Inc. (a)......... 4,300             274,383
                                                 -----------
                                                     552,360
                                                 -----------
HEALTH CARE PROVIDERS & SERVICES (2.1%)
Cardinal Health, Inc. ............ 4,000            237,360
Medco Health Solutions, Inc.
 (a)..............................    916             30,411
UnitedHealth Group, Inc. ......... 6,000             305,280
                                                 -----------
                                                     573,051
                                                 -----------
HOUSEHOLD PRODUCTS (1.9%)
Procter & Gamble Co. (The)........   5,100           501,279
                                                 -----------

INDUSTRIAL CONGLOMERATES (5.3%)
3M Co. ...........................   4,100           323,367
General Electric Co. .............   26,200          760,062
Tyco International Ltd. ..........   16,250          339,300
                                                 -----------
                                                   1,422,729
                                                 -----------



  -------
  + Percentages indicated are based on Fund net assets.
The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
Portfolio of Investments October 31, 2003

                                               11

                                                        SHARES         VALUE
                                                        -----------------------
                   COMMON STOCKS (CONTINUED)
                   INSURANCE (3.7%)
                   Allstate Corp. (The)..............   7,500      $   296,250
                   American International Group,
                    Inc. ............................   7,400           450,142
                   Marsh & McLennan Cos., Inc. ......   5,300           226,575
                                                                    -----------
                                                                        972,967
                                                                    -----------
                   IT SERVICES (3.2%)
                   Accenture Ltd. Class A (a)........   11,900         278,460
                   Affiliated Computer Services, Inc.
                    Class A (a)......................   5,500          269,115
                   Automatic Data Processing,
                    Inc. ............................   5,400           203,796
                   Paychex, Inc. ....................   2,400            93,408
                                                                    -----------
                                                                        844,779
                                                                    -----------
                   MEDIA (5.5%)
                   Clear Channel Communications,
                    Inc. ............................   6,800           277,576
                   Comcast Corp. Class A (a).........   12,743          432,243
                   Knight-Ridder, Inc. ..............   3,000           219,960
                   Time Warner, Inc. (a).............   14,500          221,705
                   Viacom, Inc. Class B..............   7,600           303,012
                                                                    -----------
                                                                      1,454,496
                                                                    -----------
                   METALS & MINING (0.6%)
                   Alcoa, Inc. ......................   5,000           157,850
                                                                    -----------
                   MULTILINE RETAIL (0.8%)
                   Target Corp. .....................   5,500           218,570
                                                                    -----------

                   OIL & GAS (4.3%)
                   BP PLC ADR (b)....................   5,600           237,328
                   ChevronTexaco Corp. ..............   3,800           282,340
                   Exxon Mobil Corp. ................   16,900          618,202
                                                                    -----------
                                                                      1,137,870
                                                                    -----------
                   PHARMACEUTICALS (8.2%)
                   Eli Lilly & Co. ..................   3,100           206,522
                   Johnson & Johnson.................   10,950          551,114
                   Merck & Co., Inc. ................   7,600           336,300
                   Pfizer, Inc. .....................   30,520          964,432
                   Schering-Plough Corp. ............   9,100           138,957
                                                                    -----------
                                                                      2,197,325
                                                                    -----------
                   ROAD & RAIL (0.5%)
                   CSX Corp. ........................   4,200           133,644
                                                                    -----------



                                                      SHARES         VALUE
                                                      -----------------------
                  SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (4.2%)
                  Intel Corp. ...................... 22,200       $   733,710
                  Novellus Systems, Inc. (a)........ 4,200            173,418
                  Texas Instruments, Inc. .......... 4,300            124,356
                  Xilinx, Inc. (a).................. 3,000             95,100
                                                                  -----------
                                                                                  1,126,584
                                                                                -----------
                     SOFTWARE (3.8%)
                     BMC Software, Inc. (a)............          9,400              163,372
                     Microsoft Corp. ..................          32,700             855,105
                                                                                -----------
                                                                                  1,018,477
                                                                                -----------
                     SPECIALTY RETAIL (3.8%)
                     Best Buy Co., Inc. ...............          4,300              250,733
                     Gap, Inc. (The)...................          14,600             278,568
                     Home Depot, Inc. (The)............          12,900             478,203
                                                                                -----------
                                                                                  1,007,504
                                                                                -----------
                     THRIFTS & MORTGAGE FINANCE (2.4%)
                     Fannie Mae........................          5,200              372,788
                     Freddie Mac.......................          4,600              258,198
                                                                                -----------
                                                                                    630,986
                                                                                -----------
                     TOBACCO (0.4%)
                     Altria Group, Inc. ...............          2,100               97,650
                                                                                -----------

                     WIRELESS TELECOMMUNICATION SERVICES (1.2%)
                     Vodafone Group PLC ADR (b)........ 14,600                      308,790
                                                                                -----------
                     Total Investments
                      (Cost $26,126,891) (c)...........           97.4%          25,952,226(d)
                     Cash and Other Assets,
                      Less Liabilities.................            2.6             699,273
                                                                 ------        -----------
                     Net Assets........................          100.0%        $26,651,499
                                                                 ======        ===========



                     -------
                     (a) Non-income producing security.
                     (b) ADR--American Depositary Receipt.
                     (c) The cost for federal income tax purposes is $26,316,402.
                     (d) At October 31, 2003, net unrealized depreciation was
                          $364,176 based on 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 $1,945,716 and aggregate
                          unrealized depreciation for all investments on which
                          there was an excess of cost over market value of
                          $2,309,892.



                           -------
                           + Percentages indicated are based on Fund net assets.




The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
12

Statement of Assets and Liabilities as of October 31, 2003

           ASSETS:
           Investment in securities, at value (identified cost
             $26,126,891)..............................................                     $25,952,226
           Cash........................................................                       1,080,353
           Receivables:
             Fund shares sold..........................................                          42,094
             Dividends.................................................                          26,464
             Manager...................................................                           2,657
           Other assets................................................                           7,067
                                                                                            -----------
                    Total assets........................................                     27,110,861
                                                                                            -----------
           LIABILITIES:
           Payables:
             Investment securities purchased...........................                         394,113
             Professional..............................................                          21,281
             Transfer agent............................................                          14,941
             NYLIFE Distributors.......................................                           7,414
             Custodian.................................................                           1,402
             Fund shares redeemed......................................                             180
           Accrued expenses............................................                          20,031
                                                                                            -----------
                    Total liabilities...................................                        459,362
                                                                                            -----------
           Net assets..................................................                     $26,651,499
                                                                                            ===========
           COMPOSITION OF NET ASSETS:
           Shares of beneficial interest outstanding (par value of $.01
             per share) unlimited number of shares authorized:
             Class A...................................................                     $    27,975
             Class B...................................................                           3,481
             Class C...................................................                             272
           Additional paid-in capital..................................                      30,436,990
           Accumulated undistributed net investment income.............                          45,700
           Accumulated net realized loss on investments................                      (3,688,254)
           Net unrealized depreciation on investments..................                        (174,665)
                                                                                            -----------
           Net assets..................................................                     $26,651,499
                                                                                            ===========
           CLASS A
           Net assets applicable to outstanding shares.................                     $23,522,339
                                                                                            ===========
           Shares of beneficial interest outstanding...................                       2,797,512
                                                                                            ===========
           Net asset value per share outstanding.......................                     $      8.41
           Maximum sales charge (5.50% of offering price)..............                            0.49
                                                                                            -----------
           Maximum offering price per share outstanding................                     $      8.90
                                                                                            ===========
           CLASS B
           Net assets applicable to outstanding shares.................                     $ 2,902,115
                                                                                            ===========
           Shares of beneficial interest outstanding...................                         348,107
                                                                                            ===========
           Net asset value and offering price per share outstanding....                     $      8.34
                                                                                            ===========
           CLASS C
           Net assets applicable to outstanding shares.................                     $   227,045
                                                                                            ===========
           Shares of beneficial interest outstanding...................                          27,227
                                                                                            ===========
           Net asset value and offering price per share outstanding....                     $      8.34
                                                                                            ===========




The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
                                                         13

Statement of Operations for the period January 1, 2003 through October 31, 2003* and the year ended
December 31, 2002

                                                                                    2003*            2002
                                                                                 -----------      -----------
     INVESTMENT INCOME:
     Income:
       Dividends (a).............................................                $   343,434      $   416,899
       Interest..................................................                        823            7,247
                                                                                 -----------      -----------
          Total income............................................                   344,257          424,146
                                                                                 -----------      -----------
     Expenses:
       Manager...................................................                    124,556          145,611
       Transfer agent............................................                     65,569           59,884
       Service--Class A..........................................                     43,239           53,508
       Service--Class B..........................................                      4,331            2,161
       Service--Class C..........................................                        336              335
       Professional..............................................                     31,696           27,504
       Registration..............................................                     30,551           15,422
       Distribution--Class B.....................................                     12,993            6,483
       Distribution--Class C.....................................                      1,008            1,004
       Recordkeeping.............................................                     10,000           12,000
       Custodian.................................................                      8,843            8,120
       Shareholder communication.................................                      7,028           26,029
       Pricing service...........................................                      5,815            9,228
       Trustees..................................................                      3,404              897
       Offering costs............................................                         --           41,853
       Miscellaneous.............................................                     13,135           15,274
                                                                                 -----------      -----------
         Total expenses before reimbursement.....................                    362,504          425,313
     Expense reimbursement by Manager............................                    (61,063)         (81,798)
                                                                                 -----------      -----------
          Net expenses............................................                   301,441          343,515
                                                                                 -----------      -----------
     Net investment income.......................................                     42,816           80,631
                                                                                 -----------      -----------
     REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
     Net realized loss on investments............................                 (3,071,282)        (616,972)
     Net change in unrealized depreciation on investments........                  6,296,807       (6,471,472)
                                                                                 -----------      -----------
     Net realized and unrealized gain (loss) on investments......                  3,225,525       (7,088,444)
                                                                                 -----------      -----------
     Net increase (decrease) in net assets resulting from
       operations................................................                $ 3,268,341      $(7,007,813)
                                                                                 ===========      ===========




                      *     The Fund changed its fiscal year end from December 31 to
                            October 31.
                     (a)    Dividends recorded net of foreign withholding taxes of
                            $1,415 and $1,737 for 2003 and 2002, respectively.




The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
14

Statement of Changes in Net Assets for the period January 1, 2003 through October 31, 2003* and the year
ended December 31, 2002

                                                                                   2003*                2002
                                                                               --------------       ------------
     INCREASE IN NET ASSETS:
     Operations:
       Net investment income.....................................               $    42,816         $    80,631
       Net realized loss on investments..........................                (3,071,282)           (616,972)
       Net change in unrealized depreciation on investments......                 6,296,807          (6,471,472)
                                                                                -----------         -----------
      Net increase (decrease) in net assets resulting from
        operations..............................................                  3,268,341          (7,007,813)
                                                                                -----------         -----------
      Dividends to shareholders:
        From net investment income:
        Class A.................................................                         --            (121,363)
        Class B.................................................                         --              (2,044)
        Class C.................................................                         --                (213)
                                                                                -----------         -----------
           Total dividends to shareholders.......................                        --            (123,620)
                                                                                -----------         -----------
     Capital share transactions:
       Net proceeds from sale of shares:
         Class A.................................................                  1,685,553         27,504,249
         Class B.................................................                  1,978,175          1,975,216
         Class C.................................................                     94,925            231,188
       Net asset value of shares issued to shareholders in
         reinvestments of dividends:
         Class A.................................................                        --               5,352
         Class B.................................................                        --               1,799
         Class C.................................................                        --                 103
                                                                                -----------         -----------
                                                                                  3,758,653          29,717,907
      Cost of   shares redeemed:
        Class   A.................................................                 (348,550)         (1,445,274)
        Class   B.................................................                 (857,464)           (229,325)
        Class   C.................................................                  (35,113)            (46,243)
                                                                                -----------         -----------
           Increase in net assets derived from capital share
            transactions.........................................                 2,517,526          27,997,065
                                                                                -----------         -----------
           Net increase in net assets............................                 5,785,867          20,865,632
     NET ASSETS:
     Beginning of period.........................................                20,865,632                  --
                                                                                -----------         -----------
     End of period...............................................               $26,651,499         $20,865,632
                                                                                ===========         ===========
     Accumulated undistributed net investment income at end of
       period....................................................               $    45,700         $     2,870
                                                                                ===========         ===========




                      *    The Fund changed its fiscal year end from December 31 to
                           October 31.




The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
                                                          15

Financial Highlights selected per share data and ratios

                                                          Class A                            Class B
                                                --------------------------         --------------------------          --------
                                                January 1,                         January 1,                          January
                                                   2003                               2003                                2003
                                                  through       Year ended           through       Year ended            throug
                                                October 31,    December 31,        October 31,    December 31,         October
                                                   2003*           2002               2003*           2002                2003*
                                                -----------    ------------        -----------    ------------         --------
Net asset value at beginning of
  period.............................             $ 7.32           $ 10.00           $ 7.31            $ 10.00           $ 7.3
                                                  -------          -------           -------           -------           ------
Net investment income (loss) (a).....                0.02             0.03             (0.03)            (0.02)            (0.0
Net realized and unrealized gain
  (loss) on investments..............                1.07            (2.66)             1.06             (2.66)             1.0
                                                  -------          -------           -------           -------           ------
Total from investment operations.....                1.09            (2.63)             1.03             (2.68)             1.0
                                                  -------          -------           -------           -------           ------
Less dividends to shareholders:
  From net investment income.........                  --            (0.05)               --             (0.01)               -
                                                  -------          -------           -------           -------           ------
Total dividends to shareholders......                  --            (0.05)               --             (0.01)               -
                                                  -------          -------           -------           -------           ------
Net asset value at end of period.....             $ 8.41           $ 7.32            $ 8.34            $ 7.31            $ 8.3
                                                  =======          =======           =======           =======           ======
Total investment return (b)..........               14.89%          (26.34%)           14.09%           (26.79%)           14.0
Ratios (to average net assets)/
  Supplemental Data:
    Net investment income (loss).....                 0.30%+           0.39%            (0.45%)+         (0.36%)             (0.4
    Net expenses.....................                 1.50%+           1.50%             2.25%+           2.25%               2.2
    Expenses (before reimbursement)..                 1.82%+           1.86%             2.57%+           2.61%               2.5
Portfolio turnover rate..............                   38%               6%               38%               6%                 3
Net assets at end of period (in
  000's).............................             $23,522          $19,244           $ 2,902           $ 1,476           $     22




                    *     The Fund changed its fiscal year end from December 31 to
                          October 31.
                   +      Annualized.
                  (a)     Per share data based on average shares outstanding during
                          the period.
                  (b)     Total return is calculated exclusive of sales charges and is
                          not annualized.




The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial
statements.
MainStay U.S. Large Cap Equity Fund

16

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 twenty-four funds (collectively referred to as the "Funds").
These financial statements and notes relate only to MainStay U.S. Large Cap Equity Fund (the "Fund"), a
diversified fund.

The Fund currently offers three classes of shares. On December 28, 2001, the Fund sold Class A, Class B and
Class C shares to NYLIFE Distributors LLC (the "Distributor"), an indirect wholly-owned subsidiary of New
York Life Insurance Company ("New York Life"), at a net asset value of $10.00. The Fund commenced
investment operations the following business day on January 2, 2002. 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 realize above average total return consistent with reasonable risk.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:

The Fund prepares its financial statements in accordance with generally accepted accounting principles 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
printing 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 deemed by the
Board of Trustees to represent fair value.
Notes to Financial Statements

                                                        17

(B) OFFERING COSTS. Costs incurred in connection with the initial offering of the Fund, in the amount of
$41,853, were amortized over a period of 12 months beginning with the commencement of operations on
January 2, 2002.

(C) 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.

(D) 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 period reclassifications between accumulated undistributed net
investment income and additional paid-in-capital arising from permanent differences: net assets at October 31,
2003, are not affected.

                                       ACCUMULATED
                                      UNDISTRIBUTED
                                      NET INVESTMENT        ADDITIONAL
                                          INCOME          PAID-IN CAPITAL
                                      --------------      ---------------
                                           $14                 $(14)




The reclassifications for the Fund are primarily due to non-deductible expenses.

(E) 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.

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.
MainStay U.S. Large Cap Equity Fund

18

(F) 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.

(G) 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. New York Life Investment Management LLC ("NYLIM" or the
"Manager"), an indirect wholly-owned subsidiary of New York Life, serves 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. McMorgan &
Company LLC (the "Subadvisor"), a registered investment Advisor and indirect wholly-owned subsidiary of
New York Life, is responsible for the day-to-day portfolio management of the Fund.

The Trust, on behalf of the Fund, pays the Manager a monthly fee for services performed and the facilities
furnished at an annual rate of 0.65% of the Fund's average daily net assets. The Manager has voluntarily agreed
to reimburse the expenses of the Fund to the extent that operating expenses would exceed on an annualized basis
1.50%, 2.25% and 2.25% of the average daily net assets of the Class A, Class B and Class C shares,
respectively. For the ten months ended October 31, 2003, the Manager earned from the Fund $124,556 and
reimbursed the Fund $61,063. For the year ended December 31, 2002, the Manager earned from the Fund
$145,611 and reimbursed the Fund $81,798.

Pursuant to the terms of a Sub-Advisory Agreement between NYLIM and the Subadvisor, the Manager pays
the Subadvisor a monthly fee at an annual rate of 0.325% of the average daily net assets of the Fund.

(B) DISTRIBUTION AND SERVICE FEES. The Trust, on behalf of the Fund, has a Distribution Agreement
with the Distributor. The Fund, with respect to each class of 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
Notes to Financial Statements (continued)

                                                        19

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 and Class C 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.

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.

(C) SALES CHARGES. The Fund was advised by the Distributor that the amount of sales charges retained on
sales of Class A shares was $842 for the ten months ended October 31, 2003. The Fund was also advised that
the Distributor retained contingent deferred sales charges on redemptions of Class B and Class C shares of
$4,048 and $333 respectively, for the ten months ended October 31, 2003.

(D) TRANSFER, DIVIDEND DISBURSING AND SHAREHOLDER SERVICING AGENT. 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 accrued for the ten months ended October 31, 2003 and year ended
December 31, 2002, amounted to $65,569 and $59,884, respectively.

(E) TRUSTEES FEES. Trustees, other than those currently affiliated with NYLIM, are paid an annual 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 fee of $20,000. Beginning January 1, 2003, the Audit Committee
Chairman receives an additional $2,000 for each meeting of the Audit Committee attended. Also, beginning
January 1, 2003, the Chairpersons of the Brokerage Committee and the Operations Committee each receive an
additional $1,000 for each meeting of the Brokerage Committee and Operations Committee attended,
respectively. The Trust allocates trustees fees in proportion to the net assets of the respective Funds. Thus the
U.S. Large Cap Equity Fund only pays a portion of the fees identified above.

(F) CAPITAL. At October 31, 2003, New York Life held shares of Class A, Class B and Class C with a value
of $20,856,800, $83,400 and $83,400, respectively. This represents 88.7%, 2.9% and 36.7% of the Class A
shares, Class B shares and Class C shares net assets, respectively, and 78.9% of the Fund's total net assets at
period end.
MainStay U.S. Large Cap Equity Fund

20

(G) 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 $490 for the ten
months ended October 31, 2003 and $439 for the year ended December 31, 2002.

The Fund pays the Manager a monthly fee for 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 recordkeeping services provided to the Fund by the Manager amounted to $10,000
for the ten months ended October 31, 2003 and $12,000 for the year ended December 31, 2002.

NOTE 4--FEDERAL INCOME TAX:

As of October 31, 2003, the components of accumulated loss on a tax basis were as follows:

                 ACCUMULATED
                UNDISTRIBUTED
               NET INVESTMENT       ACCUMULATED CAPITAL         UNREALIZED       TOTAL ACCUMULATED
                   INCOME            AND OTHER LOSSES          DEPRECIATION            LOSS
               ---------------      -------------------        ------------      -----------------
                  $ 45,700              $(3,498,743)            $(364,176)          $(3,817,219)




The difference between book-basis and tax-basis unrealized depreciation is due to wash sales deferrals.

Dividends to shareholders from net investment income shown in the Statement of Changes in Net Assets for the
year ended December 31, 2002 represent tax-based distributions of ordinary income.

At October 31, 2003, for federal income tax purposes, capital loss carryforwards of $3,498,743 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.

                                        CAPITAL LOSS                                        AMOUNT
                                     AVAILABLE THROUGH                                     (000'S)
                ------------------------------------------------------------               --------
                     2010...................................................                $ 200
                     2011...................................................                 3,299
                                                                                            ------
                                                                                            $3,499
                                                                                            ======




NOTE 5--PURCHASES AND SALES OF SECURITIES (IN 000'S):

During the ten months ended October 31, 2003, purchases and sales of securities, other than short-term
securities, were $10,492 and $8,404, respectively.
Notes to Financial Statements (continued)

                                                       21

NOTE 6--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
ten months ended October 31, 2003.

NOTE 7--CAPITAL SHARE TRANSACTIONS (IN 000'S):

                                                           JANUARY 1 THROUGH                      YEAR ENDED
                                                           OCTOBER 31, 2003*                   DECEMBER 31, 2002
                                                      ---------------------------         ---------------------------
                                                      CLASS A   CLASS B   CLASS C         CLASS A   CLASS B   CLASS C
                                                      -------   -------   -------         -------   -------   -------
Shares sold.................................            216       261       12             2,820      232       26
Shares issued in reinvestment of
  dividends.................................              --         --         --             1         --(a)       --(a)
                                                         ---       ----         --         -----        ---          --
                                                         216        261         12         2,821        232          26
Shares redeemed.............................             (46)      (115)        (5)         (193)       (30)         (6)
                                                         ---       ----         --         -----        ---          --
Net increase................................             170        146          7         2,628        202          20
                                                         ===       ====         ==         =====        ===          ==




                      *    The Fund changed its fiscal year end from December 31 to
                           October 31.
                     (a)   Less than one thousand.




NOTE 8--OTHER MATTERS:

New York Life Investment Management LLC (NYLIM) and mutual funds that NYLIM advises, including The
MainStay Funds, have received requests for information from various government authorities and regulatory
bodies regarding market timing, late trading and other matters. We are cooperating fully in responding to these
requests. We have no reason to believe that NYLIM or any of the mutual funds NYLIM advises has been
targeted as the subject of any governmental or regulatory enforcement action.
22

Report of Independent Auditors

To the Trustees of The MainStay Funds and Shareholders of MainStay U.S. Large Cap Equity Fund

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the
related statements of operations and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of MainStay U.S. Large Cap Equity Fund (one of the funds constituting
The MainStay Funds, hereafter referred to as the "Fund") at October 31, 2003, the results of its operations for
the ten months ended October 31, 2003 and the year ended December 31, 2002, the changes in its net assets
for the ten months ended October 31, 2003 and each of the two years in the period ended December 31, 2002
and the financial highlights for each of the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our audits of these financial statements
in accordance with auditing standards generally accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits, which
included confirmation of securities at October 31, 2003 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 18, 2003
                                                          23

The MainStay Funds--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 his/her successor is elected and qualified or until his/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.

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
        NAME AND          AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES*
---------------------------------------------------------------------------------------------------------
Gary E. Wendlandt         Chairman since   Chief Executive Officer, Chairman, and         43
10/8/50                   2002 and         Manager, New York Life Investment
                          Trustee since    Management LLC (including predecessor
                          2000             advisory organizations) and New York
                                           Life Investment Management Holdings LLC;
                                           Executive Vice President, New York Life
                                           Insurance Company; Executive Vice
                                           President and Manager, NYLIFE LLC;
                                           Manager, NYLIFE Distributors LLC; Vice
                                           Chairman, McMorgan & Company 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. (19
                                           portfolios); Executive Vice President
                                           and Chief Investment Officer, MassMutual
                                           Life Insurance Company (1993 to 1999).
---------------------------------------------------------------------------------------------------------
Stephen C. Roussin        President,       President, Chief Operating Officer, and        41
7/12/63                   Chief            Manager, New York Life Investment
                          Executive        Management LLC (including predecessor
                          Officer, and     advisory organizations) and New York
                          Trustee since    Life Investment Management Holdings LLC;
                          1997             Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, NYLIFE LLC; Director, NYLIFE
                                           Securities, Inc.; Chairman, President,
                                           and Manager, NYLIFE Distributors LLC;
                                           Manager, McMorgan & Company LLC;
                                           Chairman, Trustee, and President,
                                           Eclipse Funds, (4 portfolios); Chairman
                                           and Director, Eclipse Funds Inc. (13
                                           portfolios); Senior Vice President,
                                           Smith Barney (1994 to 1997).
---------------------------------------------------------------------------------------------------------
* Certain Trustees are considered to be interested persons of the Trust within the meaning of the 1940 Ac
  their affiliation with New York Life Insurance Company, New York Life Investment Management LLC, MacKay
  LLC, McMorgan & Company LLC, Eclipse Funds, Eclipse Funds Inc., MainStay VP Series Fund, Inc., NYLIFE S
  Inc., and/or NYLIFE Distributors LLC, as described in detail in the column "Principal Occupation(s) Dur
  Years."
24

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Harry G. Hohn             Trustee since    Retired. Chairman and Chief Executive          24
3/1/32                    1996             Officer, New York Life Insurance Company
                                           (1990 to 1997); Chairman of the Board,
                                           Life Insurance Council of New York (1996
                                           to 1997); Director, Million Dollar
                                           Roundtable Foundation (1996 to 1997).
---------------------------------------------------------------------------------------------------------
Donald K. Ross            Trustee since    Retired. Manager, MacKay Shields LLC;          24
7/1/25                    1991             Chairman, Chief Executive Officer, and
                                           President, New York Life Insurance
                                           Company (1981 to 1990).
---------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
---------------------------------------------------------------------------------------------------------
Charlynn Goins            Trustee since    Retired. Consultant to U.S. Commerce           24
9/15/42                   2001             Department, Washington, DC (1998 to
                                           2000); Senior Vice President and
                                           Director of International Marketing,
                                           Prudential Mutual Funds and Annuities
                                           (1990 to 1997).
---------------------------------------------------------------------------------------------------------
Edward J. Hogan           Trustee since    Rear Admiral U.S. Navy (Retired);              24
8/17/32                   1996             Independent Management Consultant.
---------------------------------------------------------------------------------------------------------
Terry L. Lierman          Trustee since    Partner, Health Ventures LLC; Vice             24
1/4/48                    1991             Chair, Employee Health Programs;
                                           Partner, TheraCom (1994 to 2001);
                                           President, Capitol Associates, Inc.
                                           (1984 to 2001).
---------------------------------------------------------------------------------------------------------
John B. McGuckian         Trustee since    Chairman, Ulster Television Plc; Pro           24      Non-Exe
11/13/39                  1997             Chancellor, Queen's University (1985 to                Directo
                                           2001).                                                 Irish B
                                                                                                  Non-Exe
                                                                                                  Directo
                                                                                                  Contine
                                                                                                  Plc; No
                                                                                                  Directo
                                                                                                  Plc.
---------------------------------------------------------------------------------------------------------
Donald E. Nickelson       Trustee since    Retired. Vice Chairman, Harbour Group          24      Directo
12/9/32                   1994 and Lead    Industries, Inc. (leveraged buyout                     Corpora
                          Non-             firm).                                                 Directo
                          Interested                                                              Advanta
                          Trustee                                                                 Corpora
---------------------------------------------------------------------------------------------------------
Michael H. Sutton         Trustee since    Retired. Independent Consultant (1999 to       24
9/19/40                   2003             present); Special Consultant, Financial
                                           Accounting Standards Board (1998 to
                                           1999); Chief Accountant, United States
                                           Securities and Exchange Commission (1995
                                           to 1998).
---------------------------------------------------------------------------------------------------------
                                               25

                                                                                     NUMBER OF
                                                                                     PORTFOLIOS
                           POSITION(S)                                                IN FUND
                          HELD WITH FUND                                              COMPLEX
         NAME AND         AND LENGTH OF            PRINCIPAL OCCUPATION(S)            OVERSEEN    OTHER D
     DATE OF BIRTH         TIME SERVED               DURING PAST 5 YEARS             BY TRUSTEE     HELD
---------------------------------------------------------------------------------------------------------
Richard S. Trutanic       Trustee since    Advisor (July 2003 to present) and             24
2/13/52                   1994             Managing Director (2001 to June 2003),
                                           The Carlyle Group (private investment
                                           firm); Chairman and Chief Executive
                                           Officer, Somerset Group (financial
                                           advisory firm); Senior Managing
                                           Director, Groupe Arnault (private
                                           investment firm) (1999 to 2001).
---------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES
---------------------------------------------------------------------------------------------------------
Jefferson C. Boyce        Senior Vice      Senior Managing Director, New York Life       N/A
9/17/57                   President        Investment Management LLC (including
                          since 1995       predecessor advisory organizations);
                                           Senior Vice President, New York Life
                                           Insurance Company; Senior Vice
                                           President, Eclipse Funds and Eclipse
                                           Funds Inc.; Manager, NYLIFE Distributors
                                           LLC.
---------------------------------------------------------------------------------------------------------
Patrick J. Farrell        Chief            Managing Director, New York Life              N/A
9/27/59                   Financial and    Investment Management LLC (including
                          Accounting       predecessor advisory organizations);
                          Officer,         Treasurer, Chief Financial and
                          Treasurer, and   Accounting Officer, Eclipse Funds Inc.,
                          Vice President   Eclipse Funds, and MainStay VP Series
                          since 2001       Fund, Inc.; Chief Financial Officer and
                                           Assistant Treasurer, McMorgan Funds.
---------------------------------------------------------------------------------------------------------
Robert A. Anselmi         Secretary        Senior Managing Director, General             N/A
10/19/46                  since 2001       Counsel, and Secretary, New York Life
                                           Investment Management LLC (including
                                           predecessor advisory organizations);
                                           Secretary, New York Life Investment
                                           Management Holdings LLC; Senior Vice
                                           President, New York Life Insurance
                                           Company; Vice President and Secretary,
                                           McMorgan & Company LLC; Secretary,
                                           NYLIFE Distributors LLC; Secretary,
                                           MainStay VP Series Fund, Inc., Eclipse
                                           Funds Inc., and Eclipse Funds; 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).
---------------------------------------------------------------------------------------------------------
Richard W. Zuccaro        Tax Vice         Vice President, New York Life Insurance       N/A
12/12/49                  President        Company; Vice President, New York Life
                          since 1991       Insurance and Annuity Corporation,
                                           NYLIFE Insurance Company of Arizona,
                                           NYLIFE LLC, NYLIFE Securities Inc.; Vice
                                           President-Financial Operations and Chief
                                           Financial Officer, NYLIFE Distributors
                                           LLC; Tax Vice President, New York Life
                                           International, LLC; Tax Vice President,
                                           Eclipse Funds, Eclipse Funds Inc., and
                                           MainStay VP Series Fund, Inc.
---------------------------------------------------------------------------------------------------------
26

THE MAINSTAY FUNDS

EQUITY FUNDS
MainStay Blue Chip Growth Fund
MainStay Capital Appreciation Fund
MainStay Equity Index Fund(1)
MainStay Mid Cap Growth Fund
MainStay Select 20 Equity Fund(2)
MainStay Small Cap Growth Fund
MainStay Small Cap Value Fund(3)
MainStay U.S. Large Cap Equity Fund

EQUITY AND INCOME FUNDS
MainStay Convertible Fund
MainStay Equity Income Fund
MainStay Growth Opportunities Fund
MainStay MAP Fund
MainStay Research Value Fund
MainStay Strategic Value Fund
MainStay Total Return Fund
MainStay Value Fund

INCOME FUNDS
MainStay Government Fund
MainStay High Yield Corporate Bond Fund
MainStay Money Market Fund
MainStay Strategic Income Fund
MainStay Tax Free Bond Fund

INTERNATIONAL FUNDS
MainStay Global High Yield Fund
MainStay International Bond Fund
MainStay International Equity Fund
INVESTMENT ADVISOR

NEW YORK LIFE INVESTMENT MANAGEMENT LLC
Parsippany, New Jersey

SUBADVISORS

MACKAY SHIELDS LLC(4)
New York, New York

DALTON, GREINER, HARTMAN, MAHER & CO.
New York, New York

FUND ASSET MANAGEMENT, L.P.
d/b/a Mercury Advisors
Plainsboro, New Jersey

GABELLI ASSET MANAGEMENT COMPANY
Rye, New York

JENNISON ASSOCIATES LLC
New York, New York

MARKSTON INTERNATIONAL, LLC
White Plains, New York

MCMORGAN & COMPANY LLC(4)
San Francisco, California


1. Closed to new purchases as of January 1, 2002.
2. Ceased operations as of November 28, 2003.
3. Closed to new investors as of December 1, 2001.
4. An affiliate of New York Life Investment Management LLC.
Trustees and Officers(1)

                         GARY E. WENDLANDT             Chairman and Trustee
                         STEPHEN C. ROUSSIN            President, Chief Executive
                                                       Officer, and Trustee
                         CHARLYNN GOINS                Trustee
                         EDWARD J. HOGAN               Trustee
                         HARRY G. HOHN                 Trustee
                         TERRY L. LIERMAN              Trustee
                         JOHN B. MCGUCKIAN             Trustee
                         DONALD E. NICKELSON           Trustee
                         DONALD K. ROSS                Trustee
                         MICHAEL H. SUTTON             Trustee
                         RICHARD S. TRUTANIC           Trustee
                         JEFFERSON C. BOYCE            Senior Vice President
                         PATRICK J. FARRELL            Chief Financial and
                                                       Accounting Officer,
                                                       Treasurer, and
                                                       Vice President
                         ROBERT A. ANSELMI             Secretary
                         RICHARD W. ZUCCARO            Tax Vice President




DECHERT LLP
Legal Counsel

PRICEWATERHOUSECOOPERS LLP
Independent Auditors
1. As of October 31, 2003.

[MAINSTAY.LOGO]

MainStay is a division of New York Life Investment Management LLC, the investment advisor to The MainStay
Funds.


Not FDIC insured. No bank guarantee. May lose value.

NYLIFE DISTRIBUTORS LLC
169 Lackawanna Avenue
Parsippany, New Jersey 07054

www.mainstayfunds.com

This report may only be distributed when preceded or accompanied by a current Fund prospectus.

(C)2003 NYLIFE Distributors LLC. All rights reserved. MSLE11- 12/03 NYLIM-A04377 31
[RECYCLE GRAPHIC]

                                   [MAINSTAY FUNDS GRAPHIC]

                               MainStay(R) U.S. Large Cap Equity Fund

                                           ANNUAL REPORT

                                           OCTOBER 31, 2003

                                          [MAINSTAY.LOGO]
ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, Registrant had 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 the registrant has at least one audit committee financial expert serving
on its Audit Committee. The Audit Committee financial expert is Michael H. Sutton. Mr. Sutton is "independent"
within the meaning of that term used in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. [RESERVED]

ITEM 6. [RESERVED]

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-
END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. [RESERVED]

ITEM 9. CONTROLS AND PROCEDURES.

(a) Based on an evaluation of the Disclosure Controls and Procedures (as defined in Rule 30a-2(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 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 significant changes in the Registrant's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation, and there were no corrective actions with regard
to significant deficiencies and material weaknesses.

ITEM 10. 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 202.

                                                           2
                                                  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/ Gary E. Wendlandt
                                                  ---------------------
                                                  GARY E. WENDLANDT
                                                  CHAIRMAN

                                          Date: January 6, 2004




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/ Gary E. Wendlandt
                                       ---------------------
                                       GARY E. WENDLANDT
                                       CHAIRMAN

                                Date: January 6, 2004

                                By:    /s/Patrick J. Farrell
                                       ---------------------
                                       PATRICK J. FARRELL
                                       TREASURER AND
                                       CHIEF FINANCIAL AND ACCOUNTING OFFICER

                                Date: January 6, 2004




                                                 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.

                                                          3
                                                [EX-99.CODEETH]

                                                      Exhibit (a)

                         CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
                                 SENIOR FINANCIAL OFFICERS

                                            THE MAINSTAY FUNDS

                                        Approved by the Board of Trustees
                                             of The MainStay Funds
                                            as of December 8, 2003

Pursuant to the Sarbanes-Oxley Act of 2002

I. INTRODUCTION AND APPLICATION

The MainStay Funds (the "Trust") recognizes the importance of high ethical standards in the conduct of its
business and requires this Code of Ethics ("Code") be observed by its principal executive officers (each, a
"Covered Officer") (defined below). In accordance with the Sarbanes-Oxley Act of 2002 (the "Act") and the
rules promulgated thereunder by the U.S. Securities and Exchange Commission ("SEC") the Trust is required to
file reports pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ("1934 Act"), and must disclose
whether it has adopted a code of ethics applicable to the principal executive officers. The Trust's Board of
Trustees ("Board"), including a majority of its Independent Trustees (defined below), has approved this Code as
compliant with the requirements of the Act and related SEC rules.

All recipients of the Code are directed to read it carefully, retain it for future reference, and abide by the rules and
policies set forth herein. Any questions concerning the applicability or interpretation of such rules and policies,
and compliance therewith, should be directed to the relevant Compliance Officer (defined below).

II. PURPOSE

This Code has been adopted by the Board in accordance with the Act and the rules promulgated by the SEC in
order to deter wrongdoing and promote:

- honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships;

- full, fair, accurate, timely and understandable disclosure in reports and documents filed by the Trust with the
SEC or made in other public communications by the Trust;

- compliance with applicable governmental laws, rules and regulations;

- prompt internal reporting to an appropriate person or persons of violations of the Code to an appropriate
person or persons identified in the Code; and

- accountability for adherence to the Code.

                                                           4
III. DEFINITIONS

(A) "Covered Officer" means the principal executive officer and senior financial officers, including the principal
financial officer, controller or principal accounting officer, or persons performing similar functions. The Covered
Officers of the Trust shall be identified in Schedule I, as amended from time to time.

(B) "Compliance Officer" means the person appointed by the Trust's Board of Trustees to administer the Code.
The Compliance Officer of the Trust shall be identified in Schedule II, as amended from time to time.

(C) "Trustee" means a trustee of the Trust, as applicable.

(D) "Executive Officer" shall have the same meaning as set forth in Rule 3b-7 of the 1934 Act. Subject to any
changes in the Rule, an Executive Officer means the president, any vice president, any officer who performs a
policy making function, or any other person who performs similar policy making functions for the Trust.

(E) "Independent Trustee" means a trustee of the Trust who is not an "interested person" of the Trust within the
meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Investment Company Act").

(F) "Implicit Waiver" means the Compliance Officer failed to take action within a reasonable period of time
regarding a material departure from a provision of the Code that has been made known to an Executive Officer.

(G) "Restricted List" means that listing of securities maintained by the Compliance Officer in which trading by
certain individuals subject to the Trust's 17j-1 code of ethics is generally prohibited.

(H) "Waiver" means the approval by the Compliance Officer of a material departure from a provision of the
Code.

IV. HONEST AND ETHICAL CONDUCT

(A) Overview. A "conflict of interest" occurs when a Covered Officer's personal interest interferes with the
interests of, or his or her service to, the Trust. For example, a conflict of interest would arise if a Covered Officer,
or a member of his or her family, receives improper personal benefits as a result of his or her position with the
Trust.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are
subject to conflict of interest provisions in the Investment Company Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act"). For example, Covered Officers may not individually engage in certain
transactions (such as the purchase or sale of securities or other property) with the Trust because of their status as
"affiliated persons" of the Trust. The Trust's and certain of its service providers' compliance policies, programs
and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does
not, and is not intended to, restate or replace these programs and procedures, and such conflicts fall outside of
the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts may arise or result from
the contractual relationship between the Trust and New York Life Investment Management LLC (the "Adviser").
The Covered Officers may be officers or employees of the Adviser. As a result,

                                                           5
this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the
Trust or the Adviser), be involved in establishing policies and implementing decisions that will have different
effects on the Adviser and the Trust. The participation of the Covered Officers in such activities is inherent in the
contractual relationships between the Trust and the Adviser and is consistent with the performance by the
Covered Officers of their duties as officers of the Trust. Thus, if performed in conformity with the provisions of
the Investment Company Act and the Advisers Act, such activities normally will be deemed to have been handled
ethically. In addition, it is recognized by the Board that the Covered Officers may also be officers or employees
of one or more other investment companies covered by this or other codes.

(B) General Policy. Each Covered Officer shall adhere to high standards of honest and ethical conduct. Each
Covered Officer has a duty to exercise his or her authority and responsibility for the benefit of the Trust and its
shareholders, to place the interests of the shareholders first, and to refrain from having outside interests that
conflict with the interests of the Trust and its shareholders. Each such person must avoid any circumstances that
might adversely affect, or appear to affect, his or her duty of loyalty to the Trust and its shareholders in
discharging his or her responsibilities, including the protection of confidential information and corporate integrity.

(C) Conflicts of Interest. Other conflicts of interest are covered by the Code, even if such conflicts of interest are
not subject to provisions of the Investment Company Act. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The
overarching principle is that the personal interest of a Covered Officer should not be placed improperly before
the interest of the Trust.

(1) Prohibited Conflicts of Interest. Each Covered Officer must:

- not use his or her personal influence or personal relationships improperly to influence decisions or financial
reporting by the Trust whereby the Covered Officer would benefit personally to the detriment of the Trust;

- not cause the Trust to take action, or fail to take action, for the individual personal benefit of the Covered
Officer rather than benefit the Trust;

- not use material non-public knowledge of portfolio transactions made or contemplated for the Trust to trade
personally or cause others to trade personally in contemplation of the market effect of such transactions; or

- report at least annually the information elicited in the Trust's Trustee's and Officer's Questionnaire relating to
potential conflicts of interest.

(2) Duty to Disclose Conflicts. Each Covered Officer has the duty to disclose to the Compliance Officer any
interest that he or she may have in any firm, corporation or business entity that is not affiliated or participating in
any joint venture or partnership with the Trust or its affiliates and that does business with the Trust or that
otherwise presents a possible conflict of interest. Disclosure must be timely so that the Trust may take action
concerning any possible conflict as it deems appropriate. It is recognized, however, that the Trust or its affiliates
may have business relationships with many organizations and that a relatively small interest in publicly traded
securities of an organization does not necessarily give rise to a prohibited conflict of interest. Therefore, the
following procedures have been adopted.

                                                           6
(3) Conflicts of Interest that may be Waived. There are some conflict of interest situations for which a Covered
Officer may seek a Waiver from a provision(s) of the Code. Waivers must be sought in accordance with Section
VII of the Code. Examples of these include:

- Board Memberships. Except as described below, it is considered generally incompatible with the duties of a
Covered Officer to assume the position of director of a corporation not affiliated with the Trust. A report should
be made by a Covered Officer to the Compliance Officer of any invitation to serve as a director of a corporation
that is not an affiliate and the person must receive the approval of the Compliance Officer prior to accepting any
such directorship. In the event that approval is given, the Compliance Officer shall immediately determine whether
the corporation in question is to be placed on the Trust's Restricted List.

- "Other" Business Interests. Except as described below, it is considered generally incompatible with the duties of
a Covered Officer to act as an officer, general partner, consultant, agent, representative or employee of any
business other than an affiliate. A report should be made of any invitation to serve as an officer, general partner,
consultant, agent, representative or employee of any business that is not an affiliate for the approval of the
Compliance Officer prior to accepting any such position. In the event that approval is given, the Compliance
Officer shall immediately determine whether the business in question is to be placed on the Trust's Restricted List.

- Gifts, Entertainment, Favors or Loans. Covered Officers are subject to the NYLIM Gift and Entertainment
Policy and should refer to that Policy for guidance with respect to the limits on giving and receiving
gifts/entertainment to and from third parties that do business with the Trust.

- Permissible Outside Activities. Covered Officers who, in the regular course of their duties relating to the Trust's
private equity/venture capital advisory and investment activities, are asked to serve as the director, officer,
general partner, consultant, agent, representative or employee of a privately-held business may do so with the
prior written approval of the Compliance Officer.

- Doing Business with the Trust. Except as approved by the Compliance Officer, Covered Officers may not have
a monetary interest, as principal, co-principal, agent or beneficiary, directly or indirectly, or through any
substantial interest in any other corporation or business unit, in any transaction involving the Trust, subject to such
exceptions as are specifically permitted under law.

V. FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSURE AND
COMPLIANCE

Covered Officers shall:

- be familiar with the disclosure requirements generally applicable to the Trust;

- not knowingly misrepresent, or cause others to misrepresent, facts about the Trust to others, whether within or
outside the Trust, including the Trust's Trustees and auditors, governmental regulators and self-regulatory
organizations;

- to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the
Trust, the Adviser and other Trust service providers with the goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the Trust files with, or submits to, the SEC and in other
public communications made by the Trust; and

- promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

                                                           7
VI. INTERNAL REPORTING BY COVERED PERSONS

(A) Certifications and Accountability. Each Covered Officer shall:

(1) upon adoption of the Code (or thereafter as applicable upon becoming a Covered Officer), affirm in writing
on Schedule A hereto that the Covered Officer has received, read, and understands the Code;

(2) annually thereafter affirm on Schedule A hereto that the Covered Officer has complied with the requirements
of the Code; and

(3) not retaliate against any other Covered Officer or employee of the Trust or their affiliated persons for reports
of potential violations that are made in good faith.

(B) Reporting. A Covered Officer shall promptly report any knowledge of a material violation of this Code to the
Compliance Officer. Failure to do so is itself a violation of the Code.

VII. WAIVERS OF PROVISIONS OF THE CODE

(A) Application of the Code. The Compliance Officer is responsible for applying this Code to specific situations
in which questions are presented under it and has the authority to interpret this Code in any particular situation.
The Compliance Officer is authorized to consult, as appropriate, with counsel to the Trust/counsel to the
Independent Trustees. However, any approvals or Waivers sought by and/or granted to a Covered Officer will
be reported to the Board in accordance with Section VIII, below.

(B) Waivers. The Compliance Officer may grant Waivers to the Code in circumstances that present special
hardship. Waivers shall be structured to be as narrow as is reasonably practicable with appropriate safeguards
designed to prevent abuse of the Waiver. To request a Waiver from the Code, the Covered Officer shall submit
to the Compliance Officer a written request describing the transaction, activity or relationship for which a Waiver
is sought. The request shall briefly explain the reason for engaging in the transaction, activity or relationship.
Notwithstanding the foregoing, no exception will be granted where such exception would result in a violation of
SEC rules or other applicable laws.

(C) Documentation. The Compliance Officer shall document all Waivers (including Implicit Waivers). If a Waiver
is granted, the Compliance Officer shall prepare a brief description of the nature of the Waiver, the name of the
Covered Officer and the date of the Waiver so that this information may be disclosed in the next Form N-CSR to
be filed on behalf of the Trust or posted on the Trust's internet website within five business days following the
date of the Waiver. All Waivers must be reported to the Board at each quarterly meeting as set forth in Section
VIII below.

VIII. BOARD REPORTING

The Compliance Officer shall report any violations of the Code to the Board for its consideration on a quarterly
basis. At a minimum, the report shall:

- describe the violation under the Code and any sanctions imposed;

- identify and describe any Waivers sought or granted under the Code; and

- identify any recommended changes to the Code.

                                                         8
IX. AMENDMENTS

The Covered Officers and the Compliance Officer may recommend amendments to the Code for the
consideration and approval of the Board. In connection with any amendment to the Code, the Compliance
Officer shall prepare a brief description of the amendment so that the necessary disclosure may be made with the
next Form N-CSR to be filed on behalf of the Trust, or posted on the Trust's internet website within five business
days following the date of the amendment.

X. SANCTIONS

Compliance by Covered Officers with the provisions of the Code is required. Covered Officers should be aware
that in response to any violation, the Trust will take whatever action is deemed necessary under the
circumstances, including, but not limited to, the imposition of appropriate sanctions. These sanctions may include,
among others, the reversal of trades, reallocation of trades to client accounts, fines, disgorgement of profits,
suspension or termination.

XI. RECORD-KEEPING

The Compliance Officer shall maintain all records, including any internal memoranda, relating to compliance with
the Code or Waivers of a provision(s) of the Code, for a period of 7 years from the end of the fiscal year in
which such document was created, 2 years in an accessible place.

XII. OTHER POLICIES AND PROCEDURES

This Code shall be the sole code of ethics adopted by the Trust for purposes of
Section 406 of the Act and the rules and forms applicable to registered investment companies thereunder. Insofar
as other policies or procedures of the Trust, the Adviser, and NYLIFE Distributors LLC (the "Underwriter"), or
other service providers govern or purport to govern the behavior or activities of the Covered Officers who are
subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the
provisions of this Code. The Trust's, the Adviser's and the Underwriter's codes of ethics under Rule 17j-1 under
the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not
part of this Code.

XIII. CONFIDENTIALITY

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be
maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not
be disclosed to anyone other than the Board, the Adviser and the Compliance Officer, and their respective
counsels.

XIV. INTERNAL USE

The Code is intended solely for the internal use by the Trust and does not constitute an admission, by or on behalf
of the Trust, as to any fact, circumstance, or legal conclusion.

                                                         9
                                                    SCHEDULE I

                                               COVERED OFFICERS

                                              Gary E. Wendlandt, Chairman

Patrick J. Farrell, Chief Financial Officer

                                                          10
   SCHEDULE II

COMPLIANCE OFFICER

    Alison Micucci

         11
                                                 EXHIBIT A

                        THE MAINSTAY FUNDS CODE OF ETHICS FOR
                  PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS

                             INITIAL AND ANNUAL CERTIFICATION OF

                                        COMPLIANCE WITH THE

                          MAINSTAY FUNDS CODE OF ETHICS FOR
                  PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS

I hereby certify that I have received the MainStay Funds Code of Ethics for Principal Executive and Senior
Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and
understood the Code. I further certify that I am subject to the Code and will comply with each of the Code's
provisions to which I am subject.

I hereby certify that I have received the MainStay Funds Code of Ethics for Principal Executive and Senior
Financial Officers adopted pursuant to the Sarbanes-Oxley Act of 2002 (the "Code") and that I have read and
understood the Code. I further certify that I have complied with and will continue to comply with each of the
provisions of the Code to which I am subject.

                                                    /s/ Gary E. Wendlandt
                            ----------------------------------------------
                                                           (Signature)

                            Name: Gary E. Wendlandt
                            Title/Department: Chairman, The MainStay Funds
                            Date: January 6, 2004

                                                    /s/ Patrick J. Farrell
                            ----------------------------------------------
                                                           (Signature)

                            Name: Patrick J. Farrell
                            Title/Department: Treasurer and Chief Financial
                                 and Accounting Officer, The MainStay Funds
                            Date: January 6, 2004




Received By: Michael Hession

                                      Signature: /s/ Michael Hession
                                                 -------------------
                                      Date: January 6, 2004




                                                      12
[EX-99.CERT]

                                                     Exhibit (b)(1)

SECTION 302 CERTIFICATIONS

I, Gary E. Wendlandt, Chairman of The MainStay Funds, certify that:

1. I have reviewed this report on Form N-CSR of The MainStay Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations, changes in net assets, and cash flows
(if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the
registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days
prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over
financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and
report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

                                             By: /s/ Gary E. Wendlandt
                                                 ---------------------
                                                 Gary E. Wendlandt
                                                 Chairman

                                             Date: January 6, 2004
13
SECTION 302 CERTIFICATIONS

I, Patrick J. Farrell, Treasurer and Chief Financial and Accounting Officer of The MainStay Funds, certify that:

1. I have reviewed this report on Form N-CSR of The MainStay Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations, changes in net assets, and cash flows
(if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the
periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the
registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days
prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over
financial reporting; and

5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and
report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

                                  By: /s/ Patrick J. Farrell
                                      ----------------------
                                      Patrick J. Farrell
                                      Treasurer and
                                      Chief Financial and Accounting Officer

                                  Date: January 6, 2004




                                                           14
[EX.-99.906CERT]

                                                    Exhibit (b)(2)

SECTION 906 CERTIFICATIONS

In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange
Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as applicable; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Registrant.

                                 By:   /s/Gary E. Wendlandt
                                       --------------------
                                       Gary E. Wendlandt
                                       Chairman

                                 Date: January 6, 2004

                                 By:   /s/Patrick J. Farrell
                                       ---------------------
                                       Patrick J. Farrell
                                       Treasurer and
                                       Chief Financial and Accounting Officer

                                 Date: January 6, 2004




[A signed original of this written statement required by Section 906 has been provided to the Registrant and will
be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.]

                                                          15