MainStay MacKay Short Duration High Yield Fund, Class C (MDHCX)

Overview

The described fund is a specialized investment vehicle that focuses on the high-yield, or "junk", bond market. It operates under the principle of allocating at least 80% of its assets towards debt securities that are not considered investment grade. These securities may either be rated below investment grade by one or more nationally recognized statistical rating organizations (NRSROs) or be unrated but deemed of equivalent quality by MacKay Shields LLC, the fund's Subadvisor. This focus on high-yield debt is premised on the search for investment opportunities that offer higher returns, albeit at a higher risk, compared to investment-grade bonds. The fund's management strategy includes maintaining a weighted average duration of three years or less, which suggests a conservative approach to interest rate risk. Despite the potential for investment in securities of any duration or maturity, the emphasis on shorter durations may mitigate some of the volatility associated with high-yield investments.

Products and Services

• High-Yield Debt Securities Investment:

  The fund invests primarily in debt securities that are rated below investment grade or are unrated but considered to be of similar quality. This includes a wide range of bonds and other debt instruments that offer higher interest rates due to their lower credit ratings, potentially increasing the return on investment but also involving greater risk.

• Investment Grade Assessment by NRSRO:

  Part of the fund's strategy involves relying on the assessments made by nationally recognized statistical rating organizations (NRSROs) to determine whether the securities fit the high-yield, below investment grade criteria. This ensures that the fund's investments align with its objectives by incorporating expert evaluations into its security selection process.

• Comparative Quality Assessment by MacKay Shields LLC:

  In cases where debt securities are unrated, MacKay Shields LLC, serving as the fund's Subadvisor, undertakes the responsibility of assessing their quality. This allows the fund to include securities that, despite lacking an official rating, are deemed to offer comparable returns and risk profiles to those that are rated, broadening the investment scope.

• Weighted Average Duration Management:

  A key aspect of the fund's investment approach is the management of its weighted average duration, generally kept at three years or less. This strategy is designed to limit the fund's exposure to interest rate risks, which can significantly impact the value of high-yield debt securities. By focusing on shorter durations, the fund aims to balance the higher yields of its investments against potential volatility.