NYLI MACKAY OREGON MUNI FUND CLASS Z

Company Description

TheFund, under normal circumstances, invests at least 80% of its assets (net assets plus any borrowingsfor investment purposes) in municipal bonds, whose interest is, in the opinion of bond counsel for theissuers at the time of issuance, exempt from federal and Oregon income taxes. Municipal bonds are a financingtool to fund a variety of public and private purposes, including general financing for state and localgovernments, financing for eligible non-profit organizations, or financing for a specific project orpublic facility. Municipal securities usually pay a fixed, variable, or floating rate of interest, andmust repay the amount borrowed, usually at the maturity of the security. The Fund is classified as a“non-diversified” investment company under the Investment Company Act of 1940 (the “1940Act”).Municipal bonds are generally debt obligations issued by oron behalf of states, territories and possessions of the United States, and their political subdivisions,agencies and instrumentalities that provide income free from federal, state and potentially local incometaxes. If the interest on a particular municipal bond is exempt from federal and Oregon income taxes,the Fund will treat the bond as qualifying for purposes of the 80% policy even though the issuer of thebond may be located outside of Oregon. Municipal bonds include general obligation bonds, revenue bonds,industrial revenue bonds, industrial development bonds, private activity bonds, as well as short-term,tax-exempt obligations such as municipal notes and variable rate demand obligations. The Fund may investup to 20% of its net assets in municipal bonds subject to the federal alternative minimum tax, and municipalbonds that pay interest that is subject to federal and Oregon income taxes. Althoughthe Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds, MacKayShields LLC, the Fund's Subadvisor, intends to invest primarily in investment grade quality bonds asrated by at least one nationally recognized statistical rating organization (“NRSRO”) orif unrated, judged to be of comparable quality by the Subadvisor. The Fund may invest up to 20% of itsnet assets in municipal bonds that are rated below investment grade (commonly referred to as “high-yieldsecurities” or “junk bonds”) as rated by at least one NRSRO, including up to 10% ofits net assets in municipal bonds that are the subject of bankruptcy proceedings, that are in defaultas to the payment of principal or interest, or that are rated in the lowest rating category by a NRSRO,or if unrated, judged to be of comparable quality by the Subadvisor (“distressed securities”).If NRSROs assign different ratings to the same security, the Fund will use the higher rating for purposesof determining the security's credit quality. The Fund may invest morethan 25% of its total assets in municipal bonds that are related in such a way that an economic, businessor political development or change affecting one such security could also affect the other securities.The Fund will seek to maintain a portfolio dollar-weighted average duration of 3-10 years, although theFund may invest in instruments of any duration or maturity. If the supply of Oregonstate tax exempt municipal bonds is insufficient to meet the Fund’s investment needs, the Fundmay invest in municipal bonds issued by other states. Municipal bonds issued by other states purchasedby the Fund will generally be exempt from federal income taxes, but may not be exempt from Oregon incometaxes.The Fund may invest in futures, options and swap agreements to seek enhanced returnsor to reduce the risk of loss by hedging certain of its holdings.Investment Process: In selecting investments,the Subadvisor analyzes the credit quality of issuers and considers the yields available on municipalbonds with different maturities.The Subadvisor uses active management inan effort to identify municipal bonds it believes to be mispriced and to build a consistent yield advantage.The Subadvisor focuses on reducing volatility through a disciplined investment process, which includesfundamental, “bottom-up” credit research and risk management. In addition, the Subadvisorreviews macroeconomic events, technicals in the municipal market, and tax policies and analyzes individualmunicipal securities and sectors.The Subadvisor’s investment processincludes a risk analysis that gives consideration to a variety of security-specific risks with respectto municipal bonds, including environmental, social and governance (“ESG”) risks. “ESGrisks” are defined as environmental, social or governance events or conditions that, if they occur,could cause an actual or a potential material negative impact on the value of the investment. CertainESG factors may be more relevant for certain sectors or issuers than others. Factors considered by theSubadvisor may include an issuer’s exposure to or management of climate risk, energy resources,community and/or employee relations, demographic shifts, cybersecurity, regulation and financial managementof policies and procedures. In addition to proprietary research, the Subadvisor may use screening toolssuch as those provided by third-party providers and, to the extent available, third-party data to identifyESG risk factors that may not have been captured through its own research. The Subadvisor’s considerationof ESG risk is weighed against other criteria and no sectors, industries or individual issuers are explicitlyexcluded from the Fund. The Subadvisor may sell a security if it no longer believesthe security will contribute to meeting the investment objective of the Fund. In considering whetherto sell a security, the Subadvisor may evaluate, among other things, the condition of the economy andmeaningful changes in the issuer's financial condition.